Property, intangible

I wrote an article proposing an analytical framework for resolution of disputes where two parties claim to own the same trademark, using settled law on the manufacturer-distributor relationship as a starting point.  The situation comes up fairly often and in this case the tip off is early – “This dispute stems from the shifting business relationship” between the parties. The court didn’t have much trouble deciding who owned the mark, though; no strenuous legal analysis required.

Multi-Vet is the plaintiff, Premier the defendant, and the goods are anti-bark spray collars for dogs.  In 2001 Premier entered into a license agreement with Multi-Vet to become the exclusive distributor of its patented anti-bark spray collars in the United States under the trademark “Gentle Spray.”  Multi-Vet registered the mark. The 2001 Agreement provided that if the agreement was terminated, Premier could buy the trademark for $1.00.

The parties next entered into a “First Amended and Restated Licensing Agreement” in 2003, which only affected financial terms of the 2001 agreement.  Then the two companies renegotiated their relationship in 2004 and entered into an “Exclusive Distribution Agreement.”  The 2004 agreement said that all “intellectual property” used by Multi-Vet in association with its products was the exclusive property of Multi-Vet, with no mention of the potential assignment described in the 2001 agreement. The agreement also had an integration clause stating that it merged, superseded and cancelled the 2003 agreement.

The 2004 agreement was terminated in 2005 and the parties entered into a non-exclusive distribution agreement, including a license to the Gentle Spray trademark.  The distribution agreement was terminated in 2006 but Multi-Vet continued to provide the collars to Premier until 2007.  After that, Premier began manufacturing its own collars.

Multi-Vet brought a trademark infringement claim against Premier in April, 2008 for Premier’s use of “Gentle Spray Bark Citronella Anti-Bark Collar” and “Gentle Leader Spray Sense Anti-Bark Collar” (complaint here).

The conflict addressed in the opinion, however, is on a motion for preliminary injunction by Premier on an infringement counterclaim.  Premier counterclaimed against Multi-Vet’s own use of the Gentle Spray mark and trade dress; you can see the two bear a strong similarity:

Premier argued that it owned the Gentle Spray trademark, a predictable loser of an argument.  Premier was largely defeated by the evidentiary presumption that Multi-Vet’s registration provided.  The purchase option for the mark under the 2001 agreement didn’t change anything; it was superseded by the 2004 agreement and later agreements made no mention of a potential transfer.  Letters from Multi-Vet to Premier assuring Premier that it had the exclusive right to use the mark were consistent with the terms of the licenses, not a reflection of the ownership of the mark.

Premier had also itself registered a “No Shock/No Pain” mark.  Multi-Vet claimed to have developed the No Shock/No Pain mark itself in Canada in the mid-1990’s, and pointed out that the 2004 agreement confirmed Multi-Vet’s ownership of all marks used in association with the product.   This was enough evidence to rebut the presumption of ownership of the “No Shock/No Pain” mark to a degree sufficient to defeat the grant of a preliminary injunction against Multi-Vet.  For good measure, Multi-Vet’s use was not likely to be confused with Premier’s use because it was so small (the small circle on the left of the back of the packaging):

No likelihood of success on the merits, therefore no need to go on to the “irreparable harm” prong of the test for preliminary injunction.  Preliminary injunction on related state law claims also denied.

A procedural faux pas (or a deliberate choice) – only Premier filed a motion for preliminary injunction, which was denied.  Multi-Vet had not, so the products are currently coexisting in the marketplace.  Premier’s replacement trademark, Spray Sense, is on the web as “formerly Gentle Spray,” so it looks like Premier is phasing out its use.  Query whether the harm to Multi-Vet is even greater, though, if consumers believe that “Gentle Spray” is being phased out when Multi-Vet itself sells it.