Property, intangible

a blog about ownership of intellectual property rights and its licensing

Screwed, But Not a Federal Problem

There’s a tale here.  Unfortunately for plaintiff, not enough to make a federal case.

The plaintiff, G & F Licensing Corporation (GFLC), claims to be a successor company to the Gordon & Ferguson Company, the original owner of the mark FIELD & STREAM for apparel.  The current record owner is Field & Stream Licenses Co., LLC (FSLC). Here’s the history of the mark and the licenses, as related by GFLC (the only storyteller) in the complaint and exhibits, and in the PTO databases:

– Gordon & Ferguson, Inc., founded in 1871, first registered FIELD & STREAM in 1926 with a first use date of 1915.
– Gordon & Ferguson, Inc. assigned the mark to Gordon & Ferguson Company in 1962.
– Gordon & Ferguson Company assigned the mark to Gordon & Ferguson Merchandising Company in 1984.
– Gordon & Ferguson Merchandising Company assigned the mark to Field & Stream Licenses Company in 1987.  Field & Stream Licenses Company was a wholly-owned subsidiary of Gordon & Ferguson Merchandising Company.
– Gordon & Ferguson of Delaware, Inc. became an exclusive licensee of the mark for outerwear on October 28, 1988.  The license would be essentially fully paid-up after $1.5M in royalties and then also freely assignable.
– Gordon & Ferguson of Delaware, Inc. transferred the license to Gordon & Ferguson, Inc. (presumably a different company than the original owner) around February, 2006.  Field & Stream Licenses Company acknowledged that the license was paid up and no consent to the assignment was required.
– Field & Stream Licenses Company became FSLC by way of merger in August, 2006.  The company was “purchased by an investor group specifically to enhance and re-launch the Field & Stream brand . . . . [M]anagement is now executing on its vision to re-position the brand by expanding the presence of Field & Stream products at upscale retailers.”
– Gordon & Ferguson, Inc. transferred the license to plaintiff GFLC around June, 2007.
– FSLC claims that the license was terminated as the result of a default by – well, who knows exactly which company, FSLC lumps them all together – around June or July, 2008.

GFLC says it was a former licensee that went out of business so there was no default, and sues for declaratory judgment of ownership and infringement by FSLC and others.  GFLC’s principal theory was that the exclusive, virtually paid-up (except for $1 a year) license was actually a de facto assignment.  But as smelly as the deal sounds (one can see why FSLC would have reason to try to ditch GFLC), there’s no getting around the plain words of the license:

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Its infringement claim against FSLC is also estopped by the license:

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as well as against the co-defendants, for lack of notice:

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So there’s just no federal remedy here. Rather:

it is essentially a contract dispute between an exclusive licensee and licensor over the right to use the trademark[s] at issue. The dispute should be determined by the principles of contract law, as it is the contract that defines the parties’ relationship and provides mechanisms to redress alleged breaches thereto. The Lanham Act, in contrast, establishes marketplace rules governing the conduct of parties not otherwise limited. This is not a case of either the licensee or licensor attempting to protect a trademark from unscrupulous use in the marketplace by third parties. Rather, this case involves the alleged breach of a license agreement.

But even aside from that, think of the lessons here.  Recall that GFLC claims that the trademark was transferred from the owner to a wholly-owned subsidiary.  Whether the later sale to an unrelated party was forced (for example in a bankruptcy) or intentional, putting ownership of the marks in a different company leaves that much more room for mischief.  This is also a really bad license; the licensee’s use was virtually without discretion once the royalty was paid up.  That may have been well and good if, as it appears possible, the original parties were sister companies.  But they’re not anymore, leaving everyone in a terrible state of affairs, perhaps with an efficient breach the only recourse.

G & F Licensing Corp. v Field & Stream Licenses Co., LLC, No. 09 Civ. 10197 (LTS) (GWG) (S.D.N.Y. July 16, 2010).

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