Should I Sell My Trademark?

This really is the sixty-four-thousand-dollar question.

The answer varies per scenario. It really depends on what situation you and your company are in that matters. In truth, each decision has both its rewards and pit falls. It’s a balancing act determined by your needs verses those things you want. Hopefully, this article will help you make an informed decision that will reap you many benefits no matter if in the long or short term.

Trademarks are considered intellectual property and just like any other property, intellectual property can be licensed, bought, sold, inherited, or otherwise transferred through legal transactions.  If you are wishing to retain certain rights when it comes to your intellectual property, then licensing may be the best bet. However, if you are no longer interested or simply can’t keep your trademark for economic, retirement, or health reasons or unforeseen events, then selling the rights to the property can be viewed as the most viable option. However, while selling intellectual trademark property can be a great way to make an instant profit, you must take into consideration the value of this one-time sale over the potential lucrative multiple payouts that comes with licensing.

Trademarks, as defined by the United States Patent Trademark Office, protect specific words or phrases, names, designs, symbols, sounds, or colors that identifies and distinguishes goods and services apart from other corporate goods or services. Think Mercedes Benz logo. The fact no description or picture is provided here is proof of a trademark’s power. You instantly can visualize the Mercedes’ trademark because of the constant exposure you have experienced and the public acceptance of the brand as symbolizing excellent quality and superior craftsmanship.

The importance of a trademark in garnering a public identity cannot be understated. They literally are a company’s soul or identity or brand if you will that has taken years to establish. With this in mind, the decision to sell or license your trademark carrys the weight of this identity with it. With selling, you give up this entitlement, but with licensing, you hand it over to someone else the same way a person entrusts the care of their child. It takes a lot of trust to make this commitment and a lot of duties and responsibilities come into play and a violation of any of these can lead to trademark infringement.

In order to sell a trademark, the process encompasses more than the modest sale of a name. It involves so much more as with any other aspect of selling a business such as the transfer of stocks. Most importantly, for the bottom line, is the transfer of goodwill as a major aspect of the deal. Goodwill involves the value of certain intangible non-monetary resources of the business. Intangible assets include customer loyalty, brand reputation, trademark effectiveness, and other non-measurable assets that all count as goodwill. As you can see, the more recognizable the trademark, the more valuable the company based simply on the assessed goodwill. Most importantly, trademarks cannot be sold in of themselves to be used for something else entirely. They have to be reassigned along with the new ownership of the business or product the trademark represents. The trademark owner or owners all have to agree to sell the trademark and the buyers have to guarantee they will not soil or otherwise ruin the trademark’s reputation and value.

A dead trademark is one the Patent and Trademark Office doesn’t distinguish anymore. Once a trademark has been deemed dead (in other words, abandoned), individuals and companies can then claim it and register and use it for their own purposes. The original trademark owner has no rights to the dead trademark and can no longer use it or seek protection for it—much less sell it.

Trademark licensing for the purposes of a legal transaction is considered a merchandise contract. The owner of the trademark, or licensor, in exchange for sharing the trademark, earns a profit or royalties. You see this type of activity all the time with professional sports teams and movie studios who wish to capitalize on the popularity of their franchise on a given moment. The Star Was licensing agreement is very lucrative as is the Dallas Cowboys one because both brands are highly recognizable and toy and clothing manufacturers wish to piggyback on their popularity.  The necessity for trademark protection arose under the Trade Marks Act of 1995, that mandates that licensors must keep financial and quality control over the authorized use of their trademarks. If they don’t, they can lose their rights to them. This is where licensing agreements get tricky—especially for an individual or small company. Enforcing or monitoring quality control of your trademark is time-consuming and expensive, especially if you have to hire an outside law firm for the task.

However, there are pluses to licensing. For example, it gives you a deep reach into new markets without the cost where your corporation can grow through your partner’s marketing and distribution channels. It can also increase brand recognition by giving your trademark a new appearance through placing it on new products and other consumer conduits resulting in an increase of attentiveness among consumers.

