When a trademark is abandoned

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Just because someone has a trademark does not mean that mark is theirs forever. The concept of abandonment means that acts or omissions of a mark’s owner can result in the loss of all rights associated with the mark. One of those acts is the transfer of the mark apart from the goodwill and services the public has come to associate with the mark.

Recently, a District of Columbia judge ordered the Proud Boys to transfer control of their mark to the Metropolitan AME church following a $2.8 million default judgment. The court required the Proud Boys to transfer all rights to the church and to not sell any goods, such as clothing bearing the Proud Boys mark, federally registered for “association services, namely, organizing chapters of a fraternity and promoting the interests of its members”.

It is highly unlikely the church will ever monetize the mark or acquire any of the Proud Boys’ rights in the mark. This is because the court’s order will result in a transfer in gross of the mark or an abandonment because the church will not use the mark as did the Proud Boys. It is not even clear that the Proud Boys used the mark in a trademark sense rather than in a decorative sense to emblazon clothing sold to identify the wearer as a member or having an affinity with the Proud Boys.

If the transfer is considered in gross, no rights of the assignee are transferred with the mark, and the church must develop its own rights from the date of its first use of the mark.

The federal Lanham Act considers a mark abandoned when actions taken regarding the mark cause it to lose its significance to designate a sole source of goods or services, as will occur when a transfer of the mark happens without the transfer of the business or services, which the public associates with the mark.

For example, if The Prime Rib sold its mark to another restaurant without rights to its decor, menus, and recipes, the mark would lose its significance. The church faces these problems if it tries to claim exclusive rights in the Proud Boys mark following the transfer.

It is not likely the Church will ever use the mark in the manner by which it was employed by prior owners, that is as a far right, fascist white supremist group that promotes political violence.

Abandonment tosses the Proud Boys’ mark into the public domain, and any third party is free to adopt and use the mark and by using the mark, develop senior rights to use the mark to the exclusion of others to describe its goods and services. The reason for this is that use of an assigned mark for services different than the assignor’s results in a fraud on the public, which should be able to assume that the use of the mark by the assignee signifies the same thing it did when it was used by the assignor.

The court’s order may prevent the Proud Boys from using their name to sell merchandise, and there are some First Amendment issues present with the court’s order preventing the Proud Boys’ use of their mark, say in a decorative fashion on clothing. It is difficult to see any financial benefits that will inure to the church unless it seeks to sell the mark back to the assignor or to another neo-fascist, white nationalist organization whose goals align with the Proud Boys.

James Astrachan has taught trademark unfair competition law at the Carey School of Law and University of Baltimore School of Law for 22 years.