Trademarks for Sale: Exploring Trademark Auctions

Like any other kind of property, trademarks can be bought and sold on the secondary market. A buyer and a seller can do this directly, but you can also find trademarks for sale at auction, which connects sellers to a wider range of buyers.

Trademark auctions can be great for both the buyer, who could pick up an otherwise unavailable mark and the seller, who may use it to recoup expenses for a project that didn't work out.

Before you rush into a trademark exchange, you should know some of the risks involved.

Trademarks for sale

Trademarks protect words, symbols, and other signals that distinguish goods and services in commerce. Having one allows you to sue competitors that might try to pass off their work as yours, and prevents competitors from acquiring the trademark.

Buyers might be interested in trademark auctions because registering a trademark on your own can be time-consuming and sometimes expensive as well. You or your attorney will need to research whether there's a similar trademark already in use for the same or similar products, complete the paperwork as completely and correctly as possible, and wait.

The U.S. Patent and Trademark Office (PTO), which grants and manages trademarks, says registration can take up to a year, or more if it encounters problems.

A trademark auction allows you to skip those steps and purchase immediate protections. These auctions can occur in person, but online trademark auctions are also popular on general-purpose auction websites and websites specific to buying and selling intellectual property.

Utah intellectual property lawyer Devin Miller says buyers interested in a custom trademark for sale should do the same due diligence that they'd do for a direct purchase. That means ensuring that the trademark for sale is registered and isn't already in use. Some websites also offer expired trademarks for sale, even though they're without value.

"You could go to the main trademark website, the PTO's website, and look at the mark in general," says Miller, founder of Miller IP Law, which helps small businesses and entrepreneurs around the U.S. protect their work. "Look at [the Trademark Trial and Appeal Board, which handles disputes] for any opposition or litigation associated with it. And ... if it had any real value, I'd probably have an attorney do it, because they're going to look at it more in depth and understand what they're looking at."

Pitfalls of buying trademarks

Miller says there are red flags to look for other than old trademarks for sale. One of these is when you're buying a trademark, but not the goods or services the seller used the trademark to protect, and the seller is continuing to sell those products.

"A lot of times, people have gone in after the fact and invalidated those trademarks, because... you're not using [the trademark] how it was originally filed," Miller says.

A 2011 article in World Trademark Review, by BakerHostetler intellectual property attorney Robert BG Horowitz, says courts have been inconsistent about whether to require a transfer of physical assets like a factory for a valid trademark. But it's a risk. If a court is likely to invalidate a trademark, it's not worth much.

Another problem stems from trademarks that the original owner registered with an "intent to use," but never actually used. Horowitz's article notes that this kind of application is not transferable before the applicant submits a Statement of Use to the PTO, specifically to discourage the buying and selling of trademarks.

Miller says competitors could also use this situation in court to invalidate the mark.

"If you're intending to use it, but then you go sell it to someone else, it raises a question," he says. "Did you actually intend to use it? Were you ever going to use it? And did you have a valid basis to actually file the trademark?"

Risks and rewards

Whether you're a buyer or a seller, you should make sure you can answer those questions and others about your trademark. Trademark auctions do require a bit of research and a bit of risk—but under the right circumstances, they can be a great deal for both parties.