So, there you have the breakdown for whether you should sell or license your trademark.

Selling involves a nearsighted, one-time profit and the loss of a lucrative identity you have spent years building. Whereas, licensing offers long-term capital, but at the cost of regulatory paperwork and the trusting of an outside entity to protect the brand from being sullied. In addition, the added expenditure to monitor this entity for quality control issues can be quite expensive. No matter what choice you make, there will always be pluses and minuses. Choosing wisely means being informed with the best information possible. Hopefully, this article helped you in assessing your priorities as to what’s best for you at this moment.

Trademark registration has both legal and financial benefits. The process is quite different in Mexico compared to other jurisdictions. It is simpler to register a trademark in this North American nation than many other countries worldwide. But, is it really necessary to register your trademark in Mexico? What benefits are there in registering trademarks in Mexico and not in other countries? What does the process look like? This article will help you find answers to these questions.

Why Register Trademark in Mexico?

1. Acquisition of exclusive use rights
   
   Mexico is a first-to-file country. This means you must register a trademark for you to acquire exclusive use rights. Failure to register puts you at legal risks. Mexico trademark registration guidelines allow the use of unregistered trademarks. That is why cases of identical trademarks in use emerge. Registering your trademark saves you from such conflicts. In a case where another enterprise is using a similar trademark as yours, the law favors the party that registered the trademark first. This is so in first-to-file countries. Mexico is one.
2. Blocking rights
   
   A trademark registration gives the owner blocking rights. It stops others from using the trademark. Whether you use the label or not, it becomes your reserve. Although, this has a time limit.
3. The Mexican trademark registration system is simplified
   
   You do not want a complex registration process. It would waste your time and cost you money. Registering your trademark in Mexico is simpler. This makes it convenient and cheaper.
4. Being part of a few international trademark agreements makes Mexico standardized. This is beneficial. Your trademark will enjoy international recognition from select nations other than Mexico.

What should a business owner know about Mexican Trademark Registration?

Business is about making money. A trademark can be a source of income or a form of protection from losing money to the owner. The same rights can be used by another owner to take money away from you.

That is why it is important for any business owner to have deep knowledge about Mexican trademark registration. Below are some of the things you must be aware of and their impacts.

1. Mexico is part of eight international trademark agreements, including the Madrid Protocol. Why should this fact matter? Soon you will be scaling. As you open branches in other countries worldwide, you will not need to do another trademark registration in the countries which have agreements with Mexico.
2. It is also important to note that Mexico does not recognize foreign trademark registrations.
3. You do not have any rights on an unregistered trademark. Although, you can challenge an entity’s trademark registration if you provide proof of use of the label under question. The use of this trademark should have occurred earlier than the registration date.
4. The Mexican trademark registrars categorize trademarks as either famous or notorious. These two categories are based on the brand’s popularity. Famous and notorious trademarks each enjoy different rights. The two categories are accorded different protections. As a business owner, it is important to know which category your business lies. This will help you know which benefits you stand to gain.
5. Only wordmarks, 3D trademarks, and designs are allowed for registration. A combination of two or three of them will also do. Others like animations, descriptive trademarks, maps and denominations among others will be rejected.  Non-traditional trademarks are not recognized in Mexico (so it’s impossible to register sound, smell or texture).

Trademark Registration Process in Mexico

Getting your trademark registration done in Mexico is not hard. The process lasts between 6 to 8 months. You do not have to walk from office to office for a successful procedure. Below are the steps:

1. Application submission

   This is the first step. You have to submit an application to the Mexican Industrial Property Institute. Once you submit your application, usually online, the 6-8 month waiting period countdown begins.

   Some of the things to include in your application include:

   • A filled application form with your personal details
   • A logo design
   • Inclusion of the products/services this trademark will protect

2. Application review by the Mexican Trademark and Patent Office

   As usual, there has to be a verification process. Your application will be reviewed and the documents checked to confirm you’ve met the regulatory requirements. In case you fail to meet the requirements, you will have to do a re-application. If you meet all the specifications, you will proceed to the next step – substantive examination. During this step, Mexican Trademark Office will check if there are any similar previously filed or registered marks and if there are, your trademark application may be refused.

