Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-16096/USCOURTS-ca9-14-16096-0/pdf.json

Parties Involved:
Crazy Horse Consulting, Inc.
Appellant
Russell Road Food and Beverage, LLC
Appellee
Frank Spencer
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RUSSELL ROAD FOOD AND

BEVERAGE, LLC, a Nevada limited

liability company,

Plaintiff-Counter-DefendantAppellee,

v.

FRANK SPENCER, an individual;

CRAZY HORSE CONSULTING, INC., an

Ohio corporation,

Defendants-Counter-ClaimantsAppellants.

No. 14-16096

D.C. No.

2:12-cv-01514-

LRH-GWF

OPINION

Appeal from the United States District Court

for the District of Nevada

Larry R. Hicks, District Judge, Presiding

Submitted May 12, 2016*

San Francisco, California

Filed July 22, 2016

* The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

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2 RUSSELL ROAD FOOD & BEVERAGE V. SPENCER

Before: John T. Noonan, Kim McLane Wardlaw,

and Richard A. Paez, Circuit Judges.

Opinion by Judge Wardlaw

SUMMARY**

Trademark

Affirming the district court’s summary judgment, the

panel held that the plaintiff was the assignee of a valid

trademark co-existence agreement entered into with the

former owner of the registered mark “Crazy Horse” and

therefore had the right to use the mark.

COUNSEL

Kaleb D. Anderson; Lipson, Neilson, Cole, Seltzer, Garin,

P.C., Las Vegas, Nevada; Harold M. Schwarz, III; Stark &

Knoll Co., LPA, Akron, Ohio; for Defendants-Appellants.

Bruno Tarabichi, Owens Tarabichi LLP, San Jose, California;

for Plaintiff-Appellee.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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RUSSELL ROAD FOOD & BEVERAGE V. SPENCER 3

OPINION

WARDLAW, Circuit Judge:

Once associated with a legendary Native American

leader, “Crazy Horse” is now a registered trademark for

“entertainment services, namely, exotic dance performances.” 

We must decide whether Russell Road’s use of the mark

“Crazy Horse III” for its Las Vegas strip club infringes

defendants Frank Spencer and Crazy Horse Consulting’s

rights to the trademark “Crazy Horse.” The district court

granted summary judgment to Russell Road, holding that it

has the right to use the mark because it is the assignee of a

valid trademark co-existence agreement entered into with the

former owner of the registered Crazy Horse mark. We agree,

and therefore affirm the entry of summary judgment in favor

of Russell Road.

I.

The mark “Crazy Horse” has been associated with adult

entertainment since Alain Bernardin opened the celebrated

Crazy Horse Saloon off the Champs-Elysees in 1951. And it

has been associated with heated trademark disputes since

Bernardin sued a London imitator in 1967. See Bernardin v.

Pavilion Properties, 19 R.P.C. 581 (1967).1In the United

States, individuals and corporations have used the “Crazy

Horse” brand for motorcycle gear, whiskey, rifles, and, of

course, strip and exotic dance clubs. Since at least the 1970s,

1 The historical record does not explain why Bernardin chose the name

of the Native American leader for his Saloon. See Bernardin, 19 R.P.C.

at 852.

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4 RUSSELL ROAD FOOD & BEVERAGE V. SPENCER

Crazy Horse nightclubs have opened everywhere from

Anchorage, Alaska to Pompano Beach, Florida.

This case concerns the nature of the right to the

trademark, as distinguished from the trademark owners’

assignment of the right to peaceably use the mark; here, a

“trademark co-existence agreement.” Although the parties’

interactions and arrangements are byzantine, ultimately the

parties’ respective rights are clear.

In January 2006, Carl Reid, a longtime owner of strip

clubs in the Carolinas, successfully registered the marks

“Crazy Horse” and “Pure Gold’s Crazy Horse” for

“entertainment services, namely, exotic dance performances”

with the United States Patent and Trademark Office

(“USPTO”). Years later, Russell Road attempted to register

the mark “Crazy Horse III Gentlemen’s Club at the

Playground” for its strip club in Las Vegas, while Frank

Spencer attempted to register the “Crazy Horse” mark for his

chain of strip clubs in Ohio. The USPTO refused each of

these applications under 15 U.S.C. § 1052(d) because it found

a likelihood of confusion with Reid’s previously registered

marks. Each party then pursued alternative means to obtain

the rights to use the mark “Crazy Horse.”

A. Russell Road’s Claim to the Crazy Horse Name

Russell Road’s claim to rightful use of the Crazy Horse

mark derives from the assignment of a trademark coexistence agreement between Reid and Crazy Horse Too A

Gentlemen’s Club, a Nevada corporation owned by John

Salvador. In September 2007, Crazy Horse Too attempted to

register that name as a mark for its Las Vegas strip club. 

