Using ‘discontinued marks’ is a whiskey affair | Fenwick & West LLP

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[author: Kristen Rovai]

In June 2022, the United States Court of Appeals for the Federal Circuit dismissed a claim filed by Tiger Lily, a UK-based liquor company, for the use of LEHMAN BROTHERS on its whiskey bottles despite the fact that the mark was allowed to expire by its former owner. . The case serves as a reminder to companies looking to use expired trademarks: Just because a trademark has expired doesn’t mean it’s been discontinued.

Before filing for bankruptcy following the 2008 financial crisis, Lehman Brothers Holdings Inc. (Lehman Brothers) was a leading investment banking institution with more than 25,000 employees and $1.5 billion in assets . The LEHMAN BROTHERS brand eventually expired, but continued to be used by Barclays, which purchased the assets of Lehman Brothers, to end the business.

Shortly after the LEHMAN BROTHERS brand expired, the opportunistic Tiger Lily began selling three LEHMAN BROTHERS branded whiskeys which, according to their website, “tell the story of the rise and fall of Lehman Brothers”.

When Tiger Lily applied to register the trademark for use on liquor bottles and for barware, the USPTO granted Barclays opposition to the application. Tiger Lily then appealed, arguing that Barclays had discontinued the mark and that using the mark for use on liquor bottles and for bar services would not cause consumer confusion with the former giant. banking. The Federal Circuit upheld the USPTO’s decision, rejecting Tiger Lily’s two arguments.

The Federal Circuit found that even though Barclays had allowed the trademark to expire, and the trademark was a source indicator for a soon-to-be bankrupt company, the trademark was not abandoned.

By continuing to use the mark in the liquidation of the business (for example, in electronic signatures, web addresses, correspondence, regulatory filings, etc.), Barclays has succeeded in negating the element of non-use of a request for abandonment. Such use, although limited and not directly related to the financial services provided by Lehman Brothers, was sufficient.

Additionally, Tiger Lily could not prove an intent not to resume use, the second element of a discontinuance claim, as Barclays granted Lehman Brothers a perpetual license to use the mark in connection with the continuation of the activities of Lehman Brothers. Thus, the license offered the possibility of continuing to use the mark at any time in the future, even after the bankruptcy proceedings.

Finding that the mark had not been discontinued, the Federal Circuit then determined that Tiger Lily’s use of the mark in connection with liquor bottles and bar sets was likely to cause consumers to confuse products and services as sold by Lehman Brothers. The LEHMAN BROTHERS brand was associated with Lehman Brothers, and the brand appeared frequently in movies, TV shows, and music.

The notoriety of the LEHMAN BROTHERS brand in relation to Lehman Brothers was likely to confuse consumers, especially as Tiger Lily admitted to intentionally seeking to link its whiskeys to Lehman Brothers. While “goods and services [were] distinctly different, the goods and services need not be identical or even competitive in nature to support a finding of likelihood of confusion,” the Circuit said in its ruling.

Finally, the Federal Circuit found that Lehman Brothers distributed alcohol-related products – including decanters, wine gift sets, wine books, bottle holders and coasters – that were still collected, sold and traded by the public at the time of Tiger Lily’s request. , which further increased the likelihood that consumers would confuse Tiger Lily’s products with Lehman Brothers’ products.

Those wishing to use expired trademarks and those acquiring trademarks from bankrupt businesses should consider their own trademark practices in the wake of this case. Companies wishing to use expired trademarks, especially famous trademarks, for their own products or services should be wary of trademark availability. An assignment of the mark or a license agreement with the company acquiring the mark is strongly suggested before use.

As for businesses that acquire trademarks from a bankrupt company, it would be wise to keep a close eye on acquired trademarks and carefully monitor unauthorized use of such trademarks. This extra diligence will put a quick end to unwitting offenders who have mistaken the liquidation of the bankrupt company for the abandonment of the acquired brand.

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