By: Jeffrey Pietsch
Naked licensing is not as fun as the name suggests. Rather it can mark the end of a trademark owner’s exclusive right to their trademark. Naked licensing occurs when the trademark owner fails to exercise adequate quality control over the licensee. This usually occurs when a trademark owner grants a third party the right to use a trademark with little or no restrictions. Naked licensing could also occur when a trademark owner fails to enforce quality control provisions in the license agreement. The failure of the trademark owner to control the use of its trademark by third parties may result in the trademark ceasing to represent the quality of the product or service the consumer has come to expect. The Ninth Circuit stated that such licensing is “inherently deceptive and constitutes the abandonment of any rights to the trademark by the licensor.”
In one such case before the Ninth Circuit, a licensee sought declaratory relief against a trademark owner on the grounds that the trademark owner abandoned its rights in the trademark by granting naked licenses to others. The trademark in question, FREECYCLE, was owned by The Freecycle Network (“TFN”) and used by TFN to identify TFN’s services known as “freecycling.” Freecycling is the practice of giving an unwanted item to another so that it can continue to be used as intended.
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isited the “safe harbor” provisions of the Digital Millennium Copyright Act (“DMCA”) in the case UMG Recordings, Inc. v. Veoh Networks, Inc., 101 U.S.P.Q.2D (BNA) 1001. Veoh is a web service that allows users to view videos uploaded by other users. Veoh was sued for copyright infringement by UMG, one of the world’s largest music and music publishing companies. 