FreecycleSunnyvale v. Freecycle Network
626 F.3d 509
| 9th Cir. | 2010Background
- FS is TFN’s member group; FS filed for declaratory relief against TFN over trademark use; TFN asserted infringement and unfair competition; district court granted FS summary judgment on naked licensing; TFN appeals claiming it maintained quality control over FS; issue is whether TFN’s rights or controls over FS’s use of TFN’s marks were adequate to prevent abandonment.
- TFN licensed or allowed FS to use the marks without an express license; TFN argued implied or actual controls via standards like Keep it Free, non-commercial use, etiquette, and Freecycle Ethos; FS’s use of the marks began in Oct 2003; TFN sent cease-and-desist notices in 2005 and Yahoo! terminated FS’s group in 2006.
- The district court found naked licensing; the Ninth Circuit reviews de novo and must apply the standard of proof for abandonment; the court will determine if TFN retained express rights, demonstrated actual control, or reasonably relied on FS’s controls.
- TFN lacked express contractual rights to inspect or supervise FS; Beal’s Oct 9, 2003 email did not create an enforceable license with inspection rights.
- TFN did not have actual control; its standards were not enforceable controls over FS, and the alleged controls were not adequate or uniformly applied.
- TFN could not rely on FS’s quality control due to lack of close working relationship and absence of sufficient indicia of control; TFN’s reliance was not enough to negate naked licensing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TFN had express contractual control over FS’s quality | TFN, TFN | FS lacked express license; TFN argues implied controls | TFN had no express contractual control |
| Whether TFN had actual control over FS’s quality | TFN maintained standards (Keep it Free, etc.) | Standards were not enforceable controls | No actual control established |
| Whether TFN’s reliance on FS’s quality controls was sufficient | TFN reasonably relied on FS’s controls | No close working relationship; reliance insufficient | Reliance insufficient to avoid naked licensing |
Key Cases Cited
- Barcamerica Int’l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589 (9th Cir. 2002) (naked licensing requires sufficient quality-control controls or actual supervision)
- Prudential Ins. Co. of Am. v. Gibraltar Fin. Corp. of Cal., 694 F.2d 1150 (9th Cir. 1982) (abandonment must be strictly proved; high burden of proof)
- Barcamerica Int’l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589 (9th Cir. 2002) (reiterates control standards for naked licensing)
- Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., 458 F.3d 931 (9th Cir. 2006) (standard of proof for trademark abandonment)
- Grocery Outlet, Inc. v. Albertson’s, Inc., 497 F.3d 949 (9th Cir. 2007) (debate over standard of proof for abandonment)