FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SELLER AGENCY COUNCIL, INC., 

Plaintiff-counter-defendantAppellee, No. 08-56791

v. D.C. No.

KENNEDY CENTER FOR REAL ESTATE  8:06-cv-00679-

EDUCATION, INC., a Georgia AHS-MLG

corporation; JOE KENNEDY, an OPINION individual,

Defendants-counter-claimantsAppellants. 

Appeal from the United States District Court

for the Central District of California

Alicemarie H. Stotler, District Judge, Presiding

Argued and Submitted

February 9, 2010—Pasadena, California

Filed September 3, 2010

Before: Sidney R. Thomas and Barry G. Silverman,

Circuit Judges, and Jeremy Fogel, District Judge*

Opinion by Judge Fogel

*The Honorable Jeremy Fogel, United States District Judge for the

Northern District of California, sitting by designation. 

13415
COUNSEL

Arthur A. Gardner and Joseph W. Staley, Gardner, Groff,

Greenwald & Villanueva, P.C., Atlanta, Georgia, for the

defendants-appellants.

Grant J. Hallstrom and Timothy D. Otte, Hallstrom Klein &

Ward, LLP, Irvine, California, for the plaintiff-appellee.

OPINION

FOGEL, District Judge:

Appellants Joe Kennedy (“Kennedy”) and the Kennedy

Center for Real Estate Education, Inc. (“KCREE”) appeal the

district court’s order denying them damages, attorneys’ fees,

and costs in an action for trademark infringement against

Appellees Seller Agency Council, Inc. (“SAC”), RealtyU, Inc.

(“RealtyU”), and Stefan Swanepoel (“Swanepoel”). The district court found that Appellants are the owners of the trademarks in question, but it also determined that Appellants

consented and acquiesced to the use of the marks by Appellees. Appellants argue that the district court erred in finding

consent and acquiescence. We affirm in part, vacate in part,

and remand for further proceedings consistent with this opinion.

I. BACKGROUND

A. Factual Background

Kennedy, the owner of KCREE, created an educational curriculum called the Accredited Seller Representative (“ASR”)

program. In connection with the ASR program, Appellants

developed and registered several trademarks (“the ASR

marks”).1 In 2003, Appellants began to market and earn

1The marks at issue have the following federal registration numbers:

3,071,769; 3,088,326; 3,093,851; 3,139,782; 3,325,443; and 3,240,837. 

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13419
income from the ASR program. A third-party real estate

school would pay KCREE an annual fee (referred to as the

license fee) in order to use the ASR materials to teach an ASR

class. In addition to the license fee, KCREE charged the thirdparty schools a fee for each student in an ASR class, and successful students also would pay yearly fees to KCREE to

maintain their ASR registration.

In 2005, Swanepoel, the owner and president of RealtyU,

approached Kennedy with a business proposition. RealtyU

represented that it could provide KCREE with access to the

RealtyU affiliates across the country and thus to a larger number of students. Kennedy and Swanepoel signed a “Letter of

Intent” on June 28, 2005, agreeing to form a new company,

SAC. KCREE was to transfer the ASR marks to SAC in

return for 49% ownership of the company. RealtyU would

contribute working capital to SAC and own the remaining

51%. Other than teaching fees earned by Kennedy, all student

course fees, provider licensing fees, and renewal fees related

to the ASR marks would belong to SAC, and profits would be

distributed according to the parties’ respective ownership

shares. Neither KCREE nor SAC was required to pay the

annual licensing fee. Kennedy testified that SAC had discretion to waive the licensing fee for RealtyU affiliated schools.

On or about September 8, 2005, the parties executed a

series of formal agreements, including a stock purchase agreement. Among other things, the agreements required SAC to

take the “best overall actions” for the company. SAC was to

acquire the ASR marks upon closing; however, SAC had to

meet certain conditions precedent before the closing could

occur, including the transfer of SAC shares to Appellants.

Although the share transfer never occurred, SAC and RealtyU

utilized the ASR marks between September 8, 2005 and July

12, 2006 without objection by Appellants.

After executing the agreements, Appellants learned that a

significant stream of ASR program revenue was being

13420 SELLER AGENCY COUNCIL v. KENNEDY CENTER
diverted from SAC directly to RealtyU. On July 12, 2006,

Appellants sent a cease-and-desist letter to Swanepoel stating

that “your companies do not have a contract with [Appellants], [and] your continued use of [their] trademarks constitutes trademark infringement.” SAC filed a complaint for

declaratory relief on July 25, 2006, requesting a determination

that SAC was the rightful owner of the ASR marks. On February 2, 2007, Appellants filed counterclaims for trademark

infringement against SAC, RealtyU, and Swanepoel. 

