How to keep your valuable trademark rights when your business operations are suspended
In trademark law there is a saying “Use it or lose it”, which is exactly what it sounds like: in order to accumulate and maintain rights in a trademark, that trademark must be used. After all, trademark rights in the United States are granted (and enjoyed) on the basis of actual use of a mark, not as a result of registration with the United States Patent and Trademark Office. . This means that failure to consistently use your trademark on a product or offer a service to the public may result in the surrender of your rights to that trademark – from brand names and logos to specific uses of color, between other source identifiers – and with it, the ability to maintain existing records.
Abandonment becomes a topical issue when companies rebrand and when sleeping beauty houses, as they are called – like Charles James, Paul Poiret and Jean Patou, the latter of whom is given a makeover by LVMH Moët Hennessy Louis Vuitton – are relaunched. It’s also an interesting topic, it seems, when a global health pandemic forces businesses, including retailers and fashion brands around the world, to close their physical doors and, in some cases, to shut down. put their business operations, as an integer, on hold indefinitely.
In light of the continued spread and lasting implications of COVID-19, businesses need to know what they can do to ensure their trademark rights are fully protected.
In the United States, trademark law states that a mark is to be considered “discontinued” if use of the mark has been discontinued without intention of resuming use. The intention not to resume use can be inferred from the circumstances, and non-use for 3 consecutive years is prima facie evidence of discontinuation. As to what constitutes “use” of a mark, that is use in the ordinary course of trade, and not simply use to reserve rights in the mark. In terms of what constitutes “ordinary use”, it will depend on the specific industry in which the mark exists.
In fashion and retail more generally, brands themselves and their uses can be widespread. Fashion-centric brands – which are defined as words, phrases, symbols or designs, or a combination of these, that identify and distinguish the source of one part’s products from those of others – range from traditional word marks, such as brand names, and logos to product packaging elements (including color) and even appearance elements of some famous products.
Chanel retains the rights to its name and double “C” logo, as well as “No. 5”, among others, which it uses on clothing, accessories, eyewear and cosmetics. Gucci has an arsenal of rights brand names, including its name and various logos, which it uses on its products and also in connection with physical retail services and online retail services. Meanwhile, Hermes retains the rights to use of a specific orange tint (in the US and worldwide), which it places on product boxes and other packaging, it also retains the trade dress rights in the appearance of its renowned Birkin bags The list goes on and on.
Since many brands have been forced to go out of business at least to some extent due to complications from the coronavirus, there’s a good chance they won’t use all of their brands in all categories of products and services in the same way and with the same consistency as they usually do. With the closure of physical stores, brands are not using their “retail services” class of service, for example. However, the use by many brands of their names and logos on clothing and accessories, among other products, is largely uninterrupted due to the continued operation of e-commerce, whether through their own websites or those of their resellers.
With that in mind, the use of brand names and logos on products of their choice and in general retailing is probably well enough positioned to withstand the potential threat of abandonment. If applicable, the uses most likely to suffer from non-use issues – which could be alleged by a defendant if a trademark seeks to enforce its trademark (such as in an action for infringement or trademark cancellation) under of a category of goods or services which have been subject to non-use – are such things as the use of its name by Prada in connection with “the organization of entertainment exhibitions” or the use by Louis Vuitton’s name and various logos in connection with “organizing exhibitions for cultural or educational purposes”, for which both brands maintain federal registrations.
The good news for brand owners right now is that most business closures, fashion show postponements and other setbacks are not voluntary; they are the result of a global health pandemic. Therefore, while the use of a company’s trademark may be discontinued in some respects, it would likely be difficult to prove that the discontinued use at this point is not accompanied by any intention to resume use.
However, the toll that this current pandemic is taking on businesses that have been forced to shut down cannot be understated, and companies should do everything possible to communicate to the public that business operations should resume as soon as possible. In addition, to the extent possible, brand owners should attempt to make products and services available to the public by all currently available and reasonable means.
For example, if the products can be sold or distributed through e-commerce platforms, this should be taken into account. If the services regularly offered by a business cannot currently be provided to its customers, a brand owner could provide, for example, relevant information and education services, online information or entertainment services, tutorials or webinars, and similar offers through its website. In this time of unprecedented forced business closures, it is critical that businesses of all types get creative and find ways to survive and, in so doing, protect their valuable brand assets.
Last month, the LVMH-owned Loewe brand launched a series of digital events called Loewe En Casa, for example. Prada announced this week that it is launching a series of “digital conversations” on Instagram aimed at “exploring culture, fashion and life”. Meanwhile, the Financial Times notes that “Brands like Nanushka are offering respite from the torpor of working from home in the form of guided meditations and yoga classes. [on Instagram], while Marc Jacobs brought in illustrators to lead a series of guided drawing sessions called Drawn Together. And yet, names like Alexander McQueen and Chanel compile and offer playlists related to the soundtracks of their fashion shows.
Not only do these brands find creative ways to connect with consumers (who are not entirely dependent on products and / or physical traffic), they may very well expand the use of their brands, depending on the classes of products and services in question. cause.
For trademark owners who are required to file an Affidavit of Continuous Use under Section 8 during the time they are closed for business, it may be necessary for you to demonstrate that the non-use of your trademark was due to misconduct. “Special circumstances”. To do this, it is necessary that the maintenance documents filed with the Trademark Office indicate the date on which the use of the mark in trade ceased, the approximate date on which such use is expected to resume, and include facts to show that the non-use is due to special circumstances which excuse the non-use and that the non-use is not due to an intention to abandon the mark.
The purpose of this section of the Lanham Act is to remove from the register records that have become deadwood, and there are no plans to cancel registrations due to a temporary discontinuance of use of the mark in due to circumstances beyond the control of the owner. of registration. However, simply stating that there are special circumstances and that there is no intention to abandon the mark will not meet the requirements of the law. Sufficient facts must be presented to clearly demonstrate that the non-use was due to special circumstances beyond the control of the owner or was forced by external causes.
*Susan Neuberger Weller manages the Trademarks and Copyrights practice at Mintz. (Changes / additions courtesy of TFL).