Trademark Ownership Depends on Use, Not Creation

By Joel E. Engel III, Woods Fuller Shareholder

Who owns a trademark? The person who comes up with it, or the business that uses it?

This was the question that the Trademark Trial and Appeal Board had to answer in a recent opposition, in which a law firm opposed a trademark application filed by a former associate for the trademark BIRTH JUSTICE shown above that the associate created prior to her employment by the firm.

It was undisputed that the associate came up with the words BIRTH JUSTICE and had the original idea for the related design. The law firm paid the graphic designer that ultimately finalized the logo, but with heavy direction from the associate. The associate left the law firm, and filed an application for the trademark. The law firm opposed the application, arguing that it was the law firm that owned the trademark, not the associate.

The TTAB agreed, and in doing so, noted a few key principles of trademark law.

First, the TTAB explained that it is well settled that merely designing or inventing a symbol does not create trademark rights. So the fact that the associate created the preliminary design of the logo did not confer trademark rights to the associate.

Second, trademark rights are created by use of the trademark. In any controversy over ownership of a trademark, the right to the trademark accrues to the party first to use the trademark, not the first "creator" of the trademark. So if the law firm was the first to use the trademark, then the law firm should be considered the owner.

Third, absent an agreement to the contrary, use of a trademark by an employee generally inures to the benefit of the employer. So when the associate created and used the trademark in the course of her employment by the law firm, the associated trademark rights created by that use went to the law firm.

This result is not particularly controversial, but is a good reminder for individuals and companies that simply coming up with a unique logo does not immediately confer trademark rights. Instead, it is the use of that logo in conjunction with goods or services that creates trademark rights. This is why an intent to use trademark application can be so valuable for clients - it preserves an earlier priority date even though the client has not started using the mark yet.

This is also a good reminder to consider trademark (and other IP such as patent or copyright) ownership in the employment context. The default rule generally is going to provide that the employer is the owner of IP created, developed, or used by the employee in the course of their employment. But written IP policies should make that default rule clear, and if a different result is desired, the parties should execute an agreement accordingly.