We have blogged about patent and copyright issues in federal contracting, but what about trademark issues? Trademarks, while not necessarily a direct source of income in the way patents and copyrights are, can be equally important to companies. So, what do government contracting regulations have to say about trademarks?
That’s right, there is no standard FAR or DFARS clause relating to the issue of trademark use and ownership in the context of government contracts. That’s because, historically, trademark ownership was of little value to both sides in a government contract.
A brief history of trademarks and government
Traditionally, the U.S. Government did not consider itself an entity in commerce with any need for trademarks (the various official seals are protected under separate statutes, and the law prevents people from registering official government marks as private trademarks). Until the passage of the Trademark Amendments Act of 1999, the U.S. Government was immune from suit for trademark infringement.
Likewise, contractors, particularly those developing products at the request of the government, saw assertion of trademarks as a potential pitfall in the context of tort liability. Generally, courts have held that a government contractor is immune from tort liability if the product at issue was made in accordance with government-approved specifications and if the government provided the quality control. Assertion of or branding with a trademark, some argued, could be seen as evidence that the product specifications and quality control were really under the control of the contractor, not the government, which could lead to a waiver of immunity.
(Trademarks) times are changing
But times have changed, and attention to trademarks is on the rise, for good reason. From the government’s perspective, agencies have gotten increasingly involved in commercial activity, particularly in certification programs – think “Energy Star” appliances, for example, and the government’s increasing role in health care and other industries.
Additionally, the government has become increasingly aware of the power of its own brand and the potential for problematic consumer confusion. The government now has an interest in asserting trademark ownership for products and services it provides, even if those products are made or services are performed by contractors. And, of course, this extends to the Internet too. Trademark is one of the ways the government (and private companies) can fight off cyber-squatters seeking to sow consumer confusion by registering similar domain names.
From the contractor perspective, as many companies have diversified their businesses, the need to use and protect trademarks in the government space has been driven by the commercial side of the business. An obvious and prevalent example is the Humvee. Originally developed under government contract, its use in conflict gave rise to the commercial Hummer vehicles. General Motors holds (and vigorously defends) trademarks for both (you can find more information here and here).
Some companies have seen trademarks, like copyrights, as a way to limit competition for certain kinds of contracts. If the government’s RFP calls for a specific trademarked brand of product or service, that requirement necessarily limits the pool of responsive bidders to the trademark holder (or its licensees) and opens up responding bidders ‒ and, potentially, the government ‒ to trademark infringement suits.
How to protect your trademarks
With increased interest on both sides of government contract transactions and no standard terms, the trademark situation is kind of a Wild West environment. So what is a contractor or potential contractor to do?
The good thing about the lack of standard terms is that your company can tailor language about trademarks to suit your particular needs. Think carefully about the kind of product or service you are providing, and negotiate trademark issues in advance.
If you are developing a product for the government, make sure to clearly reserve trademark ownership for commercial use.
Is the product or service at issue one you already provide commercially? Be sure to make your trademark ownership rights clear.
Finally, always include a discussion of trademarks along with copyrights and patents with your intellectual property counsel whenever you are bidding on a contract.
Latest posts by Jennifer Atkins (see all)
- How to Protect Your Patent Rights in Government Funded Inventions - February 13, 2015
- What You Need to Know about Trademarks in the World of Government Contracting - October 23, 2014
- 4 Things You Need to Know About CFAA & Government Contracts - May 14, 2014