Opinion ID: 223405
Heading Depth: 2
Heading Rank: 4

Heading: Licensee Estoppel

Text: In February 2006, Experian signed a license agreement that permitted Experian to use FICO's 300-850 trademark and which contained a no-contest provision stating that Experian would not challenge the validity of [FICO's] exclusive rights to its trademarks. FICO asserted trademark infringement claims against Experian and VantageScore. During trial, the district court overruled FICO's objection to the introduction of evidence by Experian that FICO's trademarks were invalid. Following trial, FICO moved for judgment as a matter of law on the issue of licensee estoppel, requesting a new trial that precludes Defendants from presenting evidence and argument challenging whether the mark is entitled to protection. Fair Isaac Corp. v. Experian Info. Solutions, Inc., 711 F.Supp.2d 991, 1001 (D.Minn. 2010). FICO asserted that VantageScore was under the absolute control of Experian and the other credit bureaus and therefore was precluded from challenging FICO's mark under principles of agency and equity. The district court found that VantageScore was not a licensee or precluded from challenging the validity of FICO's rights in the marks. Accordingly, the issue would have been submitted to the jury regardless of whether Experian was precluded from raising a challenge to the mark's validity. We review de novo the district court's denial of a motion for judgment as a matter of law, applying the same standard used by that court. Matthew v. Unum Life Ins. Co. of Am., 639 F.3d 857, 866 (8th Cir.2011). The doctrine of licensee estoppel provides that a licensee is estopped from contesting the validity of its license. See C.B.C. Distrib. & Mktg., Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818, 825 (8th Cir. 2007); Seven-Up Bottling Co. v. Seven-Up Co., 561 F.2d 1275, 1279 (8th Cir.1977) (The establishment of an existing licensor-licensee relationship between Company and [licensee] effectively constitutes an insuperable bar to recovery by [licensee] with regard to its trademark claims.). The licensee estoppel rule precludes only licensees from a challenge: other parties, even those closely affiliated with the licensee, are not foreclosed. 3 McCarthy on Trademarks and Unfair Competition § 18.63 (4th ed. 2011); see also Papercraft Corp. v. Gibson Greeting Cards, Inc., 515 F.Supp. 727, 728-29 (S.D.N.Y.1981) (holding that parent corporation was not estopped from challenging mark which licensor had licensed to wholly owned subsidiary, which was independent of parent and had separate employees, records, accounts, offices and only one shared officer). VantageScore is a limited liability company that is distinct from its three joint shareholders. FICO contends, however, that VantageScore is the alter ego of the bureaus and therefore was prohibited from doing what Experian and TransUnion themselves could not do under their licenses. If a licensor can produce sufficient evidence that an agent is an alter ego of the licensee, the agent may also be estopped from challenging a trademark under the doctrine of licensee estoppel. See, e.g., Delex, LLC v. Delivery Express, Inc., No. CV-02-237-ST, 2002 WL 31466586,  (D.Or. Apr. 25, 2002) (stating that corporation was likely bound as an alter ego of licensee because the businesses were formed simultaneously, for the same purpose, sharing common officers, and jointly operating their website). The district court acknowledged FICO's assertion that VantageScore was under the absolute control of the credit bureaus. But FICO did not present evidence, nor did the district court find, that VantageScore was the alter ego of Experian or the three credit bureaus collectively. Accordingly, we agree with the district court that VantageScore was not a licensee and therefore was not estopped from challenging the mark under either a theory of agency or equity. FICO asserts that its trademark should have been deemed valid regarding its claims against Experian, even if VantageScore was allowed to challenge the registration. A mark that is invalid cannot be infringed. See Aromatique, Inc., 28 F.3d at 875 (Thus, the court today does not reach the issue of whether Gold Seal infringed the asserted trademarks: the marks are invalid so there is nothing to infringe.). Because VantageScore successfully challenged the mark, it cannot serve as the basis of an infringement action.