Opinion ID: 187164
Heading Depth: 2
Heading Rank: 1

Heading: Summary Judgment on Trademark Claims

Text: We review the district court's grant of summary judgment de novo, applying the same standards as the district court and drawing all inferences from the evidence in favor of the non-movant. Wilburn v. Robinson, 480 F.3d 1140, 1148 (D.C.Cir.2007) (citations omitted). We may affirm only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Id. (citation omitted). Applying this standard here, we agree with the Estate that the district court erred in concluding that as a matter of law the Non-Profits owned the marks at issue and that Coll intended to register the marks on their behalf. We address first the underlying issue of ownership through use. See In re ECCS, Inc., 94 F.3d 1578, 1579 (Fed.Cir.1996) (most fundamental aspect of United States trademark law is that trademark ownership and attendant rights are acquired in the marketplace by use and that the statute, popularly known as the Lanham Act, aside from modern `intent to use' law not here involved, provides only for registration of existing marks); see also 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:3 (4th ed. 2005) (Although a federal registration will give the owner of a mark important legal rights and benefits, the registration does not create the trademark. . . . [T]he absence or cancellation of a registration does not invalidate the trademark. It is the use of the mark to identify a single source which creates exclusive trademark rights.) (footnote omitted). Ordinarily, a party establishes ownership of a mark by being the first to use the mark in commerce. See Allard Enters., Inc. v. Advanced Programming Res., Inc., 146 F.3d 350, 358 (6th Cir.1998) (`[T]he exclusive right to a trademark belongs to one who first uses it in connection with specified goods.' (quoting Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260, 1265 (5th Cir.1975) (alteration added))); Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 292 (3d Cir.) (With respect to ownership of unregistered marks, the first party to adopt a trademark can assert ownership rights, provided it continuously uses it [sic] in commerce.), cert. denied, 502 U.S. 939, 112 S.Ct. 373, 116 L.Ed.2d 324 (1991). Alternatively, the Lanham Act permits an applicant to establish ownership under the related companies doctrine by showing that it controlled the first user of the mark. See Secular Orgs. for Sobriety, Inc. v. Ullrich, 213 F.3d 1125, 1130 (9th Cir.2000) ([T]o prevail on its trademark claim, [plaintiff] must demonstrate that it was the first user of the disputed marks or, in the alternative, that if [defendant organization] was using the marks first, it was doing so as a related entity and the benefits of any such use should therefore inure to [plaintiff].). Under the doctrine of `related companies,' the first use of a mark by a person `controlled by the registrant or applicant for registration of the mark' shall inure to the benefit of the controlling entity. Id. at 1131 (quoting 15 U.S.C. § 1055). In this case, it is undisputed that the Non-Profits were the first users of the marks at issue but the Estate contends that Coll controlled the Non-Profits' use of the marks, which use therefore inured to his benefit. The district court rejected this argument, reasoning that [b]ecause the defendants are non-profit organizations with no owners and their actions are controlled solely by their Board of Directors, no one person has control over any actions of the defendants, much less control over the uses of the trademark. Summ. J. Order 3. We conclude the court erred in holding that a non-profit corporation cannot be a related company whose use of the trademark is controlled by a mark's registrant. The related companies doctrine is embodied in section 5 of the Lanham Act, which provides: Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies, such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration, provided such mark is not used in such manner as to deceive the public. If first use of a mark by a person is controlled by the registrant or applicant for registration of the mark with respect to the nature and quality of the goods or services, such first use shall inure to the benefit of the registrant or applicant, as the case may be. 15 U.S.C. § 1055. The Lanham Act defines a related company as any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used. Id. § 1127. The statute does not expressly require formal corporate control, as the district court suggested. Instead, the statute requires control over only the use of a mark . . . with respect to the nature and quality of the goods or services, id., which may include not only