I was listening to the radio the other day. Prime Time Sports hosted by Bob McCown on The Fan 590 on February 11, 2013. Now, my interest always piques when people on the radio begin to talk about trade-marks. Usually because they have no training or experience in the law of trade-marks. That always makes for an interesting discussion.
So, Bob McCown and Stephen Brunt were talking to Jamie Cuadra, the President and CEO of a new football league. It’s called the USFL. It’s not the first time a football league has operated under the name USFL.
A football league branded the USFL operated in the United States from 1983 to 1987. It hasn’t been seen since. It seems that during those years Doug Flutie spent some time playing for a team owned by Donald Trump.
So, Stephen Brunt asked the USFL CEO about how he got the rights to the name “USFL”. I’ve roughly transcribed the question and answer below:
Stephen Brunt: Who did you.. who’d you have to buy the name from, Jaime?
Jaime Cuadra: You know, it’s a really interesting thing. The name was sitting abandoned.. um.. in the National Trademark Registry um.. it had.. it had literally not been renewed and uh.. and the gentleman by the name of Michael Dwyer went in and purchased it and.. and I was actually consulting for Michael uh.. at the time and uh.. we decided to change the.. the format of the group and uh.. and so we essentially bought it from Michael but it was a uh.. trademark that was sitting out there abandoned.
Stephen Brunt: Wow.
Then, Bob McCown also asked the USFL CEO why he chose to bring back the USFL brand instead of launching the new football league under a new trade-mark. This is how that question and answer went:
Bob McCown: Uh.. when you decided to, I assume you decided.. you it.. it was you who decided, but when you decided to uh.. look at a uh.. a new football league, was.. what was it about the name USFL that intrigued you? Wa.. why that choice?
Jaime Cuadra: I think primarily because it had such a romantic, nostalgic feel to it. I think when you talk to people about the USFL they remember what great things came out of it and uh.. and we were lucky that uh..at that point in time there was really uh.. so many different people who.. who.. who when they talked to me they said they.. they kind of point it at one person as being the culprit for it going away so we figured when you only have one villain and you have a lot of really good things uh.. coming out of it that that’s something that we want to try to bring back.
I found the questions and answers fascinating from a Canadian trade-mark law perspective. Here are three reasons why.
1 – Expiry of Trade-mark Registration doesn’t mean it’s fair game
Just because a trade-mark registration has expired doesn’t mean anyone else can “buy” or “use” the trade-mark or file an identical trade-mark application of their own.
Of course, as an owner, you never want to let your registered trade-marks expire. Registered trade-marks have the greatest legal protection our law affords for trade-marks. But mistakes happen.
But regardless of the fact that a trade-mark is no longer registered with the Registrar of Trade-marks, the previous owner of that registration may have all sorts of common law rights in the trade-mark. Those don’t expire or go away because the registration has expired.
2 – Simply because a Trade-Mark is registered doesn’t mean it’s a good and valid Trade-mark that’s going to stay registered
If someone files a trade-mark application for an expired registered trade-mark, and gets that application registered, it doesn’t necessarily validate that person’s claim to the trade-mark. There are many ways a trade-mark application or a registered trade-mark could be challenged, for example, on the basis of the prior use of the expired trade-mark.
If you ever bought or licensed a trade-mark application or registration from someone who purposely filed a trade-mark identical or similar to an expired registered trade-mark, that contract had better have protections in case the owner of the expired trade-mark registration takes issue with the adoption.
And if the goal of the business is to build a successful one, and what business doesn’t have that goal, you will be promoting the trade-mark as much as possible. And the more you promote it and the more successful you are, the more chance there is that the former owner will become aware of what you are doing. And he just might decide to try his hand at invalidating your trade-mark.
3 – To prove passing off, you have to prove there is goodwill in the trade-mark
You can sue someone on the basis that they are directing attention to their products, services, or business, in such a way that may cause confusion with your products, services, or business. It’s called passing off. In order to prove it, first the plaintiff has to show that there is goodwill or reputation in their trade-mark. This is the most expensive stage for the plaintiff in any passing off action. If the plaintiff doesn’t clear this hurdle, the suit can’t continue. That’s why the plaintiff will submit as much evidence as possible to prove the existence of goodwill or reputation in their trade-mark. (And that’s what makes a registered trade-mark so desirable – with a registered trade-mark, you don’t need to prove this).
If you mention on a radio show that the reason you’re using a trade-mark is because of the residual goodwill still present in the brand, you might be providing very good evidence to the lawyers representing the owner of the expired trade-mark.
And even if you don’t make unfortunate comments on a radio program about the residual goodwill present in a brand, just adopting an old brand, instead of developing a new one, begs obvious questions. Why adopt an old brand instead of creating a new one? What is it about the old brand that you like so much that you’d adopt it for your new business venture? It wouldn’t be shocking to hear that the answer is because of the residual goodwill still present in the brand.
So, what do you do if you want to use someone else’s former trade-mark for your new business? File a trade-mark application for the former trade-mark. Hunt down the former owner and try to get it to sell you the rights to the trade-mark. If they won’t, abandon your application. If they will sell it to you, back date it to a date before you filed the application. If they want to license it to you, it would depend on the facts about whether you’d agree to that arrangement.
For those braver of heart, who want to adopt a former brand and hope the former owner won’t come calling, I can’t say you won’t get tackled. Taking such a risk and succeeding probably has the same odds as running the ball from your own 5 yard line into the opposing team’s end zone. Success is possible but I wouldn’t bet on it.
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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information. You can reach Ryan at email@example.com and (905) 287-2215.