Property, intangible

a blog about ownership of intellectual property rights and its licensing

Whoops, the State Owns the Mark

Florida VirtualSchool is an agency of the State of Florida. The enabling statute for the school says this:

The board of trustees … may acquire, enjoy, use and dispose of patents, copyrights, and trademarks and any licenses and other rights or interests thereunder or therein. Ownership of all such patents, copyrights, trademarks, licenses, and rights or interests thereunder or therein shall vest in the state, with the board having full right of use and full right to retain the revenues derived therefrom.

Florida VirtualSchool registered the trademarks FLORIDA VIRTUALSCHOOL and FLVS for educational services.  It then sued K12, Inc. for trademark infringement for use of the name “Florida Virtual Academy.” K12 filed a motion to dismiss on the basis that Florida VirtualSchool lacked standing.

So who owns the marks? The statute is not a model of clarity; it says that the school may “acquire, enjoy, use and dispose of” trademarks, a list of rights that sound like what an owner would have, but then goes on to say that “ownership of … trademarks … shall vest in the state ….”

Florida VirtualSchool argued that it must be the owner of the marks; the language “acquire, enjoy, use and dispose of” has been used to denote ownership of property since the earliest jurisprudence of the United States. Florida VirtualSchool also argued that it would be inconsistent to allow it to unilaterally dispose of marks that were owned by another entity.

But Florida VirtualSchool couldn’t sell the court on the theory; the arguments didn’t overcome the plain language in the statute that ownership of the marks vests in the state. Florida VirtualSchool therefore did not have standing as the owner of the marks.

But an exclusive licensee may also have standing. Florida VirtualSchool also argued that since it was granted “full rights” to use the marks under the enabling statute it was an exclusive licensee, but the court held that “full rights” is not the same as “exclusive rights.” The statute did not exclude others from using the marks; in fact it contemplated that the state would have ownership of plural “licenses” to the intellectual property rights. The case was therefore dismissed, albeit without prejudice.

I think there’s something missing though. Florida VirtualSchool brought actions under both Section 32 and 43(a) of the Lanham Act. Indeed a plaintiff must be the owner or exclusive licensee of the mark to have standing for a Section 32 claim, but “[u]nlike Section 32 and 43(c) [for dilution], Section 43(a) authorizes a cause of action by ‘any person who believes that he or she is likely to be damaged by such act.’ 15 U.S.C. § 1125(a)(1). Accordingly, [a non-exclusive licensee] has standing to assert the rights created by this section.” BMW of N. Am. v. Au-tomotive Gold, Inc., Civ. No. 96-384-CIV-J-20, 1996 WL 1609124 (M.D. Fla. June 19, 1996). I don’t know why the section 43(a) claim didn’t survive.

Florida VirtualSchool v. K12, Inc.
, No. 6:11-cv-831-Orl-31KRS (M.D. Fla. July 16, 2012).

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