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Seventh Circuit Review

Abstract

It is axiomatic that trademark rights are acquired through commercial use and not registration. This requirement, however, has failed to deter the trademark troll, who adopts, registers and warehouses a mark without the intent to use of the trademark himself, but to use his trademark registration to extort licensing fees out of innocent parties who make rightful use of the mark. This practice runs contrary to the statutory mandate of the Lanham Act and the policies that trademark law was designed to serve. Recently, the Seventh Circuit had the opportunity to rule on this issue when one such trademark entrepreneur filed an infringement suit seeking to enforce his rights in a mark. The problem, however, was that the plaintiff could not provide evidence of any commercial use, despite claiming to have used the mark for almost fifteen consecutive years. In Central Manufacturing v. Brett Brothers, the court affirmed the United States District Court for the Northern District of Illinois’ invocation of two powerful tools to combat the wrongful exploitation of the legal system by a plaintiff: The court ordered the cancellation of the plaintiff’s registration and awarded all attorneys' fees and costs to the defendants. Not only did the Seventh Circuit approve of the district courts’ decision to cancel the plaintiff’s mark, the court stated that “where... a registrant’s asserted rights to a mark are shown to be invalid, cancellation is not merely appropriate, it is the best course.” This Comment reviews Central Manufacturing and proposes that other courts should follow the lead of the Seventh Circuit. The combination of mark cancellation and the award of attorneys' fees and costs to the prevailing party creates a powerful situation, which may deter trademark trolls, such as the plaintiff in Central Manufacturing, from filing or threatening to file meritless suit against innocent parties for use of a mark for which they lack valid ownerships rights. Accordingly, the cancellation-as-best-course rule should become the norm rather than the exception. The practical as well as policy consequences of this proactive approach are also discussed.

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