[author: Kristen Rovai]

In June 2022, the U.S. Court of Appeals for the Federal Circuit rejected an application filed by Tiger Lily, a UK-based liquor company, for the use of LEHMAN BROTHERS on its whiskey bottles despite the trademark having been allowed to expire by its previous owner. The case serves as a reminder for companies looking to use expired trademarks: just because a trademark has expired does not mean that it has been abandoned.

Before filing for bankruptcy in the wake of the 2008 financial crisis, Lehman Brothers Holdings Inc. (Lehman Brothers) was a premier investment banking institution with more than 25,000 employees and $1.5 billion in assets. The LEHMAN BROTHERS trademark eventually expired, but continued to be used by Barclays, which bought the Lehman Brothers’ assets, in winding down the business.

Shortly after the LEHMAN BROTHERS trademark expired, the opportunistic Tiger Lily began selling three LEHMAN BROTHERS-branded whiskeys that, according to their website, “tell the tale of the rise and fall of the Lehman Brothers.”

When Tiger Lily applied to register the trademark for use on alcohol bottles and for bar services, the USPTO granted Barclays’s opposition to the application. Tiger Lily then appealed, arguing that Barclays had abandoned the trademark and the use of the trademark for use on alcohol bottles and for bar services would not cause consumer confusion with the former banking giant. The Federal Circuit affirmed the USPTO’s decision, rejecting both of Tiger Lily’s arguments.

The Federal Circuit found that even though Barclays had allowed the trademark to expire, and the trademark was a source indicator for a bankrupt company that was soon to be nonexistent, the trademark was not abandoned.

By continuing to use the trademark in the winding down of the business (e.g., in email signatures, web addresses, correspondence, regulatory filings, etc.), Barclays successfully negated the nonuse element of a claim for abandonment. Such use, though limited and not directly related to the financial services Lehman Brothers once provided, was sufficient.

Additionally, Tiger Lily could not prove an intent not to resume use, the second element of a claim for abandonment, because Barclays granted Lehman Brothers a perpetual license to use the trademark in connection with Lehman Brothers’ continuing business. Thus, the license provided the opportunity to continue use of the trademark at any point in the future, even after the bankruptcy proceedings.

Finding that the trademark had not been abandoned, the Federal Circuit then determined that Tiger Lily’s use of the trademark in relation to alcohol bottles and bar services was likely to cause consumers to confuse the goods and services as being sold by Lehman Brothers. The LEHMAN BROTHERS trademark was famously associated with Lehman Brothers, and the trademark frequently appeared in movies, TV shows and music.

The fame of the LEHMAN BROTHERS trademark in relation to Lehman Brothers was likely to create confusion among consumers, especially since Tiger Lily admitted that it intentionally sought to draw a connection between its whiskeys and Lehman Brothers. While the “goods and services [were] distinctly different, goods and services need not be identical or even competitive in nature to support a finding of likelihood of confusion,” the Circuit said in its decision.

Finally, the Federal Circuit found that Lehman Brothers had distributed alcohol-related products—including decanters, wine gift sets, wine books, wine carriers and coasters—that were still being collected, sold and traded by the public at the time of Tiger Lily’s application, which further increased the likelihood of consumers confusing Tiger Lily’s products with Lehman Brothers’ products.

Those wishing to use expired trademarks and those acquiring trademarks of bankrupt companies alike should reflect on their own trademark practices in the aftermath of this case. Companies that wish to use expired trademarks, especially famous trademarks, for their own products or services should be wary of the availability of the trademark. An assignment of the trademark or a licensing agreement with the company acquiring the trademark is strongly suggested prior to use.

As for companies acquiring the trademarks of a bankrupt company, it would be wise to keep a diligent eye on the acquired trademarks and police unauthorized use of those trademarks thoroughly. This extra diligence will put an early stop to unwitting infringers who mistook the winding down of the bankrupt company for the abandonment of the acquired trademark.