Friday, August 14, 2020

"all IP" puts C&D recipient on notice of TM (R), and a bit on the meaning of blue check marks

Commodores Entertainment Corp. v. McClary, Nos. 19-10791, 19-12819, --- Fed.Appx. ----, 2020 WL 4218236 (11th Cir. Jul. 23, 2020)

As quickly summarized by the court:

The prolonged dispute concerns the ownership of the mark “The Commodores,” the name of a famous Grammy Award-winning rhythm and blues, funk and soul music band. McClary was an original member of The Commodores but left the band in 1984. He later formed a musical group that performed as “The 2014 Commodores” and “The Commodores featuring Thomas McClary.” In 2014, [plaintiff] CEC filed this lawsuit against McClary, claiming trademark infringement, trademark dilution, passing off, false advertising, and unfair competition….

At the outset of the case, the district court granted CEC’s motion for a preliminary injunction. After the injunction was entered, CEC learned that McClary and his band were marketing upcoming performances in Europe. Upon CEC’s motion for clarification, the district court held that the injunction had extraterritorial application because use of the marks overseas would have a substantial and negative impact on CEC, an American corporation.…

The district court then determined that CEC owned trademark rights, and ultimately found that McClary infringed. A jury found that McClary had actual notice of CEC’s trademark registrations as of June 2009 and that CEC was entitled to damages from McClary’s profits resulting from musical performances at West Hampton Beach Performing Arts Center (WHBPAC) and six non-US locations.  The jury also found that CEC had not shown it had suffered damages under the FDUTPA. McClary moved to modify the permanent injunction, arguing that he had acquired licenses to use the trademark “The Commodores” in Mexico, New Zealand, and Switzerland. The district court denied the motion as untimely/insufficiently justified. The court of appeals affirmed everything. 

The most notable thing to me here was the court of appeals’ reasoning that McClary had actual notice of the trademark registration (which affects eligibility for profits/damages under 15 U.S.C. § 1111) because of a letter that claimed only “all intellectual property rights” and didn’t mention registrations. The court of appeals reasoned that the jury reasonably could have concluded that “all intellectual property rights” included registered trademarks. “The statement that CEC would treat ‘any future unauthorized use of the Commodores trade name or logo’ as misconduct further put McClary on actual notice of CEC’s trademark registrations.” This seems quite misguided to me, given the existence of non-registered trademark rights, but there you have it. 

As for the motion to modify the permanent injunction, it was filed “more than five years after the court entered the preliminary injunction, three years after it issued the clarification order confirming its extraterritorial reach, two-and-a-half years after it entered the permanent injunction, and over a year after our Court affirmed the scope of the permanent injunction.” And McClary obtained the licenses he sought to effectuate from April 2017-August 2018. “He did not move for two years after his first acquisition, and about nine months after his last. The district court was well within its discretion to find this time frame unreasonable, especially in light of the extensive litigation over the injunction and McClary’s failure to explain the delay.”

As for McClary’s counterclaim for commercial misappropriation of his likeness and identity under Fla. Stat. § 540.08, it was based on screenshots of a Facebook page run by “The Commodores,” which had a blue checkmark next to the name “The Commodores,” and used his picture on the page. CEC introduced an unsworn declaration from William King, current member of The Commodores and CEC’s president, averring that CEC does not maintain a Facebook page. McClary failed to present any rebuttal evidence, including any authority about the blue checkmark’s meaning or how Facebook confirms the identity of a verified account. Without that, he couldn’t avoid summary judgment.

McClary’s defamation/business disparagement counterclaims: They were based on allegedly false e-mail communications CEC’s former manager made to non-parties, representing that McClary was enjoined from any use of CEC’s marks. But the district court had already ruled that McClary’s use of CEC’s marks, including “The Commodores featuring Thomas McClary,” created a likelihood of confusion and actual confusion, the emails were true when McClary continued to market himself as “The Commodores featuring Thomas McClary” in the EU, and the former manager eliminated any ambiguity by attaching the preliminary injunction to his e-mail.

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