5th Circuit agrees that joint TM owners can't sue each other under any Lanham Act theory

Reed v. Marshall, --- F.4th ----, 2025 WL 1822673, No. 24-20198 (5^th Cir. Jul. 2, 2025)

Jade, an R&B, hip hop, and soul vocal group, rose to prominence in the 1990s. Jade disbanded in 1995, when the members began pursuing their respective individual careers. “Appellant Di Reed contends that her fellow Jade members, Joi Marshall and Tonya Harris, violated the Lanham Act by performing under their co-owned JADE mark with another singer, Myracle Holloway.” She lost because “the Lanham Act does not authorize claims between co-owners of a trademark.”

In 2018, the three original members agreed to a reunion tour, and collectively applied for joint ownership of the “JADE” service mark; it was registered in 2019 for “[e]ntertainment services in the nature of live musical performances.” The registrants were listed as Reed, Marshall, and Harris, all in their individual capacities. But the reunion fell through, and in June 2021, Marshall and Harris entered into a six-month work-for-hire contract with a different singer, Myracle Holloway. That trio performed as Jade at multiple “90’s Kickback Concert[s].” Promoters created social media ads that, Reed claims, inappropriately used her name, image, and likeness, along with the JADE mark.

Reed sued the other individuals, along with two other defendants (now settled out), alleging infringement, dilution, and unfair competition through false designation of origin and false advertising; as well as violations of Texas statutory and common law. After disposing of the federal claims because co-owners and licensees thereof can’t be sued, the district court found that it lacked supplemental jurisdiction over the state claims. This appeal followed.

The court of appeals framed the issue as one of statutory standing. (Scalia was never going to win this terminological issue.)

Reed, Marshall, and Harris “entered into joint ownership of the JADE mark—that is, each individual owns a complete interest in the mark.” This is disfavored—“a mark is fundamentally intended to ‘identify and distinguish a single commercial source,’ not three distinct owners,” but it is allowed (why, though, since it can’t actually perform that core function if the owners part ways and more than one keeps using the mark? This is an example of the US TM system not fully committing to the principles it says it uses; you could probably get a highly similar result by saying that the mark stops signifying the joint owners when they fragment and can be reappropriated by the first successful user thereof). Because “[a]ny discord between co-owners could result in ‘multiple, fragmented use’ that may result in ‘consumer confusion and deception,’” parties should contract to clarify “outcomes should owner interests become unaligned.” But they didn’t.

Too bad! The Lanham Act, “which is aimed at protecting consumers and mark owners from fraud and deceptive acts,” does not provide a cause of action “to remedy disputes between the co-owners of a trademark.” An owner definitionally can’t be an infringer. “Co-owners of a mark, who generally have the right to use their marks as they please,” are owners, not infringers. “[T]he question is not whether joint ownership of a trademark could cause confusion if co-owners went their separate ways, but whether the Lanham Act affords a statutory right for those co-owners to sue each other.” And Holloway was not an appropriate target either, because “Marshall and Harris, as persons with complete ownership interests in the mark, have an unencumbered right to use the mark as they please,” including by licensing. [Note that this is not correct—there are uses of the mark that will lead to loss of rights, not to mention potential conflicts with, say, JADE for other things if they try to expand.]

Dilution: Same result. Of note: “The plain text of 15 U.S.C. § 1125(c)(1) signals that at least two distinct marks need to be in play for dilution to occur: ‘the famous mark’ possessed by an owner, and an imposter ‘mark or trade name’ that causes dilution of the original mark.” Here, that mattered because an owner can’t be an imposter, but it has broader implications (if use as a mark is still a thing).

False advertising: Reed alleged that the “[d]efendants’ unauthorized use of [her] JADE Mark ... in conjunction with the promotion and provision of live entertainment services constitutes unfair competition and false advertising.” More specifically, defendants allegedly falsely advertised that “Holloway is a member of the group Jade” and “that the performances promoted and provided by Defendants are those of the group Jade.” But this hinged on the mistaken premise that defendants were using the JADE mark in an unauthorized manner. Also, there was no evidence that defendants’ use of the JADE “mark in commerce proximately caused Plaintiff to suffer injuries to commercial interests in business reputation or sales.”

Reed’s best allegation is that in marketing materials for the 2024 “R&B Block Party” concert, the event’s promoters created social media posts that included a Jade song that featured Reed’s voice. But with respect to the Lanham Act, Reed concedes that “[a] person’s name, image, or likeness cannot function as a trademark such that it affords a plaintiff a cause of action for trademark infringement,” and in any event, the promoters who made the advertisements in question are not parties to this suit.

Reed argued that she suffered “lost opportunities such as the creation of new compositions under JADE name and subsequent profits from new compositions”; “business reputation in the form of deliberate exclusion from promotional appearances under JADE name”; and lost “performances under the JADE name.” But, even had there been evidence in the record, “the defendants’ co-ownership of the JADE mark does not exclude Reed from using the mark as she pleases. In other words, the defendants’ use of the JADE mark has not caused Reed to ‘los[e] opportunities’ associated with the mark; she, as a co-owner, has the right to pursue those opportunities consistent with the (lack of) conditions linked to her ownership interests.” [Among the implications: she benefits from defendants’ use to preserve her own rights, since their use in commerce redounds to her benefit. Could a state law proceeding force partition by sale? What about partition in kind?]

False designation of origin: Here it seems like Belmora would at least allow for some sort of labeling remedy under appropriate circumstances, but Reed’s theory was not conducive to that. She argued that the defendants’ “unauthorized use” of the JADE “mark” and her “voice and likeness in commerce” was “likely to deceive consumers as to the origin, source, sponsorship, or affiliation of Defendants’ services.” Specifically, she argued that consumers would think that the Holloway-Marshall-Harris performances were “affiliated with or sponsored by” her. [My theory: people who knew the group but didn’t know the performers’ names would think that she was performing—this seems much more plausible. But the remedy might be much more limited.]

The court of appeals found that, even if she did fall within the statute’s zone of interests, her injuries were not proximately caused by a violation of the Lanham Act. [I don’t think this is a conflict with Belmora, but rejecting my theory might be—she doesn’t need to own a TM to bring a Belmora claim.] Her allegations were all premised on unauthorized use of the JADE mark. But that use wasn’t unlawful, and Lexmark bars “suits for alleged harm that is ‘too remote’ from the defendant’s unlawful conduct.”