• The Dark Underbelly of Teddy Bear Puppies

    by  • November 10, 2008 • trademark

    I’ve mentioned in the past that the naked licensing doctrine has taken on a life of its own disconnected from the statutory basis for it, abandonment. Fuller v. Heintz/Candee takes the naked licensing doctrine to an extreme, apparently holding that only one “naked license” is enough to invalidate the trademark.

    The case is tantalizing in its lack of detail. The plaintiff had voluntarily dismissed his claim and the court only had to decide costs and attorneys fees, in particular the date on which the claim became exceptional.

    It seems that the plaintiff, Jason Fuller, had a trademark registration for “Teddy Bear Puppy” and sued the defendant, Patricia Heintz/Candee, for infringement.

    Plaintiff’s puppies

    Fuller had granted at least two licenses the defendant claimed were “naked,” one to Amy Zehe granted before the suit was filed and one to Sherri Smeraglia granted after the suit was filed.

    What’s most surprising in this case is the plaintiff’s behavior. In an unrelated lawsuit over whether the Zehe license was a franchise agreement, Fuller himself argued that the trademark was invalid:

    Further, it is doubtful that the trademark “license” presented would even pass muster as a bona fide license since the usual quality control provisions imposed by the owner of such mark are completely lacking in the documents of record. While a concern for the welfare of the dogs is clearly expressed, no provisions are made for policing the use of the mark by, for example, requiring the licensee to periodically provide the Respondents with specimens showing use of the mark.

    The court nevertheless found that the Zehe license was not naked, stating “the agreement provides just enough quality control to insure consistency and quality of the product. . . . I am persuaded from the quality control mechanisms in place in the Zehe agreement that it was not a ‘naked’ license and does not establish the plaintiff’s infringement suit ‘lacked merit’ when he filed it.”

    The Smeraglia license was naked, though, although the court did not explain why because the plaintiff conceded it was. He consequently dismissed his case and cancelled his registration. The court stated bluntly, “Plaintiff issued a naked license on February 25, 2008, which automatically invalidated his trademark and undermined his infringement suit.”

    Hopefully this case will die a quiet death. A single unexplained “naked” license is simply not a legitimate basis for invalidating a trademark in ordinary circumstances.

    Fuller v. Heintz/Candee, 07-cv305-bbc, 2008 U.S. Dist. LEXIS 89620 (W.D. Wis. Nov. 4, 2008).

    © 2008 Pamela Chestek