Crazy Horse Too’s application, like those filed by Russell

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RUSSELL ROAD FOOD & BEVERAGE V. SPENCER 5

Road and Spencer, was refused based on the likelihood of

confusion with Reid’s previously registered marks. Crazy

Horse Too next initiated cancellation proceedings to

invalidate Reid’s “Crazy Horse” and “Pure Gold’s Crazy

Horse” marks. In July 2009, the USPTO’s Trademark Trial

and Appeal Board (“TTAB”) notified Reid of the cancellation

petitions and ordered Reid to respond. When Reid failed to

respond, the TTAB issued a default notice.

Before the TTAB issued default judgments, however,

Reid and Salvador, acting on behalf of Crazy Horse Too,

settled the dispute through a trademark co-existence

agreement. Under this agreement, CrazyHorse Too promised

to withdraw the cancellation petitions and “agree[d] not to

oppose, petition to cancel, or otherwise interfere with Mr.

Reid’s use and registration of Crazy Horse and Pure Gold’s

Crazy Horse.” In return, Reid consented to Crazy Horse

Too’s “use and registration” of “any mark that includes the

phrase Crazy Horse provided the mark does not contain the

phrase Pure Gold’s.”

Salvador dissolved the Crazy Horse Too corporation in

April 2011. No longer making use of the Crazy Horse name,

Salvador assigned his rights under the trademark co-existence

agreement to Russell Road on August 16, 2012. Russell

Road paid $2,500 for the assignment.

B. Spencer’s Claim to the Crazy Horse Name

In August 2010, Spencer formed CrazyHorse Consulting,

Inc. (“CHC”) to expand the Crazy Horse brand through

licensing and franchising. In December of that year, Reid

assigned his Crazy Horse trademark rights to CHC. The

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6 RUSSELL ROAD FOOD & BEVERAGE V. SPENCER

USPTO recorded the assignment on January 11, 2011.2 To

date, that trademark registration remains live. See Crazy

Horse, Registration No. 3044028.

C. The Dispute Between Russell Road and Spencer

In late 2011, Spencer learned that Russell Road was

operating a Las Vegas strip club named Crazy Horse III. 

Spencer notified Russell Road that its club’s name infringed

his trademark rights and forwarded an application to license

the use of the mark. Instead of licensing the mark from

Spencer, Russell Road entered into an assignment agreement

with Salvador, acting on behalf of Crazy Horse Too, whereby

Crazy Horse Too assigned Russell Road its rights under the

September 2009 trademark co-existence agreement.

Having secured the rights granted under the co-existence

agreement, Russell Road instituted this action, seeking a

declaratory judgment that its use of the Crazy Horse name

does not infringe Spencer and CHC’s trademark. The district

court granted Russell Road’s motion for summary judgment,

holding that Russell Road’s use of the Crazy Horse name

does not infringe Spencer and CHC’s trademark because the

trademark co-existence agreement between Reid and Crazy

Horse Too was valid, lawfully assigned to Russell Road, and

binding on Spencer and CHC. Spencer and CHC timely

appealed.

2 Around the same time, Reid assigned the Pure Gold’s Crazy Horse

trademark registration to JAT Investments, LLC (“JAT”), a company he

managed. Spencer, CHC, and JAT later entered into a trademark coexistence agreement under which JAT consented to Spencer’s use and

registration of the Crazy Horse mark, and Spencer and CHC consented to

JAT’s use and registration of the Pure Gold’s Crazy Horse mark.

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RUSSELL ROAD FOOD & BEVERAGE V. SPENCER 7

II.

We review de novo the grant of summary judgment. 

Millennium Labs., Inc. v. Ameritox, Ltd., 817 F.3d 1123, 1129

(9th Cir. 2016). Viewing the evidence in the light most

favorable to the nonmoving party and drawing all reasonable

inferences in its favor, we must determine whether there is a

genuine dispute as to any material fact. Id.; Fed. R. Civ. P.

56(a).

III.

It is beyond dispute that a trademark owner may assign

his trademark. See 15 U.S.C. § 1060(a)(1) (“A registered

mark . . . shall be assignable . . .”); see also Electro Source,

LLC v. Brandess-Kalt-Aetna Grp., Inc., 458 F.3d 931, 941

(9th Cir. 2006) (“Indeed, it is not unusual for a troubled or

failing business to sell and assign its trademark . . . .”);

Restatement (Third) of Unfair Competition § 34 (1995) (“The

owner of a trademark . . . may transfer ownership of the

designation to another through an assignment.”). When a

trademark is assigned, “the assignee steps into the shoes of

the assignor.” ICEE Distribs., Inc. v. J&J Snack Foods

Corp., 325 F.3d 586, 593 (5th Cir. 2003) (citation omitted);

see also Carnival Brand Seafood Co. v. Carnival Brands,

Inc., 187 F.3d 1307, 1310 (11th Cir. 1999); Premier Dental

Prods. Co. v. Darby Dental Supply Co., 794 F.2d 850, 853

(3d Cir. 1986). The assignee therefore “acquires not only all

the rights and priorities of the assignor, but also any burdens

and limitations on use that were incumbent on the assignor.” 

