A trademark is considered “abandoned” if its “use has been discontinued with intent not to resume such use.” 15 U.S.C. § 1127. There are two elements to a claim for abandonment: (1) nonuse; and (2) intent not to resume use. See Jack Wolfskin Ausrustung Fur Draussen GmbH & Co. KGaA v. New Millennium Sports, S.L.U., 797 F.3d 1363, 1368 (Fed. Cir. 2015) (citing J. Thomas McCarthy, 3 McCarthy on Trademarks and Unfair Competition § 17:26 (4th ed. 2015)).

Regarding the “nonuse” element, even limited use can be sufficient to avoid a finding that use of a mark has been “discontinued” under the statute. See, e.g., Person's Co. v. Christman, 900 F.2d 1565, 1571 (Fed. Cir. 1990) (“Although sales by Christman and his corporation Team Concepts, Ltd. were often intermittent and the inventory of the corporation remained small, such circumstances do not necessarily imply abandonment. There is also no rule of law that the owner of a trademark must reach a particular level of success, measured either by the size of the market or by its own level of sales, to avoid abandoning a mark.” (citing Wallpaper Mfrs., Ltd. v. Crown Wallcovering Corp., 680 F.2d 755, 759 (CCPA 1982))).

What's Up, Tiger Lily?

The Federal Circuit recently addressed this issue in connection with a trademark application to register LEHMAN BROTHERS for beer and spirits. Tiger Lily Ventures Ltd. v. Barclays Capital Inc., No. 21-1107 (Fed. Cir. June 1, 2022).

Until 2008, “Lehman Brothers” was one of the largest investment banks in the United States, until it went bankrupt and became indelibly linked to the Great Recession. After Lehman Brothers filed for bankruptcy, several of its businesses and other assets, including all of its LEHMAN BROTHERS trademarks and accompanying goodwill, were sold to Barclays Capital, Inc. for about $1.5 billion.

Barclays opposed Tiger Lily's LEHMAN BROTHERS trademark application.  The Trademark Trial and Appeal Board (“TTAB”) sustained Barclay's opposition, and Tiger Lily appealed to the Federal Circuit, arguing that Barclays had abandoned its LEHMAN BROTHERS trademarks.

Barclays argued that it had licensed the LEHMAN BROTHERS mark back to Lehman Brothers, which has continuously used the mark in connection with numerous public-facing financial and business transactions since the asset sale in 2008. “Barclays also contends that Barclays itself has used the mark in connection with its own financial services, including legacy LEHMAN BROTHERS research materials.”

The Court acknowledged that “Barclays' use of the mark has not been extensive, and it is possible that Barclays cannot quantify any financial success that may be specifically attributable to its offering of legacy Lehman Brothers market research materials.” But this “continued use of the mark, even if limited, is sufficient to avoid a finding that the mark has been abandoned,” citing Person's, 900 F.2d at 1571.

“Goodwill,” “Bad Will,” What's the Diff?

In arguing against a likelihood of confusion under Section 2(d) of the Lanham Act, Tiger Lily attempted to draw a distinction between “consumer recognition” as compared with “goodwill,” arguing that it was actually trying to trade on the “bad will” associated with the LEHMAN BROTHERS mark. The Court found “no legal support for these subtle distinctions.”

The trademark attorneys at Thomas P. Howard, LLC are experienced in the prosecution of trademark applications before the USPTO, as well as in enforcing trademarks or defending against infringement claims in litigation nationwide including in Colorado.