Who Owns Your Trademark - Trademarkabilities

Who Owns Your Trademark?

The answer is not as simple as you might think.  Ownership is a threshold issue at the USPTO and yet many applicants get this wrong on their application. If the application is filed in the name of the wrong trademark owner, it may result in your trademark being worth less than the piece of paper it is printed on.  Below, we provide some tips and guidance to help ensure you follow the rules regarding ownership.

Who is the proper owner of a trademark?

Legally, and according to the trademark rules, it is the entity who “will control the nature and quality of the goods sold or the services rendered under the mark.”  This is the only proper owner for purposes of the Trademark Act.  So, what does this mean?  I counsel my clients that this usually means the entity with the control of the purse strings usually has the decision-making control over how the mark will be used.  For smaller companies this is simple – it is the entity whose management will make the decisions affecting the brand.  It is never an individual if you are operating a business.  Applications filed in the name of individuals and later transferred to corporate entities are suspect.  Counsel your clients to get their entity formed before the trademark is filed. If you are operating a business, the business owns your trademark – period! For larger corporations, it can be more complicated.  There are holding companies, parent and subsidiaries, sister companies, and the like.  Note, that under the trademark rules, use inures from a parent to a subsidiary, but the same is not true of sister companies.  So, be sure the right entity is identified in the application and that you understand who is or will be using the mark.  This is not always easy to determine, but our job as trademark counsel is sometimes to be a detective to be sure our clients’ rights are properly protected.

Make sure the state of incorporation is correct

Another thing to be mindful of, as I have seen this mistake first-hand, is to be careful that the state of incorporation is properly identified.  For instance, if you are ACME corporation formed in the state of Delaware, but your entity is mistakenly identified as an Illinois corporation, this entity does not exist, and the owner is not proper.  Of course, typographical errors can be made and later corrected, but if they are left un-corrected, then later, this could become a problem for the trademark owner.  Clients should see every document throughout the process so that they can identify any errors.  If a typographical error such as this makes it all the way to a certificate of registration, then the resulting registrations is void, since there is no such entity. The trademark owner has no rights, because the owner is mis-identified.  This might be able to be corrected (it is at the discretion of the Director of the USPTO), but two things now happen: (1) the trademark owner’s rights are vulnerable to third parties and (2) it is costly to correct.  This also happens with foreign entities being misidentified.  Talk to your clients.  Understand how to properly characterize the entity.  It matters.

Do not assign intent-to-use applications

Please also be aware that intent-to-use applications may not be assigned until there is use in interstate commerce, absent special circumstances.  The sale of the business to which the mark pertains must also be assigned.  This rarely happens.  It is an issue ripe for summary judgment. The bottom line is make sure that the owner is correct at the time of filing.  Do not rush this.  It is much too important.

Summary

Ownership is a threshold issue at the USPTO.  Double and triple check this information.  Consult with your clients.  I cannot stress this enough.  If the information is wrong, the application falls like a house of cards and the resulting registration is void. 

If you would like to learn more about ownership and other trademark application filing tips, consider joining our Trademarkabilities™ Masterclass where we teach paralegals and attorneys how to elevate their trademark practices. You can learn more about our courses here to enroll or reach out to us for more information. Or, you can join our mailing list, and download our free e-guide “5 Tips for Trademark Success at the USPTO.”

If you are a trademark owner with questions about your trademark application, please contact us for assistance.