829 F.3d 1152
9th Cir.2016Background
- "Crazy Horse" registered in Jan 2006 by Carl Reid for exotic dance/entertainment services; registration remains live.
- Crazy Horse Too (John Salvador) contested Reid at the TTAB but settled via a September 2009 trademark co-existence agreement: Reid consented to Crazy Horse Too’s use of marks containing "Crazy Horse" (except "Pure Gold's"), and Crazy Horse Too agreed not to oppose Reid’s registrations.
- Salvador dissolved Crazy Horse Too in 2011 and assigned the co-existence agreement rights to Russell Road in August 2012 for $2,500.
- Frank Spencer and Crazy Horse Consulting (CHC) later acquired Reid’s registered Crazy Horse mark (assignment recorded Jan 2011) and asserted infringement against Russell Road’s use of "Crazy Horse III" in Las Vegas.
- Russell Road sued for a declaratory judgment; the district court granted summary judgment for Russell Road, holding the assigned co-existence agreement was valid and binding on Spencer/CHC.
- Spencer/CHC appealed, arguing among other things that the co-existence agreement was not assignable or otherwise unenforceable against them; the Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Russell Road may use the "Crazy Horse" mark via assignment of the co-existence agreement | Russell Road: valid assignment from Crazy Horse Too conveys the co-existence rights, permitting use of "Crazy Horse III" | Spencer/CHC: assignment invalid or unenforceable against them; agreement executory or breached; abandonment/nonuse | Russell Road: assignment valid; co-existence agreement enforceable and binding on Spencer/CHC |
| Whether co-existence agreements are enforceable and assignable | Russell Road: such agreements are valid contracts and assignable absent contract language or material change | Spencer/CHC: challenged enforceability/assignability (including alleged need for consent) | Court: co-existence agreements are enforceable; assignment valid here; contract allowed assignment (agreement expressly covered successors/assigns) |
| Whether nonuse/abandonment of Crazy Horse Too invalidated the agreement or assignment | Russell Road: agreement imposes no use obligation; nonuse does not void rights | Spencer/CHC: nonuse could support abandonment and invalidate consent | Court: agreement did not require use; abandonment doctrine inapplicable; nonuse did not void assignment |
| Whether district court abused discretion by denying discovery before summary judgment | Russell Road: no need for further discovery; record dispositive | Spencer/CHC: sought broad discovery to challenge validity | Court: denial proper; defendants failed to show specific facts that discovery would reveal under Rule 56(d) |
Key Cases Cited
- Millennium Labs., Inc. v. Ameritox, Ltd., 817 F.3d 1123 (9th Cir. 2016) (standard of review for summary judgment)
- Electro Source, LLC v. Brandess-Kalt-Aetna Grp., Inc., 458 F.3d 931 (9th Cir. 2006) (doctrine on trademark assignment and owner rights)
- ICEE Distribs., Inc. v. J&J Snack Foods Corp., 325 F.3d 586 (5th Cir. 2003) (assignee steps into assignor's shoes and takes burdens/limits)
- Sun-Maid Raisin Growers of Cal. v. Cal. Packing Corp., 273 F.2d 282 (9th Cir. 1959) (enforceability of trademark coexistence/consent agreements)
- Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575 (3d Cir. 2009) (parties’ mutual consent to registrations constitutes binding contract)