Pay Attention to Risks, Opportunities of ‘Retired Brands’
By Peter C. Kirschenbaum
Brand names ranging from Coca-Cola to Campbell’s Soup can seem to be a permanent part of the marketplace. However, the vast majority of brands are hardly so enduring—they flourish and then fade.
In some cases, brands vanish from the marketplace because the products they identify have been withdrawn or reinvented. In others, brand names fade because of mergers and acquisitions. Among U.S. airlines and banks, for example, numerous household names have disappeared over the past 30 years as a result of massive consolidation.
What happens to brands that are “retired” in this way? Can they be locked up in the corporate archives of a newly combined company, or do they become available to any and all?
These are worthwhile questions for CPG manufacturers, distributors and retailers to consider. CPG manufacturers or their competitors could very well seek to leverage retired marks given sufficient incentive to do so. Among many other possibilities, this could involve resurrecting an old brand to capitalize on nostalgia for it among consumers who used it in their youth. Leveraging retired brands also could involve launching an eCommerce website that seeks to capitalize on the goodwill that remains associated with a well-regarded retired brand.
It is important to note that, in the United States, trademark rights in a brand are created by using that brand in the marketplace to identify the source of a good or service. Indeed, U.S. trademark registrations are issued only to marks that are in use in interstate commerce. If a mark ceases to be used, eventually its registration will be cancelled.
In addition, brand owners’ trademark rights generally are limited to the goods or services they offer under the brand name in question, and to closely related goods or services. In other words, the same brand can be used to identify distinctly different goods and services at the same time (as one key example, Delta faucets and Delta Airlines).
U.S. law also provides to trademark registrants remedies against parties who either infringe their marks or engage in unfair competition, chiefly through false and misleading representation. The distinctions between infringement and unfair competition, which we will revisit, are important.
Protecting A Retired Brand
Here are some steps that brand owners can take to protect retired brands from unwanted use by other parties:
Continue Some Use of The Retired Brand — If possible, brand owners should continue using their retired brands in some limited fashion. For example, a top discount store chain could maintain a section of its website that offers items for sale that bear the names of former retailers that the chain has acquired. By continuing some use of these brands, the discount chain can argue that it has not completely abandoned these heritage names.
Trademark-Watching Services — Brand owners often subscribe to trademark-watching services so that they can be alerted to possible new infringements. By using such services to spot new uses of retired brands, brand owners will stand a better chance of identifying parties that are attempting to take a “free ride” on the goodwill that they created in their retired brands.
Include Retired Brands in the Company’s History — Many brand owners compile a corporate history that they make available on their website and elsewhere. It is important to include in these histories explicit references to the brands of heritage organizations that have become part of the current brand owner through merger or acquisition. By highlighting the significance of the retired brands that are associated with the heritage organizations, the brand owner helps maintain a connection between the current brand owner and the retired brands.
Refocus Enforcement Strategies — When a brand is actively used in the marketplace, it makes sense to view trademark enforcement through the lens of trademark infringement. In other words, you consider whether another party’s use of a current brand creates a likelihood of confusion with respect to the source of products or services that the brand owner currently offers. After a brand is retired, however, enforcement strategies need to be viewed primarily through the lens of unfair competition: Is another party’s use of a retired brand suggesting an affiliation with the brand owner, or one of the brand owner’s predecessors, that in fact does not exist?
Using A Retired Brand
If your company would like to revive a brand, under the right circumstances it is possible to do so without encountering problems. Keep in mind that if the mark in question has been an important part of a brand owner’s history, it will be difficult for another company to adopt the mark without objection. However, if the retired brand previously was used in a clearly distinct field, this broadens the possibilities. When selecting a retired brand as the name of a new product or service, be sure the mark is from an industry that is completely unrelated, as in the prior example of faucets and airlines.
Also, avoid suggesting any affiliation with the company that previously used the retired brand. If you select a retired brand for your new product or service, and you plan to market it with references to the company that previously used the brand, possibly even employing phrases such as “in the tradition of,” trouble will likely ensue. Your use of the mark should be truly new.
In conclusion, there are many legal challenges associated with retired brands, both for the brand owner and the would-be new adopter. Advice from experienced trademark counsel is recommended before “retiring” a well-known brand or attempting to re-use a brand that another party has retired.
Veteran trademark and brand management attorney Peter C. Kirschenbaum is Senior Counsel in the New York City office of the national law firm LeClairRyan. He can be reached at peter.kirschenbaum@leclairryan.com.