The Standard in Preventing Trademark Abandonment?

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Like many industries, there has been much brand consolidation. The petroleum industry is a good example. I recall pumping gas in Iowa back in the late seventies — at a Phillips 66 gas station (recall that a couple of years ago Phillips merged with Conoco). While pumping gas in those days, I vividly remember long gas lines and the price of gasoline doubling between 1978 and 1980.

One gas station brand I thought was long dead, at least until last week: Standard — I specifically recall Standard gas stations being converted to Amoco stations in the Midwest, and then Amoco stations were later converted to BP.

So, imagine my surprise on our recent family trip to Las Vegas, when I snapped the photo above from the In-N-Out Burger parking lot: Standard brand positioned above the Chevron logo?

Then, imagine my further surprise, in researching the history of the Standard Oil Company, to see the same Standard/Chevron gas station signage depicted on Wikipedia, shown below. The photo below appears to have been taken on October 4, 2009, and although the price of gas hasn’t doubled since then, you’ll note the sizable increase over the last two and a half years.

According to the Wikipedia posting, “Chevron Corporation operates several gas stations under the trademark ‘Standard’ in order to retain control over its former trademark (as U.S. trademark law operates under a use-it-or-lose-it rule). This one is located in Las Vegas, Nevada, just west of the Las Vegas Strip.” It also indicates, this example is ”[o]ne of 16 Chevron stations branded as ‘Standard’ to protect Chevron’s former trademark.”

As we have said before, serious trademark owners develop plans to avoid trademark abandonment when brands are acquired, merged, and/or consolidated. No doubt, Chevron is a serious brand owner with an apparent plan in place to avoid abandonment of the Standard trademark. Notably, the Chevron website indicates: “Our company proudly sells petroleum products around the world under the Chevron, Texaco and Caltex brands.” No mention of Standard, at least that I could find. Perhaps because — according to the Wikipedia post for Chevron – only 16 of some nearly 10,000 Chevron/Texaco retail gas stations operate under the Standard brand name.

Of course, there is a delicate but critical balance in avoiding trademark abandonment following mergers and consolidations. Trademark types often will hear this question from brand managers after learning that three years of non-use constitutes presumptive abandonment: What is the minimum amount of use necessary to retain rights in the brand and trademark?

It is a dangerous question — especially when phrased this way – because “token use” of a trademark was rejected as a “use in commerce” in the U.S., back when our current intent-to-use trademark registration system was ushered into law during 1989. In outlawing “token use” as a now failed way of developing trademark rights, the definition of “use in commerce” was amended to add this critical language, requiring the use to be: “the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.”

So, asking how little a use is enough to retain rights, starts to sound a lot like a use made “merely to reserve a right in a mark.” Congress did indicate that what constitutes use “in the ordinary course of trade” will vary from one industry to another. It also noted that “use in commerce” should be “interpreted flexibly” so as to encompass various genuine, but less traditional, trademark uses. And, the Trademark Manual of Examining Procedure (TMEP) notes that these three factors are important to consider: (1) the amount of use; (2) the nature or quality of the transaction; and (3) what is typical use within a particular industry. TMEP 901.02.

What do you think, is operating 16 gas stations out of 10,000 (0.16%) a token use made “merely to reserve a right in a mark,” or a very carefully and intelligently calculated “bona fide use of a mark in the ordinary course of trade” for the retail petroleum industry?

For some additional reading on trademark abandonment issues, see: Dialing in on Trademark Abandonment?

Published In: Administrative Agency Updates, Communications & Media Updates, Energy & Utilities Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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