Property, intangible

a blog about ownership of intellectual property rights and its licensing

Not His First Time at the Rodeo

In 1992, plaintiff Oleg Pogrebnoy began publishing a Russian language newspaper in New York titled in Cyrillic “KYPbEP,” which translates as “courier”; Pogrebnoy also later used the word “Kurier.” Pogrebnoy claimed ownership of the unregistered trademarks through a chain of transactions, starting with his own use in 1992, through five different companies (probably all companies he owned one way or another), and back to himself in November, 2010. This is Pogrebnoy’s second try at the suit; a 2008 complaint he filed in his own name was dismissed because the trademark was owned by Radony Inc., not Pogrebnoy personally. After the 2008 case was dismissed, Pogrebnoy had Radony assign the trademark back to him so he could pursue this action pro se. The district court originally dismissed this second suit for lack of standing too because Pogrebnoy couldn’t prove the full chain of title, but the 9th Circuit reversed. And we finally reach the substance of the claim.

In 1994, Pogrebnoy and defendant Matusov entered into an oral agreement, the terms of which were not only disputed but the court also has this to say about the parties:

22. The Court, having observed Pogrebnoy during his testimony, finds that Pogrebnoy is not a credible witness. He was evasive and combative while testifying. He also asserted his Fifth Amendment rights against self-incrimination when he initially declined to answer several questions. The Court also finds that Pogrebnoy frequently failed to observe corporate formalities, and has not always conducted his business dealings in an entirely ethical manner.

23. The Court also concludes, based on its observations of Matusov’s testimony, that Matusov is not an entirely credible witness and that he too has not always conducted his business dealings in an entirely ethical manner.

On to the facts. Pogrebnoy first sent defendant Vitaly Matusov copies of the New York KYPbEP paper to Los Angeles, where Matusov distributed them for 12 weeks to test the desirability of launching a Los Angeles version. After that, Pogrebnoy would provide Matusov with film negatives, and then later computer files, of the New York paper that Matusov would use in creating the Los Angeles newspaper. Both agreed that Matusov was to pay Pogrebnoy, although they claim different amounts and different bases: Pogrebnoy claiming it was a percentage of sales and Matusov claiming it was a flat fee. Matusov said he replaced most of the advertisements in the New York version with ads he sold for the Los Angeles market, and that he would use some, but not all, of the articles. Pogrebnoy would also sell ads for both the New York and Los Angeles market, and Matusov wouldn’t replace those.

The parties had a falling out in 2007; Pogrebnoy claimed that Matusov wasn’t paying him the agreed-upon amount and demanded that Matusov turn the Los Angeles business over to him. When Matusov didn’t, Pogrebnoy said he was terminating the license to use his KYPbEP and Kurier trademarks and trade dress.

But was there a license? First the legal effect if there was:

10. … If Pogrebnoy and Matusov had agreed that Matusov would license the trademarks, and this agreement allowed Pogrebnoy to terminate that license, Defendants’ use of those marks after termination would be infringing. Additionally, if Defendants’ use of the marks and trade dress was pursuant to a license from Pogrebnoy, their use would inure to the benefit of Pogrebnoy, which would make Pogrebnoy the senior user in the Los Angeles market and establish Defendants’ infringement.

But there was no license:

11. The Court concludes that Pogrebnoy has failed to establish by a preponderance of the evidence that he either expressly or implicitly granted to Defendants a license to use the trademarks and trade dress at issue in this litigation. Specifically, Pogrebnoy’s description of the oral contract between him and Matusov did not include any terms concerning a trademark and trade dress license. Nor has Pogrebnoy introduced sufficient evidence for this Court to conclude that it is more likely than not that the relationship between him and Matusov created an implied trademark and trade dress license. There simply is no evidence, let alone a preponderance of evidence, tending to indicate that Pogrebnoy and Matusov discussed any issues concerning trademark and trade dress rights or licenses when they negotiated their oral contract. Instead, as Matusov testified, it is more likely that the parties agreed that Pogrebnoy would provide the negatives from which Matusov would create the Los Angeles version of KYPBeP, utilizing the articles and page layouts supplied by Pogrebnoy, in exchange for payment from Matusov. Pogrebnoy has not satisfied his evidentiary burden to establish that in 1994 when he entered into the oral contract with Matusov that he knew or cared about trademark and trade dress rights.

12. The Court further determines that there is insufficient evidence to support a conclusion that a trademark and trade dress license should be implied from the parties’ relationship and their course of conduct. The parties did not share accounting information, and Pogrebnoy and his companies were never liable for any of the printing, distribution, or other expenses incurred by the Los Angeles KYPBeP. Nor did Pogrebnoy and his companies ever review the Los Angeles KYPBeP before it was published. There is also no evidence to support a conclusion that Matusov would devote more than a decade to developing the Los Angeles KYPBeP if, after building the value of the newspaper, Pogrebnoy could unilaterally terminate the purported license and force Matusov out of the business. Instead, the evidence adduced at trial supports the conclusion that, at most, Pogrebnoy could terminate his obligation to supply the articles and page layouts that had been prepared by the New York KYPBeP.

To sum it up, in the court’s opinion there was no evidence on any essential terms of a license agreement, nor any evidence that Pogrebnoy had any say over the quality of the Los Angeles newspaper. I’m not sure this is entirely correct: after all, other than the localized advertising it looks like the content was largely provided by Pogrebnoy—surely that is some control over the quality of the goods.

And the court was swayed by Pogrebnov’s experience with the court system:

13. This conclusion is further supported by the fact that after Pogrebnoy and Matusov entered into their oral contract, Pogrebnoy has been involved in several intellectual property disputes involving both copyright law, see Itar–Tass Russian News Agency v. Russian Kurier, Inc., 886 F.Supp. 1120 (S.D.N.Y. 1995), and trademark licensing, see Russian Kurier, Inc. v. Russian American Kurier, Inc., 899 F.Supp. 1204 (S.D.N.Y. 1995). The Court concludes that it is more likely than not that Pogrebnoy learned about the value of intellectual property rights and trademark licenses from those experiences. As a result, his “termination” of the purported license, some 13 years after entering the oral contract, is not sufficient evidence from which the Court can find the existence of an implied or express license. Instead, Pogrebnoy appears to be attempting to use the ambiguity in the original oral contract to take Defendants’ business from them. Pogrebnoy has failed to present sufficient evidence to establish that he is entitled to do so.

Not one trademark, two, separated by a continent.

Pogrebnoy v. Russian Newspaper Distrib., Inc. , No. CV 10-8532 PA (SSx) (C.D. Calif. Dec. 18, 2014).

Creative Commons License
The text of this work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

Share Button

Leave a Reply

Your email address will not be published. Required fields are marked *