United States: “Good Times” For Chic: Court Protects Domestic Trademark By Enjoining Infringing Musical Performances Abroad

The United States District Court for the Southern District of New York recently held, on cross-motions for summary judgment, that performances in foreign countries by two former members of a musical group were not extraterritorial acts falling outside the reach of the Lanham Act, and could be enjoined when such performances were materially advanced by infringing acts occurring in the United States. Rodgers v. Wright, 04 Civ. 1149, 2008 U.S. Dist. LEXIS 26550 (S.D.N.Y. March 31, 2008). This decision illustrates an important remedy that may be available to domestic trademark holders seeking to enjoin infringing activities outside the United States.

Plaintiff Nile Rodgers, a well-known writer of hit songs such as "We Are Family," producer of iconic classics including Madonna's "Like a Virgin," and founder of the music group Chic, brought a trademark infringement action under the Lanham Act against two former Chic singers. Rodgers, as an original group member and partner of Chic, is the registered owner of the trademark "Chic," and has, since 1977, regularly performed throughout the world under the name Chic, and has signed contracts and released albums under that trademark. The defendants, former vocalists for Chic, were not in the Chic partnership and had never held any trademark rights in the name. Nevertheless, in 1996, the defendants began performing domestically and abroad under the titles "Ladies of Chic," "First Ladies of Chic," "Chic" and other monikers that identified and advertised themselves by their former association with Chic. The defendants also maintained a website advertising their availability for performances both in the United States and abroad. Id. at *2-5.

In considering the parties' cross-motions for summary judgment, the court first corrected the defendants' inaccurate arguments on the effect of trademark registration lapses and mark abandonment. Since the plaintiff had "continued to use the mark in commerce since 1982, and [he] applied to register the mark anew before the 1982 Registration expired," the court dismissed the defendants' argument that Rodgers had abandoned the mark. Id. at *13. Notably, the decision is silent as to whether the defendants argued laches or acquiescence in light of the fact that Rodgers waited until 2004 to file suit—almost eight years after the infringing activities commenced in, approximately, 1996. Ambiguities notwithstanding, the court then proceeded in its infringement analysis by assessing the Polaroid factors and found that the defendants' use of "Chic," "Ladies of Chic," and similar marks was likely to confuse consumers and, in at least one instance, had actually confused consumers. Id. at *17-20. The court further held that there was no fair use defense because the defendants did not act in good faith, and employed the Chic mark in such a way as to trade on the good will of the plaintiff. Id. at *20-21 (quotes omitted). Finally, the court held that the defendants' European performances were within the reach of the Lanham Act. Id. at *22-23.

The Supreme Court previously held that "Congress has the power to prevent unfair trade practices in foreign commerce by citizens of the United States, although some of those acts are done outside the territorial limits of the United States," and Congress exercised that power in providing for extraterritorial application of the Lanham Act. Steele v. Bulova Watch Co., Inc., 344 U.S. 280, 286-87 (1952). Accordingly, the court examined the Second Circuit standard for extraterritorial application of the Lanham Act, and considered: (1) whether the defendants' conduct had a substantial effect on United States commerce; (2) whether the defendants were United States citizens; (3) and whether there was a conflict between the defendants' trademark rights under foreign law and plaintiff's trademark rights under domestic law. Rodgers v. Wright, 2008 U.S. Dist. LEXIS 26550 at *22 (citations omitted).

While noting that the Second Circuit has "never applied the Lanham Act to extraterritorial conduct absent a substantial effect on U.S. commerce," the court acknowledged that it was "somewhat unclear as to what sort of substantial effect on U.S. commerce is required for a court to exercise jurisdiction over a U.S. citizen's foreign infringement of a U.S. trademark." Id. at *23-24. But the court reasoned that U.S. consumer confusion or harm to the plaintiff's domestic goodwill would suffice to meet this requirement, and that financial harm to the American trademark owner also would be considered relevant to this determination. Id. at *24.

In concluding that the Lanham Act should apply where a U.S. citizen's foreign infringement is materially furthered by infringing domestic activities that will likely confuse American consumers, the court opined:

Whether the eventual performance was in the U.S. or abroad, it is undisputed that defendants directed, coordinated, and operated their "First Ladies of Chic" enterprise from the U.S. That is, save for the actual performance abroad, defendants "conducted [their] business almost exclusively within the United States and used the instrumentalities of American commerce to profit at [plaintiff's] expense without regard to where the [infringing performances] ultimately occurred or whether those [performances] violated American law. . .Moreover, defendants materially advanced their foreign infringement with their domestic infringement. . . .[A]s part of their effort to attract bookings and concertgoers, defendants advertised their availability to perform anywhere as "First Ladies of Chic" on their own website, www.ladiesofchic.com, and on the websites of American promoters and talent agencies, thus using plaintiff's mark in American commerce in a way that was likely to confuse domestic as well as foreign consumers . . . it is well-settled that the Lanham Act applies to an American defendant's foreign infringement where that infringement results in a likelihood of a confusion of American consumers. . . .

Id. at *28-31.

This decision by the Southern District is notable, particularly for those who regularly seek injunctions against trademark infringers who operate both domestically and internationally. As this decision demonstrates, courts are willing to enjoin infringing acts outside the United States even when only domestic trademark registrations and rights are at issue.

www.proskauer.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions