Overhead Door Company of Kansas City v. OGD Equipment Company is a trademark infringement case that began in the Northern District of Georgia, and found itself in the Eleventh Circuit on appeal.
D.H. Pace Company (“Pace”) licensed its OVERHEAD DOOR trademarks from the Overhead Door Corporation (ODC). ODC, as licensee, sued another similarly-named company, Overhead Garage Door (OGD) for trademark infringement. The licensor, ODC, had already settled its own case with defendant OGD. But even though the licensor gave up any further rights to sue for infringement, the licensee (Pace) sued ODC to enforce the rights it had obtained through its license.
In this case, Overhead Garage Door, OGD, said that ODC’s infringement claim should be barred for three reasons.
1. The contract between the licensor, who was not part of this lawsuit, and the licensee, the plaintiff in this case, did not expressly provide for the right to sue to enforce trademark rights.
2. There was already a settlement agreement in which all of the rights of the licensor had been relinquished.
3. The licensee/plaintiff in this case was not the exclusive licensee.
OGD cited a case in the Eleventh Circuit in which a contract barred the licensee from bringing a lawsuit, and used that to springboard into a new argument: If an agreement doesn’t expressly say you can sue to enforce, then you don’t have the right to sue. However, the court found that was wrong.
The Eleventh Circuit case cited by OGD, called Kroma, simply said that a specific contract limited the right of the licensee to bring a lawsuit. That case did not stand for the proposition that, if bringing a lawsuit is not addressed, there is no right to sue.
Also working in favor of the plaintiffs was Section 43A of the Trademark Act, which generously allows any party that believes it will be harmed by another party’s use of a trademark to bring a lawsuit. The section allows parties, under section 43A, to enforce a registered trademark — not only by the registries, but also for non-registered rights.
That may sound esoteric, but Section 43A is a wonderful catchall. Even if a party doesn’t have a registered trademark, it can still sue to enforce — the only prerequisite being the reasonable belief that it will be harmed in the future.
One thing that caught my eye was that the plaintiff was not the exclusive licensee of the party that had already settled the case. In the Second Circuit, at least, I’d always thought, not being the exclusive licensee means there is no right to bring a trademark lawsuit. The Eleventh Circuit said those are cases outside of its circuit, and so they’re not binding on it. More importantly, the court said, those cases involved registered marks.
Lastly, the settlement agreement between the licensor and the defendant did not bar this plaintiff, the licensee, from bringing this lawsuit. It expressly said that it does not bar licensees from bringing a lawsuit. So why did the district court even entertain OGD’s claim when there’s a carve-out that expressly says the contrary?
The case was remanded back to the Northern District Of Georgia, where the lawsuit will continue.
The way that the Eleventh Circuit made this decision leaves me wondering how any other court could have decided otherwise — especially considering the carve-out that seemingly could have cleared up a large portion of this case before oral arguments were even made.
