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Does trademark registration of an imported product require consent?

  1. There is a European company named "UYT Widgets"
  2. They make widgets sold with the trademarks "UYT 1500", "UYT 2050", etc.
  3. A US distributor that buys and resells the UYT widgets, obtained a trademark "UYT" under the widget class in the US. The US distributor hopes the US trademark will protect against the manufacturer using another distributor. Can the manufacturer make and sell in the US, with a different distributor, different widgets or the same widgets under a new product name, such as "TRE 1500" made by "UYT Widgets"?

Foremost, if the US distributor would like the exclusive right to distribute the European manufacturer's widgets, the US distributor needs an exclusive distribution agreement. Trademarks do not confer the exclusive right to sell products. Trademarks protect consumers from becoming confused about who is selling them stuff. Protecting consumers from becoming confused is the real purpose of trademarks -- Trademarks only protect the companies that own them indirectly.

Even in the best case scenario, the European manufacturer would always be able to compete (directly or with other distributors) simply by using a different trademark. Why? Because with different trademarks consumers would always be able to determine whether the product was coming from the US distributor or the European manufacturer.

Yet, the best case scenario seems very unlikely. The result in a legal contest between the US distributor and the European manufacturer may depend on with whom the consumer associates the widgets. Determining who the consumer is associating the mark with may depend on many factors. Does the distributor sell the goods to retailers or direct to the public? How are the widgets marked and who does the marking? Who else is distributing the widgets in the US? Is the US distributor involved in any type of quality checking of the widgets? Did the US consumer recognize the UYT mark prior to the US distributor's sale or resale into the US? Is the US distributor providing any additional services, such as support, warranty work, service contracts, or customization? Why did the European manufacturer allow the registration of the "UYT" mark at the US Trademark Office? Was there any "bad faith" on the part of the US distributor during registration? What other circumstances surround the sale of the widgets? And, even worse, even if every factor was in favor of the US distributor, if the European manufacturer were "surprised" by the US distributor's claim to a trademark, the cost of proving that the US distributor is correct in a court of law would be a very expensive endeavor. Moreover, the European manufacturer, unless they have an ongoing agreement to sell widgets to the US distributor, could simply stop selling them their widgets.

Why is there so much complexity to this question? Curiously, in most European countries, trademark rights are conferred only by the process of registration. So, a strategy like this may have more predictable consequences in European nations. In the US, trademark rights come from three sources: 1) Federal registration, 2) state registrations and state laws, and 3) rights that "spring" from the common law because of actual sale of the trademarked product. In this situation, there is likely a conflict between these rights at various levels. Furthermore, the US law will consider other circumstances, such as, the circumstances surrounding the registration of a mark.

So, if you are looking for exclusive rights to distribute, get an exclusive distribution agreement. If you wish, have this agreement deal directly with the issue of who will own, enforce and enjoy the US trademark rights to avoid any conflicts. An exclusive distribution agreement that assigns the US trademark rights to the benefit of the US distributor would certainly favor the US distributor. If you are thinking of your trademark claim as a indirect way of gaining the exclusive right or control to sell a product in the US without the consent of the European manufacturer, you are clearly headed for an expensive legal battle that you may not clearly win. Consult your trademark lawyer for advice on how to proceed. Your US registration is a valuable right, but, you must exercise some caution if you have not proceeded with the help of a trademark attorney.

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