The start of a new year is a great time to take stock of where
your company's business has been and where it is headed.
If you have not done a trademark audit within the last few years,
here are five good reasons why you should make it a priority in
1. You may identify gaps in your registration coverage.
Often, taking a fresh look at a company's trademark
portfolio reveals significant gaps that should be filled. An
attorney conducting a trademark audit will be on the lookout
Failure to seek registration of important marks
Registrations covering fewer than all goods/services
Registrations covering fewer than all countries
Registrations containing unnecessary disclaimers
Registrations on the Supplemental Register
Ownership not properly recorded
Section 15 (incontestability) declarations not filed
It is much easier to address issues like these as a matter of
routine trademark portfolio maintenance, rather than in response to
a crisis created by a third party's unauthorized use of the
company's trademarks or some other external event.
2. You may wish to weed out applications and
registrations that lack commercial value.
It is advisable to periodically trim the deadwood from your
trademark portfolio so that you can better manage and direct your
company's trademark resources. A trademark audit is a
good opportunity to identify trademark applications and
registrations that should be designated for abandonment.
3. You may uncover potential risks, such as infringement,
breach of contract, and abandonment risks, that can be managed
before they materialize.
An important component of any trademark audit is a review of how
the company uses trademarks – both its own and those of
others – in the marketplace. In many cases, companies
use the trademarks of third parties in improper ways, yet need only
make some basic changes to come within the scope of the fair use or
nominative fair use doctrines. Similarly, companies can often
avoid infringing and diluting the trademark rights of others with
some thoughtful analysis and counseling. Many companies
inadvertently abandon their trademark rights by improper usage,
including failure to affix the mark to goods or by using the mark
as a descriptive or generic term. It is important to confirm
that the company is not in breach of any agreements or court orders
that may limit its trademark use. These types of problems can
be very difficult to correct once they are identified and
challenged by others, but easy to correct when the company is not
under a microscope.
4. You may not be adequately policing your own licensees
or third parties.
Companies that fail to police their licensees are often leaving
money on the table. A company that licenses its trademarks
should periodically audit its licensees' books to ensure that
royalties are being paid in the correct amount. Licensors
should take appropriate action to ensure that the trademark is
being used properly and the quality of the licensed products is
acceptable. A licensor does not have to conduct regular
inspections in order to meet its obligation to exercise quality
control, but rather remain aware of the quality of the products and
step in if there is a quality problem that could reflect poorly on
Trademark owners should also take steps to ensure that their
trademark is not being misused by others. While it is best to
monitor the marketplace for infringing activity on an ongoing
basis, a trademark audit presents a good opportunity to review the
landscape and identify any third party infringements that require
5. You may benefit from putting in place trademark
An attorney conducting a trademark audit will take a close look
at the company's trademark policies and consider how they could
be improved. Given the rise of social networking and
nontraditional marketing campaigns, the risk that a company's
trademark will be misused – inadvertently or not – by
the company's present and former employees, agents, affiliates,
and partners is greater than ever. It is therefore
increasingly important that the conduct of these parties be
addressed in clear, written policies.
There are many good reasons to conduct a trademark audit.
Resolve to audit your trademark portfolio in 2013!
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