by Traverse Legal, reviewed by Enrico Schaefer - December 9, 2010 - l. Trademark Licensing
The naked license defense to trademark infringement has been resurrected by the Ninth Circuit Court of Appeals. In the trademark infringement case of FreecycleSunnyvale v. Freecycle Network, the court held that by permitting a naked license to the user of a trademark resulted in the loss of trademark rights due to lack of any control over quality for use of the trademark. The case involved a claim brought by FreecycleSunnyvale, which was a local chapter of a national group formed to promote free recycling by providing an unwanted item to a stranger so that it can continue to be used for its intended purpose and therefore be recycled. The local chapter was provided permission to use Freecycle Network’s FREECYCLE trademark in connection with a Yahoo! Groups discussion forum. Subsequently, there was a dispute over the use of the mark and FreecycleSunnyvale saw the declaratory judgment that Freecycle Network had abandoned the mark by engaging in naked licensing in permitting the use of its mark without the right to control, or exercising any actual control, over FreecycleSunnyvale’s local activities.
The court held that in order to maintain trademark rights, the licensor must show it “exercised adequate quality control over the license”. The naked license defense is a legitimate defense to a trademark infringement claim when there is permission to use the license without controls. The import of the Sunnyvale case is that when a trademark holder is licensing a trademark that the best course of action is to provide for specific contractual rights of control over the licensee’s use of the mark in order not to be put in a position to have the naked license defense asserted against you as a trademark holder.
Traverse Legal provides experienced trademark attorneys who can assist with your trademark license and provide the necessary licensing language to preserve your trademark rights. Contact an experienced Traverse Legal Attorney today for a flat fee quote concerning your trademark license.
As a founding partner of Traverse Legal, PLC, he has more than thirty years of experience as an attorney for both established companies and emerging start-ups. His extensive experience includes navigating technology law matters and complex litigation throughout the United States.
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.
