Thursday, June 23, 2011

Heard of the band Expose? 11th Circuit addresses "joint endeavors"

What does that video have to do with trademark law? It will help explain "joint endeavors," of course.

Trademark rights are generally established through use of a mark in commerce. Who, then, owns a trademark for a band? The band members? The record company who promotes the band? Expose will help answer that question.

A dispute arose between band members and various entertainment companies. One of the entertainment companies had sued the band members concerning their use of the Expose mark. Nobody had a federal registration. The Court had to determine who actually owned the mark.

The entertainment company argued that it owned the mark because its predecessor had adopted it. The Court explained the law:
Common-law trademark rights are “‘appropriated only through actual prior use in commerce.’” Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1193–94 (11th Cir. 2001) (quoting Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1022 (11th Cir. 1989)). “[T]he use of a mark in commerce . . . must be sufficient to establish ownership rights for a plaintiff to recover against subsequent users under section 43(a).” Id. at 1195. Crystal bore the burden of proving its prior use.

We have applied a two-part test to determine whether a party has proved “prior use” of a mark sufficient to establish ownership: “‘[E]vidence showing, first, adoption, and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.’” Id. (alteration in original) (footnotes omitted) (quoting New Eng. Duplicating Co. v. Mendes, 190 F.2d 415, 418 (1st Cir. 1951)). The district court was required to inquire into the “totality of the circumstances” surrounding the prior use of the mark “to determine whether such an association or notice [was] present.” Id. (internal quotation marks omitted). We have determined that a company proved prior use of a mark sufficient to establish ownership when, among other things, “the distribution” of the mark was “widespread” because the mark was accessible to anyone with access to the Internet, id. at 1196; the evidence established that “members of the targeted public actually associated the mark . . . with the [product] to which it was affixed,” id.; “the mark served to identify the source of the [product],” id. at 1197; and “other potential users of the mark had notice that the mark was in use in connection with [the product],” id.
So, who gets the rights? Band or entertainment company? It depends on who controls the quality of goods/services. If the entertainment company is controlling the quality of the recordings, then it could have rights. Here, that wasn't the case. So the entertainment company had no prior rights to the mark.

Since the entertainment company couldn't prove it had first adopted the mark, the Court needed to address the "joint endeavor" issue:
Because Crystal failed to prove that it first appropriated the Exposé mark, the district court was required to determine the owner of the mark “where prior ownership by one of several claimants cannot be established.” Bell, 640 F. Supp. at 580. The Bell court aptly described this controversy as a “case of joint endeavors.” Id. We have yet to address a trademark dispute of this type, but other courts have consistently resolved such disputes by awarding trademark rights to the claimant who controls the nature and quality of the services performed under the mark. See Robi v. Reed, 173 F.3d 736, 740 (9th Cir. 1999); Polar Music, 714 F.2d at 1571; Ligotti v. Garafolo, 562 F. Supp. 2d 204, 227 (D.N.H. 2008); Bell, 640 F. Supp. at 580; Rick v. Buchansky, 609 F. Supp. 1522, 1537–38 (S.D.N.Y. 1985).

The Bell court applied a two-step approach in this circumstance: “[T]o determine ownership in a case of this kind, a court must first identify that quality or characteristic for which the group is known by the public. It then may proceed to the second step of the ownership inquiry, namely, who controls that quality or characteristic.” Bell, 640 F. Supp. at 581 (footnotes omitted). See also Ligotti, 562 F. Supp. 2d at 217–27; 2 McCarthy, supra, § 16:45, pp. 16-85 to -86 (“Whether the service mark or name [of a performing group] identifies and distinguishes that particular performer combination or just style and quality [is] an issue of fact. . . . The issue to be resolved is whether the mark signifies personalities, or style and quality regardless of personalities.”). In Bell, the members of the band “New Edition” and the companies that had produced, recorded, and marketed their first album disputed the rights to the name of the band. The Bell court ruled that the band members owned the mark because they had first appropriated it, and alternatively they owned the mark under the “joint endeavors” test. 640 F. Supp. at 580–82. The court explained that “the quality which the mark New Edition identified was first and foremost the [band members] with their distinctive personalities and style as performers.” Id. at 582.
Here, the district court properly applied the "joint endeavors" test. The entertainment company hadn't exercised control over the band members, and hadn't taken an active role in scheduling any of the group's performances. The band members controlled the band's image, and thus they were entitled to ownership of the rights at common law.

I can't say that I listened to this band. The Court did sprinkle a number of references to the band's songs as a means of dividing up the opinion. (i.e. "'Seasons Change,' see Expose, Seasons Change, on Exposure (Arista Records 1987), but the law in this Circuit about the requirements for ownership of a trademark or service mark at common law has remained relatively constant.") So, we'll get to thank this 80s band for helping us understand the trademark concept of "joint endeavors." Thanks, Expose.

No comments:

Post a Comment