On July 28, 2006, three days after commencement of the

action for declaratory relief, Kennedy sent an email to Tom

Mitchell (“Mitchell”), the Senior Vice President of RealtyU

Group, Inc.2 Kennedy forwarded a complaint of a potential

ASR student who was having difficulty registering for an online ASR course. Kennedy told the potential student that he

was “forwarding this to our IT folks.” Mitchell responded to

Kennedy that it was “[t]aken care of.” More than a year later,

on November 19, 2007, Kennedy sent Mitchell a facsimile

regarding “Candidate Apps.” The cover page read “[f]rom

Kennedy Center to be placed in database.” The facsimile contained several ASR candidate applications and the candidates’

completed ASR course exams. The district court found that

Kennedy had “ask[ed] SAC to make use of the intellectual

property by requesting that it process certificates and certify

members in the ASR program for classes.”

B. The District Court’s Determinations

The district court determined that Appellants are the rightful owners of theASR marks. It concluded that SAC could not

enforce the agreement requiring Appellants to transfer the

intellectual property because SAC had not satisfied the conditions precedent contained in the stock purchase agreement,

including its obligation to issue stock to Appellants. The dis2Based on Appellees’ corporate disclosure statement, RealtyU Group,

Inc. owns RealtyU, Inc. 

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13421
trict court also found that SAC could not enforce the agreement because it had unclean hands: while the stock purchase

agreement required SAC to take the “best overall actions” for

the company, SAC in fact diverted many of the ASR student

course fees to RealtyU rather than keeping the fees itself. 

The district court noted that “[f]rom September 8, 2005,

until July 12, 2006, [i]t is undisputed that . . . SAC had permission or an implied license to use the ASR Trademarks.” It

also concluded that Appellants’ conduct after the July 12,

2006 cease-and-desist letter led SAC, RealtyU, and Swanepoel to believe they had permission to continue using the ASR

marks, and it denied damages and royalties for that period “in

light of [Appellants’] acquiescence to [Appellees’] use of the

trademarks” after the cease-and-desist letter and the initiation

of litigation. For the same reason, the district court declined

to award attorneys’ fees. The district court did, however, permanently enjoin SAC, RealtyU, and Swanepoel from infringing or otherwise making use of Appellants’ intellectual

property.

II. ANALYSIS

Appellants challenge the district court’s decision on several

grounds. They argue that because SAC had unclean hands, the

court erred in sustaining SAC’s affirmative defense of acquiescence. They also contend that the record is insufficient to

support the conclusion that they gave any form of consent for

RealtyU to use the ASR marks, either before or after the July

12, 2006 cease-and-desist letter. Finally, they also challenge

the finding of acquiescence itself, arguing that the evidence in

the record is insufficient to support the conclusion that they

acquiesced to use of the ASR marks by SAC or RealtyU.

A. Standards of Review

To the extent that Appellants challenge the district court’s

factual findings, such findings are reviewed for clear error.

13422 SELLER AGENCY COUNCIL v. KENNEDY CENTER
Fed. R. Civ. P. 52(a)(6). A district court’s finding of fact is

clearly erroneous if it is “(1) ‘illogical,’ (2) ‘implausible,’ or

(3) without ‘support in inferences that may be drawn from the

facts in the record.’ ” United States v. Hinkson, 585 F.3d

1247, 1262 (9th Cir. 2009) (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 577 (1985)). 

The application of the equitable doctrine of unclean hands

is within the discretion of the trial court and is reviewed for

abuse of that discretion. See TransWorld Airlines, Inc. v. Am.

Coupon Exch., Inc., 913 F.2d 676, 694 (9th Cir. 1990) (citing

Wash. Capitols Basketball Club, Inc. v. Barry, 419 F.2d 472,

478 (9th Cir. 1969) (finding that the application of the

unclean hands doctrine was committed to the district court’s

discretion). Similarly, while the question appears to be one of

first impression in our circuit, we join our sister circuits in

concluding that the application of the equitable doctrine of

acquiescence is within the discretion of the trial court and also

is reviewed for abuse of discretion. See Coach House Rest.,

Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551, 1558 (11th

Cir. 1991) (finding that “[b]ecause acquiescence is an equitable defense, it will be reviewed for an abuse of discretion);

Piper Aircraft Corp. v. Wag-Aero, Inc., 741 F.2d 925, 932-33

(7th Cir. 1984) (finding that because acquiescence imports a

fact-based analysis, its determination rests in the “sound discretion” of the trial court and only will be disturbed on review

for “clear abuse” of that discretion).