3. Application publication

   Getting to this stage is not a walk in the park. During the publication stage, any third party may oppose on the basis of possible confusion with their own trademark. If there are no oppositions, your application will proceed to the next stage. The opposition process in Mexico is different as it doesn’t suspend the trademark if it was opposed. Failure to respond to an opposition does not mean that the application will be abandoned, it simply means that the Trademark Office will issue a decision on the opposed trademark, either by registering it or by denying it.

4. Trademark registration

   Past the publication phase, your trademark will get registered. The registration gives its owner the exclusive right to use the trademark for 10 years, beginning from the filing date. To maintain its rights, a trademark owner has to use the trademark within 3 years after the registration. A declaration of use real and continued use has to be filed 3 years after registration.

5. Trademark renewal

   Trademarks may be renewed every 10 years indefinitely.

How Mexico is different from other countries when it comes to trademarking

Mexico offers a different perspective as far as trademarking is concerned. Where does the variance come from? Below are some of the differences.

• Mexico is a single-class country, meaning that a trademark application may only be filed in a single class.
• Other countries allow you to enjoy trademark ownership rights for the continuous use of a trademark. In Mexico, registration is mandatory for the issuance of a trademark property title.
• Mexico does not give opposition rights to others unless under certain circumstances. Even when the opposition is filed, the application stands and the registration process does not stop. This is quite different from other countries.
• Mexico allows the transfer of trademark rights. In some other countries, this is unallowable.

CONCLUSION

Mexico is different when it comes to trademarking. Their registration process is simple and the system standardized. It’s a first to file country and you can only file your application in one class.

During the trademark registration process, a trademark application is published so that any third-party who believes that they will be harmed if the application is registered can file an opposition to prevent that from happening. If no one opposes the mark during this time, the trademark will usually go on to be registered.

But, how do you oppose the registration of a trademark that is confusingly similar to yours? Likewise, how do you oppose a trademark that has already been registered but that infringes upon your prior trademark rights?

What follows here is a list of things to consider and steps that you need to take to oppose somebody else’s trademark:

1.  Don’t Miss the Deadline to File a Trademark Opposition

If you catch an offending trademark during the publication period, you can file an opposition to that trademark application to attempt to prevent it from being registered. You typically have between 30 and 90 days to file an opposition. However, some countries will allow you to extend this term for an additional 30 to 90 days, while others will not. In the US opposition period is 30 days, in Canada and Australia – 2 months; in the EU, UK, Germany and China it’s 3 months.

If you missed the window to oppose a trademark application during the publication period, you may be able to have the trademark cancelled after it has been registered. The exact process differs from country to country, but in most cases, the national trademark authority offers a process by which you can oppose a trademark that has already been registered and have it revoked or invalidated.

2.  Assess How Similar the Trademark Is To Yours

Trademark owners often utilize trademark monitoring services (like Trademark Angel’s Confusion Watch Service) to let them know whenever somebody is attempting to register a trademark that is confusingly similar to theirs. The trademark owner and their attorney will then assess any offending mark by asking the following questions:

• Is the mark really similar to yours? How so?
• Are the goods and services for which the mark is being registered similar? To what extent?
• Are the channels of trade the same?
• Will the underlying goods be marketed to the same consumers?

If the answer to any of these questions is yes, then opposing the trademark’s registration may be the right thing to do. If you are still unsure, then before deciding to oppose, it may be worth asking a few uninterested parties if they also find the mark to be confusingly similar to yours.

3.  Determine If You Have Sufficient Grounds To Oppose The Trademark

You may only oppose a trademark if you have a real or a legitimate stake in its outcome. In most countries, this means having a previously registered trademark or being able to demonstrate earlier use of a mark that is the same or very similar to the one being opposed.

