Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc.

Is a summary judgment determination of abandonment appropriate when the record supports an inference that the trademark holder — a small, troubled business — continued to transport and sell trademarked goods in the ordinary course of trade as part of a good faith effort to deplete inventory? The answer is no, because the trademark law requires both discontinuance of all bona fide trademark use in the ordinary course of trade and an intent not to resume such use. 15 U.S.C. § 1127 . Legitimate commercial transport or sales of trademarked goods, even for a failing business, are sufficient to defeat a claim of abandonment.

Ronald Mallett owned federal Trademark No. 2,073,287 (the “Pelican Mark”), consisting of the word “pelican” below an outline of a flying pelican in a circle, for a backpack/ luggage line. His business had enjoyed some modest success but later was set back by dwindling prospects. Nonetheless, Mallett kept plugging, selling a few backpacks and promoting them at trade shows for several years until he assigned the Pelican Mark to Electro Source, LLC (“Electro Source”). Because he continued to transport and sell his trademarked goods in commerce, he never ceased using…