Co-ownership of trademarks is rare. Some courts have even gone so far to say co-ownership is disfavored. But co-ownership disputes do occasionally reach the courts, most recently in Reed v. Marshall, which involved band members arguing over the use of the band's co-owned name. The dispute here involved the 1990's R&B group Jade and use of the "Jade" name by some of those members without the permission of others. The United States District Court for the Southern District of Texas ultimately didn't "Like the Way" the case came together and granted summary judgment for the Defendants, finding they could not be liable for trademark infringement based on their use of a band name they co-owned, even without permission of the other co-owner. The decision illuminates the unique features of disputes between trademark co-owners and, in particular, the dangers that can arise from co-ownership.
Plaintiff Di Reed, together with Defendants Joi Marshall and Tonya Harris, comprised the girl-group Jade popular in the early 1990's. The group saw remarkable success, breaking the Billboard Hot 100 with several single releases. The group's single "Don't Walk Away" was certified Gold by the Recording Industry Association of America in 1993; their first studio album "Jade to the Max" was certified Platinum in 1994; and their second studio album, "Mind, Body & Song" was certified Gold in 1995. In 1994, Harris stopped performing with Jade and the members each pursued solo careers.
Over the years, the members discussed reuniting, and during these discussions in 2018, they filed a trademark application together to register the service mark "JADE" for entertainment services. Reed, Marshall, and Harris were listed as co-registrants. The mark registered in 2019, but the three members never toured together. Rather, in 2021, Marshall and Harris toured with Defendant Myracle Holloway, who had been contracted to take Reed's place. Marshall and Harris used the JADE mark to promote their tour. Though Reed demanded they stop, Marshall and Harris continued to perform with Holloway under the JADE name and without accounting profits to Reed.
With Reed left "Hangin'" by her former band members, she filed federal Lanham Act claims for trademark infringement and dilution on theories of direct, contributory, and vicarious liability; false designation of origin and false advertising claims; and various Texas state law claims for trademark infringement, dilution, unfair competition, misappropriation of right of publicity, and accounting of profits. Defendants moved for summary judgment, which the court granted in full.
The court began with Reed's federal infringement and dilution claims against Holloway, which arose from the theory that Holloway made unauthorized use of the JADE mark by performing on tour with Marshall and Harris. Because Holloway had Marshall and Harris's authorization to use the JADE name, but not Reed's, the court had to determine the novel question of whether an individual authorized to use a co-owned trademark by some but not all of the co-owners could be liable for trademark infringement and dilution. The answer: no.
In making that determination, the court began by confirming that Marshall and Harris could not be liable to Reed for trademark infringement because they co-owned the JADE mark and thus had equal rights to use it. The court then analyzed whether those "equal rights" allowed Marshall and Harris to authorize Holloway's use of the JADE mark such that she could avoid liability. While the court found no case directly on point, it cited an analogous case (East West Tea Co., LLC v. Puri, 2022 WL 900539 (D. Or. Mar. 28, 2022)) holding that a licensee of a trademark co-owner cannot be liable to another co-owner for infringement. Based on East West Tea Co., the court concluded that Holloway could not be liable for trademark infringement because Marshall and Harris—as co-owners—had consented to her use of the JADE mark. For the same reason, the court found that Holloway was not liable for dilution.
The court then turned to Reed's contributory and vicarious trademark infringement claims against Marshall and Harris, which were based on the authorization they gave to Holloway to use the JADE mark. Because Reed could not establish direct infringement against Holloway, the court held that Marshall and Harris could not be contributorily or vicariously liable and dismissed those claims.
The court then granted summary judgment to Marshall and Harris on Reed's false designation of origin and false advertising claims. Citing the Supreme Court's decision in Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), the court explained that to show false designation of origin and false advertising under the Lanham Act, Reed had to prove an injury to her commercial interest in sales or business reputation proximately caused by Marshall's and Harris's alleged misrepresentation of the JADE mark's source. The court found that Reed failed to make this showing because she provided no evidence that she had marketed services using the JADE mark such that the mark's ability to identify her as its source had been undermined. To the contrary, the court found the undisputed evidence showed that the JADE mark continued to be associated with the Jade group, which included co-owners Marshall and Harris. And although the court acknowledged that Reed had argued a commercial injury in failing to receive profits for the reunion tour, it found the Lanham Act did not require Marshall and Harris to provide Reed an accounting. The court also noted that there was no statute or case law requiring Reed's authorization of Marshall and Harris to use the mark as co-owners.
Finally, the court dismissed Reed's various Texas state law claims. Because the court had dismissed all of Reed's federal claims and there were no grounds for diversity jurisdiction, it observed that it would have to exercise supplemental jurisdiction over the state claims for the suit to proceed. The court declined to do so after analyzing the Fifth Circuit's supplemental jurisdiction factors. Because no party had filed motions in limine or other pretrial motions and no hearing or trial dates had been scheduled, the court found there would be no prejudice to either party in dismissing the state law claims. The court also noted that it had not yet familiarized itself with the state law issues, and comity demanded that the important interest of federalism be respected, so there was no reason to exercise supplemental jurisdiction over the state law claims. Accordingly, the court granted summary judgment in full and dismissed the entire action.
The case is Reed v. Marshall, Case No. 3:11-cv-01358, 2023 WL 6963661 (S.D. Tex., Oct. 20, 2023).
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