Property, intangible

a blog about ownership of intellectual property rights and its licensing

Be Careful What You Wish For

To “plead yourself out of court” is to state facts in a complaint that mean you have already lost. Something like, in a personal injury case, saying “I rear-ended him because he stopped at a red light” would do it.

In Reynolds v. Banks it’s not quite exactly that, but pretty darn close. Sandra Banks is the owner of a trademark registration for THE DRAMATICS. The Dramatics is an R&B vocal group formed in Detroit in 1964 (caution, mellow music autostart). Sandra Banks is the widow of band member Ronald Banks, who died on March 4, 2010. Sandra Banks filed the application to register THE DRAMATICS trademark in her own name on April 21, 2010. Co-band member Larry Reynolds filed a petition to cancel her registration on March 27, 2012. He also filed a trademark infringement lawsuit in the Eastern District of Michigan about two weeks later. It’s a tortured litigation history in both venues, but I’ll just stick to the essentials.

Banks’ counsel filed a Rule 12(b)(7) motion to dismiss for failure to join an indispensible party. The motion alleged that petitioner Reynolds, in his petition to cancel, claimed that the THE DRAMATICS trademark is owned by a Michigan limited liability company of which Reynolds, band member Willie Ford, and the deceased Ronald Banks were members. Banks’ theory in her motion was that the proper party to the lawsuit was the limited liability company, not Reynolds in his individual capacity, also saying that Banks “would refuse to be joined as petitioner against herself.”

But there’s one one fatal flaw – if true, it also meant that Banks wasn’t the proper owner of the trademark registration. In an earlier opinion the Board issued Banks an Order to Show Cause:

Respondent is allowed until October 20, 2016 to show cause why judgment should not be entered against Respondent based on her apparent lack of exclusive rights in the mark THE DRAMATICS, failing which judgment will be entered against Respondent. Specifically, Respondent must state whether she alleges that she is the sole and exclusive owner of the rights in the mark THE DRAMATICS. To the extent Respondent maintains that she is not the sole and exclusive owner of the rights in the mark THE DRAMATICS, Respondent must provide the Board with her basis for maintaining that she is entitled to a registration for the mark THE DRAMATICS.

At this point Banks was acting pro se and her response was to provide a settlement proposal that didn’t mention the trademark rights. So it was over:

According to Respondent’s own allegations, she is, at most, a co-owner of the mark THE DRAMATICS with Petitioner. As such, she is not entitled to the registration at issue and her application was void ab initio. Inasmuch as Respondent failed to respond substantively to the Board’s September 30, 2016 order to show cause, and inasmuch as Respondent has acknowledged that she is not the exclusive owner of the rights in the subject registered mark THE DRAMATICS, judgment is hereby entered against Respondent. The petition to cancel is accordingly GRANTED.

I did wonder about it procedurally though – if Banks’ allegation that it was an LLC that owned the trademark was true, would it also be true that Reynolds didn’t have standing to file the petition and therefore the TTAB no authority to cancel the registration, valid or not? There was no discussion of standing in the new opinion, but I found it in an earlier opinion:

By way of its May 31, 2012, motion to dismiss, Respondent also moved to dismiss these proceedings on the ground that Petitioner failed to join indispensable parties, namely, Willie Ford and the Estate of Ronald Banks.[fn5]

“[T]he fact that two or more parties may have an interest in a mark to be pleaded in a notice of opposition, or a petition for cancellation does not mean that each such party must be joined as opposer, or petitioner.” TBMP § 303.06 (2016). While joint filing is permissible, it is not required. See id.; Avia Group International Inc. v. Faraut, 25 USPQ2d 1625, 1627 (TTAB 1992) (denying motion to join petitioner’s parent as real party in interest because proceeding involved “what rights petitioner has in its pleadeed marks vis-à-vis the defendant, not what right anyone else may have in it and denying motion to dismiss for failure to disclose parent company.”). In fact, the Board has held on at least one occasion that a requirement that all parties with an interest in a trademark be joined would be “contrary to the specific provisions of Sections 13 and 14 of the [Trademark Act] which provide that ‘any person’ who believes that he is or would be damaged by the registration of a mark is a proper party to file an opposition or a petition to cancel.” Sun Valley Company Inc. v. Sun Valley Mf’g Co., 167 USPQ 304, 309 (TTAB 1970). Here, Petitioner has alleged that he is and will be damaged by Respondent’s registration. It is not necessary that all ot her parties that may have an interest in the mark be joined as petitioners. Accordingly, Respondent’s motion to dismiss for failure to join indispensable parties is DENIED.

[fn5] It is unclear if Respondent contends that Willie Ford and the Estate of Ronald Banks, as individuals, are indispensable parties, or if The Dramatics, LLC is an indispensable party, of which Willie Ford and the Estate of Ronald Banks are members. It is also unclear if Respondent contends that the Estate of Ronald Banks should be joined as a separate person or if Respondent herself is now the appropriate party following the disposition of the estate.

So, a defense that failed on so many levels – not only was it rejected flat-out, but it also then handed the petitioner his case without any further ado. Not pleading yourself out of court, but defending yourself out of court.

HT to John Welch for the case.

Reynolds v. Banks, Cancellation No. 92055379 (TTAB Jan. 19, 2017).

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