Plan deters trolls while still allowing for legitimate suits

It is axiomatic that the commercial use of a trademark and not its registration confers enforceable rights in that mark. As basic as it may seem to those well-versed in the field of trademark law, it is apparent that some still misunderstand the U.S.’s use-based system of registration. In Central Manufacturing, the plaintiff was certainly confused. Fortunately, the Seventh Circuit got it right. The district courts should not wait for a defendant to plead cancellation as an affirmative defense to trademark infringement where it is clear that the plaintiff’s registration is invalid. Rather, district courts should adopt the “cancellation-as-best-course” approach enunciated by the Seventh Circuit in Central Manufacturing, and invoke the power to cancel sua sponte when given the opportunity by a plaintiff filing suit without valid rights to the registered mark in question. A more liberal invocation of the courts’ power to cancel promotes each of the three policy components that form the very foundation of trademark law: protecting producers, protecting consumers from confusion, and fostering fair competition. In addition, the cancellation-as-best-course route provides greater certainty regarding the status of trademark rights by putting the public on notice of the district court’s trademark related judgments and refreshing the federal register. It will also reduce the production of trademark thickets thereby releasing marks into the public domain for other producers to make meaningful use. Further, a combination of the threat of cancellation and the award of attorney’s fees creates a powerful situation which may deter trademark trolls from either filing, or threatening to file, meritless trademark infringement suits. Although Stoller was the extreme case due to the nature of his extensive litigation history, Central Manufacturing stands for the proposition that if a party chooses to bring a trademark infringement suit, they better be sure to have credible evidence establishing commercial use. Otherwise, they may not only risk losing their registration, but may be forced to pay the costs of litigation.