it please the court my name is don b kelly and i represent the defendant appellant in this appeal the district court erred in finding the plaintiffs marks not abandon in this case in its unclean hands ruling and its assessment of damages and as of january one two thousand and fifteen plaintiffs had no mark rights to its march with the words law and management and i think at this point why is that that's that's a strong proposition but what is true what's the authority in the want to number two number two how do you how do you get there when the use of the mark was part of a court or very simply your honor because what happens is you have the you have the omission  licensing but how do you have naked licensing when it's part of a court order it's not well you just have this were uses however you want to it was done pursuant to court order that is in fact naked licensing because naked licensing focuses on the terms whether it be a court order consent decree or an agreement that's what he backed to use the vernacular we probably have a naked license on steroids because there's was a wholesale right to use the name and impersonate a company with no quality control whatsoever and that is was there were there allegations that the quality control of progress who was was  so poor that people no longer thought law managers was a good brain no and that's not the standard with naked licensing with any mark your honor the mark has a degree of quality to it it's not whether it's poor or less it's whether it's consistent and with naked licensing the hallmark is to rid tension of control to reserve and preserve that same level of quality that was not here and what was the proof that that the perception of the quality or the quality itself actually changed well there's no evidence of the proof of the perception it's the mark significance of the confusion as to who is who and that's what we have here when a mark doesn't designate a single source of origin what the it wasn't infringing acts which caused the mark it was the use of the mark in complete compliance with the decrees meaning you may hold yourself out as l managers and that's where this case distinguishes itself this isn't a case where the plaintive failed to police and bad actors under cut its mark this what happened here was the natural progression of what happens when you say you may hold yourself out and call me the same thing as my company send employees out with our uniforms our old uniforms our trucks and things like that talking about a license it's more appropriate to discuss there was the two thousand and twelve order and then there was the two thousand and fourteen there are really two separate documents in there and each rig gave the defendant or mrs smith the right to utilize that name and impersonate the plaintiff so what happens over those two years and this is the adjunct of section eleven twenty seven t acts caused the loss of significance and in this case again the peculiar fact we had in the mission and opening statement the statement of the principal and the office manager a point there which were so significant judge knows remarked upon it in his order he actually said as of the time at the beginning of two thousand and fifteen the ability to distinguish the two companies was god so that the and the ability to to assess whatever damage they might have been from infringement and that's that's a very difficult issue be good for what i'm going to talk about in a second it was gone it was impossible that wasn't due to a wrongful acts of the plaintiffs that was due to the acts and compliant with th divorce decree and again that's what makes this case a different animal than these other naked licensing cases so as of that time in two thousand and fifteen on this record again admissions opening statement and testimony and repeatedly throughout judge noses decision he points to this confusion and when consumers cannot distinguish between two companies you don't have a mark anymore a mark tells consumers where those services come from and it's an exclusive source and that's why this case you have abandoned and judge knows i think he foresaw that and in and rather than uphold the compelled conclusion he said he cited the freestyle case and said that we have an ongoing close relationship actually didn't say ongoing we had a close working relationship which may have been true before but these cases don't hold that a prior close working relationship alone will salvage a naked license in fact those cases have that ongoing relationship and we point out again the peculiar facts of this case at opening statement plaintiff's counsel noted that these parties mourn even talking to each other and this tag zoom to those stanfield cases we mentioned which shows that when you have an adversarial relationship that prior close working relationship exemption goes away so what we have here we've got the hallmarks of section eleven twenty seven abandonment and if it doesn't apply in this case and really what we're saying is  never applies but people are hopelessly confused between two companies you've got loss of mark significance there's another issue in this case which we've addressed and with regard to unclean hands  this rolling is overtly inconsistent from a perceived drill standpoint and i'd like to explain why at page six of the ruling the district court said that missouri lost be used on a contract provision or unclear indicating that there is some ambiguity to this the provisions of the decrees while the determination that a contract is a big is an objective one is based upon a review of a document as a whole on appeal that's it been over review the ruling in this case about what might make it and bigger is not there the decision is devoid of any such analysis it remarks that the meaning of a contract