1201.03 Use by Related Companies
Section 5 of the Trademark Act, 15 U.S.C. §1055, states, in part, as follows:
Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies, such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration, provided such mark is not used in such manner as to deceive the public.
Section 45 of the Act, 15 U.S.C. §1127, defines "related company" as follows:
The term "related company" means any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used.
Thus, §5 of the Act permits applicants to rely on use of the mark by related companies. Either a natural person or a juristic person may be a related company. 15 U.S.C. §1127.
The essence of related-company use is the control exercised over the nature and quality of the goods or services on or in connection with which the mark is used. Noble House Home Furnishings, LLC v. Floorco Enters., LLC, 118 USPQ2d 1413, 1421 (TTAB 2016). When a mark is used by a related company, use of the mark inures to the benefit of the party who controls the nature and quality of the goods or services. Id. This party is the owner of the mark and, therefore, the only party who may apply to register the mark. Smith Int’l. Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981).
Reliance on related-company use requires, inter alia, that the related company use the mark in connection with the same goods or services recited in the application. In re Admark, Inc., 214 USPQ 302, 303 (TTAB 1982) (finding that related-company use was not at issue where the applicant sought registration of a mark for advertising-agency services and the purported related company used the mark for retail-store services).
A related company is different from a successor in interest who is in privity with the predecessor in interest for purposes of determining the right to register. Wells Cargo, Inc. v. Wells Cargo, Inc., 197 USPQ 569, 570 (TTAB 1977), aff’d,606 F.2d 961, 203 USPQ 564 (C.C.P.A. 1979).
See TMEP §1201.03(b) regarding wholly owned related companies, §1201.03(c) regarding corporations with common stockholders, directors, or officers, §1201.03(d) regarding sister corporations, and §1201.03(e) regarding license and franchise situations.