Earlier this month, Macy's won a ruling against a company that revives out-of-use, but well-known brands. Strategic Marks LLC is in the business of reviving abandoned brands, sometimes referred to as "zombie" brands, using them on T-shirts and similar items.
The zombie nickname turned out to be particularly apt in the Macy's/Strategic Marks case, because Strategic Marks learned that even though a trademark may be technically "dead" – no longer in use, and no longer protected by a trademark registration – it can still have some teeth when it comes to enforcing against a would-be infringer.
The case of zombie brands creates a dilemma under trademark law. Under trademark practice in the U.S. and elsewhere, trademarks are presumed abandoned if they are not in use for a period of time – three years in the U.S. However, when a new adopter reintroduces a defunct brand back into the marketplace, they are essentially allowed a free ride on the goodwill of the original owner. Indeed, the fact that a mark retains substantial goodwill, is what makes it ripe for resurrection. Courts sometimes address this conflict by accepting evidence of residual goodwill to rebut the statutory presumption of abandonment.
In the Macy's case, the court did not need to reach the residual goodwill issue, as it was able to point to some continued use of the marks at issue by Macy's itself, under its heritage brands program. For brand owners not yet willing to relinquish rights to a well-known mark, a similar maintenance/ marketing program directed to older brands may be sufficient to deter would-be new adopters.
For those looking to resurrect a zombie brand, bear in mind that the very goodwill and recognition that makes the brand attractive, may be the very thing that rises up to bite you.
This article appeared in the February 2016 issue of MarkIt to Market. To view our past issues, as well as other firm newsletters, please click here.