If you claim to have prior rights in a mark that is confusingly similar to the offending mark, proof of registration will usually be sufficient, as long as you can show that your rights in that mark will somehow be diminished.

While you can file an opposition without having registered a trademark yourself, this may make it much more difficult for you to win. So, if you haven’t registered your trademark, you should file your trademark application before you oppose.

As for the actual grounds for trademark opposition, the most frequently used is a likelihood of confusion. Other grounds for opposing a trademark include:

• The mark is generic in relation to the goods and services for which it is being registered;
• The mark is purely descriptive in relation to the underlying goods and services;
• The applicant doesn’t genuinely intend to use the trademark in commerce; and
• If registered, the trademark would potentially dilute the value of a mark which enjoys common law rights.

The bottom line here is that registration of the trademark will somehow harm you, your brand, and/or your business directly.

4.  Determine If You Have the Budget For A Possible Trademark Opposition

Though there may be certain differences, the procedures for opposing a trademark are generally the same from country to country. You usually initiate the procedure by filing a document called a petition or a notice of opposition and paying a government fee (usually a few hundred dollars, for example, in the US the government fee to oppose a trademark is US$600 per class; in Canada it’s C$1,085.76 per trademark and in the EU it’s €320).

But, while trademark oppositions are easy and inexpensive to initiate, they can go on for years and cost you tens and even hundreds of thousands of dollars before being resolved. If you don’t think you have the budget to fund an opposition all the way to a win, it may not be worth filing an opposition at all.

5.  Decide if You Wanted to Settle the Trademark Opposition Case

You may not have a problem with the other party’s trademark, as long as they amend the application or registration to exclude certain goods. In some cases, you may even ask the other party to enter into a coexistence agreement, which is an agreement between two users of similar marks that wish to use their marks without infringing on one another.

For example, you may propose that the other party limit the underlying goods and services, or that they refrain from using the mark with certain other words. Similarly, you may ask the other party to agree to only use their mark in a certain form, for example, as a stylized mark or with an image but not as a standard character wordmark.

By settling the issue in this way, you can save both you and the other party a lot of time and money, while still protecting your brand. Bear in mind, however, any agreement you make to accommodate a mark that may be confusingly similar yours will also weaken the strength of your trademark to some extent.

6.  Find A Professional To Oppose the Trademark On Your Behalf

The majority of trademark oppositions is resolved early on through some type of agreement and, in some such cases, maybe resolved without the use of an attorney. However, as opposition cases can be very complex and full of potential pitfalls, it is usually best to engage an attorney to assist you throughout the process, if you have the resources required.

7.  Be Patient As Trademark Oppositions Take Time

Trademark oppositions are nothing more than federal lawsuits on paper, but they can be very long and drawn out adversarial proceedings. So, if you decide to oppose, be prepared to be involved with the case for 18 months or longer if the issue can’t be settled early on.

8.  Follow the Course

If you are concerned about how somebody else’s trademark will affect yours, it is likely because your trademark is very important to you and a valuable part of your business. Therefore, once you and your attorney have decided upon an appropriate course of action, follow the plan until the case has been settled or has been litigated to the end and you have reached your desired result.

For more information about opposing someone else’s trademark, or any other trademark issue, please feel free to contact Trademark Angel at 226.246.2979, or visit our contact page to arrange an initial consultation.

If you are reading this article, you may have received notice that your trademark or trademark application is being opposed. This legal challenge is called a trademark opposition.

A trademark opposition is a serious and complex legal process that challenges your right to register a trademark with the Canadian Intellectual Property Office, US Patent and Trademark Office, United Kingdom Intellectual Property Office, etc (depending on where you filed). Thousands of trademark oppositions are filed every year and they can be extraordinarily expensive and time-consuming to defend.

The good news, however, is that the vast majority of trademark oppositions are settled early on in the opposition proceeding. So, just because someone files an opposition against your trademark or trademark application, doesn’t mean that you won’t be able to work things out and keep or obtain a registration for your trademark.

Why is My Trademark Being Opposed?

