Trademark Abandonment and Naked Licensing: How a Mark Is Lost Through Nonuse or Loose Licensing

Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).

A trademark is abandoned when its owner stops using it with no intent to resume, or when the owner's own conduct, such as licensing without quality control, causes it to lose its significance as a mark. (15 U.S.C. § 1127.) Three consecutive years of nonuse is prima facie evidence of abandonment. Four years without sales puts the owner on the defensive, but it does not end the question. Kolmogorov Law, P.C. litigates abandonment and trademark ownership disputes for businesses in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss a dormant mark that is being asserted against you, or a mark you need to keep alive.

The two ways a trademark is abandoned

The Lanham Act gives two definitions, and either one is enough. (15 U.S.C. § 1127.)

The first is nonuse. A mark is abandoned when its use has been discontinued with intent not to resume. Both parts are required: the use stopped, and the owner did not intend to bring it back.

The second is loss of significance. A mark is abandoned when any course of conduct of the owner, including omissions, causes it to become the generic name for the goods or otherwise to lose its significance as a mark. Naked licensing falls under this second definition.

The three-year presumption and what rebuts it

Intent is rarely admitted, so the statute lets it be inferred from circumstances. Nonuse for three consecutive years is prima facie evidence of abandonment. (15 U.S.C. § 1127.)

Prima facie is not the same as conclusive. Once the challenger shows three years of nonuse, the owner usually has to come forward with evidence that it did use the mark or that it intended to resume. A bare statement that the owner never meant to give the mark up is not enough. A wish to keep the name in reserve is not a plan. Useful evidence includes a documented reason for the pause, such as a supply failure or a regulatory hold, and dated steps toward relaunch.

Shorter gaps can also count. A challenger with less than three years of nonuse gets no presumption and must prove both the nonuse and the intent not to resume without its help.

Token use does not keep a mark alive

The statute defines use as bona fide use made in the ordinary course of trade, and not made merely to reserve a right in a mark. (15 U.S.C. § 1127.) Sales staged only to keep a registration alive, or a parked web page with no goods or services behind it, are what that definition was written to exclude. The line is not always obvious. The Ninth Circuit has said that even a single good-faith use in the ordinary course of trade can defeat an abandonment claim. Thin sales are not the same as no sales.

A live registration does not answer the question either. Registration owners must file affidavits of use or excusable nonuse, first between the fifth and sixth year and then in the year before each ten-year anniversary. (15 U.S.C. § 1058(a), (b).) But a registration can sit on the register for years after sales have stopped. I check the marketplace before I credit the certificate.

Naked licensing: losing a mark by lending it out

A trademark owner may license its mark, and a licensee's use counts as the owner's so long as the owner controls the nature and quality of the goods or services. (15 U.S.C. §§ 1055, 1127.) Licensing without that control is called naked licensing.

The Ninth Circuit treats it as a form of abandonment. Where a licensor fails to exercise adequate quality control, a court may find the mark abandoned, and no subjective intent to abandon is required. (Barcamerica International USA Trust v. Tyfield Importers, Inc. (9th Cir. 2002) 289 F.3d 589, 595-596.) In that case the owner of a wine brand lost the mark and its registration because its oversight of the licensee amounted to occasional informal tastings.

Courts look at control in three ways. Did the license give the owner an express right to inspect and supervise? Did the owner exercise actual control? Could the owner reasonably rely on the licensee's own quality measures because of a close working relationship? (FreecycleSunnyvale v. Freecycle Network (9th Cir. 2010) 626 F.3d 509, 516-518.) Reliance alone is not enough without other signs of control. (Id. at p. 519.)

The defense is not easy to win. The party asserting a naked license faces a stringent standard of proof. (Barcamerica, supra, 289 F.3d at p. 596.)

If you are accused of infringing a dormant mark

Abandonment is a defense to an infringement claim, even against a registration that has become incontestable. (15 U.S.C. § 1115(b)(2).) It is also a ground for cancellation that can be raised at any time, and the court hearing the infringement case can order the cancellation. (15 U.S.C. §§ 1064(3), 1119.)

Build the record before you rely on it. Archived web pages, marketplace listings, distributor inquiries, and test purchases show whether anything was for sale and when. Ask for sales records early in discovery.

Check the dates carefully. If the owner resumed real use before you adopted your name, the old rights may be gone, but the owner's new rights could still predate yours. Our pages on trademark infringement defenses and on cancellation at the Trademark Trial and Appeal Board cover the companion arguments.

If you own the mark

Keep proof of sales under the mark for every year, by product line. If you must pause, write down why and what the plan to resume is, and keep working on it.

Put every license in writing with quality standards and a right to inspect. Then use that right, and keep records of the reviews. Informal permission to dealers, affiliates, or a former partner is where most naked licensing arguments begin. Our page on IP license disputes covers the contract side, and split-ups are addressed in who owns the trademark when partners part ways.

What to bring to the first meeting

• The demand letter or complaint and the registration at issue.
• Whatever you have found about the owner's recent sales, or the lack of them.
• For owners: sales records by year, license agreements, and any inspection or approval records.
• The date you first used your own mark, with proof.

Frequently asked questions

The company accusing us of infringement has not sold anything under that mark in four years. Is the trademark abandoned?

Possibly. Under the Lanham Act, three consecutive years of nonuse is prima facie evidence of abandonment, so four years without sales supports the defense. (15 U.S.C. § 1127.) The owner can respond with proof of actual use or of a real intent to resume. Confirm the nonuse with records before relying on it, because federal courts in California expect abandonment to be strictly proved.

How long until a trademark is considered abandoned?

There is no fixed period. A mark is abandoned when use stops with intent not to resume, which could in theory happen in months. Federal law treats three consecutive years of nonuse as prima facie evidence of abandonment, which gives a challenger a presumption to work with. Use means bona fide use in the ordinary course of trade, not token transactions.

What is a naked license?

A naked license is permission to use a trademark without adequate control by the owner over the quality of the licensee's goods or services. In the Ninth Circuit, which includes California, it can result in abandonment of the mark and cancellation of its registration, even though the owner never intended to give the mark up.

We let a few dealers and affiliates use our logo without written agreements. Could we lose the trademark because of that?

It is a risk worth fixing now. Courts in California's federal circuit ask whether the owner had a contractual right to control quality, exercised actual control, or reasonably relied on a licensee it worked with closely. Reliance with no other sign of control has not been enough. Unwritten permission with no oversight is the pattern that has cost owners their marks. Written licenses and documented quality checks reduce the risk going forward, though they may not restore rights already lost.

Can I start using a trademark that someone else abandoned?

Generally a truly abandoned mark is open to a new user, but the danger lies in being wrong about abandonment. The prior owner may show continued sales you did not find, or an intent to resume. Before adopting a dormant name in California, investigate actual use and consider a cancellation petition if a registration is still on file.

Talk to a California trademark litigation attorney

If a mark that looks dead is being asserted against you, or you need to defend your own mark against an abandonment claim, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is at 327 Magnet, Irvine, CA 92618, and represents businesses in Orange County, Los Angeles, and throughout California.

See also our IP litigation practice page and our guide to trademark cease and desist letters.

This page provides general information about federal trademark law as applied in California and is not legal advice. Outcomes depend on the history of use, the licensing record, and the court.