Intellectual Property Law

Court Grants Preliminary Injunction in Trademark Ownership Dispute

By Michael Atkins

You can’t transfer more than you own.

On Sept. 1, the Eastern District applied that basic tenet of property law to the issue of who likely owns the trademark RELIANCE in connection with trailers. The first party claiming to own the mark is plaintiff Pacific Coast Trailers, LLC, which licensed the mark from the Reliance Trailer Manufacturing Corporation. The other is defendant Cozad Trailer Sales, LLC, which claims to have purchased the mark from Reliance Trailer Co.’s lender, Sterling Savings Bank, after Reliance Trailer Co. defaulted on its loans and filed for bankruptcy protection.

Both Reliance entities used to share common owners and managers.

On Pacific Coast’s motion for a preliminary injunction, Eastern District Judge Edward Shea sided with Pacific Coast. In the end, it found little evidence that Cozad purchased any rights to the RELIANCE mark.

“First, Pacific Coast holds ‘an exclusive, royalty bearing right and license’ to use the RELIANCE name, which it obtained from the presumed owner of the RELIANCE trademark, Reliance Mfg. Thus, Pacific Coast can likely prove it obtained a valid, protectable interest in the RELIANCE trademark.

“Second, Cozad’s use is likely unauthorized. Cozad attempts to rebut Reliance Mfg.’s presumed ownership by claiming that it purchased from Sterling all the assets and goodwill listed in Reliance, LLC’s bankruptcy schedule, which included the RELIANCE mark. Although a trademark may be validly assigned by sale or operation of law via bankruptcy, a transferor cannot convey any more interest than he or she has. But for the fact that the RELIANCE mark was listed in Reliance LLC’s bankruptcy schedule, there is no evidence that Reliance LLC (or Sterling) ever owned or obtained any interest in the RELIANCE mark. Furthermore, the fact that Sterling assigned to Cozad the marks for STURDYWELD, ALLOY, and COMET but not RELIANCE indicates that Sterling is at least uncertain whether it owned any interest in the RELIANCE trademark in the first place. If Sterling never owned any interest in the mark, it could not have transferred any interest to Cozad. Thus, Cozad has failed to rebut the presumption that Reliance Mfg. owns the RELIANCE trademark and could properly license it to Pacific Coast.”

Previous STL post on the case here.

The case cite is Pacific Coast Trailers, LLC v. Cozad Trailer Sales, LLC, 2010 WL 3489710, No. 10-111 (E.D. Wash. Sept. 1, 2010) (Shea, J.).

Full post as published by Seattle Trademark Lawyer on September 14, 2010 (boomark / email).