Property, intangible

a blog about ownership of intellectual property rights and its licensing

It Wasn’t the Royal “We”

Third Education Group, Inc. v. Phelps is a short, clean, decision on trademark ownership. Richard Phelps wanted to create a web-based journal and asked Thompson to join him in the endeavor. Phelps thought of the name “Third Education Group” and registered the trademark in his own name. The parties had a falling out and ownership of the trademark was disputed.

Without any tedious multi-factor tests or legal standard cited, the court distilled it down quickly:

Although it is undisputed that the name Third Education Group was Phelps’ creation, it is similarly undisputed that Phelps created this name not to be his own property but as the name of the voluntary association he entered into with Thompson. (See Docket No. 67-5. (“I think we should call ourselves ‘Third Education Group,’ or something like it….”).) And it is further undisputed that, at least prior to the registration, the mark had never been used by Phelps individually but only on behalf of TEG. (See, e.g., Emails from Phelps to Thompson, Docket No. 73-2 at 26 (“I already got us a trademark and domain.”); Docket No. 73-2 at 190 (“I got a card from the U.S. Patent Office a few weeks ago notifying us that they would post our name for a month (July) to give any other potential claimants to the name or complainants in general the opportunity to challenge our right to the name.”); Docket No. 73-2 at 219 (“I haven’t heard about our trademark.”) (emphasis added in each)). Thus, the name belonged to the association and not to Phelps personally.

Phelps therefore didn’t own the mark, so the application wasn’t filed in the name of the owner of the mark and the registration was void. In the court’s opinion, the registration should have been made in the name of the two as joint owners. Multiple claims fall as a result.

Here’s a practice tip: a voluntary association can register a trademark only if its existence is in a state where this type of entity has the capacity to sue and be sued. Lanham Act § 45, 15 U.S.C. § 1127 (“The term ‘juristic person’ includes a firm, corporation, union, association, or other organization capable of suing and being sued in a court of law.”) Wisconsin isn’t one:

Prior to its incorporation, TEG existed under Wisconsin law as a voluntary association between Phelps and Thompson. A voluntary association “is a name applied to a group of individuals who have joined together for a certain object and who are called, for convenience, by a common name.” Herman v. United Auto., etc., Implement Workers, 264 Wis. 562, 567, 59 N.W.2d 475, 477 (1953). As a voluntary association, TEG lacked the capacity to sue or to be sued, Elections Bd. v. Ward, 105 Wis.2d 543, 546, 314 N.W.2d 120, 123 (1982) (citing Crawley v. American Society of Equity, 153 Wis. 13, 17, 139 N.W. 734 (1913)); but see Teubert v. Wisconsin Interscholastic Athletic Asso., 8 Wis.2d 373, 99 N.W.2d 100 (1959), and thus, contrary to the assertion of TEG, Inc./Thompson, TEG was not a juristic person, see 15 U.S.C. § 1127, capable of registering the trademark, see 15 U.S.C. § 1051. Rather, a voluntary association acts through its individual members.

As an aside, hat’s off to the court for struggling through less than clear legal argument. You know it was tough going when the court had to figure out whether a theory of “estoppel” mean promissory estoppel or equitable estoppel.

Third Education Group, Inc. v. Phelps, Nos. 07-C-1094, 07-C-1095, 2009 WL 2150686 (E.D. Wis. May 15, 2009).

© 2009 Pamela Chestek

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