Property, intangible

a blog about ownership of intellectual property rights and its licensing

Think of the Trademark Too

Lingo v Lingo,” so you know where this is going.  In this case brother versus sister, arguing over ownership of the trademark for “Lingo’s Market” in Rehoboth Beach, Delaware. The opinion isn’t terribly clear on the facts, so I’ve put the story together from the pleadings and the decision.

Lingo’s Market was opened in Rehoboth Beach, Delaware 112 years ago by the parties’ grandfather.  It was run by the parties’ father until 1981, when he died. Plaintiff Archie Lingo then took over the business.

In 1998, he incorporated “Archie’s Market, Inc.” and was its sole stockholder and officer. He, or Archie’s Market, Inc., leased the building from his mother Eleanor. He also federally registered the trademark in his own name.

His mom Eleanor worked at the store, for the most part for no pay, except when Archie was divorcing his wife. During that time he and his mom both testified that his mom owned the store and she received the income from the store.  They lied so that Archie’s ex-wife wouldn’t get as much alimony.

When Archie’s dad died, he made no provision in his will for the ownership of the market or the name of the store. His will had a residuary clause that created a trust for the benefit of Eleanor which, upon her death, terminated with the corpus to be distributed to Archie and his sister, defendant Dinah, per stirpes. Eleanor died in November of 2009 and also did not devise the market or trademark in the will. It did have this juicy bit, though:

FOURTH. I make no provisions in this will for my son Archie, except the same amount of love that he showed me after he started living with his French girlfriend, because he has been well provided for. This is because, Archie, you came to me and said “mother, let me show you how to save money by incorporating Lingo’s Market.” You incorporated it as “Archie Lingo’s Market.” I trusted you my son, but you used me for [your] own money grubbing ways. I thought your wife Bunny was a piece of work, after living in our house rent free for years with her demands. But your French girlfriend is a real sick person. I work over 100 days a year in the market, 12 hours a day without a break, and my son does not pay me or offer any help. My son makes me wait for the rent check until the end of the year so he can get the interest and only pays half the rent. You only care about your French girlfriend, you treat your mother, your sister and your daughter the same, without any care.

The chancery court ordered a partition sale of the property and Dinah bought it.  She apparently kicked Archie out to take over operation of the store herself. According to the complaint, Archie took down his sign but it was stolen, and then the store sported a new sign under Dinah’s ownership:

(click for larger image)

If your eyes are better than mine, you can see “The Original” is in the top left corner of the new sign and “Dinah H. Lingo, Sole Proprietor” in the bottom right. (She created an LLC, “The Original’s Lingo Market, LLC” presumably to run the business.  So is “sole proprietor” false advertising?)

The court realized “this case turns on who actually owns the mark.” It concluded Archie did:

The evidence of record, while not compelling, supports the court’s conclusion that plaintiffs have carried their burden to prove, by a preponderance of the evidence, that Archie owns the statutory and common law rights to the “Lingo’s Market” trademark. There is no mention of the Lingo’s Market trademark in the will or estate documents of either William or Eleanor Lingo. Furthermore, Eleanor indicates in her will that Archie had claimed ownership of Lingo’s Market when he incorporated the business under “Archie’s Market, Inc.” Archie’s registration of the “Lingo’s Market” trademark on the principal register of the USPTO further supports his claim to ownership as it is “prima facie evidence of the mark’s validity, the registrant’s ownership of the mark, and [his] exclusive right to use the mark in commerce.”

While Archie said during his divorce that he didn’t own the trademark, that was a lie – “while the court does not condone Archie’s actions, his story is consistent with the record.”  The leases were consistent with Archie’s ownership of the trademark too, since they referred only to the real estate being leased, not the trademark.

The court then marched through likelihood of confusion, albeit it in a confusing way. It treated Dinah’s new use, “The Original Archie’s Market,” as a separate mark and evaluated whether there was likelihood of confusion (surprise, surprise, there was).  But confused with what?  Archie doesn’t have a market anymore. There is no cause of action for determining ownership in the Lanham Act, so where was the subject matter jurisdiction? The complaint alleged that Archie plans on opening another market, which I suppose was enough. Rather than cooking up a Lanham Act claim though, I would prefer to have seen the chancery court decide who owned the trademark. But perhaps no one thought to point out to the chancery court that the market and the trademark were two separate assets, and later Archie was clever enough to get a second, and successful, bite at the apple.

Lingo v. Lingo, No. 10-624-SLR (D. Del. May 19, 2011).  First Amended Complaint here, Answer here.

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