> Mirco makes products under license from PPS.
> A trademark licensor can be held liable for defective goods produced by their licensees.
> Therefore, PPS shares in the responsibility for damages caused by products on which their trademark appears.
> PPS bares liability even if they are not the manufacturer or may not be the retailer of the products.
> All entities that take part in production or marketing are strictly liable for any injuries resulting from such entity placing a defective good in the stream of commerce.
> This reasoning is based on an always-moving cost-benefit analysis that holds entities which benefit from the sale of defective products are responsible for the costs.
> The Lanham Act permits a trademark owner to license its trademark to a licensee that is a related company.
> The act defines a related company as "any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used."
> Under the Lanham Act, a trademark licensor cannot be completely uninvolved in the manufacturing or they risk forfeiture of the mark.
> If PPS declares they have “nothing to do with the goods” other than placing their trademark on the products then they have failed to exercise the mandated control over nature or quality.
(See Lanham Act § 45, 15 U.S.C. § 1127)