Litigation Planning for

Licensing Attorneys

Michael G. Atkins
Graham & Dunn PC
December 15, 2008

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Naked Licensing of Trademarks

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Definition of naked
licensing
Approving use of one’s trademark
without exercising control over the
quality of the goods or services
provided under the mark

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Trademark principles
A trademark:
−
Symbolizes goodwill
− Assures consistency of quality

− Encourages brand loyalty

− Avoids consumer confusion

Licensor must control quality of

goods/services sold under licensed
mark to maintain these principles
− Naked licensing is “inherently

deceptive” 4
Example of naked
licensing
• “Give me some loot and use the
name.”
• TTAB found petitioner engaged in
“inadequately controlled licensing”
of PIED PIPERS mark
• Owner Clark Yocum abandoned
rights in mark
Yocum v. Covington,
216 U.S.P.Q. 210 (TTAB 1982)
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Abandonment of trademark
rights

• Failure to exercise quality control

may cause licensed mark to stop
functioning as trademark
• Owner is estopped from asserting
rights in trademark
• Mark is deemed abandoned
without owner’s subjective intent
to do so
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Insufficient quality control
• Licensor informally tasted wine
connected with licensed mark
− Determined wine was “good”
• Licensor relied on licensee’s
reputation as a world-famous
winemaker
• Held: Abandonment found; S/J
against licensor affirmed
Barcamerica v. Tyfield,
289 F.3d 589 (9th Cir. 2002)
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What control is sufficient?
• Quality better than or equal to
existing goods/services offered by
licensor
− Define how quality is judged

Objective or subjective measures
− Define inspection
process/representative samples

Right to review customer
comments 8
Right to control quality is
inherent
• Right to control quality stems from
trademark law, not license
agreement
• Contractual silence does not amount
to naked licensing
− Exercise of control is what’s

important
• Licensor can block unwanted
sublicenses even if sublicenses are
permitted
Miller v. Glenn Miller,
454 F.3d 975 (9th Cir. 2006) 9
Recent case law
Halo Management v. Interland, 2004
WL 1781013 (N.D. Calif.)
• License agreement required licensee
to:
− “Employ reasonable commercial efforts
to maintain positive business value of
HALO mark”
− To limit mark use to that as shown in

pending applications
− To mitigate confusion or likelihood of

confusion
• Held: Defendants’ S/J motion to dismiss
owner’s infringement claim granted 10
Recent case law
Bach v. Forever Living Prods., 473
F.Supp.2d 1110 (W.D. Wash. 2007)
(Pechman, J.)
• No express quality control provision
− Trademark owner reserved “moral rights” in
copyrighted work that served as trademark
− Owner would “establish and protect validity
of rights” if attacked by third parties
− In separate agreement, owner reserved
right to veto change in movie title and to
approve score to movie
• Held: Defendants’ S/J motion to
dismiss owner’s infringement claim 11
Recent case law
Experience Hendrix v. Electric Hendrix,
2008 WL 3243896 (W.D. Wash.)
(Zilly, J.)
• Quality control procedures, including
inspection of prospective licensee
prototypes to ensure mark properly
displayed and that Jimi Hendrix not
placed in a bad light, deemed
sufficient
• Held: Owner’s S/J motion to dismiss 12
Questions?

Michael Atkins
Graham & Dunn PC
(206) 340-9614
matkins@grahamdunn.com

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