Round and Round
by Pamela Chestek • November 14, 2016 • trademark • 1 Comment
We have one of my favorite things, a chain of title case, and one about a band name to boot. Usually band name cases are pretty ugly, about a bunch of people getting together without any legal formalities. But this is not that case.
We have the 80’s glam band RATT (official website – or is it this one?),
successful enough that in 1985 the five members, Crosby, Pearcy, Blotzer, DeMartini and defendant Juan Croucier, entered into a formal Partnership Agreement. The partnership could register the band trademarks, which it did. No partner could transfer any part of their interest in the partnership without the unanimous consent of all the partners nor could a member be kicked out without the unanimous consent of the other partners. The agreement also provided that a member could withdraw from the partnership on three months’ notice.
There was no dispute that Crosby was properly expelled. In 1992 Pearcy hand-wrote a document on a napkin:
It’s difficult to make out, but it says something about “departure from RATT … And that I’m leaving the band.” A few years later Pearcy disavowed having written the napkin, but also said that he had voluntarily withdrawn from the band and denied that the partnership stll existed.
In 1992, DiMartini’s lawyer sent a letter addressed to the partnership saying “This letter will constitute formal notice that Warren DeMartini is no longer a member of the recording and performing group professionally known as ‘RATT’, effective as of the date hereof.”
In January 1997, Blotzer and Pearcy sent Croucier a “letter of expulsion” expelling him from the RATT Partnership. Later that year Blotzer, Pearcy and DiMartini executed a Bill of Sale and Agreement that conveyed all of the rights in the trademarks to a new entity, the plaintiff WBS, Inc. The transfer was recorded at the PTO.
Then we have our usual conflicts between various members or former members of bands, each claiming that others shouldn’t be using the name of the band, and the predictable trademark infringement lawsuit, this one against Croucier for call himself “RATT’s Juan Croucier.”
Croucier attacked WBS’s ownership of the band trademarks. First we have WBS testing out the sure-fire loser that one cannot challenge ownership of an inconstestable mark; the court’s analysis on that point was pretty incomprehensible but nevertheless it is accurate that one may indeed challenge the validity of the underlying assignment of ownership, even if the trademark is incontestable.
We therefore reach the crux of the problem. In 1992 both Pearcy and DiMartini did SOMETHING with respect to their membership in the Partnership and/or the band. But we’re at a summary judgment. As to the napkin-scribbling and later disavowal:
Although a reasonable trier of fact could not conclude, on this record, that the napkin alone sufficed to signify or inform the other members of the RATT Partnership of Pearcy’s voluntary departure from the Partnership, it does, in conjunction with his 1995 disavowal of the continued existence of the Partnership, create a triable issue of fact as to his partnership status at the time of the 1997 assignment to WBS.
The meaning of DiMartini’s letter was also ambiguous enough that the court couldn’t grant summary judgment:
The letter is sufficiently ambiguous to, as Croucier acknowledges, create an open question regarding DeMartini’s withdrawal. The letter refers only to DeMartini’s withdrawal from the band RATT, with no mention of the RATT Partnership, and does not strictly comply with the requirements of the Partnership Agreement, as it does not provide three months advance notice and, arguably, to the extent it was not copied to Pearcy, did not inform all of the other partners of DeMartini’s intent. The letter was, however, addressed to the RATT Partnership. Although the bulk of the evidence appears to suggest that DeMartini did not intend to withdraw from the Partnership, a trier of fact might conceivably conclude otherwise.
But there was one factual issue on which the court could grant summary judgment. You will have noticed that the letter by which Croucier was supposedly kicked out2 was signed only by Blotzer and Pearcy but the Bill of Sale, only a few months later, was signed by three members, Blotzer, Pearcy and DiMartini. In either case, to expel a member or to sell a partner share, all partners had to participate. WBS took the position in the litigation that DiMartini had never resigned from the partnership. But, he hadn’t signed Croucier’s expulsion letter, so Croucier wasn’t expelled. And if Croucier wasn’t expelled, then the assignment from the partnership to WBS was defective because it lacked his agreement. Thus the partnership, not WBS, owns the trademarks, meaning WBS failed to prove one of the elements of its infringement claim, ownership of a mark. Summary judgment for Croucier on the Lanham Act claims.
WBS, Inc. v. Croucier, No. CV 15-07251 DDP (JCx) (C.D. Cal. Nov. 8, 2016).
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