It has been about one year since the last update on the Outlaws lawsuit. A lot has happened in that time, but I’m going to fast forward to April 6, which is the date that Judge Lazzara entered his order granting summary judgment to… the DEFENDANTS!
My very first post concerning this case hinted that “the paperwork” would be the key to the case. That was a reference to the license agreement that was attached to the Complaint and which allegedly gave the Defendants the right to use the OUTLAWS mark while touring. The Court carefully inspected the license agreement and noticed some major problems with it. One problem was that the license purported to be an “exclusive” license granting the Defendants the exclusive right to use the mark; but, in a different provision, the license said that the Licensees (Defendants) agree that they may not use the mark without prior written consent of the Owner (Plaintiff). WHOOSH! That’s the sound of the license agreement being sucked into a black hole of unenforceability. A trademark licensor cannot grant an “exclusive” license to a licensee and then require that licensee to ask for written permission before using the trademark. That’s not a license, and it results in “no mutuality of obligation,” meaning that the licensee has obligations under the contract but the licensor doesn’t. It’s “illusory.”
Also, the license agreement (properly) contained provisions whereby the licensor (Plaintiff) could monitor the quality of the Defendants’ services under the mark. This is necessary to prevent “naked licensing.” Since the mark is still owned by the licensor, they have to make sure that the licensee is providing goods or services that live up to the quality of the trademark or risk abandoning or otherwise harming the mark. The record in this case established that the licensor did not monitor the quality of the services being provided under the licensed mark, thus the license agreement was illusory.
It wasn’t just the license agreement that sunk the case for the Plaintiff, however. The Order is filled with references to Mary Thomasson’s deposition. That deposition provided extremely valuable information for the Defendants. It revealed numerous problems with the transfer of the Outlaws intellectual property and the corporate structure used to control the intellectual property. It’s a bit sad because a lot of the ownership problems seem to have occurred in the wake of Mr. Thomasson’s death.
This case is, at least for the Plaintiff, a painful reminder of the importance of properly assigning and licensing one’s intellectual property.
After spending pages and pages explaining how the OUTLAWS trademark was improperly assigned and licensed, the Court makes a poignant statement: “The Licensee Defendants have not infringed Outlawlessness’ [Plaintiff’s] ‘Outlaws’ trademark, to the extent it exists.” (emphasis added). Ouch. Mismanagement of the mark may have legally killed it. (The Court makes an interesting finding that a “recording company” and “live musical performances” are not related for purposes of trademark infringement. I think that’s debatable, especially with the facts in this case. However, that issue really wouldn’t have mattered given all of the other problems with the mark.)
There were some other issues in the case that I haven’t addressed (i.e. copyright), but my focus in featuring this case has always been the trademark issues.
Here is a link to the Order. It’s worth the read.