The trademark registration process includes a period of time in which anybody in the entire world can challenge your trademark application. This is done so that third parties have an opportunity to complain to the trademark office that the trademark should not be registered for some reason. In addition, a third party may also file a petition to cancel your trademark anytime after it has been registered (but this a topic for another article).

A trademark opposition can allege one or more reasons for challenging a trademark or application––most often because the opposer owns prior rights in a trademark that is identical or confusingly similar to the one being registered. But a trademark application may be opposed for many other reasons as well.

What Can I Do If My Trademark is being Opposed?

Regardless of when or why there are several very important things that you must do if your trademark has been opposed:

1.   Seek the Assistance of an Experienced Trademark Attorney

Hire an attorney immediately, even if it’s only for a consultation. If you want to save your trademark or trademark application, you will need professional help. Never do it alone and never approach an opposer directly.

2.   Respond to the Notice of Opposition Before the Deadline

Opposition proceedings have deadlines. If you miss a deadline, the opposer may win automatically.

3.   Analyze the Opposition to See if it has Merit

Analyze the opposition to determine how valid the claim actually is. Are the marks very similar? Was the opposer using their mark before yours? Are the classes the same? Are the descriptions the same? Are there any other similar trademarks?

Compare the trademark description in your application with the opposer’s description in their registration. A frequently raised issue in trademark mark oppositions is that the descriptions overlap and, in this case, the one who used the trademark first in connection with the goods and services described will usually prevail.

4.   Research the Opposer

Is the opposer a major corporation? Is it a small business? Is it an individual? Do they frequently oppose trademarks? Are they represented by an attorney? Understanding who your opposer is will help you determine what chance you have of overcoming the opposition and whether a settlement is even possible.

5.   Determine if a Settlement is Possible.

Settling a trademark opposition is usually in the best interest of both parties involved. This is because trademark opposition proceedings can go on for years and cost both parties a lot of money (with the US being the most expensive jurisdiction).

Compare the trademark description in your application with the opposer’s description in their registration. See if there is a common ground or a way you can coexist and still protect your brand.

6.   Assess Whether the Mark is Worth Defending

If a settlement is not possible, the trademark may or may not be worth defending. But you first need to analyze the situation before you can decide what’s best for your business.

Check your budget to make sure you have the funds to fight the opposition. If you have no budget to go all the way, it may not be worth trying to defend the mark and you may want to consider the possibility of rebranding. Try to get an estimate of costs (keep in mind that many attorneys can be very vague, so be sure you understand what each step will cost you).

7.   Choose a Course of Action

Continue to work with an experienced trademark professional to choose and implement a course of action and to avoid making critical mistakes, such as trying to contact the opposer directly to explain your use of the mark, or for any other reason.

An experienced trademark attorney can also perform the research necessary to assess the merits of the opposition. He or she will then be able to properly advise you on a course of action that will be in your best interest and guide you throughout the entire process.

For more information or for help defending an opposition filed against your trademark or trademark application, call Trademark Angel.

Trademark Law in Canada: After many years of being anticipated by those in the legal field and laypersons alike, sweeping changes to Canadian trademark law have finally come into effect.

On June 17, 2019, Canada implemented changes to trademark law that, among other things, eliminate the use requirement for trademark registration.

This is the biggest change to trademark law in Canada in recent history, drastically changing the way trademarks are protected and enforced in Canada.

This article provides an overview of the most significant changes to the trademark law in Canada, as well as, important consequences of those changes that you should take note of.

The Most Significant Changes to the New Trademark Law in Canada

The most significant changes to trademark law in Canada are as follows:

●    Proof of Use No Longer Required

Use is no longer required for trademark registration in Canada. An applicant can now apply for trademark registration without having to prove that the mark has been in use or their intent to use the mark.

This eliminates the need to specify a date of first use or foreign registration of the trademark. However, this also provides more opportunities for trademark squatter and trolls to obtain registration for brands that have not yet been registered in Canada.

