I don’t think I have ever been so excited about an exhibit in a case before. It’s one that makes the heart of a person who writes about trademark ownership sing. Just look at it:Unique Casting v Duncan Pawn ticket
Yes, it is a pawn ticket. I have looked at many documents claiming to be a trademark assignment and this one surpasses all my hopes and dreams. If you can’t read it, it shows that on January 4, 2010, in exchange for $9,999.99, Edwin Rene Arenas granted Brass Balls Pawn & Jewelry
a security interest in the following items: name ‘UNIQUE CASTING’ to be trademarked under G&S IC 015, US 022 039 wearable garments & G&S IC 035, US 100 101 102 employment services in the nature of talent casting in the fields of music, video and films.
The story behind the pawn ticket, is, of course, a complicated one. The petitioner in this cancellation is Unique Casting Partners LLC, a business that does talent casting, and the registrant/defendant is Kathleen Duncan. She owned Brass Balls Pawn & Jewelry, the company on the pawn ticket. Both parties claim rights to the UNIQUE CASTING mark through the same person, the aforementioned pledgor and non-party Edwin Rene Arenas.
But the business goes back before him. The original Unique Casting was a Florida company, Unique Castings, Inc. (UCI), which did business as UNIQUE CASTING from the 1980’s through 2000. Arenas, who had worked for UCI as a camera operator, formed Ed Arenas Island Casting, Inc. and purchased UCI in 2000, including the mark. By 2004 he had some sort of business relationship with Duncan and in 2010 he borrowed $10,000 from Duncan, hence the pawn ticket.
On January 29, 2010, Arenas and Duncan filed the trademark application for UNIQUE CASTING, the application saying that both were “DBA Unique Casting” but also with Duncan saying that she was a North Carolina corporation and Arenas saying he was a Florida corporation. Their statuses were clarified by an Examiner’s Amendment to state they were individuals of US citizenship.
Meanwhile, Arenas’ business was struggling and he asked George Grafas for help. Grafas formed petitioner Unique Casting Partners LLC, of which Arenas became an executive. The LLC entered into a promissory note with Grafas to pay Grafas $150,000 over time. Arenas personally guaranteed the loan, so if Grafas was not paid he would become the owner of Ed Arenas Island Casting and its trademarks. And as night follows day, Arenas defaulted and the petitioner, Unique Casting Partners LLC, ended up with the company and the trademark.1
Arenas also never paid back the $10,000, so Duncan claimed that she owned the trademark. On April 3, 2012, Duncan recorded a “change of name,” which were meeting minutes purportedly kicking Arenas out of the company and transferring ownership to herself solely. (Seriously, check out the link. Another thing of beauty.)
Duncan disabled the LLC’s Facebook pages by filing trademark complaints so frequently that the LLC ultimately removed “Unique” from its name and filed the petition to cancel.
Grafas testified that Duncan never ran any kind of casting business:
No, it doesn’t make any sense at all. This is ridiculous, and it’s false. It’s entirely false. First of all, he [Arenas] was never working for her. He didn’t have a relationship with her. She didn’t have any minutes of any meeting. This was just fabricated, and this is what she wrote on the documents and sent to the USPTO. But she, you know, Ed did not work for her. He never worked for her. He never worked with her …
I’m saying ever. I don’t think that he had ever – she’s not a casting director. She never was a casting director. She has never casted anything before in her life. Ever. She has never worked as a casting director. She has never generated a single penny, a dollar as being paid as a casting director ….
I asked her if she wanted the $10,000 that was lent to her in order for me to pay for whatever it was that she paid for the trademark. I told her to send me a copy of the check, and I’ll reimburse her for it, and she can transfer the trademark to me. She didn’t want to transfer the trademark with me. She wanted to be co-owner. She wanted to be on the trademark and wanted to have a business relationship with me in order for her to do film and TV work. And she felt that she was obliged to stay on it … It’s just that she was wanting to coerce me in order to work with her to help her set up her office and to cast out of there ….
Duncan didn’t claim to have offered any casting services directly. Rather, she relied on her predecessors-in-interest’s use of the mark when she filed the Statement of Use, claiming a first use date in 1985.2
So how does it come out?
Whether we assess Respondent’s claimed ownership of the mark in the Registration at the time she filed the Statement of Use on behalf of both herself and Mr. Arenas, or at the time she recorded the “meeting minutes” with the Assignment Branch which resulted in Mr. Arenas being deleted as an identified owner of the Registration in Office records, the conclusion is the same – Respondent did not own and does not own the mark.
But it isn’t because Duncan was or was not using the mark, or a matter of whether another entity was her related company. Rather, it boiled down to pure chain of title. Recall at the very beginning of our story that Ed Arenas Island Casting – not Arenas personally – purchased the business from UCI. There was no evidence that the mark was ever assigned to Arenas and so the security interest he granted via pawn ticket was for property he did not own.
And consider the pawn ticket. The security interest was granted to Brass Balls Pawn & Jewelry. Although solely owned by Duncan, it is a separate juristic person. If anyone owned the mark because of the pawn ticket, it would have been Brass Balls.
Nor was the change of name/assignment via meeting minutes anything of the sort:
The minutes are not an assignment of anything, much less a service mark assignment including associated goodwill. Neither UCNC [Unique Casting North Carolina] nor Respondent had any ownership interest in either the mark or the Registration for the reasons already stated, and therefore they had nothing to “assign” or in connection with which to effect a “change of name.” Moreover, there is no evidence whatsoever that Mr. Arenas was ever UCNC’s employee or that UCNC had any authority or power over Mr. Arenas, while there is evidence to the contrary, and therefore UCNC had no basis upon which to limit or terminate Mr. Arenas’s trademark rights, any more than it could limit or terminate a complete stranger’s trademark rights.3
The petition to cancel the registration was granted.
Unique Casting Partners LLC v. Duncan, Cancellation No. 92056074 (TTAB Nov. 6, 2017).
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- I’m a bit confused. The promissory note was to Grafas, so when Arenas defaulted the assets would be owned by Grafas, not his entity. So I’m not sure how the TTAB reached the conclusion that the successor in this chain of title was the LLC, not Grafas. But it doesn’t matter. ↩
- The sharp reader will have noticed that the Statement of Use was signed only by Duncan, but where a trademark is jointly owned it has to be signed by the joint owners. That didn’t escape the Board’s notice either. ↩
The Board had a couple of clunkers in its theory why Duncan doesn’t own the mark too, though. The Board noted that Duncan claimed that the services offered under the mark were provided by UCNC and therefore “Respondent herself is not the source of any casting services.” Nothing in the opinion suggests that UCNC had any juristic existence separate from Duncan, so if it provided services (but there was no evidence it did), then presumably it was Duncan dba UCNC that would have been providing the services.
The second clunker is the statement “Indeed, in order for a service mark assignment or grant of a security interest to be valid, the assignment or grant must include the goodwill associated with the mark. Here, neither the pawn ticket nor any other evidence suggests, much less proves, that any goodwill was transferred to Respondent or Brass Balls Pawn & Jewelry, and therefore any assignment was in gross, or ‘naked,’ and as a result invalid.” A couple of problems here – indeed any assignment must include the goodwill, but it is overstating the requirement to say (if this is indeed what was meant) that the writing has to reflect it. If one perfects a security interest and then acts as a true trademark owner by operating a business oneself or by licensing the mark out, or the acquiror subsequently sells the asset to someone who can use it, I daresay this security interest would have worked just fine. ↩