Imitation, The Sincerest Form of Flattery: Whether the Unauthorized Use of a Trademark After the Termination of a Franchise Constitutes Counterfeiting?

Imitation, The Sincerest Form of Flattery: Whether the Unauthorized Use of a Trademark After the Termination of a Franchise Constitutes Counterfeiting?

JFL, 261B

This note examines whether the unauthorized use of a trademark after the termination of a franchise constitutes counterfeiting. Currently, the Sixth Circuit and Ninth Circuit of the United States are divided in answering this question. The Sixth Circuit held that a franchisee’s use of a franchisor’s trademark following the termination of a franchise does not constitute a counterfeit mark under the Lanham Act. However, the Ninth Circuit held that a licensee’s use of a licensor’s certification mark following the termination of the license does constitute a counterfeit mark. While certification marks and trademarks differ in name, the core purpose of each remains the same: to prevent public confusion. Thus, the question remains: is a former franchise’s continued unauthorized use of a franchise’s trademark counterfeiting? This note adopts the holding of the Ninth Circuit: a counterfeit mark exists when a non-genuine mark is registered with the Principal Register for use on the same goods, the Registered mark was in use, and the use of the mark was unauthorized; thus, the unauthorized continued use of a franchise’s trademark constitutes counterfeiting. Though the Sixth Circuit did not correctly apply the Lanham Act, they identified eight criteria for evaluating the likelihood of confusion, a central element of a counterfeiting claim. Therefore, the unauthorized use of a trademark after the termination of a franchise constitutes counterfeiting and can be determined by applying eight criteria from the Sixth Circuit.