Who has rights to company name & logo?

[beekrock]

PA

*******Sorry for the length of this post!********

A non-profit entity that has been using the name "Company X" since 2003 has announced that it was "closing its doors" and would be filing articles of Dissolution in Massachusetts.

The fact is that the "Company X" name was never legally registered in Massachusetts (the state of incorporation of prior named entity), did not file for a fictitious name or change of name, and never filed a federal service mark or trademark. Basically, they simply just began using the name, Company X.

A group of investors, wanting to continue the mission of the so-called Company X, has began preparations to continue the mission by using the same Company X name. The "new Company X" is incorporated under the Company X name in Delaware and has pending service & trademarks for "Company X" and its logo.

The "old Company X" has sent a cease & desist letter to the "new Company X" alleging infringement of proprietary rights and claiming injury to the "old Company X's" goodwill and reputation.

In as much as damages are required for successful civil litigation, how can an entity who has "closed its doors" and stopped all business possibly have any damages?

Which entity, old or new, has superior rights to the name "Company X"? "Old" used it first without any name changes, logo trademarks, or registrations and the "new" has corporate name status in Delaware and pending trade/service marks.

 

[divgradcurl]

PA

*******Sorry for the length of this post!********

A non-profit entity that has been using the name "Company X" since 2003 has announced that it was "closing its doors" and would be filing articles of Dissolution in Massachusetts.

The fact is that the "Company X" name was never legally registered in Massachusetts (the state of incorporation of prior named entity), did not file for a fictitious name or change of name, and never filed a federal service mark or trademark. Basically, they simply just began using the name, Company X.

A group of investors, wanting to continue the mission of the so-called Company X, has began preparations to continue the mission by using the same Company X name. The "new Company X" is incorporated under the Company X name in Delaware and has pending service & trademarks for "Company X" and its logo.

The "old Company X" has sent a cease & desist letter to the "new Company X" alleging infringement of proprietary rights and claiming injury to the "old Company X's" goodwill and reputation.

In as much as damages are required for successful civil litigation, how can an entity who has "closed its doors" and stopped all business possibly have any damages?

Which entity, old or new, has superior rights to the name "Company X"? "Old" used it first without any name changes, logo trademarks, or registrations and the "new" has corporate name status in Delaware and pending trade/service marks.

Trademark rights arise through use of the mark in commerce, so the fact that the trademark is not registered, and the company itself is not registered, is irrelevant to issue of whether or not trademark infringment is occuring. If they had the name first, and they can prove that they have acquired trademark rights to the name and logo, it's their trademark, and you can't use it without permission.

As far as damages are concerned, maybe they are going to use their "goodwill" in another form, just not a corporation. Who knows.

 

[beekrock]

Thanks for the reply!

I was under the impression that when they file for dissolution that everything goes back into the public domain, being that they are a tax-exempt 501 (c) (3) non-profit. Is that not true? The old company is gone, so how can they claim damages?

 

[spmlawyer]

Dissolution

It's not true in NY where dissolution is an involved process often requiring a plan and approval of that plan by a state agency. In some cases, the assets of a not-for-profit, after taxes and debts are paid, are distributed to a similar not-for-profit by court order.

As to the name conflict, if Company X's business was geographically distinct (i.e., limited to Mass.) there is no federal trademark because the name would have to be associated with goods or services in interstate commerce. You could conceivably function under the same name in all other states but Internet exosure could bring you into conflict in Mass.

Even if Company X transacted in interstate commerce, the mere use of the name would not automatically entitle it to common law trademark protection. The name may be descriptive and/or fal short of scondary meaning in the minds of consumers. It's impossible to tell from your fact pattern whether you have a valid position. You need to consult with a trademark attorney who can give you specific advice and counsel.

 

[beekrock]

Thanks again for the replies. One more quickie....

I understand now that trademark rights arise from the use of the mark in commerce, but do trademark rights cease once the use of the mark in commerce has ended (going out of business)?

 

[spmlawyer]

Rights in a registered trademark are perpetual if the trademark owner continues to use the mark on or in connection with the goods and/or services but there are periodic filings that are required in order to maintain registration. Failing such filings the mark would eventually be considered by USPTO as abandoned. I do not believe the mere fact of a company going out of business necessarily abandons the mark as it could be sold as part of a transaction. If someone were to use the "abandoned" mark there may be an owner yet extant who could claim infringement but the sine qua non would still be use of the mark on or in connection with the goods and/or services in interstate commerce.