Court Opinion

ID: 9825726
Source: CourtListenerOpinion
Date Created: 2023-09-01 14:00:58.100078+00
Date Added: 2024-06-11T13:39:06.893920
License: Public Domain

USCA11 Case: 22-10188   Document: 45-1    Date Filed: 09/01/2023   Page: 1 of 7

                                                [DO NOT PUBLISH]
                                 In the
                United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                              No. 22-10188
                         Non-Argument Calendar
                         ____________________

       COMMODORES ENTERTAINMENT CORPORATION,
                                                    Plaintiff-Counter
                                               Defendant-Third Party
                                                Defendant-Appellee,
       versus
       THOMAS MCCLARY,
       FIFTH AVENUE ENTERTAINMENT, LLC,

                                                Defendants-Counter
                                               Claimants-Third Party
                                                Plaintiffs-Appellants,
USCA11 Case: 22-10188    Document: 45-1     Date Filed: 09/01/2023    Page: 2 of 7

       2                     Opinion of the Court               22-10188

       DAVID FISH,
       an individual,
       WILLIAM KING,
       an individual,
       WALTER ORANGE,
       an individual
       DOES 1 - 100,

                                                Third Party Defendants.

                           ____________________

                 Appeal from the United States District Court
                      for the Middle District of Florida
                  D.C. Docket No. 6:14-cv-01335-RBD-GJK
                          ____________________

       Before WILSON, LUCK, and MARCUS, Circuit Judges.
       MARCUS, Circuit Judge:
              This is the fourth appeal in a protracted battle about the
       ownership of the name of a famous band brought by Commodores
       Entertainment Corporation (“CEC”) against Thomas McClary and
       his company, Fifth Avenue Entertainment, LLC (“McClary”). This
       time around, McClary appeals two district court orders: one award-
       ing CEC substantial attorney’s fees, and another denying
       McClary’s motion to modify the scope of a permanent injunction.
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       22-10188               Opinion of the Court                       3

       After careful review, and in light of the Supreme Court’s recent
       opinion in Abitron Austria GmbH v. Hetronic International, Inc.,
       143 S. Ct. 2522 (2023), we vacate and remand both orders.
                                        I.
              We have discussed the facts surrounding this case at length
       elsewhere. See Commodores Ent. Corp. v. McClary, 648 F. App’x
       771 (11th Cir. 2016) (“Commodores I”); Commodores Ent. Corp.
       v. McClary, 879 F.3d 1114 (11th Cir.) (“Commodores II”), cert. de-
       nied, 139 S. Ct. 225 (2018); Commodores Ent. Corp. v. McClary,
       822 F. App’x 904 (11th Cir. 2020) (“Commodores III”). Briefly, the
       parties have long fought over the ownership of the mark “The
       Commodores,” the name of a famous funk and soul band that rose
       to prominence in the 1970s and 1980s. McClary, an original mem-
       ber of the band, left in 1984 and later performed in a group that he
       called “The 2014 Commodores” or “The Commodores featuring
       Thomas McClary.” In 2014, CEC -- a corporation run by two of
       the original Commodores who remained active in the group -- sued
       McClary, raising a slew of trademark, false advertising, and unfair
       competition claims arising under the Lanham Act, 15 U.S.C. § 1051
       et seq., and state law. McClary responded with several counter-
       claims and third-party claims of his own.
             Early on, the district court granted a motion by CEC for a
       preliminary injunction, barring McClary’s use of the mark. Then,
       when CEC filed a motion for clarification revealing that McClary
       was marketing a tour in Europe, the court held that the preliminary
       injunction order applied extraterritorially because use of the mark
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       4                       Opinion of the Court                 22-10188

       overseas would have a negative impact on CEC, a U.S. corpora-
       tion, and would continue to cause customer confusion in this coun-
       try. Based on the prevailing law at the time, we affirmed the entry
       of preliminary injunctive relief, including its extraterritorial appli-
       cation. Commodores I, 648 F. App’x at 778.
              Moving forward, the district court bifurcated the trial into
       Phase I, addressing the trademark ownership rights, and Phase II,
       addressing infringement, liability, and damages. Phase I ended
       with the entry of an order granting CEC’s motion for judgment as
       a matter of law -- before the jury was called upon to answer the
       question -- and converting the preliminary injunction into a perma-
       nent injunction. We affirmed. Commodores II, 879 F.3d at 1142.
              In Phase II, the district court granted partial summary judg-
       ment in favor of CEC on its trademark infringement claim and
       summary judgment in favor of CEC on all of McClary’s counter-
       claims and third-party claims. Then, at a 2019 trial, a jury found
       that McClary had actual notice of CEC’s trademark registrations as
       of June 2009 and that CEC was entitled to damages equal to
       McClary’s profits from seven musical performances in Europe.
       The district court also denied a motion by McClary to modify the
       permanent injunction so that it would no longer include Mexico,
       New Zealand, and Switzerland because McClary had obtained ex-
       clusive licenses for the mark in those countries. Again, a panel of
       this Court affirmed. Commodores III, 822 F. App’x at 915.
             After all that, CEC moved for attorney’s fees and costs under
       § 1117(a) of the Lanham Act. The district court referred the matter
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       22-10188               Opinion of the Court                        5

