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Without an assignment/license, who owns the trademark if the publicly recognized controller of it changes soon after first use?

Raleigh, NC |

Say Person A creates / markets an application with help from his good friend, Person B. A and B brainstorm application names, and A suggests the name that is used for the application, XYZipp. Without a formal entity, XYZipp is first released to the public in A’s name, A and B quickly discuss a more formal partnership and start an LLC called XYZipp Apps a few months later.

1) The XYZipp trademark is not registered, and the app is now sold by the LLC, not in the name of Person A.
2) More apps are created / sold using name variations of the XYZipp mark.
3) No assignment or license to use the trademark is made.

A few years later, A wants to end the partnership. At this point, who owns the XYZipp and XYZipp Apps trademarks? The LLC that bears the name? The partners? Person A?

Attorney Answers 4


  1. Best answer

    Unless there are more facts, and there might be, XYZipp and XYZipp Apps trademarks appear to belong to the LLC by agreement of A & B, and dissolution will need to resolve how LLC assets are distributed.

    You would do well to try to get A & B (I presume you are one of them) to mediate a settlement if this is a valuable asset, which is likely is for you to be here asking about it. So, I suggest you contact an IP attorney to try to work on a mediated settlement. Perhaps A gets the assets and pays B a negotiated royalty to "buy out" B's interest, if any. Or, vice versa B gets the assets and pays A. A mediation is preferable so you agree on the solution rather than having a Judge impose one on you. As an IP mediator, I like MEDALOA (mediation and last offer acceptance) for this type of situation. You know it as "baseball arbitration". Having the mediator choose the best offer from one of the parties if there is no agreement makes the parties think twice about making an unfair offer or not negotiating in good faith as such shenanigans usually result in the last offer from the other party getting imposed.

    Good Luck and choose carefully and negotiate fairly.

    I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.


  2. This is very fact specific; it's going to turn on exactly what happened during the early development, what the written agreements say, and how things have played out to this point. You should go see an IP attorney who can review your documents and help you to understand the position of the company at present.

    No information you obtain from this answer is legal advice, nor is it intended to be. You should consult an attorney for individualized advice regarding your situation. No attorney-client relationship is formed by my responding to your question.


  3. All the facts point to the LLC as the owner of the trademark. But ... there are certainly more facts in play that can only be evaluated by your own trademark attorney.

    The above is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.


  4. Another possible concern for you, unless otherwise defined by contract, might be who owns the copyrights to code in your apps and to other intellectual property. As far as your trademark question goes, the I agree with the first response, which was that a lot depends on the earlier stages of development. In order to fully answer your question, I'd like to know more about what happened between creating the app, naming the app, and forming and LLC. Either way, you should consider contacting an IP attorney who is licensed in North Carolina, as your facts implicate State and common law trademark issues.

    DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting. The law firm of Klish and Eldreth, PLLC offers many flat-rate legal services in the areas of business law and intellectual property to entrepreneurs, small-to-medium size businesses, independent inventors and artists in North Carolina. Your inquires are always welcome. Feel free to call 919-833-5322 for a free phone consultation or email Justin@klisheldreth.com

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