A trademark license is an agreement through which one organization allows another to draw on its trademark. Ostensibly, till last year, no court had been asked to decide if a trademark licensee in bankruptcy can presume, or presume and consign, a non-licensed trademark license without the consent of the trademark owner. The first answer to that query was found in a case named In re: N.C.P. Marketing Group, Inc., 337 B.R. 230, at a time when the U.S. District Court (Nevada) declared that trademark licenses are private and non-convertible, deficit of a regulation in the trademark license on the other hand. In the concluding part, the court stated that according to the Lanham Act, (the federal trademark statute), a trademark holder has the right and responsibility to supervise the quality of products sold under the trademark:

Given that the holder of the trademark has an interest in the entity to whom the trademark is consigned so that it maintains the quality, value, and goodwill of its merchandise and thereby its brand name; trademark licenses are exclusive to the beneficiary and not freely transferable to a third party.

The U.S. Court of Appeals for the Ninth Circuit (including California, Nevada and other western states) had formerly improvised that the key Bankruptcy Code terms involved, Section 365(c)(1), in order to prevent a debtor from taking on a contract while it does not hold the right to consign it.

Constituting on the Ninth Circuit law, the trade name holder in the N.C.P. Marketing Group event disputed that under trademark act the defaulter could neither assign nor assume the non-transferable trademark permit at issue. This was agreed by the district court, stating that the bankruptcy court rightly allowed the trademark holder’s action to induce the debtor to decline the trademark permit, compelling the debtor to renounce its license rights.

For trademark owners, this judgment is good news. A lot of people have been apprehensive that if a licensee declares bankruptcy, it could use the Bankruptcy Code’s universal authority to assume and assign executory agreements to consign trademark permits to third parties over the trademark holder’s disapproval. The decision of the N.C.P. Marketing Group extends to trademark holders insurance already acknowledged by various courts for copyright and patent owners. The instance does not state whether the same law would be applicable for special trademark licenses. However, known that the trademark holder has analogous rights and responsibilities to supervise the quality of products traded under a certified mark, the upshots could be the same.

For trademark licensees declaring bankruptcy, the judgment is, certainly, bad news. In case the decision is trailed by other courts, trademark licensees declaring bankruptcy shall be powerless to give their rights to third parties or to retain those authorities for themselves without the consent of the trademark holder.  The merit of these debtors, as well as their capability to pay off creditors, could suffer too.

If you have additional questions please contact us by filling out the contact form or giving us a call at 206-682-7975.

Leigh Steinberg

Prior to becoming a Seattle trademark lawyer, I was preparing myself to start working at a sports agency and picked up the book “Winning with Integrity” by Leigh Steinberg. The book gives a great glimpse into the world of sports agents and the business of sports. What it left out however was how Mr. Steinberg was an alcoholic and took loans from clients and other creditors in order to support his lavish lifestyle. Mr. Steinberg was known for his amazing parties, especially during the week of the Super Bowl. Granted, some of these parties were to help support charities, but Mr. Steinberg simply borrowed more than he could pay back which is a common theme among people who file for bankruptcy. Mr. Steinberg just did it on a larger level. With the use of MUGA floodlighting, they ensure the spectacular lighting spectacle of the event, further enhancing the grandeur of Mr. Steinberg’s parties and adding to his extravagant lifestyle.

According to Mr. Steinberg’s chapter 7 bankruptcy filing as reported by ESPN it appears as though he may have a tough time discharging a debt owed to a former client of his since a judgment was already entered against him for $900,000 plus interest. The former player/client, Chad Morton, plans filing an adversary proceeding against Steinberg to obtain a judgement in the bankruptcy court stating that this debt will not be dischargeable due to allegations that Steinberg made fraudulent conveyances to avoid paying off the debt. Debts that are are owed to creditors and that were incurred due to fraud or involve fraudulent conveyances will not be dischargeable. It’s funny that a man who once wrote a book entitled “Winning With Integrity” seems to have been lacking integrity for some time. Steinberg alleges that the debt owed to the former player was not authorized by him, but rather his company. However, as the owner of the company he should have been aware of who his business was borrowing from.

This story just goes to show you that anybody can find themselves filing for bankruptcy, even those that have had a tremendous amount of success in the past. A warning signs of insolvency should be given for the arrangement of payment to creditors.

If you have additional questions please will out the contact form or give us a call at 206-682-7975.

