Yes. Trademark rights can be lost through naked licensing. If a trademark owner fails to exercise reasonable control over the licensee’s products or services, the trademark may cease to function as an accurate identifier of the source of the product or services. The purpose of a trademark is to inform consumers about the source of a product or service. Consumers rely on them in making purchasing decisions. They develop an understanding of the nature and quality of a product or service that is marketed under a particular brand name. Naked licensing essentially results in making the licensee rather than the trademark owner the true source of a product or service.
Trademark laws are not only intended to protect the rights and interests of trademark owners. They are also intended to protect consumers from being misled about the nature, quality or source of a product or service. Because naked licensing amounts to giving up control over the nature or quality of the product or service marketed under the trademark, naked licensing can result in a finding that the trademark owner has abandoned the trademark. The USPTO or a court may cancel a trademark if it finds that the trademark owner has abandoned it through naked licensing.