TM co-owner can't challenge uses authorized by other co-owners (bonus Lexmark reasoning)

Reed v. Marshall, 2023 WL 6963661, No. H-21-3942 (S.D. Tex. Oct. 20, 2023)

In 1991, Reed and defendants Marshall and Harris formed the recording group Jade, and in 1992 they signed an exclusive recording agreement with a now-defunct label, Giant. The Giant agreement provided that the service mark “JADE” would be held exclusively by the Jade Group, that at no time would more than one member of the Jade Group appear on a non-Jade Group recording, and that no additional members would be added to the Jade Group without Giant’s consent. The three principals registered JADE for “entertainment services, namely live performances by a musical group,” identifying the owner as “JADE,” a California “partnership,” “composed of Joi Marshall, Deyelle Reed and Tonya Harris.” In 1995, Harris decided to stop performing with Jade, and the members pursued individual careers.

In 2013, Marshall and Harris posted a video to YouTube.com titled “Jade — Continuum,” which included vintage footage of Jade, including Reed, from the 1990s, and promotional material for a new recording featuring Holloway under the name “JADE.” Reed objected, claiming to own “equal ownership and rights” to the Jade name and also claiming violation of her right of publicity. In 2014, Marshall and Harris appeared together at the Judge Mablean Ephraim Foundation red carpet where they identified themselves as “Jade.”

In 2018, in anticipation of a reunion tour, the three filed an application to register the service mark “JADE” for “Entertainment services in the nature of live musical performances” and related services. Marshall and Harris later entered into an agreement with defendant Holloway, pursuant to which Holloway would “create/contribute to live performances and promotions ... as ‘work for hire.’” When Reed learned that Marshall and Harris had hired Holloway to sing in her place at a “90’s Kickback Concert” tour using the Jade mark, she objected again.

Defendants admitted that they performed as Jade at a “90’s Kickback Concert” held in three different locations in 2021; they did not account to Reed for any profits.

Reed alleged that Holloway was violating §32 of the Lanham Act. Marshall and Harris responded that they, as co-owners, consented to her use (while performing with them), and no agreement with Reed barred them from doing so. The court agreed with defendants. Although Reed was clearly within the statute’s zone of interests, there was no evidence that her injuries were proximately caused by a violation of the statute. There was no argument or authority that, by performing under the mark with Marshall and Harris, Holloway infringed Reed’s rights. This is why co-ownership is disfavored in trademark—but co-ownership is not prohibited. Courts have uniformly held that federal claims for infringement cannot be maintained against co-owners because “[c]o-owners of trademarks hold ‘equal and unfettered rights of use.’ ” As one court explained, “[b]ecause co-owners are naturally associated with the same source, … use by a co-owner cannot create confusion as to the source among consumers.” Although a co-owner might be entitled to an accounting, that was not a federal claim. It follows that “a valid licensee of one co-owner of a trademark cannot be liable to another co-owner for infringement.” This reasoning also disposed of contributory/vicarious infringement claims against Marshall and Harris.

§43(a) false designation of origin/false advertising: Lexmark applied to both, and Reed failed to present evidence that she suffered an injury to a commercial interest in sales or business reputation proximately caused by the defendants’ misrepresentations. There was no evidence that Reed marketed services under the mark such that its single source identifying value had been fractured or undermined. And there was no authority that Marshall and Harris needed her authorization to use the mark in commerce. Although joint ownership might potentially lead to confusion, there was still no commercial injury to Reed’s business reputation or sales. Reed didn’t identify evidence that defendants used Reed’s likeness or voice in advertising materials, or credited Holloway instead of Reed for her performances/recordings (also Dastar-barred, by the way; the court discusses a lot of pre-Dastar 9^th Circuit precedent that can’t be valid any more).

Dilution also failed. “[F]ederal claims for dilution — like claims for infringement — cannot be maintained against co-owners.”

The court declined to exercise supplemental jurisdiction over the Texas dilution and ROP claims. (I would expect they’re preempted.)