Trademark rights may be granted for the actual use of a mark or for the bona-fide intent to use a mark as a source identifier of goods and services in commerce. However, where adequate precautions are not taken these rights can be lost.

Loss by non-use

In the United States, if a trademark owner discontinues use of their mark without the intent to resume use in the future, the mark is deemed abandoned. While non-use for a period of three years creates a rebuttable presumption of abandonment, U.S. courts generally lean towards a finding that the mark has not been abandoned where excusable non-use has been shown. A few examples that may qualify as excusable non-use are (1) temporary non-use due to sale of the business (2) non-use due to a trade embargo and (3) illness, fire and other catastrophes where in the case of illness of the owner it is shown that the business could not continue without the owner’s presence.

Loss by naked licensing

Naked licensing occurs where a mark owner licenses the use of their mark to a third party(licensee) but fails to exercise adequate quality control or supervision over the licensee’s use of the mark. U.S. courts have ruled that the level of supervision that needs to be exercised over the use of a mark by a licensee is not such that the quality of the products produced by the licensee are of high quality but rather that the products are of consistent quality. One of the underlying policies of trademark law is to ensure that consumers know what to expect when they receive products and/or services from a single source. Naked licensing undermines this policy. Consistency in quality ensures that consumer’s expectations are met.

To avoid naked licensing a mark owner should (1) ensure that there is a legally binding licensing agreement containing quality control provisions. The agreement should allow the mark owner to revoke the license if adequate standards of quality are not maintained, and (2) exercise actual control and supervision over the mark and the quality of the goods and services associated with the mark.

Loss by genericide

A trademark must be distinctive as a source identifier. A mark becomes generic where, against the intentions of the mark owner, the public uses the mark to refer to a general category of products or services rather than a single distinctive source. A few examples of marks that were victim to genericide in the U.S are KLEENEX, ESCALATOR, ASPIRIN, CELLOPHANE, THERMOS and COLA.

To prevent against the loss of rights to genericide, trademark owners should create strategies educating the public on the appropriate use of their marks, avoid the use of their marks in a generic manner and actively enforce their trademark rights.