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Millenials and other people who loved 90s music will probably recognize the title as a hit song from the eccentric musical group Primus. The phrase is an offshoot of the phrase “your name is mud” which, as I found out when doing some due diligence for this post, was not coined by Dr. Samuel Mudd, the man who treated John Wilkes Booth after his assassination of Lincoln. But I digress.

Brand owners and people who have popularized their likeness have a strong interest in protecting their name from being drug through the mud. If a brand is allowed to be drug through the mud, be it by the brand owner itself or someone who the brand owner has allowed to use the trademark, the trademark may become so weak and unable to identify the original source that it is deemed to be lost. When this happens, all the goodwill that a brand owner has developed over the years and all the millions of dollars that went into building the brand are forfeited to the dreaded pit of abandoned trademarks.


So you could understand why Donald Trump, the real estate magnate and famed developer of luxury condos and hotels, would sue a company for attaching his name to a pair of dilapidated casinos in Atlantic City. At one time, Trump controlled a corporate entity that owned a few casinos in Atlantic City: Trump Plaza and Trump Taj Mahal. When Trump exited the casino space many years ago, Trump sold the hotels to a separate company, but he allowed the company to retain the Trump name as part of a licensing agreement. Now in 2014, the casino properties that once were controlled by Trump (and which still bear his name) have fallen into disrepair and failed to maintain the high standards of quality and luxury that Trump provided in the licensing agreement. Because the casino management company had breached the licensing agreement, Trump wants to use his own signature line “You’re fired.”

“Right, so Trump is trying to class up the place with his pompous air that he flaunts so regularly on TV,” you might say. But Trump does have a valid concern here. After all in licensing a trademark, an owner of the mark must be careful not to allow “naked licensing”, the wholesale allowance of trademark use by others by the trademark owner. Ordinarily, when we talk about a trademark we talk about a brand of a single company or source. But what happens when there are multiple distributors or sellers that put the trademark on their products? For example, does the NFL benefit when a company produces fancy baseball caps that bear a team’s logo? The short answer to these questions is that the trademark owner does benefit, even if they themselves do not make the product. Consumers still recognize the trademark on the product, and that is worth something to the trademark owner. Trademark laws recognize this relationship and consider such a relationship as value contributed to the trademark owner.

This concept (deemed as the “related company” rule) permits trademark owners to license their trademark to others. Trademark owners are free to license use of their trademarks to anyone, but the trademark owner must ensure that the goods or services put on the market by the licensed user meet the trademark owners’ quality standards. If the licensed user misuses the trademark or puts it on shoddy goods that do not rise to the standard of the trademark owner, the reputation of the trademark is harmed and the brand can no longer be taken as an indication of source to consumers. Imagine if Tiffany’s licensed its trademark to a jeweler that was using the famous blue box and elegant TIFFANY name for jewelry made with stainless steel and cubic zirconia. Clearly, such jewelry doesn’t rise to the high standards Tiffany’s places on its jewelry and over time (if the licensed user had substantial sales), consumers would no longer be able to trust that the TIFFANY name is synonymous with quality.

Similar considerations exist here. By allowing the casinos to continue operation in a substandard state not characteristic of the TRUMP name, Donald Trump would be damaging the value of the brand. Consumers could no longer rely on TRUMP as an assurance of consistency in quality of the services being offered. So the Donald has to come in and crack the whip or else he loses his mark completely.

Besides, mud is awfully damaging to nice, Italian wool suits. 

 


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