Eva's Bridal Ltd. v. Halanick Enterprises, Inc.
United States Court of Appeals for the Seventh Circuit
639 F.3d 788 (2011)
Said and Nancy Ghusein (plaintiffs) owned Eva's Bridal Limited, a dress shop, and licensed the 'Eva's Bridal' trademark to relatives, including Nayef Ghusein and his company, Halanick Enterprises (defendant). The license agreement gave the Ghuseins no supervisory authority over how Nayef ran his store, and the Ghuseins admitted they never exercised any actual control over it. After the license expired, Nayef kept using the mark but stopped paying royalties, so the Ghuseins sued for trademark infringement. The district court dismissed the complaint, finding the Ghuseins had abandoned the mark by granting a naked license, and they appealed.
Whether granting a license to use a trademark, without exercising reasonable control over the nature or quality of the licensee's goods, services, or business, constitutes abandonment of the trademark.