Excell Consumer Prods. v. Smart Candle LLC

To satisfy the real continuity with the past test, the assignee of a trademark must maintain the quality of the goods in a manner that consumers have come to associate with the mark.

Opinion (Aspen): Excell Consumer Products (“Excell”) commenced an action for trademark infringement against its former distributor Smart Candle LLC (“Smart”). The parties disputed the ownership of the trademark “Smartcandle.” Excell contended that it purchased Smart’s trademark rights in the Smartcandle mark through an assignment provision in a 2004 agreement. The court applied the precedential “real continuity with the past” test, in which the court determined whether the assignee of the mark acquired sufficient assets to use the trademark in real continuity with the past. Put differently, the court had to determine whether the successor company had sufficient assets to maintain the quality of the goods in a manner that consumers have come to associate with the trademark. In a case such as this one, where the successor company had purchased only part of the original business, the successor company must have satisfied not only real continuity with the past, but also that the assigning company divested itself of the rights in the trademark and any business activity involving the mark in question. Smart continued to conduct business and use the Smartcandle mark after the 2004 agreement. With respect to this issue, the court held that Excell had not presented enough evidence to prove that Smart had divested itself entirely of the use of the Smartcandle mark. Based on the presumption that the manufacturer owned the disputed mark, however, the Court found for Excell and ORDERED for relief consistent with that finding.