Trademark Law - Personal Names
10/12/2009 3:23:58 PM EST
LaLonde on Use of Personal Name After Selling Related Trademark Rights
Author, Gilson on Trademarks
The fashion industry is replete with valuable personal name trademarks. After selling his rights to the registered trademark consisting of his name, one fashion designer waited out his non-compete agreement and began a new company. He wanted to use his name in advertising his new designs. The company that had purchased rights to his name objected. In this Analysis, Anne Gilson LaLonde discusses JA Apparel Corp. v. Abboud, 568 F.3d 390 (2d Cir. 2009) and examines the use of personal names after selling related trademark rights. She writes:
In JA Apparel Corp. v. Abboud, 568 F.3d 390 (2d Cir. 2009), the Second Circuit found that the sales agreement between the designer and the purchaser was ambiguous as to whether the designer had signed over all of the rights to use his name, including in marketing his new designs. It also found that the designer might have a fair use defense to the purchaser's trademark infringement claim, though the district court would have to consider his proposed advertisements individually to determine whether the defense was viable. The case is now back with the district court.
The JA Apparel ruling may well make it more difficult to buy and sell rights to personal name trademarks. In this case, the parties' contract anticipated that the designer would be able to compete with the party that had purchased rights to his personal name trademarks when the non-compete clause ran out. However, they failed to hammer out the specifics of just how the designer would later be able to advertise his involvement in new projects. Agreeing to allow the designer to use his name without restriction in later marketing might have stopped the purchaser from buying trademark rights to that name or could have significantly lowered the price the purchaser was willing to pay. Refusing to allow the designer to use his name in any context in future ventures could have led the designer to balk at the trademark sale altogether.
After the JA Apparel case's cautionary tale, parties negotiating over the sale of personal name trademarks would be well advised not to simply hope for the best or hope that the individual loses interest in the goods and services his name was known for. They would instead be better off detailing precisely how the individual will be able to use his name once he has sold the trademark rights to it, from advertising to labeling to personal appearances.
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