Finally, “ ‘[w]e may affirm on any basis supported by the

record, whether or not relied upon by the district court.’ ”

Bank of N.Y. v. Fremont Gen. Corp., 514 F.3d 1008, 1020 n.8

(9th Cir. 2008) (quoting Hall v. N. Am. Van Lines, Inc., 476

F.3d 683, 686 (9th Cir. 2007)) (alteration in the original).

B. SAC’s Equitable Defenses and the District Court’s

Finding of Unclean Hands

[1] Appellants argue that SAC’s unclean hands should preclude it as a matter of law from benefitting from the equitable

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13423
defense of acquiescence. “The doctrine [of unclean hands]

bars relief to a plaintiff who has violated conscience, good

faith or other equitable principles in his prior conduct, as well

as to a plaintiff who has dirtied his hands in acquiring the

right presently asserted.” Dollar Sys., Inc. v. Avcar Leasing

Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989) (citations omitted). The doctrine of unclean hands also can bar a defendant

from asserting an equitable defense. See Jarrow Formulas,

Inc. v. Nutrition Now, Inc., 304 F.3d 829, 841-42 (9th Cir.

2002) (noting that a defendant with unclean hands is barred

from asserting the equitable defense of laches). “ ‘It is fundamental to [the] operation of the doctrine that the alleged misconduct by the [party] relate directly to the transaction

concerning which the complaint is made.’ ” Dollar Sys., 890

F.2d at 173 (quoting Arthur v. Davis, 126 Cal. App. 3d 684,

693-94 (Cal. Ct. App. 1981)). “[U]nclean hands does not constitute ‘misconduct in the abstract, unrelated to the claim to

which it is asserted as a defense.’ ” Jarrow, 304 F.3d at 841

(citing Republic Molding Corp. v. B.W. Photo Utils., 319 F.2d

347, 349 (9th Cir. 1963)).

The district court found that SAC had unclean hands

because it diverted substantially all of its ASR program revenue to RealtyU, despite the provisions of the stock purchase

agreement, which specified that ASR program revenue was

for the benefit of SAC and that SAC was obligated to take the

“best overall actions” for the benefit of the company. It was

this diversion of revenue that ultimately precipitated the July

12, 2006 cease-and-desist letter and Appellants’ claim for

trademark infringement.

[2] However, the district court’s finding of unclean hands

related explicitly to events that occurred before July 12, 2006.

SAC’s claim of acquiescence was based on events occurring

after July 12, 2006, specifically Kennedy’s requests that SAC

continue to use the ASR marks even after Appellants sent

their cease-and-desist letter. The record does not reflect a

determination by the district court with respect to whether

13424 SELLER AGENCY COUNCIL v. KENNEDY CENTER
SAC acted with unclean hands after July 12, 2006. However,

we must presume that in sustaining SAC’s acquiescence

defense, the district court found implicitly that SAC did not

have unclean hands with respect to Appellants’ claim for

trademark infringement, which could have arisen only after

July 12, 2006. The district court did not abuse its discretion

in concluding that SAC’s earlier breach of the stock purchase

agreement did not preclude SAC from claiming that Appellants acquiesced to its use of the ASR marks thereafter.

C. RealtyU’s Right to Use the ASR Marks before July

12, 2006

Appellants contend that RealtyU never had any right to use

the ASR marks, notwithstanding any acquiescence that may

have occurred after July 12, 2006. The district court’s finding

of consent is a factual determination that we review for clear

error. See Fremont Gen. Corp., 523 F.3d at 1020 (noting that

a district court’s factual findings established consent and

could not be overturned without a showing that the finding

was clearly erroneous); Gonzalez-Caballero v. Mena, 251

F.3d 789, 795 (9th Cir. 2001) (noting that a district court’s

factual finding of consent was not clearly erroneous); PIC

Realty Corp. v. Evans, 605 F.2d 476, 483 (9th Cir. 1979)

