Trademark Transactions in the United States: Towards a De Facto Acceptance of Trading In Gross?

• Main Author: CALBOLI, Irene
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: intellectual property law; Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/1602; https://search.library.smu.edu.sg/discovery/fulldisplay?docid=alma99135605402601&context=L&vid=65SMU_INST:SMU_NUI&lang=en&search_scope=Everything&adaptor=Local%20Search%20Engine&tab=Everything&query=any,contains,The%20Law%20and%20Practice%20of%20Trademark%20Transactions:%20A%20Global%20and%20Local%20Outlook&offset=0
• Institution: Singapore Management University

In this chapter, I elaborate on the current laws regarding trademark transactions in the United States (U.S.). In particular, I address the rules and requirements that apply to trademark assignments and trademark licensing agreements. Based on the principle that trademarks are not protected as property rights, U.S. trademark law has historically forbidden trading trademarks ‘in gross’. As a result, trademarks must be assigned with the associated goodwill of the business to which the marks belong and, in licensing agreements, licensors must control the quality of the products that are produced by the licensees under the license agreement. Since their introduction, however, these rules have proven ambiguous, primarily due to the lack of clear definitions as to what constitutes ‘trademark goodwill’ and ‘quality control’. As a result, the courts have applied these rules inconsistently. Furthermore, because of the ambiguity surrounding these concepts, the courts have de facto moved away from a strict application of these rules and have instead assessed the validity of trademark transactions based primarily on whether the quality of the products at issue remains consistent and whether or not the public is confused as to this quality. My analysis proceeds as follows. In Section B, I offer a brief primer of trademark theory. In Section C, I examine the rule on trademark assignment.