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Posted on July 22, 2015.
As you probably know, a federal trial court recently upheld the decision to revoke the trademark registrations for the REDSKINS team name.
The team will appeal. The opinion has weaknesses. The case could make it to the Supreme Court.
But let’s assume the Redskins’ registrations ultimately are revoked. What then for the team’s name?
Examining this issue helps one understand the benefits of federally registering a trademark. Let’s look at things from that perspective:
Would losing their trademark registrations force the club to change its name?
No. Trademark registration doesn’t create trademark rights. It only strengthens them. Trademark rights arise from use. A trademark registration isn’t a permit needed to use a name for good or services.
But the loss of registrations could make it harder for the team to stop counterfeiters and mimics, which could create merchandise revenue losses.
Based upon published reports, all NFL teams except the Dallas Cowboys pool and share merchandise revenue, so it appears any losses due to increased counterfeiting would be spread among 31 teams.
What would the Redskins lose if the team’s trademark registrations are cancelled?
• Perhaps the biggest impact: Cancelation might keep the team from using the U.S. Customs Service to stop the importation of counterfeit merchandise, and from using the U.S. Marshals Service to seize such merchandise. There are additional legal tools and remedies that can be used against counterfeiters only by owners of registered trademarks.
• When you sue for infringement of a federally registered trademark, you get a presumption of trademark validity and consumer recognition. The Redskins can easily prove those points without a presumption.
• It’s easier to stop cybersquatters if you have a trademark registration. A cybersquatter is someone who registers a similar domain name in a bad faith attempt to profit from someone else’s trademark.
• It’s easier to attack trademark infringements on social media, such as Facebook and Twitter, if you have a registration.
• Being able to use the ® symbol (a notation that a trademark is federally registered) obviates the need to prove actual notice of trademark rights when seeking a monetary recovery. This shouldn’t be a problem for a famous trademark such as REDSKINS.
• A federal registration gives you dibs on using your trademark in all U.S. geographic markets, even ones you have not yet reached. This isn’t a problem for an NFL team.
• Registered trademarks are valuable assets when selling a business.
• Having a federally registered trademark provides an express lane to registering it in many foreign countries.
• When suing a willful trademark infringer, you potentially can be awarded a higher level of damages if you have a federal registration.
• If you use a trademark for five years after getting it registered, you become insulated from most potential challenges to your use of it.
• If your trademark is famous – a household word – trademark anti-dilution laws give it extra protection against mimicry by others. Whether your trademark is federally registered is a factor in determining if it’s famous. Also, federal registration insulates you from claims under state trademark anti-dilution laws.
• You generally need to have a registered trademark to utilize a special program for protecting trademarks in the new top-level domain names (such as .club and .sports).
Those potential legal disabilities are survivable for the Redskins, but what if the club could not enforce its trademark at all?
In a recent decision in a different federal case, an appellate court judge, Kimberly Moore, opined that a disparaging trademark cannot be enforced in federal court or, likely, in state courts, regardless of whether it’s registered. Judge Moore opined that the same statutory law that prohibits registering disparaging trademarks also prohibits court enforcement of them.
Is this right? Probably not. I can’t find any case making that holding, and I don’t see a good statutory basis for it either. The granddaddy trademark professionals organization, the International Trademark Association, argues Judge Moore is wrong.
Even if the Redskins lose their registrations, the conventional legal wisdom is that they could still use their “common-law” (unregistered) trademark rights to sue counterfeiters and generally protect their trademark from infringers.
But if that is not the case, the Redskins would lose total control over their REDSKINS brand, which could result in powerful business pressure for a name change. You can bet the interests trying to force a name change will use Judge Moore’s opinion as a weapon in that fight.