One of the most visited websites on the Internet is Google. On April 1, 2010 anyone visiting that site was immediately met with a new name and mark – Topeka. Seemingly, Google had adopted a new name. Eric Schmidt, CEO of Google, elaborated:
“We didn’t reach this decision lightly, after all we had a fair amount of brand equity tied up in our old name… But the more we surfed around (the former) Topeka’s municipal website, the more kinship we felt with this fine city at the edge of the Great Plains. In fact, Topeka Google Mayor Bill Bunten expressed it best: ‘Don’t be fooled. Even Google recognizes that all the roads lead to Kansas, not just yellow brick ones.’”
Alas, the name change was nothing more than one of Google’s infamous April Fools’ Day jokes. But do not throw caution to the wind – such public statements under ordinary circumstances may serve as evidence of abandonment of a trademark.
In this time of economic constraint, budgets are being cut, funds are being conserved and brand owners are taking stock of their inventory of marks. In some cases companies are focusing on their core brands and deciding to let go of other secondary marks. In other cases companies are reaching back into their historical inventory to re-introduce marks and their corresponding products and services into the marketplace, all the while attempting to rely on the already established brand equity instead of spending money in creating that brand equity. Some of these marks have been out of use for many years. Notwithstanding periods of nonuse, companies expect to retain their ownership rights of these marks. This idea is misconceived. The US trademark system is based on use, defined as a “bona fide use in the ordinary course of trade, and not made merely to service a right in the mark.” Therefore, a trademark owner’s rights in a mark can be abandoned if there has been no continued use of that mark. In fact, a trademark owner’s rights in any given mark are only as good as the use the owner makes of that mark. In some instances, companies have not used these marks for their goods and/or services for significant periods of time and these marks may be considered abandoned.
Under 15 USC §1127, a trademark is abandoned “[w]hen its use has been discontinued with intent not to resume such use.” There is a presumption of abandonment where there has been nonuse for three consecutive years. “Once the presumption is triggered, the legal owner of the mark has the burden of producing evidence of either actual use during the relevant period or intent to resume use.”1 However, an intent to resume use must be made in the reasonably foreseeable future.2 According to the Court of Appeals for the Second Circuit, in order to defeat an abandonment charge, a mark holder must have formulated an intent to resume use of its mark during the three-year period of nonuse that triggers the statutory presumption of abandonment.3 Self-serving and conclusory statements of an intent to resume use or possible use in the future are given little weight.4 Furthermore, sporadic or token use of a mark is not sufficient to overcome a showing of abandonment.5 Changes in the form of the mark also can constitute abandonment of the former mark.6 And finally, statements of a name change and an intent not to resume use as a result of that change may establish abandonment of a mark.
However, abandonment essentially is considered a forfeiture of rights and must be proved by clear and convincing evidence. Even when a brand owner no longer uses a mark, that mark is not necessarily abandoned through that nonuse. There must be a corresponding intent not to resume use of a mark. Moreover, abandonment has not been found where there remains public recognition of a mark.7 Even nonuse may be justified or considered excusable in certain situations. Examples of justified nonuse can stem from nonuse beyond a brand owner’s control and caused by outside forces, such as government action, intervention or labor strikes. Excusable nonuse also can be found when bankruptcy proceedings have been instituted, financial difficulty arises or where there has been a temporary unprofitability of sales.
In sum, when brand owners are reviewing their inventory of marks and considering whether or not to continue using a mark or resuming the use of a mark not currently in use, they should consider whether those marks are at risk of abandonment. Before resuming use of a mark, consider the length of time that mark has been out of use and investigate whether there has been any intervening, new use of that mark by a third party. Before discontinuing any use of a mark, assess the current and prospective value that mark has to a company. If a mark has continued value, trademark owners are advised to continue using that mark and avoiding statements that they no longer will use such a mark. Unlike Google, such statements, besides perhaps those made on April Fools’ Day, could provide evidence to support a claim of abandonment. And finally with all of your marks, remember the old adage: use it or lose it!