Lapse of Trademark Registration is Not Abandonment of All Trademark Rights

CrashDummiesYou search the trademark database at the USPTO and find that your competitor’s trademark registration was canceled because the competitor did not file renewal documents and fees. You jump at the chance to grab their trademark by filing your own trademark application on their mark. Did you succeed in grabbing up rights in their trademark? Not necessarily.

Common law trademark rights can be obtained by use of the trademark in business/commerce alone without a federal registration. Therefore lapse of a trademark registration does not automatically result in a loss of all trademark rights.

This principle is demonstrated in the case of Crash Dummy Movie, LLC v. Mattel, Inc., 601 F.3d 1387 (Fed. Cir. 2010).

Crash Dummies Fight

Mattel owned a trademark registration on CRASH DUMMIES for toys. Mattel acquired rights in the CRASH DUMMIES trademark when it acquired Tyco in 1997. In December of 2000, the USPTO cancelled Mattel’s registration on CRASH DUMMIES because Mattel did not file the required trademark renewal documents and fees.

On March 31, 2003, The Crash Dummy Movie, LLC (“CDM”) filed an intent-to-use trademark application on CRASH DUMMIES for games and playthings.

Mattel filed an opposition against the CDM’s trademark application based on Mattel’s common law rights in the mark CRASH DUMMIES. CDM claimed that Mattel abandoned its trademark rights in the mark.

Registration Lapse is not Abandonment

The Court stated, “Although Mattel later allowed its trademark registrations to lapse, cancellation of a trademark registration does not necessarily translate into abandonment of common law trademark rights.”

As explained in prior abandonment posts here and here, a trademark is abandoned if (1) its use in commerce has been discontinued (2) with no intent to resume use. The Lanham Act provides “[n]onuse for 3 consecutive years shall be prima facie evidence of abandonment….” 15 U.S.C. § 1127. This means that after three years of nonuse there is a presumption that the mark has been abandoned.  But, the trademark owner can rebut that presumption by presenting evidence that during the three years the owner formulated an intent to resume use of the trademark in commerce.

Presumption of Abandonment and Rebuttal Evidence

Abandonment depends on trademark use and owner intent and not on registration alone. In the Crash Dummy Movie case, the presumption of abandonment attached because Mattel did not use the CRASH DUMMIES mark for more than three years beginning in December 1995 and ending in December 2003 (8 years) when Mattel made a shipment of CRASH DUMMIES toys.

But Mattel was able to rebut the presumption of abandonment and maintain its ownership of the mark by presenting evidence that Mattel intended to resume use of the mark during the first three years of non-use. That evidence included: (1) Mattel’s discussion with KB Toys in 1998 about them being the exclusive retailer of CRASH DUMMIES toys, (2) Mattel recorded trademark assignment in 1998 transferring ownership of the CRASH DUMMIES mark from Tyco to Mattel, and (3) research and development activities by Mattel from 2000 to 2003 regarding CRASH DUMMIES toys.

Looking at the Trademark Database is Not Enough

The Crash Dummy Movie case demonstrates that the failure to renew a trademark registration does not automatically result in abandonment of all the owner’s trademark rights. The trademark owner may still have common law trademark rights based on their ongoing use or intent to resume use of the mark.

Therefore, simply looking at the status of a registration in the USPTO trademark database will not tell you conclusively whether a trademark owner has abandoned all rights in the trademark. You will need to perform due diligence to gain reasonable assurance that the trademark owner has (1) stopped using the mark in business/commerce and (2) does not intend to resume use.

Determining the trademark owner’s intent is often not easy. So grabbing up an apparently dead trademark of another will likely carry some risk that the trademark owner has not abandoned all of its trademark rights.

8 Years of Non-Use Not Too Long

The risk that the owner has not abandoned all rights may reduce as the period of non-use grows over time. However, Mattel did not use its CRASH DUMMIES mark for 8 years from 1995 to 2003 and still retained its trademark rights based on its activities showing intent to resume use as explained above.

Risks If Trademark Rights Not Abandoned

If the original trademark owner has not abandoned all of its trademark rights, the owner might be able to sue you for trademark infringement based on your use of the mark and/or may oppose your registration of the mark as Mattel successfully did in the Crash Dummy Movie case.

Trademark Registration Renewal Requirements

TrademarkRenewA trademark registration can be maintained indefinitely as long as the required renewal fees are paid, renewal forms are filed, and you continue to use the mark in commerce or have a period of excusable non-use.

First Renewal: Between the 5th and 6th Years
Between the 5th and 6th years after the date of registration, the trademark owner must file a declaration of use or excusable non-use under section 8 of the Lanham Act. A fee must also be paid with this declaration. If this section 8 declaration and fee are not paid, the USPTO will cancel your registration. The USPTO will not send you a reminder notice to pay this fee.

Between the 5th and 6th years after the date of registration the owner may also file a section 15 declaration of incontestability, if (1) the mark has been registered on the Primary Register, (2) the mark has been in continuous use in commerce for five years after the date of registration, and (3) there is not an adverse decision or pending proceedings involving rights in the mark. There is a fee that must be paid to file this section 15 declaration. The filing may also be made within a 6-month grace period after the expiration of the 6th year with the payment of an additional fee.

The section 8 and 15 declarations and associated fee can filed as a combined declaration and paid together.

Every 10 Years
Between the 9th and 10th year after registration and every 10 year thereafter, the registration owner must file a Combined Declaration of Use or Excusable Nonuse and Application for Renewal under Sections 8 and 9 of the Lanham Act. This declaration requires the payment of a fee. The filing may also be made within a 6-month grace period after the expiration of the 10th year with the payment of an additional fee. The USPTO will cancel the registration if this declaration is not filed. The USPTO will not send you a reminder notice to pay this fee.

Conclusion
A trademark owners rights tend to be strengthened by maintaining a trademark registration for a long period of time. Filing of the proper declarations and payment of the proper renewal fees will enable a trademark registration owner to maintain its trademark registration.