Several news outlets are reporting that Dick’s Sporting Goods has acquired the Maxfli brand from Adidas’ TaylorMade golf unit. In at least one particular news report from the Pittsburgh Tribune Review it was reported that Dick’s Sporting Goods purchased the trademark. While this is likely descriptive enough for everyone to know what happened, I figured I would take this opportunity to explain that trademarks cannot be sold.
A trademark is a name, slogan, logo or other symbol that identifies the particular goods or services. The trademark only has meaning when it is associated with a particular source for the goods or services. What this means is that a trademark does not and cannot exist on its own. A trademark is recognized by law to assist consumers in making intelligent and informed decisions about the goods and services they may which to purchase. The fact that a trademark is considered to be a form of property is only incidental to its primary purpose. A trademark identifies the quality, or lack thereof, that consumers come to associate with the goods or services bearing the trademark.
What this means is that the owner of the trademark does not have a piece of property that can be sold at will. A trademark owner that simply attempts to sell the trademark will cause the trademark to become completely worthless. Such an attempted transaction is legally referred to as a “naked assignment,” which results in the loss of all rights that were previously associated with the trademark.
When one wants to “sell” or acquire a trademark what must be sold is not just the trademark but the good will that has become associated with the trademark. What this means is that in any acquisition of a trademark the underlying business must go along with the trademark. For example, in this situation Dick’s Sporting Goods has purchase the Maxfli brand. In order for the Maxfli brand to continue to be a valid and existing trademark Dick’s Sporting Goods must also have obtained the underlying rights to the product that has been associated with the Maxfli brand. Stated another way, Dick’s Sporting Goods cannot merely purchase the trademark and then place the trademark on a completely different line of golf balls.
Trademarks do change over time so Dick’s Sporting Goods is not forever required to continue to make and sell the same golf balls as those that are currently associated with the Maxfli brand, but in order for the trademark to continue to exist it must have been acquired as a part of an ongoing business operation.
The only other explanation for this story would be that Adidas’s TaylorMade unit did not sell Dick’s the Maxfli brand, but rather is licensing Dick’s to make its own golf balls under that trademark. A trademark license, however, must also carry on the good will associated with the underlying product or service. You cannot license the trademark “Cadillac” and then market a Kia using the Cadillac trademark.