Note: Use is Still Very Important

Elimination of the use requirement for trademark registration doesn’t mean that use has become unimportant to trademark protection. Use remains an important factor that will be considered when determining if a mark is entitled to protection. Moreover, use remains important for opposing competing trademark applications and for seeking to have a troll’s registration invalidated.

●    Nice Classes

Canada has switched to the Nice Classification system, which is used by most other World Trade Organization countries. Now, an applicant is required to categorize their goods and services into Nice classes and to pay a separate registration fee for each class.

This is very different from the previous system, where one application fee allowed access to every classification and all that was required was a list of the applicant’s goods and services that could cover many, if not all, Nice classes.

This applies to all new applications and all registrations renewed after June 17, 2019, and will result in significantly higher costs for anyone wanting to protect a trademark mark in multiple classes.

●    Increased Filing and Renewal Fees

The filing fee for a trademark application has increased from C$250 to C$330 in 2019, and then again to C$458.00 on Jan 1, 2024, which only includes one class. The filing fee for each additional class is C$100. In 2024 the fee for each additional class is $139. Also, the fee for registration renewals has increased. To renew in one class is now C$400 and C$125 for each additional class. In 2024 the renewal fee has increased to C$555 for the 1st class and C$173 for each additional class.

These fees can add up quickly, especially if you wish your mark to protect multiple classes of goods and services. Consequently, one now needs to be more discerning when deciding which Nice classes to protect. If necessary, registration can be amended during the renewal process to delete one or more classes of goods and services.

●    Trademark Definition Expanded

Canada’s definition of a trademark has been expanded to include holograms, moving images, tastes, scents, textures, and anything else that acts as an indication of the source of goods and services. Applicants now have more ways to create and register a trademark to protect their brand.

●    Divide and Merge

An applicant can now divide a trademark application. Conversely, applications that were previously divided can now be merged into a single application.

The ability to divide and merge applications can be extremely beneficial when the registration for some, but not all, of the underlying goods and services, are being opposed.

This can also speed up the registration for goods and services in some classes, which can then be merged with those in other classes later on.

●    Shortened Terms

The term of trademark protection in Canada has now been shortened from 15 years to 10 years. Registrations issued after June 17, 2019, are now only valid for 10 years. Likewise, any registration renewed after June 17, 2019, will be renewed for 10 years, rather than 15 years.

●    Distinctiveness Required

Registration can now be refused because the mark is not inherently distinctive. Distinctiveness refers to a mark’s ability to distinguish one source of goods and services from others in the mind of the consumer.

Previously, applications for trademark registration were not subject to any examination for distinctiveness. But, under the new law, an applicant may be required to establish that even though the mark is not inherently distinctive, it is distinctive within the context that it is used, or because it has acquired distinctiveness through use in the market.

The new distinctiveness requirement applies to all new trademark applications, as well as, any application that has been examined but is still waiting to be approved, including those examined before June 17, 2019, but not yet approved.

●    Madrid Protocol

Canada has also joined the Madrid Protocol and applicants can now file a Madrid application with the World Intellectual Property Organization (WIPO) to have their trademark registered in multiple jurisdictions around the world.

Previously, an applicant who wanted to register a mark in multiple international jurisdictions had to file and pay for a separate application in each jurisdiction. Now that Canada has joined the Madrid Protocol, obtaining international trademark protection is a lot easier and significantly less costly.

Conclusion

These changes are intended to simplify filing procedures, encourage more trademarks to be registered in Canada, and to align Canadian trademark law with standardized international procedures. However, the elimination of the use requirement and simpler filing procedure also creates more risk for Canadian brands. It is now more important for Canadian businesses to be proactive and to protect their brands by being the first to file.

For more information on applying for trademark registration in Canada, US, UK, EU, Germany, Australia, China, and other jurisdictions contact Trademark Angel. We can help ensure that you get the most protection from your trademark registration. Call us today at 226.246.2979, or visit our contact page to arrange an initial consultation.

Updated on Jan 6, 2024.