Do you know what intellectual property your business owns? Do you know what type of legal and business condition your business IP is in? Maintaining clean intellectual property is just as important as maintaining a clean set of financial records. Your financial records are audited, right? So, too, should your business IP be thoroughly examined. Doing so provides assurance of ownership, confirms value, clarifies rights of use, and places your business is a better posture for the license of its IP or the sale of its assets.
This article provides a list of potential issues to address concerning your firm’s trademarks. Future articles will address domain names, copyrights, patents and trade secrets.
Here is a list of potential issues to consider in conducting a trademark audit.
Trademark Due Diligence:
Have you identified your firm’s trademarks? Is the trademark limited solely to a word mark or to a design mark (logo)? Or, does your firm’s trademark include product trade dress, the design of a product or its packaging?
Have you documented your firm’s trademark use? Do you have written documents showing specifically how your trademark is used? If not, why not?
Have you registered your trademark for each type of good or service that your firm offers to the public? If not, why not?
If your firm is using its trademark on different goods or services than as indicated in a trademark registration, is it appropriate to apply for an additional registration for the non-covered goods or services?
If your firm uses its trademark on its website, is the on-line usage of the trademark covered by the trademark registration? Should there be an additional registration covering on-line usage?
Have you conducted a search to determine whether there are other users of your trademark (or a similar version) and trade dress for similar goods or services? If not, why not?
Have you documented your firm’s trademark and trade dress ownership? Was your firm’s trademark or trade dress initially developed or used by former owners of your business? Or by other parties? If so, does a transfer document exist from the prior users to your firm? If not, why not?
If your firm acquired its trademark or trade dress from another person or party in the past, has a transfer document been recorded with the U.S. Patent and Trademark Office?
Have you documented the first use date of your firm’s trademark or trade dress for each type of good or service provided by your firm? If so, does your documentation of first use adequately establish usage in interstate commerce, foreign commerce or commerce with the Indian tribes (these are the forms of "commerce" that Congress has the right to regulate)?
Have you obtained documentation of the first use date of any trademark or trade dress obtained from a prior user?
Is your firm’s trademark or trade dress “free and clear” of liens or encumbrances? Has your firm given a security interest to a lender covering your firm’s trademarks or trade dress? Or, covering “general intangibles”? Has a prior owner of your firm’s trademark or trade dress given a security interest to a lender covering the trademark, or covering general intangibles? If you license the use of a trademark or trade dress, has your licensor given a security interest in the trademark or trade dress, or in its general intangibles?
Does your firm use its trademark or trade dress in a consistent manner, or does it modify its trademark or trade dress from time to time? Does the present use of your firm’s trademark or trade dress match exactly the representation or design that is registered (as to font, color, styling and other design attributes)? Has the appearance of your firm’s trademark or trade dress been altered over time, even slightly? If so, is it appropriate to apply for a new registration for the modified styling?
Does your firm use its trademark or trade dress in foreign countries? If so, has it obtained protection in foreign countries?
Does your firm intend to use a new trademark in the future? If so, has it filed an Intent to Use application with the Patent and Trademark Office?
Does your firm license the use of its trademark or trade dress to others? Here, the term “license” applies to all forms of permission, from implied consent, to a consensual handshake, to a formal license document. If a license exists, is it in writing? If it is not in writing, why not?
Does your trademark license contemplate new uses that presently do not exist but which may subsequently develop in your industry?
Have you obtained the right to use a trademark or trade dress pursuant to a license obtained from another person or firm? If so, is it in writing? Is the trademark free and clear?
Does the license to use a trademark or trade dress include specific obligations concerning quality control of the usage, the type or manner of usage, or other limitations or requirements of use? If not, why not? Does the licensor actually monitor quality control of the licensee’s usage? Does the licensee actually comply with its quality control obligations?
Does the license to use a trademark or trade dress give the licensee any rights to the trademark or trade dress? Does it limit the usage of the trademark or trade dress to certain goods or services, or to certain geographic areas? Does it include a provision to reconcile any dispute concerning trademark use, quality control, termination of use and royalty?
The PTO requires the filing of periodic maintenance documents, and the payment of periodic fees, in order to prevent cancellation of a trademark registration. Is someone specifically charged with monitoring and maintaining the registration status of the trademark?
Do you allow your dealers, distributors or customers to use your firm’s trademark in their business name, in their domain name, or in their marketing materials? If so, do you have written documentation controlling this usage? If not, why not?
What is your trademark worth? What is your trade dress worth? What would happen to your business in the event your firm lost the exclusive use and control over its trademark or trade dress?
The foregoing list of trademark due diligence issues is not intended to be comprehensive. Every business is different and these issues should be considered in the context of a particular business. But these issues represent the basics for many business users.