(agreeing with the district court that the bankruptcy court’s

finding of no consent was not clearly erroneous). A district

court’s finding of fact is clearly erroneous if it is “(1) ‘illogical,’ (2) ‘implausible,’ or (3) without ‘support in inferences

that may be drawn from the facts in the record.’ ” Hinkson,

585 F.3d at 1262. 

[3] The district court found explicitly that SAC had permission or an implied license to use the ASR marks from September 8, 2005 until July 12, 2006. Although it did not make

such an explicit finding with respect to RealtyU, because it

declined to award damages based on RealtyU’s use of the

ASR marks, it must have decided implicitly that RealtyU also

had consent of some type to use the ASR marks before July

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13425
12, 2006. In addition, “ ‘[w]e may affirm on any basis supported by the record, whether or not relied upon by the district

court.’ ” Fremont Gen., 514 F.3d at 1020 n.8 (citation omitted). The district court determined that “Kennedy signed

agreements with SAC in September 2005 and he and his company promptly began to cooperate with RealtyU and/or SAC

to market his ASR program.” It also found expressly that the

purpose of Swanepoel’s proposed business venture was to

provide Appellants with “access to the RealtyU affiliates

across the country and the large number of students they provide.” Thus, the purpose of the agreement between KCREE

and SAC was to allow RealtyU and its affiliates to use the

ASR marks. 

[4] This determination is neither illogical nor implausible:

in order for RealtyU to provide SAC with ASR student fees,

it had to use the ASR marks. However, Appellants contend

that RealtyU had consent to use the marks only if it paid a

licensing fee for that use — a fee that should have been paid

to SAC. While the district court did not make an explicit factual determination as to this point, its implicit conclusion that

RealtyU or its affiliates did not have to pay a licensing fee is

supported by inferences that may be drawn from the record.

Kennedy testified at trial as follows:

Q: [Counsel] If I understand what you’re saying,

you’re testifying that you made an agreement

and memorialized it in the stock purchase

agreement that Kennedy Center itself would not

have to pay the thousand dollar a year licensing

fee, right?

A: [Kennedy] Likewise

Q: And neither would RealtyU?

A: That’s correct. [ ]

13426 SELLER AGENCY COUNCIL v. KENNEDY CENTER
(ER 31:7-13.) Kennedy continued to explain:

Q: So if I understand things, neither Kennedy Center nor Seller Agency Council are [sic] required

to pay the annual licensing fee?

A: That is correct.

Q: What about RealtyU affiliate schools?

A: I believe that it’s basically that it’s up to RealtyU. I mean, they don’t have to charge the

licensing fee if they don’t want to. The actual

annual license fee.

Q: So Seller Agency Counsel could waive the

license fee for the RealtyU school?

A: That is correct. That is correct.

(ER 32:6-16.) 

[5] The district court’s factual determination that Appellants consented to RealtyU’s use of ASR marks prior to July

12, 2006 is not clearly erroneous. Accordingly, RealtyU may

be liable only for infringement occurring after it received the

cease-and-desist letter on July 12, 2006, and then only if

Appellants did not consent or acquiesce to that use.

D. Acquiescence

[6] Although we have dealt in passing with the concept of

acquiescence to infringement — see, e.g., Westinghouse Elec.

Corp. v. Gen. Circuit Breaker & Elec. Supply, 106 F.3d 894,

899 (9th Cir. 1997); E. & J. Gallo Winery v. Gallo Cattle Co.,

967 F.2d 1280, 1294 (9th Cir. 1992); Nat’l Lead Co. v. Wolfe,

223 F.2d 195 (9th Cir. 1955); Golden W. Brewing Co. v.

Milonas & Sons, Inc., 104 F.2d 880 (9th Cir. 1939) — we

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13427
have not articulated a definition or established a practical test

for district courts to apply. We begin by observing that the

equitable defenses of acquiescence and laches are very similar. “Laches is an equitable time limitation on a party’s right

to bring suit resting on the maxim that one who seeks the help

of a court of equity must not sleep on his rights.” Jarrow, 304

F.3d at 835 (citations and internal quotations marks omitted).

Acquiescence, on the other hand, limits a party’s right to

bring suit following an affirmative act by word or deed by the

party that conveys implied consent to another. 6 J. THOMAS

MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR

COMPETITION, 31:42 (4th ed. 2008) (citing What-A-Burger of

Va., Inc. v. Whataburger, Inc. of Corpus Christi, Tex., 357

F.3d 441, 452 (4th Cir. 2004) (finding that “[a]cquiescence is

the active counterpart to laches, a doctrine based on passive

consent”); Creative Gifts, Inc. v. UFO, 235 F.3d 540, 547-48

(10th Cir. 2000) (finding that acquiescence requires “conduct

on the plaintiff’s part that amounted to an assurance to the

defendant, express or implied, that plaintiff would not assert

his trademark rights against the defendant”); Sara Lee Corp.

v. Kayser-Roth Corp., 81 F.3d 455, 462 (4th Cir. 1996) (finding that acquiescence implies active consent, while laches

implies passive consent); Coach House, 934 F.2d at 1558

(finding that “[t]he difference between acquiescence and

laches is that laches denotes passive consent and acquiescence

denotes active consent”)).

