Property, intangible

Francisco Coll-Monge (deceased at the time of the suit) founded two non-profit companies in the 1960’s, Inner Peace Movement, Inc. (IPM) and Peace Community Church (PCC), to promote self-actualization programs. He registered various trademarks, including INNER PEACE MOVEMENT and PEACE COMMUNITY CHURCH, in his own name. The district court got it wrong but the court of appeals got it right, that Coll indeed owned the trademarks.

In Section 5 the Lanham Act recognizes the commercial reality that trademarks are used by entities other than than the registrant – such as motorcycle logos used on jackets – but that the goodwill arising from the use should nevertheless accrue to the registrant. The statute calls these entities “related companies.” Section 5 defines a “related company” as “any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used.” The district court wrongly held that the non-profits could not be “related companies,” and that instead Coll had registered the mark on behalf of the non-profit companies. The district court erred by interpreting “related companies” in the corporate law vein, i.e., formal corporate control through ownership, rather than the specialized definition in Section 5. The court of appeals corrected the misinterpretation and found that there was enough evidence of Coll’s control over the services offered by the non-profits to avoid summary judgment against the estate.

The district court’s conclusion was wrong in a second way not discussed by the court of appeals, which is the conclusion that Coll could be a registrant but the non-profits the true owners of the marks. Under Section 1 of the Lanham Act an application must be filed by the “owner” of the mark; if Coll was not the owner then the registrations were invalid.

The estate had advertised a meeting of the Board of Directors for the “Inner Peace Movement®” at the same time the Board of Directors meeting for IPM was scheduled. The district court enjoined the estate’s meeting and the estate was ordered to pay for corrective mailings to sort out the confusion. Perhaps counter-intuitively this was upheld by the court of appeals, despite the fact that it reversed on the trademark ownership claim. The court of appeals was right, though; the estate was using its trademark in a way that created confusion for the corporation, actionable under the expansive language of Section 43(a).

The relationship between the non-profits and the estate looks like it’s soured. If the conflict continues it could be interesting sorting out the trade name/trademark confusion problem. Four trademark registrations, Reg. Nos. 1806494, 1801163, 1894364 and 1899284, were assigned to Inner Peace Movement, Inc. and Peace Community Church, Inc. because of the district court order. In the usual related company situation, i.e., a standard licensor-licensee relationship, the contract generally requires cessation of the use of the trademark and any confusingly similar trade name at the end of the relationship. With the court of appeals holding that the estate owns the trademark, rather than there being a unity of ownership of the trademarks and trade names, the larger battle about who gets to use what names and marks in the future could be just beginning. The web site at innerpeacemovement.org (last modified in 2006) both uses the ® symbol and states it is a 501(c)(3) non-profit corporation.

Estate of Coll-Monge v. Inner Peace Movement, Inc., 524 F.3d 1341 (D.C. Cir. 2008), available here (Findlaw, free subscription required).