Intellectual Property Law

Seventh Circuit: Operating agreement permitted license of marks, so no trademark infringement

By McKee, Voorhees & Sease, P.L.C.

In its second trademark decision Friday, the Seventh Circuit clarified what is required for a party to be authorized to use another entity's trademarks.  In this case, the plaintiff—one of four founders of two LLC's designed to manage and control a restaurant in Chicago—alleged trademark infringement against the three other co-founders based on the co-founders' use of the trademarks and trade dress of the two LLC's in similar restaurants in New York and Las Vegas.  The district court dismissed the case because it found that such use of the trademarks and trade dress was authorized according to the operating agreement of the LLC's.

The Seventh Circuit affirmed.  The court emphasized the operating agreement of one of the LLC's specifically contemplated and permitted expansion of the "Concept" of the Chicago restaurant (including the use of the trademarks and trade dress) in other locations if two of the co-founders desired to expand.  Because three of the co-founders desired the expansions to New York and Las Vegas, the expansion and corresponding use of the trademarks and trade dress was authorized.  Being authorized, the three co-founders' use of LLC's trademarks could not, as a matter of law, infringe the LLC's trademark and trade dress rights, and the district court therefore properly dismissed the claim.

More detail of Segal v. Geisha NYC LLC after the jump.

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Full post as published by FileWrapper on February 25, 2008 (boomark / email).