Movie Mania Metro, Inc. v. GZ DVD's Inc.
857 N.W.2d 677
Mich. Ct. App.2014Background
- Plaintiff used the mark “Movie Mania” in commerce since 1989 and registered it with Michigan in 1996; registration lapsed in 2006 and was later reregistered in 2011.
- From 1999–2007 plaintiff licensed the mark to unrelated video-rental operators (CLD, Samona, others) with little or no quality-control, standards, fees, or oversight; multiple independently run "Movie Mania" stores operated in Metro Detroit.
- In 2010 defendants began using the Movie Mania name after purchasing one store; plaintiff demanded cessation and sued for trademark infringement (common law, Michigan Trademark Act, Lanham Act) and Lanham Act dilution.
- Defendants moved for summary disposition arguing plaintiff had abandoned the mark through naked licensing and nonrenewal; the trial court granted summary disposition for defendants.
- On appeal the court affirmed, holding: (1) plaintiff abandoned the mark under the Lanham Act via naked licensing (so federal infringement claim fails); (2) dilution claim fails because the mark is not "famous"; (3) under Michigan law naked licensing is not statutory "abandonment," but it destroyed the mark’s distinctiveness so the mark is invalid and the state infringement claim also fails.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff’s Lanham Act dilution claim is viable | Movie Mania is entitled to dilution protection | Movie Mania is not a nationally "famous" mark | Dismissed — mark not "famous," dilution fails |
| Whether plaintiff abandoned the mark under the Lanham Act via naked licensing (impact on federal infringement) | Licensing did not abandon mark; plaintiff retained rights | Naked licensing constituted abandonment under 15 U.S.C. §1127 | Held abandoned under Lanham Act — federal infringement fails |
| Whether naked licensing qualifies as "abandonment" under Michigan Trademark Act | Naked licensing equals abandonment under state law | Michigan statute defines abandonment as discontinuance/nonuse, not naked licensing | Court: naked licensing is not statutory abandonment under MCL, so trial court erred on that theory |
| Whether plaintiff’s state trademark-infringement claim survives despite no statutory abandonment | Plaintiff’s mark is valid and infringed | Naked licensing rendered the mark non-distinctive/invalid as a source identifier | Held invalid mark due to naked licensing; state infringement fails (correct result despite erroneous abandonment finding) |
Key Cases Cited
- Janet Travis, Inc v Preka Holdings, LLC, 306 Mich. App. 266 (Mich. Ct. App.) (framework for Michigan trademark distinctiveness and statutory analysis)
- Eva’s Bridal Ltd v Halanick Enters, Inc, 639 F.3d 788 (7th Cir.) (quality-control requirement for trademark licensing)
- Dawn Donut Co v Hart’s Food Stores, Inc, 267 F.2d 358 (2d Cir.) (early formulation that licensor must police licensees to protect public)
- FreecycleSunnyvale v Freecycle Network, 626 F.3d 509 (9th Cir.) (naked licensing constitutes abandonment under Lanham Act)
- Exxon Corp v Oxxford Clothes, Inc, 109 F.3d 1070 (5th Cir.) (uncontrolled licensing leads to abandonment of trademark rights)
- Abercrombie & Fitch Co v Hunting World, Inc, 537 F.2d 4 (2d Cir.) (classification of marks for distinctiveness)
- Wal-Mart Stores, Inc v Samara Bros, Inc, 529 U.S. 205 (U.S. Supreme Court) (trademark distinctiveness and source-identification principle)