Action Ink, Incorporated v. New York Jets, L.L.C. , 576 F. App'x 321 ( 2014 )

Case: 13-31112 Document: 00512709234 Page: 1 Date Filed: 07/23/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 13-31112 July 23, 2014
Lyle W. Cayce
Clerk
ACTION INK, INCORPORATED, a Louisiana Corporation,
Plaintiff - Appellant
v.
NEW YORK JETS, L.L.C., a New York limited liability company;
ARKADIUM, INCORPORATED, a New York corporation,
Defendants - Appellees
Consolidated w/ No. 13-31113
ACTION INK, INCORPORATED,
Plaintiff - Appellant
v.
ANHEUSER-BUSCH, INCORPORATED,
Defendant - Appellee
Appeals from the United States District Court
for the Eastern District of Louisiana
USDC Nos. 2:12-CV-46, 2:12-CV-141
Before JOLLY, SOUTHWICK, and HAYNES, Circuit Judges.
Case: 13-31112 Document: 00512709234 Page: 2 Date Filed: 07/23/2014
No. 13-31112
PER CURIAM:*
This opinion decides the two captioned cases, consolidated on appeal.
Action Ink, the plaintiff and appellant, registered a service mark to use
the phrase “Ultimate Fan” in the context of promotional contests at sporting
events. It conducted no contests between 1995 and 2012, when it sued the
defendants for infringement. We hold that Action Ink abandoned its mark,
and affirm the respective judgments in each case.
I.
Action Ink, Inc. (“Action Ink”) has no employees and one sole
shareholder, Michael Eckstein. It owns a service mark for the phrase
“Ultimate Fan” (“the mark”). The registration for the mark is for "promoting
the goods and/or services of others by conducting a contest at sporting events.”
Action Ink last held such a contest in 1995. Since then, Action Ink has sent
out letters to many businesses alleging infringement, some of which are signed
by Eckstein, who is also a lawyer. Action Ink has also sought unsuccessfully
to interest potential clients in holding promotional contests.
In 2012, Action Ink sued Anheuser-Busch, Inc. (“Anheuser-Busch”), and
in a separate suit also sued the New York Jets, L.L.C. and Arkadium Inc.
(collectively, the “Jets Defendants”). Action Ink alleged infringement and false
designation of origin under the Lanham Act, 1 and unfair competition, injury to
business reputation and unfair trade practices under Louisiana law. 2
Judge Milazzo in No. 13-31112 awarded summary judgment to the Jets
Defendants. The court held that Action Ink had abandoned its service mark
and consequently had no valid mark that could have been infringed. Judge
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
1 15 U.S.C. §§ 1114, 1125(a).
2 La. Rev. Stat. §§ 51:1405, 51:223.1.
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No. 13-31112
Vance in No. 13-31113 subsequently granted summary judgment to Anheuser-
Busch on the grounds that: (a) collateral estoppel from the Jets suit applied on
the abandonment issue and thus Action Ink had no valid mark and (b) Action
Ink failed to show a likelihood of confusion between its mark and Anheuser-
Busch’s. Action Ink now appeals each of the judgments dismissing its
respective complaints.
II.
We first consider Judge Milazzo’s grant of summary judgment to the Jets
Defendants, which we review de novo. Royal v. CCC&R Tres Arboles, L.L.C.,
736 F.3d 396, 400 (5th Cir. 2013).
The Lanham Act provides that a mark shall be abandoned (1) “[w]hen
its use has been discontinued” and (2) there is “an intent not to resume such
use.” 15 U.S.C. § 1127. “Use” is defined as “the bona fide use of [a] mark made
in the ordinary course of trade, not made merely to reserve a right in a mark.”
Id. (emphasis added). Nonuse for three consecutive years is prima facie
evidence of abandonment. Id. Once a party establishes a prima facie case of
abandonment, it becomes the mark holder’s burden to show that
“circumstances do not justify the inference of intent not to resume use.” Exxon
Corp. v. Humble Exploration Co., Inc., 695 F.2d 96, 99 (5th Cir. 1983).
The Jets Defendants have established their prima facie case of
abandonment. We note that
A trademark is a symbol of existing good will. Thus, if for any
reason, the good will of a business or product comes to an end,
there is nothing left for a mark to symbolize. Such a mark should
be officially declared “abandoned.” If there is no good will or a
reasonable prospect of it, a “trademark” symbolizes nothing.
3 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR
COMPETITION § 17.14 (4th ed. 1996).
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Action Ink performed no contests for seventeen years before filing suit.
Thus, there was “nothing left for [its] mark to symbolize.” Id.
Action Ink argues that soliciting clients constituted “bona fide use.” See
15 U.S.C. § 1127. Action Ink cites Allard Enters. v. Advanced Programming
Res., 146 F.3d 350, 359 (6th Cir. 1998), which held that the defendant’s
activities, which included but were not limited to solicitation of clients,
constituted “use in commerce.” But Allard does not help Action Ink. Unlike
Action Ink, the Allard defendant rendered services to at least one client,
arranging for that client to interview a job applicant. Id. at 353. The Allard
defendant also went on to achieve significant market penetration and sign a
state-wide contract. See Allard Enters v. Advanced Programming Res., 249
F.3d 564, 573–74 (6th Cir. 2001). In contrast, Action Ink has nothing to show
for its years of soliciting clients.
As the Jets Defendants have established their prima facie case of
abandonment, the burden shifts to Action Ink to establish that “circumstances
do not justify the inference of intent not to resume use,” Exxon, 695 F.2d at 99.
Action Ink points to a licensing agreement it signed with Tulane University in
2013. But this agreement does not persuade us that Action Ink had any intent
to resume bona fide use of its mark. First, Action Ink signed the agreement
only after it had already sued the defendants here. Second, Tulane’s
consideration for the license suggests a sham agreement, as Tulane agreed to
give 300 tickets to various charitable groups that Tulane had the sole authority
to choose. Third, Action Ink points us to no authority stating that a licensing
agreement, even if legitimate, can resurrect a mark that has been long
abandoned.
The Jets Defendants have thus established abandonment. Because
Action Ink failed to argue on appeal that collateral estoppel on abandonment
does not apply to Anheuser-Busch, we hold that Action Ink also abandoned its
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No. 13-31112
mark with respect to Anheuser-Busch. We consequently do not reach the
likelihood of confusion between Action Ink’s and Anheuser-Busch’s marks.
III.
For the reasons above, the respective judgments of the district courts in
favor of all defendants in each of the cases are
AFFIRMED.
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