The district court applied the test articulated in ProFitness

Physical Therapy Ctr. v. Pro-Fit Orthopedic & Sports Physical Therapy P.C., 314 F.3d 62, 67 (2d Cir. 2002). Acquiescence under ProFitness requires that “(1) the senior user

actively represented that it would not assert a right or a claim;

(2) the delay between the active representation and assertion

of the right or claim was not excusable; and (3) the delay

caused the defendant undue prejudice.” Id. at 67 (internal citation omitted). That test appears to have originated in an Eleventh Circuit opinion modifying that court’s test for laches to

accommodate an acquiescence inquiry. See Coach House, 934

13428 SELLER AGENCY COUNCIL v. KENNEDY CENTER
F.2d at 1558 (modifying the prima facie case for laches from

Conagra, Inc. v. Singleton, 743 F.2d 1508, 1517 (11th Cir.

1984), to create the prima facie case for acquiescence as articulated in the opinion and recited in ProFitness).

[7] Because laches and acquiescence are closely related

concepts, we agree with the approach taken by the Eleventh

Circuit that modifying our current test for laches is an appropriate way to provide a practical test for acquiescence. In the

Eleventh Circuit, the prima facie case for laches required “(1)

a delay in asserting a right or claim; (2) that the delay was not

excusable; and (3) that the delay caused the defendant undue

prejudice.” Conagra, 743 F.2d at 1517 (citations omitted).

The prima facie case for laches in our own circuit is essentially identical. “The test for laches is two-fold: first, was the

plaintiff’s delay in bringing suit unreasonable? Second, was

the defendant prejudiced by the delay?” Internet Specialties

W., Inc. v. Milon-DiGiorgio Enters., 559 F.3d 985, 990 (9th

Cir. 2009) (citing Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery Ass’n, 465 F.3d 1102, 1108 (9th Cir.

2006); Jarrow, 304 F.3d at 838). The first aspect of our test

in turn consists of two sub-parts: an assessment of the length

of the delay followed by an assessment of the reasonableness

of the delay. Jarrow, 304 F.3d at 838. 

[8] Because we agree with the Eleventh Circuit that acquiescence differs from laches principally in that it requires some

form of active consent, we conclude that the Coach House

test largely comports with our own understanding of the

prima facie case for acquiescence. Accordingly, we adopt that

test. The elements of a prima facie case for acquiescence are

as follows: (1) the senior user actively represented that it

would not assert a right or a claim; (2) the delay between the

active representation and assertion of the right or claim was

not excusable; and (3) the delay caused the defendant undue

prejudice.

With respect to the third prong, we note that in the case of

laches, undue prejudice requires at least some reliance on the

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13429
absence of a lawsuit. See Lathan v. Volpe, 455 F.2d 1111,

1122 (9th Cir. 1971), overruled on other grounds by Lathan

v. Brinegar, 506 F.2d 677, 691 (9th Cir. 1974) (finding “the

two essential elements of laches — lack of diligence by plaintiff and injurious reliance thereon by defendant”); accord Pro

Football, Inc. v. Harjo, 565 F.3d 880, 884 (D.C. Cir. 2009)

(“To be sure, a finding of prejudice requires at least some reliance on the absence of a lawsuit”). Relatedly, prejudice in the

context of acquiescence inherently must involve reliance on

the senior user’s affirmative act or deed, and such reliance

must be reasonable. When inquiring into the reasonableness

of reliance, a district court must examine both the content of

the affirmative act and the context in which that act was performed. In addition to their relevance with respect to undue

prejudice, findings with respect to reliance also may inform

whether the delay between the active representation and assertion of the right or claim was excusable. See 3 ANNE GILSON

LALANDE, GILSON ON TRADEMARKS § 11.08[3][i][iii][A] (2010)

(“When the plaintiff has in some way assured the defendant

that it will not assert its rights in the mark and the defendant

has relied to its detriment, the plaintiff should be estopped

from bringing an action by its acquiescence regardless of the

period of delay.”).

