What to make of a licence for a famous trade mark?

Way back in 1990, squarely facing the onset of mid-life crisis, this Kat did what any rational IP attorney would do --he decided to write a book. And so he did, on the topic of trade mark licensing, the result of five years of labour. He even got involved in writing a second edition, this time with a co-author. When I ponder what I have written, I recognize that one topic, nascent when I first penned the book, remains untreated. That topic is the treatment of licensing in the context of a famous or well-known mark.

From the American perspective, the basic paradigm of trade mark licensing is clear enough. Focusing on a registered trade mark, a licence will govern the use of all or some of the goods/services for which the mark is registered, subject to satisfying the quality control requirement in order to maintain the source identification function. Moving on to the UK, the paradigm applies in part ("a licence will govern the use of all or some of the goods/services for which the mark is registered"). However, ever since the Scandecor saga, the source identification function seems to have been uncoupled from any quality requirement, even if the metes and bounds of this uncoupling are not fully clear.

As for civil law, in Continental Europe (although I admit I am on a bit less firm ground here) neither the source identification function nor quality control appear to play any appreciable role in connection with trade mark licensing. What is central is simply whether the licensee acts within the terms of the licence and the licence covers all or some of the goods/services for which the mark is registered.

All of this brings me to the question of what is missing in this analysis. In one sense, the answer is that nothing in missing in our treatment -- we have accounted for trade mark licensing in light of the accepted legal constructs, having regard primarily to variations in treatment between the US and the UK positions. Seen from another angle, however, there may be some unfinished business here, namely the treatment of famous or well-known marks.

The basic issue with which I am wrestling is the nature of the correlative relationship between the scope of the trade mark right for purposes of infringement and the scope for purposes of licensing. Under any of the traditional paradigms, as discussed above, there is close (if not precisely a one-to-one) correlation. Whatever unauthorized third-party use the owner of a registered trade mark may sue upon, he may also grant a licence to use the mark in a wholly correlative fashion. There is certainly a degree of indeterminancy here in the sense that a claim for infringement will extend beyond the literal scope of the registered specification. But the indeterminacy is ultimately anchored in a reasonable interpretation of the meaning of the registered goods/services.

When we move on to a famous, or well-known mark, however, this indeterminancy becomes much more pronounced, perhaps unmanageably so. The scope of protection for a given famous mark will very much depend upon the circumstances of that mark. It is well-nigh impossible to suggest ab initio the metes and bounds for the scope of protection in such circumstances. If this is correct, then the proper scope for the licensing of a famous mark becomes daunting -- or worse. While a case-by-case determination of what constitues infringement of a famous mark is workable, even if a bit messy, such a case-by-case approach seems simply unworkable to serve as the basis for defining the scope of a licence of that mark.

If so, this raises the question of whether the licensing of a famous mark is conceptually impossible, or whether the problem lies with the application of any given licence and not with the notion per se of a licence to use a famous mark. This Kat has just begun to try and work out his position regarding these questions. Any thoughts any readers might have are most welcome.

More on the Scandecor case here