isn't the touchstones inten but there's no discussion of what the intent would be there's no evidence citing what evidence the parties intent or specific provisions of the marital settlement agreement that indicated that in for example there was a provision that pointed out that the actual homes accounts that were given to each of the individuals those if they wanted to sell those they had to give the other side a right to first purchase that was never discussed so that mean that raw ruling that has no explanation in there yet we now have the contradictory statement later on in the opinion that where the court says the judgment expressly limited two years so we're left baffled was it ambiguous or was it not if it was ambiguous then we ask ourselves why didn't the court look at the state court decisions that were filed with the court for  didn't do and which we pointed out are contradictory with what the court and i would submit to the court that if you have a summary judgment ruling that has the at least the potential for collateral estoppel to not even mention in a given deference  parties in the different proceedings we need to remember the plaintiff was an asset in the divorce decree it was an asset so this again we have very unusual facts in this case which compel this sort of understanding mind you though what we had here when judge when judge notes just said no on clean hands now we have tension with what's going on in the state court because the state court issued t preliminary injunction on a summary judgment ruling to the contrary so now that case is on appeal and we've got the tension in there i would also point out on the unclean hands rulin another significant issue which we take issue with them we're not sure how the judge concluded this but the court cited without citation that the only claim of unclean hands the defendant was making was with regard to the solicitation service of customers after july twenty five two thousand won't you back yes your honor we had sixteen or seventeen proposed findings of fact specifically addressed to you know things that were going on before and that's you know at eight twenty in the record so i'm not sure where that stemmed from but we were clearly the evidence in there was mentioning about what was going on before that date so that was an erroneous statement damages the damages award in this case are clearly erroneous in fact there plainly and just the expert testimony was based upon faulty and unsupportable premise that all  defendants revenues were due to infringement and i want to point something out that's very significant here throughout this case from the complaint which was sworn there was the assertion that using the name that was given by the decrees progressive one managers was in and of itself infringing in fact we've cited case law that shows that when one mark incorporates another there is a rebuttable presumption it's infringing in this case the again beyond the complaint saying that using progressive law managers are using managers or management is confusing and infringing there was a summary judgment motion that sought to take it away an opening statement plaintiff again asked to take away the right to use progressive law matters so now whatever his calculations were included two relevance of infringement one of which was clearly not infringement because we were allowed to be progressive one manager so now we are in your  concepts think that the attorneys that were involved at the time didn't have any conception of naked licensing they were trying to divide up the assets of a company which was done and the intention was as the trial of and show the intention was that miss smith should be able to use the same name and or her new name for a period of time the same name for a period of time and then the new name going forward after that but doesn't that from that moment create or at least shortly after when the companies start operating in the same geographic area doesn't that lead to the immediate confusion and in the ban minimum arc i mean there were some shared employees i think are employees who had worked with one of the other there were trucks with different markings driving in the same neighborhood using same same signage in some cases there were checks that were owed to one company that were mailed to the other company doesn't that suggest that the market lost its value at the point that it had been abandoned no it's just that oh that the bookmark had value and that both companies were using the name because it had value  and i had not lost its significance mr smith wanted to use the lawn manager's name because she wanted to operate as if she was still the same company and that was what was done it would have been very confusing still it was confusing but no more confusing than to mcdonald's franchisees owned by two different companies  the point is that as of january first two thousand and fifteen she had a duty to stop using the lawn manager's name so the confusion could subside and that wasn't done and that's what judge knows  their answer but i'm not sure that that technically that applies in other words eleven twenty seven under the definition of abandonment talks about loss of use for three years or non progress at that point in time she's made her company look like it's still lawn managers and she no longer has the right to do so on and that's what judge no he found that as a whole as a user of the name as a licensee she had a duty when she no longer had that right to distinguish your company and not to make it continue to look the same interviews the same confusing mark and he used the same name  so basically this is a holding over case like heat and case was  he had held that the  the license was actually given by randy to linda in the divorce the each had