ICEE, 325 F.3d at 593 (quoting J. Thomas McCarthy,

McCarthy on Trademarks and Unfair Competition § 18:15

(4th ed. 2002)); see also Sun-Maid Raisin Growers of Cal. v.

Cal. Packing Corp., 273 F.2d 282, 284 (9th Cir. 1959) (“The

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8 RUSSELL ROAD FOOD & BEVERAGE V. SPENCER

assignment of the trademark did not in and of itself cause all

rights under the contract and injunction to vanish magically

as in a puff of smoke.”); Waukesha Hygeia Mineral Springs

Co. v. Hygeia Sparkling Distilled Water Co., 63 F. 438, 442

(7th Cir. 1894) (“No larger claim can be maintained than was

possessed by the source of title, and the right is subject to the

same equities, abandonment, or estoppel which could be

asserted against the vendor.”).

It is also beyond dispute that trademark co-existence

agreements are enforceable. See Sun-Maid, 273 F.2d at

283–84 (affirming an injunction enforcing an agreement to

limit the use of the Sun-Maid mark to raisins and raisin

products); see also Am. Eagle Outfitters v. Lyle & Scott Ltd.,

584 F.3d 575, 579, 586 (3d Cir. 2009) (holding that the

parties’ agreement to consent to the registration of each

other’s eagle marks was a binding contract); Bongrain Int’l

(Am.) Corp. v. Delice de France, Inc., 811 F.2d 1479,

1484–85 (Fed. Cir. 1987) (assigning “great weight” to the

parties’ trademark co-existence agreement, “which would

give both of them the advantages of registration”); Waukesha

Hygeia, 63 F. at 441 (enforcing an agreement that “fixes and

defines the existing trademark of each” party—one to the

Hygeia mark in connection with distilled water, and the other

in connection with natural mineral or spring water). And, like

other contracts, trademark co-existence agreements are

typically assignable. See Britton v. Co-op Banking Grp.,

4 F.3d 742, 746 (9th Cir. 1993) (citing Restatement (Second)

of Contracts, § 317(1) (1981)) (discussing the standard for

proving a valid assignment of rights).

Here, there is no genuine dispute of material fact as to the

validity of the trademark co-existence agreement between

Reid and Crazy Horse Too, or as to the validity of the

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RUSSELL ROAD FOOD & BEVERAGE V. SPENCER 9

assignment of rights from Crazy Horse Too to Russell Road.3

Under applicable state law, “a contractual right is assignable

unless assignment materially changes the terms of the

contract or the contract expressly precludes assignment.” 

Easton Bus. Opp. v. Town Exec. Suites, 230 P.3d 827, 830

(Nev. 2010). Neither exception applies here: The terms of

the trademark co-existence agreement did not materially

change upon assignment. Russell Road obtained only the

rights that Crazy Horse Too had possessed, while Spencer,

CHC, and Crazy Horse Too retained the duties not to oppose

each other’s use of the Crazy Horse mark, to take reasonable

steps to reduce the likelihood of confusion, and so on. 

Likewise, the agreement expressly provides that it “shall be

binding upon and shall inure to the benefit of the parties

hereto, their respective successors, assigns and licensees.”

Spencer and CHC’s other challenges to Russell Road’s

assignment are similarlyunavailing. First, the uncontroverted

record evidence is that Russell Road paid $2,500 to Crazy

Horse Too in consideration for the assignment. Next, Crazy

Horse Too’s failure to use the mark, even if proven, did not

invalidate the trademark co-existence agreement. The

agreement did not require Crazy Horse Too to use the mark,

3 Spencer and CHC argue that the district court abused its discretion by

denying their request for additional discovery. But defendants failed to

“identify by affidavit the specific facts that further discovery would reveal,

and explain why those facts would preclude summary judgment,” as

required to obtain more time for discovery under Federal Rule of Civil

Procedure 56(d). Tatum v. City & County of San Francisco, 441 F.3d

1090, 1100 (9th Cir. 2006) (discussing former Rule 56(f), which is now

Rule 56(d)). Instead, they sought “all documents” and “all

communications” to “investigate the validity of the Consent Agreement

and Assignment Agreement.” The district court properly denied that

broad request.

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10 RUSSELL ROAD FOOD & BEVERAGE V. SPENCER

and the doctrine of trademark abandonment does not apply. 

See generally 15 U.S.C. § 1115(b); Electro Source, 458 F.3d

at 935. Finally, Spencer and CHC’s remaining

arguments—that the trademark co-existence agreement is an

executory contract that cannot be assigned without the

consent of both parties, and that Russell Road breached the

agreement—were not raised before the district court and are

therefore waived. See Armstrong v. Brown, 768 F.3d 975,

981 (9th Cir. 2014).

IV.

Because Russell Road obtained a valid assignment of an

enforceable trademark co-existence agreement, its use of the

Crazy Horse name did not infringe Spencer and CHC’s

registered trademark. Therefore, the district court properly

granted summary judgment in favor of Russell Road.

AFFIRMED.

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