Tuesday, November 28, 2006


Recently, in an opinion published on 11.21.06, the Calif. Court of Appeal, Second App. District ruled on a case concerning the propriety of joint ownership of a trademark (Iskenderian v. Iskenderian, Case No. B183419; 2006 DJDAR 15202). The mark at issue was a Calif. restaurant service mark, ZANKOU CHICKEN. The Appellate Court affirmatively ruled that the law does not prohibit joint ownership of a trademark. In so ruling, this state court referred to federal law on point, e.g., 15 U.S.C. Sec. 1052(d), which permits concurrent registrations of marks under certain circumstances. Additionally, the court cited Prof. Thomas McCarthy, for the proposition that joint ownership of trademarks is possible. In this regard, the court referred to McCarthy's approach as to the propriety of the joint ownership of a trademark as requiring a balancing of two policies, namely:

1) "the protection of customers, which 'requires that fragmented, multiple ownership of marks be avoided and prohibited where likelihood of confusion exists,' and

2) the contractual expectation policy, which requires that when parties create a contractual framework of joint ownership, 'their legitimate expectations should be honored." (2 McCarthy on Trademarks and Unfair Competition (4th ed., 1992), Sec. 16:40, p. 16-64.3).

In this case, the court ruled that "the policy of honoring the legitimate expectations of multiple family members owning the trademark would clearly outweigh any risk of customer confusion, as all members of the family 'have a strong interest in protecting the validity and integrity' of the Zankou Chicken mark, and 'presumably would not engage in activity detrimental to' their rights in the mark."

A contrary finding is cited in a footnote in this same opinion, namely, Durango Herald, Inc. v. Riddle (D. Colo. 1988) 719 F. Supp. 941, wherein "the district court enjoined both parties to a joint venture from further use of the joint venture's trademark after expiration of the joint venture. The parties could not agree on the expansion or extension of their joint venture agreement, and both rejected cross-offers to buy out their partnership interests in the venture." In the end, the district court in Durango ruled that the particular circumstances in that case required the 'extinguishment' of the mark.

In conclusion, the findings of the Zankou and Durango opinions seems to make clear that the joint ownership of a trademark and its enforceability will depend upon whether or not the joint owners can get along and share in the benefits and burdens of trademark ownership. Therefore, joint trademark owners should avoid selfish and self serving use of the mark to the exclusion of the other owners which can lead to the type of prohibited fragmented ownership of marks which can cause likelihood of confusion. In other words, "Don't Bogart that Trademark !"

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