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Back to the Trademark Dispute

On Behalf of | Nov 23, 2015 | Legal Blog

When Marty McFly and Doc Brown traveled from 1985 to 2015 in a modified DeLorean DMC-12 in the second movie of the Back to the Future trilogy, they visited the town square of fictional Hill Valley and the courthouse played a key role in getting them back to their own time. Little did they know, but in the real year 2015 a real courthouse (albeit in real New Jersey) was the setting for a legal battle over the intellectual property rights associated with the DeLorean brand.

Late last year, John DeLorean’s widow, Sally, filed suit on behalf of her late husband’s estate against a Texas-based business known as the DeLorean Motor Company. According to the complaint, DeLorean Motor Company has
been using the DeLorean name for years to sell hats, pens, notebooks, key chains and other items, even going so far as to license the DeLorean name and images of the DMC-12 to other companies, including Nike, Urban Outfitters and Apple. However, neither John DeLorean (who died in early 2005) nor the DeLorean estate had ever authorized such usage. Consequently, Mrs. DeLorean filed a lawsuit in the U.S. District Court for the District of New Jersey (in 2014) seeking an injunction against further use of the name and unspecified monetary damages.

If we did a bit of time traveling ourselves, we’d see that John DeLorean’s company sold only about 9,000 of the stainless steel bodied DMC-12 in 1981 and 1982 and then filed for bankruptcy protection. John was able to purchase from the bankruptcy proceeding all of his former company’s intellectual property, including the trade dress of the iconic car, the company trademarks, and the design and engineering rights. However, he never put those rights to use.

Mrs. DeLorean correctly argued that there was never been any formal affiliation between the DeLorean Motor Company (of Texas) and the one Mr. DeLorean founded in the 1980’s that produced the futuristic car. But, the DeLorean Motor Company argued that they were entitled to use Web addresses including www.delorean.com and www.deloreanmuseum.org and to commercially use DELOREAN trademarks they had registered with the U.S. Patent and Trademark Office because John DeLorean and his estate had effectively abandoned those marks by not using them for a period of more than three years.

After reaching a preliminary settlement in June, the parties were able to reach a final settlement in October, shortly before the date, October 21, 2015, Michael J. Fox’s Marty McFly traveled to in Back to the Future II and found, among other innovations, flying skateboards, automated dog-walkers and self-drying jackets. Under the terms of the settlement, the DeLorean Motor Company will pay Sally DeLorean an undisclosed sum while allowing the company to retain rights to use the DeLorean Motor Company name, trademarks and logo.

Why It Matters. Unless there’s a Back to the Future IV, we’ll probably never know how Fox’s McFly and Christopher Lloyd’s Doc Brown would have reacted to news of the IP battle, but there are several useful lessons to come from the case (even though it ultimately settled):

1. It is important to register company trademarks in every jurisdiction where the company actively uses them (or intends to sue them). Continued registration and maintenance of active trademarks can lead to incontestability and conclusive evidence of ownership and the exclusive right to use the mark.

2. Continued and appropriate use of trademarks, especially those that have been registered, is essential to enhancing and protecting trademark rights. This is the best to any argument that a mark may have been abandoned.

3. Use a trademark watch service and your own due diligence to remain vigilant about the misuse of your trademark rights. The longer you wait to enforce your rights, the less likely you’ll be able to enforce them, even if you own a time traveling sports car.