Intellectual Property Law

Western District Denies Summary Judgment Over Trademark Ownership

By Michael Atkins

Plaintiff Trade Associates, Inc., sued defendant Fusion Technologies Inc. in the Western District on various patent issues and for breaching an alleged royalty agreement.

Fusion filed a counterclaim asserting an ownership interest in Trade Associates’ DURA-BLOCK mark in connection with sanding blocks for sanding automobiles. It argued that it independently conceived of the DURA-BLOCK mark and that the mark may be transferred to it pursuant to the parties’ royalty agreement because Trade Associates abandoned the marketing of Dura-Block technology.

Trade Associates argued that its registration is incontestable evidence that it owns the trademark and that the royalty agreement does not permit transfer of the mark to Fusion.

Trade Associates moved for summary judgment on the counterclaim.

On Aug. 30, Western District Judge Robert Bryan denied the motion, finding that Trade Associates’ incontestable registration did not mean that it had not assigned the mark to Fusion. The court also found that the royalty agreement was ambiguous, which impacted whether the alleged assignment was an assignment in gross.

“This ambiguity also affects whether the assignment of the trademark is an ‘assignment in gross,’” the court found. “An assignment of trademark must also transfer goodwill. An assignment made without goodwill is an assignment in gross. However, it is not necessary that an entire business or its tangible assets be transferred, it is the goodwill of the business that must accompany the mark. The purpose behind requiring that goodwill accompany the assignment mark is to maintain the continuity of the product symbolized by the mark. In this case, the Court is unable to determine the scope of the mark and the associated goodwill. Moreover, the Court is uncertain whether the Agreement provision includes the transfer of goodwill along with the trademark.”

The case cite is Trade Associates, Inc. v. Fusion Technologies Inc., 2010 WL 3432646, No. 09-5804 (W.D. Wash. Aug. 30, 2010) (Bryan, J.).

Full post as published by Seattle Trademark Lawyer on September 09, 2010 (boomark / email).