A trademark is a word, symbol or device used by an entity or an individual capable of indicating a source of goods or services. 15 U.S.C. § 1127. A trademark functions as a source indicator of reputation and reduces consumer deception. Park ‘n Fly v. Dollar Park & Fly, 469 U.S. 189, 198 (1985). Trademarks are powerful tools in commerce, enabling consumers to efficiently identify a single source of a good or service, associate it with a certain level of quality and uniformity and make informed purchasing decisions, making co-ownership inherently problematic.

Joint ownership is disfavored by the law (though not impossible if joint control can be demonstrated) because having multiple owners of a trademark may lead to consumer confusion, weaken the mark and, in extreme cases, lead to trademark abandonment. Yellowbook Inc. v. Brandeberry, 708 F.3d 837, 845 (6^th Cir. 2013). In Durango Herald, Inc. v. Riddle, 719 F. Supp. 941 (D. Colo. 1988), the court favored the abandonment of a trademark rather than permitting it to be divided, illustrating the tension between the functional purpose of a trademark and the contractual expectations of shared ownership. Moreover, the United States Patent and Trademark Office (USPTO) is reluctant to approve co-ownership trademark applications because that runs “contrary to the function of a trademark to indicate singleness of commercial source.” 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 16:41 (5th ed. 2025).

Another critical nuance of trademark co-ownership is that co-owners generally cannot sue each other for trademark infringement, unauthorized use of a confusingly similar mark or dilution when a mark’s uniqueness is diminished. As the court noted in Piccari v. GTLO Prods., LLC, 115 F. Supp. 3d 509, 515 (E.D. Pa. 2015), the purpose of trademark protection is to shield consumers from confusion and to protect trademark owners from others taking advantage of the brand’s goodwill. Therefore, “[a] co-owner with an equal right to use the trademark cannot be an ‘imitator’ at whom the statute is directed.” Id. Co-owners each may use the mark as they wish, as they possess all the rights that come with ownership. Reed v. Marshall, 2025 U.S. App. LEXIS 16326, *15 (5^th Cir. 2025).

Taken together, the case law, the USPTO’s stance and the realities of disputes involving co-owned trademarks mean that it is critical for co-owners to enter into a written agreement that clearly defines their rights and responsibilities. Better still is to vest ownership in a jointly held entity, such as a limited liability company.

Despite this best practice, it is not unusual for inexperienced collaborators, particularly in creative industries like music and entertainment, to form informal “partnerships” without legal guidance and written agreements covering intellectual property. Disagreements are especially problematic since each co-owner has the right to use or license the trademark unless revoked explicitly by contract. And, more troubling, record labels and talent agencies may not be transparent with talent and can take advantage of the unequal power dynamic. For instance, although a lawsuit was never filed, it has been widely reported that the artist and businessman formerly known as Prince adopted a symbol as his name to circumvent his agreement with Warner Bros. Records. That agreement was signed when he was 19 and granted the label ownership of his birth name “Prince,” which Warner trademarked.

Such issues also arise when a co-owned entity dissolves. Trademarks are treated differently from other property because trademarks cannot exist without the indivisible goodwill attached to them. Yellowbook, 708 F.3d at 844. Courts have held that dividing a trademark may amount to an invalid transfer, often referred to as an assignment in gross. This principle is echoed in McCarthy’s treatise: each co-owner “will of necessity use the mark to symbolize good will different from that which the mark previously symbolized.” McCarthy, § 16:42.

If there is no contract in place when an entity is dissolved, courts may apply state dissolution law. Id. Some states, such as Pennsylvania, may cancel trademark registrations if a corporation has been dissolved, while others, such as Hawaii, allow corporations to revoke their dissolution.

To avoid these complications, parties should include provisions in their agreements that address exclusive trademark ownership in the case of dissolution or partnership termination.

For further reading from our website on the topics discussed here, see the following Insights and IP Bits & Pieces®: Trademark Scams, What Trademark Owners Need to Know in 2025 and our Trademark FAQs.