901 F.3d 37
1st Cir.2018Background
- Scholz (leader of the band BOSTON) and former guitarist Barry Goudreau signed a 1983 Settlement Agreement giving Goudreau limited rights to describe himself as "Formerly of Boston" but prohibiting use of the name BOSTON in advertisements or promotions except that limited biographical usage.
- Goudreau later performed with Ernie and the Automatics (EATA); EATA promotional materials and a YouTube "pop-up" video described Goudreau as an "original" or "founding" member of BOSTON and used other references to the band.
- Scholz sued Goudreau alleging trademark infringement (Lanham Act), breach of contract, and breach of the covenant of good faith; Goudreau counterclaimed for breach of contract, breach of covenant, abuse of process, and sought declaratory relief.
- On cross-motions for summary judgment the district court granted judgment to Goudreau on most claims but left genuine issues on contributory/vicarious trademark liability relating to EATA promotions; it granted Scholz summary judgment on Goudreau's abuse-of-process claim.
- A jury trial followed; the jury rejected the remaining claims and counterclaims. Scholz moved to amend his complaint to reinstate breach of contract and later sought judgment based on the jury finding against Goudreau’s counterclaim; the district court denied these motions and denied Goudreau attorney’s fees under 15 U.S.C. § 1117(a).
- Both parties appealed; the First Circuit affirmed the district court in all respects.
Issues
| Issue | Plaintiff's Argument (Scholz) | Defendant's Argument (Goudreau) | Held |
|---|---|---|---|
| Whether Summary Judgment on Scholz's breach of contract was improper | Goudreau authorized or encouraged others (Boch/EATA) to advertise him as an "original/founding" member, breaching the Settlement Agreement | No evidence Goudreau directed or approved the nonconforming promotions; some third parties acted independently | Affirmed: no genuine factual dispute that Goudreau himself breached; summary judgment for Goudreau proper |
| Whether the trial evidence/ questioning implied consent to try an unpleaded breach claim (motions to amend under Rule 15(b)) | Trial questioning about authority over promotions and the Confirmatory Agreement showed Goudreau consented to try breach of contract | Questions were relevant to trademark vicarious/contributory liability (apparent authority); not exclusive to breach claims | Affirmed: district court did not abuse discretion in denying post-trial amendments |
| Whether jury verdict on Goudreau's counterclaim (finding he did not perform) required entry of judgment for Scholz on his breach claim | Jury finding on nonperformance is effectively a breach finding entitling Scholz to judgment | The jury finding did not establish the damages element required for Scholz’s breach claim; the verdict is not the logical equivalent of a plaintiff’s breach verdict | Affirmed: motion for entry of judgment and Rule 59(e) relief denied |
| Whether district court erred dismissing abuse of process and denying fees under the Lanham Act | (Goudreau) Litigation was brought to coerce transfer of royalties and to harass; thus abuse and exceptional case for fees | (Scholz/district court) Pleadings and discovery motives were legitimate; case not "exceptional" under Octane Fitness factors | Affirmed: no abuse of process; no legal error or manifest abuse in denying fee award |
| Whether admission of EATA "pop-up" video was erroneous (protected parody/noncommercial speech) | The video was artistic/parodic and constitutionally protected; its admission prejudiced Goudreau | The video was promotional/commercial, created to market EATA's CD and thus relevant to trademark claims | Affirmed: evidence admissible; district court did not abuse discretion in finding a commercial purpose and admitting the video |
Key Cases Cited
- Brooks v. AIG SunAmerica Life Assurance Co., 480 F.3d 579 (1st Cir.) (elements of breach of contract)
- Ocasio-Hernández v. Fortuño-Burset, 777 F.3d 1 (1st Cir.) (standard of review for summary judgment)
- Aponte-Rosario v. Acevedo-Vilá, 617 F.3d 1 (1st Cir.) (summary-judgment inference standard)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court) (summary judgment standards)
- DCPB, Inc. v. City of Lebanon, 957 F.2d 913 (1st Cir.) (implied consent to try issues at trial)
- Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1 (Mass. Supreme Judicial Court) (apparent authority rule)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (Supreme Court) (what makes a case "exceptional" for fee awards)
- L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26 (1st Cir.) (parody/protected speech and trademark confusion)