corporate control but also licensing agreements and other types of oversight. See, e.g. Turner v. HMH Pub. Co., 380 F.2d 224, 229 (5th Cir.1967) (concluding under 15 U.S.C. § 1055 plaintiff as licensor introduced ample evidence to show that [it] fully controlled and dictated the nature and quality of the goods and services used in connection with the trade and service marks by the several [independently owned] licensees); see also Carpenteri v. Marini, 2006 WL 2349586, at  (D.Conn. July 11, 2006) (In certain cases, an individual may control the nature and quality of the goods or services in connection with which a mark is used even if he or she does not own the company that is using the marks.); 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 18:51 (4th ed.2005) (term related is not limited to control of a company in general but simply refers to control over the `nature and quality of the goods and services in connection with which the mark is used.') (quoting Roberts, The New Trademark Manual 20 (1947)); id. (although superficial reading of the Lanham Act `related company' provisions might lead one to the conclusion that the `companies' (meaning `any person') must be `related' by some form of stock ownership, such as are parent and subsidiary corporations, . . . [i]n fact, during the legislative hearings, the Department of Justice wanted to limit the language to 100 percent controlled subsidiaries, and this was rejected. (citing Shinderman, Trademark Licensing: A Saga of Fantasy and Fact, 14 Law & Contemp. Probs. 248 (1949); Taggart, Trademarks and Related Companies: A New Concept in Statutory Trademark Law, 14 Law & Contemp. Probs. 234, 241 (1949))). The Estate has offered sufficient evidence of such control to survive summary judgment. In a 2001 declaration, Coll's ex-wife stated that she had been in association with Coll from 1962 to 1985 and that, [w]hile there was a Board of Directors, [her] late husband was always in complete control of [IPM] and its use of the mark, INNER PEACE MOVEMENT. Coll Decl. ¶ 2. In addition, in his 2001 declaration, quondam IPM president Robert Conrad averred that he had been involved in the IPM program since July 1973 and that Coll shut[] down the Board of Directors, kept IPM dormant for 4-5 years: from July 1979 to July of 1983 or 1984 and founded the INNER PEACE MOVEMENT Association . . . to replace [IPM] during its period of dormancy. Conrad Decl. ¶ ¶ 3, 6. Conrad further stated that Coll controlled the use of the INNER PEACE MOVEMENT mark and merchandizing through multiple distribution channels. Id. ¶ 6. According to Conrad, Coll's control extended even to . . . giving specific permission for each traveling leader and lecturer as to their use of the mark in merchandizing their lectures and courses. Id. ¶ 11. Finally, letters that Coll wrote to the USPTO in response to requests for clarification of his trademark registration applications indicate that he controlled the content of the materials the Non-Profits used under the disputed marks. See, e.g., JA 41 (The applicant, Dr. Francisco Coll, is the Founder and Director of the PEACE COMMUNITY CHURCH. There exists a verbal understanding between the applicant and the Peace Community Church that any and all materials (being, books, tapes, letterhead, envelops [sic], brochures, etc.), be reviewed and approved by the applicant prior to use by the Peace Community Church, which mark is the logo for said corporation.); id. at 51 (The applicant as Founder of the, the [sic] Inner Peace Movement, determines the materials the Corporation consistently uses.); id. at 55 (The applicant as President & Founder of the Peace Community Church determines the materials the Corporation consistently uses.). These documents put into dispute whether or not Coll controlled the use of the Non-Profits' marks from the marks' first use and therefore preclude summary judgment on the ownership issue. [6] The district court also erroneously found on the evidence before it that Coll necessarily registered the marks in a representative capacity on behalf of the Non-Profits. It is not dispositive, as the court believed, that [w]hen Dr. Coll registered the trademarks in 1993, he signed the applications as `founder' and/or `president' of IPM and PCC. Summ. J. Order 2. The application forms themselves contain indicia that Coll intended to register the marks in his individual capacity. In them, Coll identified himselfDr. Francisco Collas the Applicant and checked the box next to Individual rather than Corporation. See, e.g., JA 30 (IPM service mark application), 33 (PCC service mark application). In light of the contradictory inferences to be drawn from the applications, summary judgment was inappropriate.