US: Trade marks: Disputes between departing member and remnant group
Managing IP is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

US: Trade marks: Disputes between departing member and remnant group

In Lyons v American College of Veterinary Sports Medicine and Rehabilitation, the US Court of Appeals for the Federal Circuit addressed a dispute regarding the proper owner of a service mark when there has been a departure from or change of membership in a group and both the departing party and the remnant group claim ownership of the mark. In so doing, the Court highlighted the importance for ventures to enter into formal agreements memorializing ownership of a mark.

Lyons was a founding member of the American College of Veterinary Sports Medicine and Rehabilitation (the College) and obtained in her own name a certificate of registration for the mark The American College of Veterinary Sports Medicine and Rehabilitation following her dismissal from the College. The College filed a cancellation action with the Trademark Trial and Appeal Board against Lyons' registration on the grounds of priority of use, likelihood of confusion, misrepresentation of source and fraud. The cancellation proceeding was suspended pending a civil action between the parties in which Lyons alleged trade mark infringement by the College. The district court dismissed Lyons' claims and the Board subsequently cancelled the trade mark registration, finding that Lyons was not the owner of the mark such that the application underlying her registration was void ab initio. Lyons then appealed the decision.

On appeal, Lyons argued that the Board erred in finding that she was not the owner of the mark at the time her application was filed, claiming that, as between the parties, she was the first to use the mark in commerce. The Court of Appeals confirmed that Lyons did not own the mark and that the test applied by the Board to determine ownership was the correct one. The test applied considered the following factors: (1) the parties' objective intentions or expectations; (2) who the public associates with the mark: and (3) to whom the public looks to stand behind the quality of goods or services offered under the mark.

In applying the three-prong test, the Court held that the collective expectation of the parties was that Lyons and others would form the College with a name that became the trade mark rather than Lyons owning the mark individually; that Lyons only made a de minimis use of the mark such that her use never rose to the level necessary to create an association in the minds of the purchasing public; and that the College, which had obtained the necessary accreditation, was the party to whom the relevant public looks to stand behind the quality of the educational and certification services associated with the mark. Although Lyons may have been the first to use the mark and that her involvement with the College was the reason that the College adopted the mark at issue, the Court determined that the record established that the College used the mark in commerce first.

This case serves as a reminder that it is prudent for parties forming a jointly owned entity to memorialise trade mark ownership, especially following the possible dissolution of the entity or disassociation of one or more founders. If one of the parties is intended to hold ownership individually, any ambiguity would be minimised by having a formal agreement reflecting ownership of the mark (and, possibly, a grant of a licence to the entity to use the mark).


Karen Artz Ash

Bret J Danow

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, NY 10022-2585

United States

Tel: +1 212 940 8554

Fax: +1 212 940 8671

more from across site and ros bottom lb

More from across our site

In the first of a two-part UPC special, lawyers at A&O Shearman explain what you need to know about changes of procedural language and security for costs
Lawyers in the US and Europe reveal the work they focus on, how they stay one step ahead of creative counterfeiters, and why reputation matters
Abion said the appointment of Silvia Asioli and the launch of its Milan office will expand its market position in southern Europe
UK firms who have hired litigation and transactional lawyers reveal how they work together and the lessons have they learned
Jonah Mitchell tells us why he would have liked to have tried his hand at being a firefighter or chef
Noemi Parrotta, chair of the European subcommittee within INTA’s International Amicus Committee, explains why we might not have heard the last of the morality debate
Counsel say the USPTO's examples of AI patentability should make their lives easier and help point clients in the right direction
We provide a rundown of Managing IP’s news and analysis from the week, and review what’s been happening elsewhere in IP
Ehsun Forghany says he was impressed by the firm's focus on fashion and IP as well as the expertise of chairman Anthony Lupo
Counsel at medical device companies say the unitary patent, AI and terminal disclaimers are major areas of concern
Gift this article