Legal Question in Intellectual Property in California
What happens to a registered trademark after the company that owns it goes out of business?
3 Answers from Attorneys
Abandonment is a defense to a trademark infringement claim. A registered trademark is presumed abandoned if it hasn't been used in 3 years. See Los Angeles Dodgers v. Brooklyn Dodgers Sports Bar (http://cyber.law.harvard.edu/metaschool/fisher/domain/tmcases/majleag.htm). That's not the actual name of the case, but you get the idea.
The Attorney above is correct. Alternatively, if you want to save the mark, the business could transfer the IP ownership of the mark to another (example: via assignment). You should contact an attorney to assist you in creating the necessary documentations and meet certain recording requirements if you should decide to transfer the ownership.
Jim Betinol
Attorney, Partner
Withrow and Betinol Law
Intellectual Property, Contracts, and Business
(t) (424) 229-2560
Disclaimer: This communication does not create an attorney-client relationship and such a relationship can only be formed through a signed written agreement. This communication is not legal advice and should not be solely relied upon in making your legal decisions. Any situation depends on many different facts and specific laws that require an in-depth legal consultation to evaluate the best solution for your needs.
A trademark is property, just like the company's office furniture. It can be sold, abandoned or otherwise dealt off. The mere fact that the company is out of business does not mean the trademark is up for grabs. Often, a creditor or legal successor entity will end up owning the trademark.