A “Promiscuous Licensor” Risks Losing Its Trademark

A Michigan appeals court issues a reminder that there is social responsibility inherent in a trademark, and that a mark is more than a symbol that can be licensed willy-nilly for revenue. Whether it remains legitimate, the court said, depends on whether “the consuming public is able to use the mark to distinguish a good or service as originating from a particular source.” Trademark owners who engage in “naked licensing,” the court said, destroy their own trademark. A client alert from Proskauer Rose looks at the Michigan decision, in which a plaintiff video rental business was deemed to have engaged in naked licensing for several years, effectively abandoning the mark under 15 USC §1127(2), and summary judgement for the defendant was upheld.