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  • Wendi Gundersen

Frittering away your trademark—or the problem of a divided kingdom



(Pictured: Alfonso VII of León, who triggered a half century of war by dividing his kingdom among his sons.)

Do you have subsidiaries or related businesses that use the same or similar marks? If so, you could be in danger of frittering away your mark.

For example, foreign companies frequently set up a US subsidiary without putting a formal agreement in place between the companies. Over time, the subsidiary builds the brand in the US. If the subsidiary is ever spun-off—but there was never a formal trademark license in place—the parent company could lose the US-trademark rights.

Another problem arises with related businesses owned by family members. Siblings might own companies related to a company founded by mom or dad—or inherit one of various subsidiaries. When mom and dad die or retire, disputes could arise about how to use the shared marks. Without an agreement in place, all the companies might have a right to use the mark—creating confusion and a loss in trademark value. 

There are different solutions to these problems, ranging from having the parent directly license the marks to setting up an IP-holding subsidiary that licenses the marks to all the companies—keeping the ownership of the marks clear.

An intellectual-property attorney can work with you to develop a customized plan that works best for your situation. 


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