Monday, February 1, 2016

Trademark Infringement and Sibling Rivalries

Trademark infringements may be common in the business world, but they are as well not unheard of among family members in business who are competing in the same products.  The Southern District Court in Ohio heard a case between siblings which touched on pivotal points regarding trademarks. The court wrestled with the issue of ‘use’ in commerce and the element of possible confusion. The court as well dealt with the issue of issuing a ‘license’ for the recipient’s use of the mark and the conditions for the license.

The court also saw the issues regarding the parties’ concern over the similarity of products in the marketplace.  Combined with this concern was the appearance of identical color, font, and similar word[s] in advertising.  To this latter concern the 6th Circuit Court of Appeals affirmed the modification of the injunction which previously drew the appeal seeking a revision.  The controversy between siblings arose when one brother, Jimmy Flynt, after his split with Larry Flynt, stopped paying his brother Larry fees for using trademarks licensed by HUSTLER.  Larry, the owner of the marks, sued to enjoin his brother’s use of the HUSTLER trademark and as stated in the filing from “using any trademark or any variation thereof owned by” himself or any of his entities.

The court modified its earlier injunction that prohibited Jimmy Flynt, stating that he was prevented from “[u]sing the name ‘Flynt’ in connection with the sale, promotion or advertising of adult entertainment products or services unless it is accompanied by the first name ‘Jimmy’ in the same font size, color, and style and on the same background color.”  The court used the trademark test stated in Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009), pointing to ownership, use on commerce, and likelihood for confusion. The court determined that Jimmy Flynt’s marketing plan would reasonably confuse the general public and creating an association with his brother’s Hustler business, hence meeting the three-part test.  The court also determined that as a result of the previous injunction being violated by Jimmy Flynt, it had to address how to prevent siblings competing in the marketplace causing confusion by using a product that is similar to what the Larry Flynt created.  Jimmy Flynt’s conduct and marketing would cause confusion with the LARY FLYNT trademark.  With that it concern, the court recognized that the case law does not prevent protection for use of personal name, where marketing had used their last names.  The case law does point to the need to find that there be unfair competition where a secondary meaning had arose from the advertising and marketing of similar products and that the offending commercial conduct pertains to the use of the last name.  Hence, the court reasoned as the court in Taylor Wine Co. case from the Second Circuit, that where there is the use of same last name, there must be a clear statement of no association to the other and that it is not a successor to the other.

The 6th Circuit, as did the 2nd Circuit, decided that a disclaimer was needed to demonstrate to the public the absence of association despite similarity of product, to prevent a secondary meaning.  The court found that since product use is the pivotal criteria to demonstrate ownership in trademark-infringement actions, see Homeowners Grp., Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1105 (6th Cir. 1991), that Larry and his corporations owned the LARRY FLYNT trademark with respect to retail goods in the adult retail stores.  Furthermore, despite previous abandonment of the LARRY FLYNT trademark application filing, the court found that by continuing the use in commerce, it held the rights to the mark in the adult related retail stores. Volkswagenwerk, 814 F.2d 812, 816–17 (1st Cir. 1987).  Over all, the element of possible confusion associated with last name drew the court to issue the need for a disclaimer to be publicly stated attesting to the absence of association between two sibling competitors.

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