these companies they were each one hundred percent shareholder they reach and prove that he with the company companies we believe that licensee is toppled should apply and there should not be linda should not be committed to bringing this abandonment claim and circuit has repeatedly it applied licensee of stopp adverse relationship between the parties and what's your best case on that particular issue i think if you take a close look at the free cycle case judge knows i think cited it because it's straight at the reasonable reliance on the other party's quality control that can substitute for written terms of control and actual control so the question here is whether there's reasonable reliance these two parties were so it's our position that there was reasonable reliance on the evidence a trial showed that progressive did the same stuff and treatments billing statements were very similar they were following the same business plan connecting with with customers in the same way as are our clients company and so there was reasonable reliance on progressive  quality control in that case as stated in the disjunctive the or but it's not the only case there's a number of cases where there's been a family relationship as i said the divorce settlement agreement is not a model of trademark law but there were just trying to separate these two companies so that the parties go go forward in a smith could set up her progressive line managers and operate her own company and that was the intention of what they were trying to do it probably should approach brought in trademark lawyer but they didn't do that  the other thing about that issue is that progressive didn't offer any independent evidence of loss of significance the statutory definition calls for proof of loss of significance and it's a high burden of proof to prove abandonment and that's that's been recognized by this court and and other courts that it's a high burden of proof  confusion post license confusion equals loss of significance then when do you ever how do you ever distinguish between proof of plaintiff's case and defendant's argument that it's been abandoned because of the same evidence they had no independent evidence of loss of significance there was no survey evidence there was no evidence that any third parties were using the mark or using that the term on managers in any advertising there is no evidence at all a loss of significance that was presented so there just purely relying on the same evidence of loss of confusion that proves plaintiff's case and which judge knows relied upon which is the coast license records of customer confusion phone calls ok turning to the unclean fendant's argument on unclean hands they're trying to turn collateral estoppel on its head basically  they brought the issue into this case they raised it as a defense judge knows felt that he needed to address the issue and he looked at the language of the agreement and found that the words perpetual forever do not appear in the award of customers in the division customer's customers are not trucks customer relationships are not trucks they're not wheelbarrows they're not items of property that can be awarded for ever unless the agreements is forever or perpetual and so he properly interpreted that language and defendant's whole argument in an unclean hands relies on this legal argument that mr smith owns these customers forever it's not a tunnel argument as a legal matter and that's what judge found he also found that it would only go to the question of damages rather than over a liability and so he rejected it based on the law now progressive keeps arguing that what happens in hillsborough should control the federal court we think that's a ridiculous argument collateral estoppel issue preclusion applies to the discretion review by this court so the case was properly on the district court's docket the district court properly addressed the unclean hands issue because progressive brought it into the case as it judge knows ruled first and his ruling is binding on the state court and not the other way around  only have a few seconds left i would just say that the damages rulings were proper based on the case and based on the i wouldn't rather and the ruling on attorney's fees was proper thank you you are first off there's a major issue with the damages to judge knows as we mentioned when he noted that the expert had a clue did revenues from before july two thousand and sixteen customers that were specifically given that linda made an equitable accounting he didn't provide any indication how that mathematics work but in his ruling he did include the revenues in his equitable accounting prohibited solicitation and business with those customers that's a major problem with that damage calculation so not even the equable accounting cure attorney's fees octane fix fitness we are as we look at litigation conduct there's no allegations of misconduct here regard to presentation of issues or anything like that long for second or third the excuse me with regard to abandonment judge no stated even when many things from judge knows but he noted the same evidence shows that the damage to consumers ability to differentiate between plaintiff and defendant was already done by the date infringement began that's abandonment with regard to the three years your honor you asked the question three years of  nonuse is presumed to show intent under the first prong of the abandonment definition in section twenty seven it is not there is no time limit for our second prong for abandoned by loss of distinctiveness so that's all i want to point out if the court has for the questions i'd be happy to see them thank you kelly thank you also in this room we appreciate your argument to the court this morning in the briefing that you have provided us