License and Franchise Situations

The USPTO accepts applications by parties who claim

to be owners of marks through use by controlled licensees, pursuant to a

contract or agreement.

Pneutek, Inc. v. Scherr,

211 USPQ 824,

833 (TTAB 1981).

A controlled licensing agreement may be recognized

whether oral or in writing.

In re Raven Marine,

Inc.

, 217 USPQ 68, 69

(TTAB 1983) (citing

Basic Inc. v. Rex

, 167 USPQ 696, 697

(TTAB 1970));

see

Sock It To Me, Inc. v. Aiping Fan

, 2020 USPQ2d 10611, at *3-4

(TTAB 2020) (citing

Woodstock’s Enters. Inc. (Cal.) v. Woodstock’s

Enters. Inc. (Or.)

, 43 USPQ2d 1440, 1447 (TTAB 1997);

Univ. Book Store v. Univ. of Wis. Bd. of Regents

, 33

USPQ2d 1385, 1396 (TTAB 1994)) ("Even if there is no formal written agreement, a

license can be implied.").

If the application indicates that use of the mark

is pursuant to a license or franchise agreement, and the record contains nothing

that contradicts the assertion of ownership by the applicant (i.e., the licensor

or franchisor), the examining attorney will not inquire about the relationship

between the applicant and the related company (i.e., the licensee or

franchisee).

Ownership rights in a trademark or service mark may

be acquired and maintained through the use of the mark by a controlled licensee

even when the only use of the mark has been made, and is being made, by the

licensee.

Turner v. HMH Publ'g Co.,

380 F.2d 224, 229, 154

USPQ 330, 334 (5th Cir. 1967),

cert. denied

, 389 U.S. 1006,

156 USPQ 720 (1967);

Cent. Fid. Banks, Inc. v. First Bankers Corp. of

Fla.

, 225 USPQ 438, 440

(TTAB 1984) (holding that use of the mark by petitioner’s affiliated banks

considered to inure to the benefit of petitioner bank holding company, even

though the bank holding company could not legally render banking services and,

thus, could not use the mark). However, a mere licensee cannot rely on use of

the mark by the licensor, whether through the license or otherwise, to establish

priority.

Moreno v. Pro Boxing Supplies, Inc.

, 124 USPQ2d

1028, 1036 (TTAB 2017)

anks

considered to inure to the benefit of petitioner bank holding company, even

though the bank holding company could not legally render banking services and,

thus, could not use the mark). However, a mere licensee cannot rely on use of

the mark by the licensor, whether through the license or otherwise, to establish

priority.

Moreno v. Pro Boxing Supplies, Inc.

, 124 USPQ2d

1028, 1036 (TTAB 2017).

Joint applicants enjoy rights of ownership to the

same extent as any other "person" who has a proprietary interest in a mark.

Therefore, joint applicants may license others to use a mark and, by exercising

sufficient control and supervision of the nature and quality of the goods or

services to which the mark is applied, the joint applicants/licensors may claim

the benefits of the use by the related company/licensee.

In re Diamond Walnut Growers,

Inc. & Sunsweet Growers Inc.

, 204 USPQ

507, 510 (TTAB 1979)

.

Stores that are operating under franchise

agreements from another party are considered "related companies" of that party,

and use of the mark by the franchisee/store inures to the benefit of the

franchisor.

Mr. Rooter Corp. v. Morris

, 188 USPQ 392, 394

(E.D. La. 1975);

Southland Corp. v. Schubert

, 297 F. Supp.

477, 160 USPQ 375, 381 (C.D. Cal. 1968).

In all franchise and license situations, the key to

ownership is the nature and extent of the control by the applicant over the

nature and quality of the goods or services with which the mark is used.

See

Sock It To Me

, 2020 USPQ2d 10611, at *4 (quoting

In

re Jos. Bancroft & Sons

, 120 USPQ 329, 330-31 (TTAB 1961)).

Control over all of the related company’s affairs is not required.

See

Sock It To Me

, 2020 USPQ2d 10611, at *4 (citing 3 J. Thomas

McCarthy, McCarthy on Trademarks & Unfair Competition §18:58 (5th ed. Nov.

2019 update)). However, a trademark owner who fails to exercise sufficient

control over licensees or franchisees may be found to have abandoned its rights

in the mark.

See

Hurricane Fence Co. v. A-1 Hurricane Fence Co.

, 468 F. Supp

’s affairs is not required.

See

Sock It To Me

, 2020 USPQ2d 10611, at *4 (citing 3 J. Thomas

McCarthy, McCarthy on Trademarks & Unfair Competition §18:58 (5th ed. Nov.

2019 update)). However, a trademark owner who fails to exercise sufficient

control over licensees or franchisees may be found to have abandoned its rights

in the mark.

See

Hurricane Fence Co. v. A-1 Hurricane Fence Co.

, 468 F. Supp.

975, 986; 208 USPQ 314, 325 (S.D. Ala. 1979).

In general, where the application states that a

mark is used by a licensee or franchisee, the USPTO does not require an

explanation of how the applicant controls the use.