TMEP 1201.03(c): Common Stockholders, Directors, or Officers

October 2017 Edition of the TMEP

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1201.03(c)    Common Stockholders, Directors, or Officers

Corporations are not "related companies" within the meaning of §5 of the Trademark Act, 15 U.S.C. §1055, merely because they have the same stockholders, directors, or officers, or because they occupy the same premises. Great Seats, Ltd. v. Great Seats, Inc., 84 USPQ2d 1235, 1243 (TTAB 2007) (holding that the fact that both the applicant corporation and the corporate user of the mark have the same president and controlling stockholder, and share the same premises, does not make them related companies); In re Raven Marine, Inc., 217 USPQ 68, 69 (TTAB 1983) ( holding statement that both the applicant corporation and the corporate user of the mark have the same principal stockholder and officer insufficient to show that the user is a related company).

If an individual applicant is not the sole owner of the corporation that is using the mark, the question of whether the corporation is a "related company" depends on whether the applicant maintains control over the nature and quality of the goods or services such that use of the mark inures to the applicant’s benefit. A formal written licensing agreement between the parties is not necessary, nor is its existence sufficient to establish ownership rights. The critical question is whether the applicant sufficiently controls the nature and quality of the goods or services with which the mark is used. See Pneutek, Inc. v. Scherr, 211 USPQ 824, 833 (TTAB 1981) (holding that the applicant, an individual, exercised sufficient control over the nature and quality of the goods sold under the mark by the licensee that the license agreement vested ownership of the mark in the applicant).

Similarly, where an individual applicant is not the sole owner of the corporation that is using the mark, the fact that the individual applicant is a stockholder, director, or officer in the corporation is insufficient in itself to establish that the corporation is a related company. The question depends on whether the applicant maintains control over the nature and quality of the goods or services.

See TMEP §1201.03(b) regarding use by wholly owned related companies.