Friday, January 13, 2017

Trump's trademarks

Selling, first and foremost, would not eliminate possibilities of conflicts of interest. In fact, it would exacerbate them. The Trump brand is key to the value of the Trump Organization’s assets. If President-elect Trump sold his brand, he would be entitled to royalties for the use of it, and this would result in the trust retaining an interest in the brand without the ability to assure that it does not exploit the office of the presidency.

First, there is absolutely no requirement that any transaction divesting Trump of the Trump trademarks must have royalties attached.  Lump sums—that is, outright sales—are perfectly acceptable methods of carrying out such transactions.  Fixed license fees with no relationship to sales are also possible.  The lawyer’s claim is a misstatement of the law, and one that should not have been made by anyone with even minimal trademark transaction experience.  I take it that in essence this statement is meant to be coupled with the later, and contestable in its own right, claim that President-Elect Trump shouldn’t have to (comply with the Constitution if that would mean he’d) suffer financially from being President, plus the implicit assertion that lump sums or fixed fees would be less financially attractive than royalties.  But “we think he couldn’t make as much money from a true sale” is not the same as “a sale would entitle him to royalties” and thus continue his financial interest in the brand no matter what. 

Second, to the extent that Trump is in fact (if you believe he is) isolated from information about and management of the brands, he has a bigger trademark problem: that would mean abandoning the mark.  If he is to be the owner, he needs to control the quality of the products and services sold via that mark.  If all he promises to do is step back so that he’s not involved in any decisions but just reaps the rewards, he’s just engaging in naked licensing, which in the US results in the abandonment of the mark.  So this “explanation” is flat wrong at best, backwards at worst.  [I wonder what would happen if someone brought a cancellation petition after he takes office.  I suppose one could claim that the non-blind trust is the legal owner, and is making management decisions, which just happen to inure to his benefit.  At last look, he was personally the owner of record of a bunch of the Trump registrations according to TSDR; I wonder if/when that will change.  But the real point is: without true divestment, no trust arrangement can keep him from having a financial interest in the Trump marks and businesses and thus from being vulnerable to influence in his official duties.]

Now, that doesn’t mean that these misstatements will ever have any consequences for the President-Elect, any more than other, more significant ones have done.  But let’s make a record anyway.

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