Can I Lose My Trademark Rights If I Don’t Sue Infringers?

Many people believe that trademark rights can be “abandoned” or lost if the trademark owner fails to object to infringing uses of the mark, but that is not entirely accurate.

There is a great deal of uncertainty in the courts with respect to the effect on one’s trademark rights of a failure to prosecute infringers. Some courts maintain that it makes no difference whatsoever. Other courts have concluded that the failure to prosecute can result in the abandonment or loss of trademark rights. And still others have found a middle ground in holding that the failure to prosecute can reduce the strength of a mark but not result in total abandonment.

At the outset, it is important to keep in mind that this issue concerns whether the failure to prosecute one infringer has any bearing on the strength of a trademark owner’s rights with respect to a different infringer or the world at large. There is a separate and distinct issue that arises when a trademark owner fails to prosecute an infringer for a time and then later tries to pursue that same infringer. This latter, separate issue concerns the doctrine of laches, which is not the subject of this post.

What Is Trademark Abandonment?

Trademark abandonment, in general terms, occurs when a mark owner discontinues use of the mark with no intent to resume use. Nonuse for a period of three years creates a presumption of abandonment. Abandonment also occurs when the mark owner takes action that causes the mark to become generic. 15 U.S.C. § 1127. According to these strict definitions from the Lanham Act, the question ought to be whether the failure to prosecute infringers makes a mark generic (because the failure to prosecute is presumably not accompanied by a discontinuance of use). But this is not really how all courts have treated the issue.

What Is the Effect of a Failure to “Police” a Mark or a Failure to Prosecute Infringers?

Courts have taken three basic approaches to this issue:

  • Failure to Prosecute Is Irrelevant to Abandonment: This rationale is based on the notion that an infringing defendant should not be let off the hook just because some other infringer was not pursued for its wrongdoing. This rationale is also supported by policy concerns: if a mark owner is threatened with a loss of rights for not prosecuting every infringer, it would clog the court system with petty disputes brought for no other purpose than to avoid abandonment. This approach has been followed by federal courts in California, Florida, Georgia, Illinois, New York, and also the Trademark Trial and Appeals Board.
  • Failure to Prosecute Results in Abandonment by Making the Mark Generic: This theory holds that when a trademark owner has failed to pursue infringers for so long that the mark experiences widespread use by competitors and customers to the extent that it has become the generic name of a product, then the failure to prosecute can result in abandonment. It is important to note that this theory does not necessarily penalize a mark owner for the failure to prosecute a single infringer; the failures to police and the scope of allowed infringing uses must be much more widespread. This approach has been followed by courts in Illinois, New York, and also the Trademark Trial and Appeals Board.
  • Failure to Prosecute Impairs the Strength of a Mark: This theory is really not about abandonment (as a total loss of rights) at all, although courts have not foreclosed the possibility that the loss of strength could be so severe as to reach that level. This theory is premised on the most fundamental aspects of trademark law: a trademark signifies a connection in the mind of consumers between a particular mark and the products or service of a particular company. From this perspective, the allowed use of the mark by competitors would serve to lessen this connection in the minds of consumers—the more significant the infringing uses, the more muddled (and less strong) the connection becomes in the minds of consumers. This approach has been followed by federal courts in the 2nd, 5th, 6th, and 11th Circuits, and also the Trademark Trial and Appeals Board.

So Do I Have to Sue Infringers or Not?

There is no easy answer to this question. The short answer is “No,” a trademark owner does not have to sue every single infringer, and the failure to do so in an isolated case of infringement will likely not result in abandonment. However, the failure to take action in the face of widespread infringement could significantly impact a mark owner’s rights.

It is for this reason that many larger companies that invest heavily in their trademark portfolios err on the side of caution in pursuing infringers. This is because there is no bright line rule regarding how much infringing use is too much, and it may be more economical to address potential infringers when they first begin using a confusingly similar mark, as opposed to waiting until the use becomes more widespread and the infringer is more invested in the mark.

When it comes to policing a mark by prosecuting infringers, many clients mistakenly believe that the failure to take swift action will automatically lead to abandonment, but the issue is far more nuanced than that. The prudent business owner should be aware of infringing uses and will take appropriate action when necessary. However, careful analysis of the infringing uses, the prevalence of the mark in the market as a whole, and other factors is helpful in crafting a brand protection strategy that is protective of the trademark owner’s rights while not being unnecessarily litigious.

 

As in all areas of the law, if you find an instance of potential trademark infringement, you should discuss the issues with an attorney specializing in that area of law.

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