933 N.W.2d 167
Wis. Ct. App.2019Background
- Ted and Carolyn Ritter operated “Bibs Resort” (cottages, tavern, residence) from 1986 and converted the property into a 13-unit condominium in 1998, creating “Bibs Resort Condominium, Inc.” as the unit-owners association.
- At conversion the Ritters owned all units and initially controlled the association; individual owners later acquired units and used the Bibs Resort name/logo to market rentals.
- In 2006 the Ritters sold their property-management business and certain units to Tony and Arlyce Farrow; the sale documents referenced transfer of goodwill and included “all tangible and intangible personal property,” but later joint correspondence described the Farrows’ use of the name as permissive rather than an ownership transfer.
- Relations soured; the Ritters resumed renting units and used the Bibs name. The Farrows sued for trademark/trade-name infringement and won at trial; on appeal the court held the condominium association should have been allowed to intervene and remanded.
- On remand the association and Ritters moved for summary judgment, arguing the association owned the “Bibs Resort” name as of the 1998 conversion; the circuit court granted summary judgment for the association and Ritters, and the Farrows appealed.
Issues
| Issue | Plaintiff's Argument (Farrows) | Defendant's Argument (Ritters/Association) | Held |
|---|---|---|---|
| Whether the condominium conversion transferred trademark rights in the name “Bibs Resort” to the Association | The Ritters retained trademark rights; Wisconsin Condominium Act governs real property only and cannot transfer intangible trademark rights; therefore the Ritters sold the name/goodwill to Farrow in 2006 | The conversion and the parties’ subsequent conduct manifested an implied agreement transferring the name and goodwill to the Association in 1998, so Ritters had no exclusive rights to sell in 2006 | Held for Association/Ritters: implied transfer occurred at conversion; Ritters did not own exclusive rights in 2006 so Farrows could not have acquired them |
| Whether the 2006 sale granted Farrows exclusive trademark rights (goodwill) in Bibs Resort | The sale documentation listed goodwill and "all intangible personal property," so Farrows acquired exclusive rights | Even if management contracts and goodwill were sold, contractual termination rights and the declaration reserved key rights to the Association; parties’ conduct showed Farrows only obtained permissive use, not exclusive ownership | Held for Association/Ritters: record shows Farrows did not acquire exclusive rights; unit owners and association retained control |
| Whether the Association’s prior use bars Farrows’ exclusive claim | N/A (Farrows contended exclusivity) | Association had prior and continued use; name was incorporated into the condominium/association identity and used by unit owners | Held for Association: prior use and association identity preclude singular exclusive ownership by Farrows |
| Whether collective-trademark principles mean individual owners or the association own the mark | Farrows argued they could obtain exclusive use via purchase | Association argued collective/association ownership and use by members supports nonexclusive rights | Court did not base decision solely on collective-mark doctrine but noted collective marks vest ownership in the association rather than individual owners |
Key Cases Cited
- TMT North America, Inc. v. Magic Touch GmbH, 124 F.3d 876 (7th Cir. 1997) (implied agreement to transfer trademark requires conduct manifesting agreement and transfer must include goodwill)
- Berni v. International Gourmet Restaurants of Am., Inc., 838 F.2d 642 (2d Cir. 1988) (trademark rights are inseparable from business goodwill)
- Apple Valley Gardens Ass’n, Inc. v. MacHutta, 316 Wis. 2d 85 (Wis. 2009) (condominium associations have statutory authority to regulate owners, including rental restrictions)
- Madison Reprographics, Inc. v. Cook’s Reprographics, Inc., 203 Wis. 2d 226 (Ct. App. 1996) (Wisconsin courts look to federal trademark principles when state law is undeveloped)
- Koepsell’s Olde Popcorn Wagons, Inc. v. Koepsell’s Festival Popcorn Wagons, Ltd., 275 Wis. 2d 397 (Ct. App. 2004) (goodwill is essential to trademark significance)
- ABKA Ltd. P’ship v. Board of Review of Vill. of Fontana-On-Geneva Lake, 231 Wis. 2d 328 (Wis. 1999) (for resort properties, unique qualities of the land attract renters more than fungible management services)
- Baker v. Commissioner of Internal Revenue, 338 F.3d 789 (7th Cir. 2003) (goodwill enables a purchaser to “step into the shoes” of the seller)