Assume in 1980, after having used a trademark for five years, CRAZY EDDIE MUSIC, a New York City-based record label, seeks and receives a U.S. federal trademark registration for the trademark “CRAZY EDDIE MUSIC” in connection with creating and distributing disco-inspired musical recordings.
That record label then renews the CRAZY EDDIE MUSIC trademark registration for ten (10) additional years in 1990. The company continues to actively use the name in commerce until 1997, when it declares bankruptcy. In 2000, the federal trademark registration expires.
Today, in 2012, nostalgic for disco, you are interested in reviving the mark CRAZY EDDIE MUSIC for a new company that you will create to make and distribute disco-related musical recordings. Can you safely and legally do so?
The answer is that it depends.
First, the abandonment of the federal registration in the U.S. Patent and Trademark Office is NOT NECESSARILY abandonment of all underlying rights in the trademark.
In this hypothetical, the original CRAZY EDDIE MUSIC record company declared bankruptcy in 1997. However, the trademark rights and goodwill associated with the company’s name were an asset that may have been sold or transferred to someone else as part of generating revenue to pay off the company’s unpaid debts in the bankruptcy proceeding.
In fact, some third party may have purchased the rights to the trademark in that proceeding and continued to use the name continuously, but just forgot to renew the old federal registration.
This third party may still be entitled to possess all the trademark rights of CRAZY EDDIE MUSIC going all the way back to 1975!
Remember, use of a trademark in commerce, even without a current federal registration, still equates to common law trademark use in the U.S. Therefore, if the company that bought the trademark rights in bankruptcy still continuously used the name in commerce, it still would keep all the common law rights to the mark, even if it abandons or surrenders a federal registration.
Also, it is important to remember that the owner has to have INTENDED to abandon its rights in the mark with no intention of resuming use for the mark, in order for it to be considered legally extinguished. Without knowing exactly what happened in the 1997 bankruptcy proceeding, you are theoretically at risk of becoming an infringer to an unknown company that has every intention of resuming use next month.
In this hypothetical, you could not safely or legally be advised to revive the CRAZY EDDIE MUSIC name without being 100% certain that all residual rights to the prior mark had been completely extinguished through non-use, with no evidence of intent to resume.