[9] While it appropriately drew upon ProFitness for the

elements of acquiescence, the district court apparently did not

make factual findings either as to the scope of Appellants’

active representations or as to the extent and reasonableness

of Appellees’ reliance on those representations. In particular,

it did not determine whether Appellants’ requests that Appellees use the ASR marks for specific purposes after July 12,

2006 amounted to a carte blanche to use the marks for any

other purposes, whether and to what extent the marks actually

were used for other purposes, or whether it was reasonable in

light of the cease-and-desist letter and subsequent litigation

for Appellees to use the marks either for purposes of the specific requests or for purposes outside of scope of those

requests. Because the application of the acquiescence doctrine

13430 SELLER AGENCY COUNCIL v. KENNEDY CENTER
is within the discretion of the trial court, see Coach House,

934 F.2d at 1558; Piper Aircraft, 741 F.2d at 932-33, we will

vacate the judgment and remand so that the district court may

consider these questions consistent with the foregoing discussion.

E. Whether Appellants granted consent to use the ASR

marks after July 12, 2006

[10] Appellees contend that the judgment may be affirmed

based upon the district court’s separate conclusion that their

use of the ASR marks was with Appellants’ “consent and permission.” The district court concluded that “[Appellees’] use

of the intellectual property, including use past the commencement of this litigation, was with [Appellants’] consent and

acquiescence.” However, a fair reading of the district court’s

discussion as a whole reflects a determination that Appellants

consented to the use of the ASR marks before July 12, 2006

and acquiesced to that use after July 12, 2006. The district

court observed that “[Appellants’] conduct after they sent the

July 12, 2006 demand letter led [Appellees’] to believe that

they continued to have ‘permission’ to use the trademarks.”

The district court’s phrasing — i.e., that Appellees only

believed that they had “permission” — demonstrates that the

district court was focused on acquiescence rather than actual

consent.

[11] To be sure, Kennedy made active representations that

Appellees could use the ASR marks, at least for the purposes

of specific tasks. The district court found that Kennedy “request[ed] that [SAC] process certificates and certify members

in the ASR program for classes,” and that he “continued to

forward student information to SAC to be included in SAC’s

‘website system’ [between July 12, 2006 and November

2007].” Nonetheless, as the district court determined, Appellees did not have a contractual right to use the ASR marks.

Any consent that may have been granted after July 12, 2006

arguably amounted to nothing more than a revocable license

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13431
to use the ASR marks for the particular tasks. Because the

parties were litigating actively with respect to the ASR marks

at the time Kennedy made his requests, it would be difficult,

if not impossible, to determine if and when Appellants

revoked any post-July 12, 2006 consent to Appellees’ use of

the marks. Because of these difficulties, the district court was

correct to apply the acquiescence doctrine to the instant case.

Rather than attempting to determine exactly when Appellants

granted or revoked consent, the proper inquiry is whether and

to what extent Appellees relied reasonably on Appellants’

active representations that Appellees had a right to use the

marks.

III. COSTS AND ATTORNEYS’ FEES ON APPEAL

[12] Pursuant to Federal Rule of Appellate Procedure 38,

Appellees seek double costs and attorneys’ fees on appeal.

“We can award such relief only ‘if the result is obvious or if

the claims of error are wholly without merit.’ ” In re Peoro,

793 F.2d 1048, 1052 (9th Cir. 1986) (quoting Orange Belt

Dist. Council of Painters No. 48 v. Kashak, 774 F.2d 985, 991

(9th Cir. 1985)). Appellees contend that Appellants’ arguments are without merit. Because we conclude that the case

must be remanded to the district court,3 we cannot conclude

that Appellants’ arguments are wholly without merit.4

IV. CONCLUSION

We affirm the district court’s conclusion that the doctrine

of unclean hands does not bar the application of the equitable

3Appellees also argue that Appellants’ briefing raises matters not presented to the district court and contains misleading and inappropriate characterizations of the district court’s determinations. Although there is some

merit to these observations, we conclude that sanctions would be inappropriate. 

4

In light of this disposition, Appellants’ motion to stay consideration of

this issue and to strike Appellees’ brief in opposition to the motion to stay

are terminated as moot. 

13432 SELLER AGENCY COUNCIL v. KENNEDY CENTER
defense of acquiescence in this instance and its conclusion

that RealtyU had permission to use the ASR marks before

July 12, 2006. We vacate the judgment and remand so that the

district court may consider the applicability of Appellees’

defense of acquiescence in a manner consistent with this opinion. Each party shall bear its own costs.

AFFIRMED IN PART, VACATED IN PART, AND

REMANDED.

SELLER AGENCY COUNCIL v. KENNEDY CENTER 13433