       to a magistrate judge, who determined in a Report and Recom-
       mendation (“R&R”) that CEC was entitled to fees and costs be-
       cause the case was “exceptional” under § 1117(a). The magistrate
       judge instructed CEC to submit updated information about its fees
       and costs and then issued a second R&R, calculating attorney’s fees
       to be $602,618.67 and costs to be $4,560.56. Over the objections of
       McClary, the district court adopted both R&Rs in full.
               While the supplemental order on attorney’s fees was pend-
       ing, McClary moved to modify the scope of the permanent injunc-
       tion under Federal Rules of Civil Procedure 60(b)(5) and (b)(6).
       McClary argued that he had received a trademark registration of
       “The Commodores” from the European Union, so the district
       court should modify the injunction to allow him to use the mark
       throughout the European Union. The district court denied this
       motion too because: (1) the application, which was filed more than
       five years after the entry of the permanent injunction, was un-
       timely under Rule 60(c)(1); and (2) even if the motion were timely,
       it failed on the merits. Applying this Circuit’s precedent interpret-
       ing Steele v. Bulova Watch Co., 344 U.S. 280 (1952), the trial court
       concluded that McClary and his LLC were U.S. citizens, that their
       activity had a substantial effect in the United States, and that the
       worldwide injunction did not infringe on the sovereignty of the Eu-
       ropean Union, so it upheld the worldwide scope of the injunction.
                                        II.
             At this stage of the case’s prolonged history, McClary is ap-
       pealing the district court’s order awarding CEC attorney’s fees and
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       6                      Opinion of the Court                 22-10188

       its order denying his request for a modification of the scope of the
       permanent injunction. However, before we could reach the merits
       of the appeal, the Supreme Court decided Abitron, which altered
       the law in some measure surrounding “the foreign reach of 15
       U.S.C. § 1114(1)(a) and § 1125(a)(1),” two provisions of the Lanham
       Act. 143 S. Ct. at 2527. In that case, a manufacturer of radio remote
       controls, Hetronic, sued a foreign distributor, Abitron, under §
       1114(1)(a) and § 1125(a)(1) for “Abitron’s infringing acts world-
       wide.” Id. A jury awarded Hetronic damages, and the district court
       “entered a permanent injunction preventing Abitron from using
       the marks anywhere in the world.” Id. After the Tenth Circuit
       largely affirmed the judgment, the Supreme Court granted certio-
       rari and reversed, holding that § 1114(1)(a) and § 1125(a)(1) “are not
       extraterritorial and that they extend only to claims where the
       claimed infringing use in commerce is domestic.” Id.
              Notably, the same Lanham Act provisions at issue in Abitron
       are implicated in the case before us. Thus, following Abitron, we
       asked the parties to brief its impact here. CEC responded that
       Abitron did not affect the district court’s orders since the focus of
       the permanent injunction was primarily domestic and the attor-
       ney’s fees determination was based on McClary’s long history of a
       variety of unreasonable litigation tactics. McClary, for his part,
       claimed that both orders must be vacated because the injunction is
       aimed mostly at his foreign conduct, and because CEC is no longer
       entitled to attorney’s fees now that Abitron has vindicated his liti-
       gation position all along. So, as we see it, the parties’ current
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       22-10188                Opinion of the Court                         7

       dispute raises several new factual questions. And importantly, they
       disagree on whether the injunction is targeting domestic and/or
       foreign conduct, and on how this discrepancy might fare under
       Abitron, which restricted the Lanham Act’s reach over foreign con-
       duct. Because the resolution of the issues in front of us may require
       further factfinding, we are not inclined to tackle them in the first
       instance. Pullman–Standard v. Swint, 456 U.S. 273, 291–92 (1982)
       (“[F]actfinding is the basic responsibility of district courts, rather
       than appellate courts.” (alteration in original) (quotations omit-
       ted)); E.E.O.C. v. Joe’s Stone Crab, Inc., 220 F.3d 1263, 1286 (11th
       Cir. 2000) (“We therefore abide by the general rule of law that a
       remand is the proper course unless the record permits only one
       resolution of the factual issue.” (quotations omitted)). Instead, we
       believe the wiser course is to give the district court the first oppor-
       tunity to reconsider both the extraterritorial application of the in-
       junction and its attorney’s fees determination, taking into account
       the Supreme Court’s new case law.
              Accordingly, we vacate and remand so that the district court
       can revisit its latest two orders in light of the Supreme Court’s de-
       cision in Abitron.
              VACATED AND REMANDED.