D.C. Cir.: Licensee estoppel prevents licensee from arguing ownership due to naked licensing

In a decision involving unique circumstances, the D.C. Circuit held today that a licensee was precluded by licensee estoppel from arguing that the licensor abandoned the licensed mark by engaging in “naked licensing.” The licensee argued, unsuccessfully, that licensee estoppel shouldn’t preclude it from asserting that it owned the mark because it was undisputed that:

• The licensor ceased monitoring the licensee in 1991;
• The licensor went bankrupt in 1991, and, a few years after the bankruptcy was converted to Chapter 7 in 1993, the licensor’s former owners misappropriated the mark (from the trustee) and re-started the essentially the same business under the mark;
• The bankruptcy court then entered an order enjoining the licensor’s former owners from continuing to use the mark; and
• Business associates of the licensor’s former owners later purchased the marks from the trustee.

Although it’s hard to draw categorical conclusions from such a unique case, it’s at least safe to say that, if a licensee can’t assert ownership/abandonment in these circumstances, licensee estoppel is pretty robust in the D.C. Circuit.

The case is John C. Flood of Va., Inc. v. John C. Flood, Inc., No. 10-7098 (D.C. Cir. June 17, 2011)

D.C. Circuit holds that 1998 law bars renewal of Cuba-owned trademarks

Yesterday the D.C. Circuit, in a 2-1 decision, ruled that the Cuban government-owned company Cubaexport could not renew its HAVANA CLUB trademark for rum. In Empresa Cubano Exportadora de Alimentos y Productos Varios v. United States Dep't of Treasury, No. 09-5196 (D.C. Cir. Mar. 29, 2011), the majority held that a provision in a 1998 appropriations act which prohibited transactions or payments to the PTO under 31 CFR § 515.527 (which at the time referred to registrations and renewals as “transactions”), was not impermissibly retroactive as to Cubaexport. Noting that a “vested right” was required to invoke the presumption against retroactivity, the majority held that Cubaexport did not have a “vested right” in renewal because the Cuban trademark regulations at issue also contained an express reservation allowing them to be amended or modified at any time. The dissent argued that the Supreme Court’s retroactivity jurisprudence makes clear that a statute that impairs an existing “substantive right” is impermissibly retroactive, and that the majority was reading “vested right” to mean something more than substantive rights, thus “driv[ing] a large hole in the presumption against retroactivity.” The dissenting judge noted that Cubaexport had a substantive, existing right to renew its registration, notwithstanding the theoretical possibility that hypothetical future regulations could have eliminated that right.