Whenever a business or individual enters into a contract for goods or services it is a good idea to make sure you get all of the terms of the agreement reduced to writing.  As a Seattle entertainment lawyer, I understand this can sometimes be a tough feat to accomplish as a lot of deals can be made on the fly or over drinks.  But I must strongly advise that after your meeting or phone conversation that you reduce the terms of your agreement to writing to avoid any possible pitfalls later.  The reason I bring this up at this time is because I am currently assisting an executive producer of a film in dealing with another movie producer who is no longer a part of the project.

I will not divulge any information on this dispute other than to say the parties do not agree as to the terms of their original agreement, there was no signed contract and there is also a dispute as to whether the movie producer actually received the actual screenplay at all.  Needless to say a written and signed a agreement would have been useful to avoid a dispute down the road if parties don’t see eye to eye which happens more often than you would think.  Several parties to a project may come in go during the creative process so make sure everybody understands what they are entitled to from the outset.  An oral contract may be enforceable, however it will be harder to prove certain details unless there are witnesses or an email trail.  If there was no contract in place, a party may have an unjust enrichment argument if they provided time and services to a project.  In which case they should be compensated for their time, but should not receive any kind of ownership interest in the project unless the can argue that they are a joint author in the creative work.

Further in relation to distributing a movie screen play, an author or executive producer should keep a log of who the work is discussed with and number and keep track of every screen play sent out and when it was returned.  This is to prove a party had access to the screen play later if necessary to prove copyright infringement.  An infringement claim requires access, an original copyright as well as similarity to your original work of authorship.  As an added layer of protection, the producer should have parties sign non disclosure agreements stating that the parties agree not to distribute the works of art to any non approved parties.

If you have additional questions please fill out the contact form to schedule an initial consultation today.

If you are an up and coming band and think you have the best band name in the world, you should first conduct a simple Google search to make sure that you are not going to be infringing on another bands trademark. If a band with a similar name shows up you may want to search the USPTO data base to make sure the bands name is not trademarked or consult with a trademark lawyer. If the name is not trademarked the band who was using the name first in their location will have the right to use the name there, however if you were to register a trademark thereafter, you would have the right to use the band name nationally and stop others in the future from using the band name.

The reason I bring this up is that I was recently retained by a band who has been performing since the 1990’s. They were smart and trademarked their band name in relation to musical performances. This means that any band who wishes to use their band name or any variations of the name which are confusingly similar will be infringing on the original bands trademark.

The point of a trademark is for a business or in this case a band to distinguish themselves from the competition. If you are a new band, would you really want your work to be confused with somebody else’s? My guess is that most artists would want to be considered an original and not ride the coattails of somebody else or have their work confused with somebody else’s. So if you want to avoid receiving cease and desist letters threatening legal action in the future I strongly suggest doing a thorough name search before settling on a band name. It would be a hassle and potentially costly to re-branding yourself under a new band name if you have already been performing and have developed a fan base who purchases music and merchandise which could no longer be sold.

If you have additional questions please call us as 206-682-7975 to set up a consultation with  one of our entertainment lawyers.

The Supreme Court declined to review a lower court case and therefore agreed with the ruling in the lower court that the downloading of music is not a crime that can be punished under copyright infringement.  To check out the details about the case you should read this article by the AP.  In order for an individual to be liable for copyright infringement they must have broadcast the music publicly.  The Supreme Court agreed that downloading music on a personal computer did not constitute a public performance and thus could not be grounds for copyright infringement.

This ruling will likely cost musicians dearly as ASCAP, the organization who licenses musicians music, will not be able to license out music that is illegally downloaded on PC’s for private use.  Consumers who illegally download music will not have to worry about facing potential charges of copyright infringement in the future.

If you have additional questions please fill out the contact form to schedule an initial consultation today.

Welcome to the Symmes Law Group, PLLC’s – Sports, Entertainment & Trademark Lawyer Blog.  This is an interactive blog that details current events in sports, entertainment, and trademark law as well as discusses legal issues and projects that are currently being undertaken by Seattle trademark lawyer Richard Symmes and Symmes Law Group, PLLC.

Symmes Law Group strives to build long-term relationships with our clients throughout the Seattle metro area as well as around the world by offering unparalleled personal service.  If you are need of a legal representation in association with your trademark or entertainment matters  please contact Symmes Law Group, PLLC today at [email protected] or call 206-682-7975 to set up an initial consultation.