Who Owns Your Trademark?

In Uncategorized by Stacey Kalamaras

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.  Here, we provide some tips and guidance to help ensure you follow the rules regarding ownership. However, we note that given the importance of this topic, and the fact that ownership may not be able to be corrected later, you always want to consult with a qualified trademark attorney before you file your application.

Who is the proper owner of a trademark?

Legally, 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 small 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.  Form your entity first and then file the trademark.  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 client’s rights are properly protected.

Make sure the state of incorporation is correct

Another thing to be mindful of, as I have seen this first hand very recently, 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 for purposes of trademark law, cannot own anything.  Of course, typographical errors can be made, but it is critical that trademark counsel and the client read every document to be filed at the USPTO.  Clients should see every document throughout the process so that they can identify any errors.  If this error makes it all the way to a certificate of registration (this actually happened to a prospective client I know who was represented by counsel!), then the resulting registrations are void.  The trademark owner has no rights, because the owner is mid-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.  So, if you file based on intent to use, but expect you will “correct” the ownership later via assignment, this is not the purpose of an assignment.  Summary judgment is granted on this basis.  I know.  I won a case based on this exact provision of the law early in my career.

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 need help filing your application or have any questions, please contact us.