Property, intangible

UPDATE: The parties settled, divvying up the brands.

I haven’t written about “zombie” or “heritage” marks in a long time. I last wrote in 2011, about a suit involving department store brands that Macy’s acquired and rebranded, abandoning the original names of Marshall Field’s, I. Magnin, Burdine’s, Kaufmann’s, Lazarus, Meir & Frank, Rich’s and Strawbridge’s. Macy’s created a “Macy’s Heritage Shop” where it sold T-shirts and tote bags sporting the store names. Macy’s also filed trademark applications for T-shirts and tote bags.

Defendant Strategic Marks is in the business of trying to revive “zombie” brands, or brands that have been abandoned but still have name recognition with consumers. It filed trademark applications for the department store names and started a “Retro Department Stores” website, selling T-shirts with the retro branding on them. Macy’s sued in two different lawsuits.

The opinion is on a motion for partial summary judgment, with Strategic Marks arguing that the use of the department store brands on T-shirts and tote bags is ornamental, not use as a mark.

Macy’s successfully defended the validity of the marks on a theory of “secondary source,”explained this way:

It is a matter of common knowledge that T-shirts are “ornamented” with various insignia, including college insignias, or “ornamented” with various sayings such as “Swallow Your Leader”. In that sense what is sought to be registered could be construed to be ornamental. If such ornamentation  is without any meaning other than as mere ornamentation it is apparent that the ornamentation could not and would not serve as an indicia of source. Thus, to use our own example, “Swallow Your Leader” probably would not be considered as an indication of source.

The “ornamentation” of a T-shirt can be of a special nature which inherently tells the purchasing public the source of the T-shirt, not the source of manufacture but the secondary source. Thus, the name “New York University” and an illustration of the Hall of Fame, albeit it will serve as ornamentation on a T-shirt will also advise the purchaser that the university is the secondary source of that shirt.*

The court concludes that Macy’s trademarks use on T-shirts and tote bags is not ornamental because the marks are associated with the department stores:

Simply because a store has ceased operations does not mean that its proprietor or owner does not maintain a valid interest in the registered trademark of the business. A trademark can still exist and be owned even after a store closes.[fn2] If an accused infringer uses the mark, a consumer may still be confused as to whether the owner of the trademark authorized or licensed the infringer…. Where as here the mark is arbitrary and has a well-known association with a source (as here) rather than constituting some generic term without any such association, and particularly where “TM” appears next to the mark or the accused products, the marks are not ornamental.

[fn2] Although a valid mark may legally be abandoned, 15 U.S.C. § 1127, a claim of abandonment is not asserted here.

Wait, what? If the department store doesn’t exist anymore (putting aside for the moment that there wasn’t an abandonment theory before the court), meaning there is no primary use of the mark, how can the secondary source justification for the validity of the mark on promotional goods still apply?**

Take for example BURDINE’S. Wikipedia reports that the name for department stores was dropped in 2005. The application for T-shirts and tote bags was filed in 2012 at a time when the department store registration was still active, having been renewed in 2003. The examining attorney expressly relied on the registration for department store services, for a brand that hadn’t been used for almost 10 years, when allowing the application for T-shirts and tote bags: “The mark [for T-shirts and tote bags] has become distinctive of the goods as evidenced by ownership of U.S. Registration No. 1799777 on the Principal Register for the same mark for the same or related services.”

So we have a successful strategy for indefinitely extending the lifespan of a zombie brand—put the logo on a few cheap T-shirts before the facially valid registration expires and claim it is a secondary source mark when there is no use of the mark for its primary goods or services.

* The Patent and Trademark Office will register a mark on this theory too. TMEP § 1202.03(c).
** We’ll also ignore “arbitrary.” Several of the marks were originally refused registration because they are surnames.

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