Court Opinion

ID: 9555339
Source: CourtListenerOpinion
Date Created: 2023-08-11 18:03:20.674543+00
Date Added: 2024-06-11T15:42:23.035508
License: Public Domain

USCA11 Case: 22-13441    Document: 32-1     Date Filed: 08/11/2023   Page: 1 of 5

                                                  [DO NOT PUBLISH]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

                          ____________________

                                No. 22-13441
                          Non-Argument Calendar
                          ____________________

       BLUE MOUNTAIN HOLDINGS LTD.,
       a British Columbia, Canada corporation,
       LIGHTHOUSE ENTERPRISES, INC.,
       a Barbados Company,
                              Plaintiﬀs-Counter Defendants-Appellants,
       versus
       BLISS NUTRACETICALS, LLC,
       a Georgia Limited Liability Company,
       DOES 1 THROUGH 10,
       SHABANA PATEL,
       a Georgia Citizen,
       FARUQ PATEL,
       a Georgia Citizen,
USCA11 Case: 22-13441        Document: 32-1   Date Filed: 08/11/2023    Page: 2 of 5

       2                       Opinion of the Court               22-13441

       PHILLIP JONES,
       a Georgia Citizen ,

                                                      Defendants-Appellees,

       VITAZEN BOTANICALS, LLC,
       a Florida Limited Liability Company, et al.,

                    Defendants-Third Party Plaintiﬀs-Counter Claimants.

                              ____________________

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                     D.C. Docket No. 1:20-cv-01837-TWT
                           ____________________

       Before NEWSOM, LAGOA, and BRASHER, Circuit Judges.
       PER CURIAM:
                We agree with the district court that Lighthouse abandoned
       its trademark. That conclusion rested on two sub-conclusions:
       first, that Lighthouse’s transfer of its trademark to Blue Mountain
       was a license; but second, that this license became a “naked license”
       when Lighthouse failed to police Blue Mountain’s use of the trade-
       mark. Because we find no error in either, we affirm.
USCA11 Case: 22-13441      Document: 32-1       Date Filed: 08/11/2023      Page: 3 of 5

       22-13441                Opinion of the Court                           3

                First, the transfer was a license—not an outright sale or an
       assignment. That it was labeled a sale is not dispositive. “Whether
       a transfer of a particular right or interest under a patent is an assign-
       ment or a license does not depend upon the name by which it calls
       itself, but upon the legal effect of its provisions.” Waterman v. Mac-
       kenzie, 138 U.S. 252, 256 (1891). What distinguishes a license from
       an assignment is the control retained by the licensor: While “[a]n
       assignment is the transfer of the entire interest in a mark” and ren-
       ders the assignee “the new owner,” “a license involves the transfer
       of something less than the entire interest, and does not affect the
       licensor’s title.” 4 Callmann on Unfair Comp., Tr. & Mono. § 20:53
       (4th ed.). Here, Lighthouse did not transfer its “entire interest” to
       Blue Mountain. As the district court explained:
              Blue Mountain could not receive legal title to the
              mark with the USPTO or any other government reg-
              istry; Blue Mountain could not register the mark in
              new jurisdictions in its own name—only Light-
              house’s; Blue Mountain could not license or assign
              the mark except as speciﬁed in the Agreement or with
              Lighthouse’s prior written consent; Blue Mountain
              could manufacture, distribute, and sell its products
              only through approved entities; Lighthouse contin-
              ued to have a suﬃcient “ownership interest” to pro-
              tect the mark; and Lighthouse could order Blue
              Mountain to modify or cease its use of the mark if
              Lighthouse suspected harm to the mark’s goodwill or
              noncompliance with the Agreement.
USCA11 Case: 22-13441      Document: 32-1     Date Filed: 08/11/2023     Page: 4 of 5

       4                      Opinion of the Court                 22-13441

       Doc. 359 at 5–6. This transfer didn’t make Blue Mountain the
       “new owner” of Lighthouse’s trademark. Blue Mountain had only
       a license.
              Second, this license became a “naked” license, and thereby
       worked an abandonment. “The abandonment of a mark by ‘naked
       licensing’ occurs when the owner of a mark fails to supervise its
       licensee and allows the licensee to depart from the licensor’s qual-
       ity standards.” Groucho’s Franchise Sys., LLC v. Grouchy’s Deli, Inc.,
       683 F. App’x 826, 830 (11th Cir. 2017) (per curiam) (citing Kentucky
       Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 387
       (5th Cir. 1977)). We don’t judge the “nakedness” of a license by
       looking at whether the licensor allows product quality to suffer.
       See Kentucky Fried Chicken, 549 F.2d at 387. Rather, we look merely
       at whether the licensor is keeping an eye on product quality—
       whether, in other words, it “has abandoned quality control” or not.
       Id. (“We must determine whether Kentucky Fried has abandoned
       quality control; the consuming public must be the judge of
       whether the quality control efforts have been ineffectual.”). If it
       has, the license is “naked” and the trademark is abandoned.
              The district court didn’t err by finding that Lighthouse aban-
       doned quality control here—and that there’s no genuine dispute as
       to that fact. Quite the opposite, “the record in this case shows that
       Lighthouse . . . engaged in no meaningful supervision or inspection
       of products bearing the VIVAZEN mark.” Doc. 345 at 16. Indeed,
       the record is replete with “sworn deposition testimonies and ad-
       missions of material facts” from top Lighthouse and Blue Mountain
USCA11 Case: 22-13441         Document: 32-1         Date Filed: 08/11/2023         Page: 5 of 5

       22-13441                   Opinion of the Court                                5

       officials “asserting unequivocally that Lighthouse has never super-
       vised Blue Mountain’s production, marketing, or sale of VIVAZEN
       products.” Doc. 359 at 7 (emphasis added); see Doc 345 at 16 (“Dur-
       ing their depositions, Blue Mountain’s and Lighthouse’s corporate
       representatives revealed that Lighthouse does not exercise any
       quality control over Blue Mountain’s operations and does not in-
       spect any of Blue Mountain’s products.”).1 That is more than
       enough to find that Lighthouse abandoned quality control, and
       thus abandoned its trademark altogether.
               The district court’s orders are AFFIRMED.

       1 While Lighthouse tried to “backtrack on their numerous admissions” and

       “drum up a fact issue by citing new deposition excerpts” on the motion for
       reconsideration, that effort came too late. Doc. 359 at 8. “[P]arties are not
       permitted to introduce new evidence on a motion for reconsideration, unless
       the evidence was previously unavailable (which is not the case here).” Id. And
       “[n]either the district court nor this court has an obligation to parse a summary
       judgment record to search out facts or evidence not brought to the court’s
       attention.” Atlanta Gas Light Co. v. UGI Utils., Inc., 463 F.3d 1201, 1208 n.11
       (11th Cir. 2006).