Court Finds Naked Licensing of “Movie Mania” Trademark Under State Law

Author: Laura K. Johnson

In a recent state court trademark decision, Movie Mania Metro, Inc. v. GZ DVD’s Inc., No. 311723 (Sept. 9, 2014), the Michigan Court of Appeals held that Plaintiff’s MOVIE MANIA trademark had become invalid as a result of naked licensing.

Plaintiff commenced use of the name “Movie Mania” in 1989 in connection with a video-rental operation, and subsequently registered the trademark with the Michigan Department of Regulatory Affairs. In 1999, Plaintiff began licensing use of the mark to various third-party video-rental businesses. The licensing agreement, however, contained virtually no quality control standards such as standards on advertising, store operations, or the rental or sale of merchandise. In 2010, Defendant purchased a “Movie Mania” store from a current licensee and, over Plaintiff’s objections, proceeded to open another video-rental store bearing the “Movie Mania” mark. Plaintiff sued, alleging trademark infringement under the Lanham Act, Michigan Trademark Act, and common law.

The trial court granted Defendant’s motion for summary judgment, finding that Plaintiff’s claims were precluded as a matter of law because its naked license had led to an “abandonment” of its trademark. The Michigan Court of Appeals affirmed, holding that Plaintiff’s uncontrolled licensing of the “Movie Mania” mark without standards or restrictions over five-plus years was a textbook example of naked licensing. It noted, however, that the proper framework for assessing naked licensing under Michigan state law was not abandonment but invalidity, as naked licensing causes a trademark to lose its ability to serve as a valid source identifier.


DISCLAIMER: Although we wish to hear from you, information exchanged in this blog cannot and does not create an attorney-client relationship. Please do not post any information that you consider to be personal or confidential. If you wish for Finnegan, Henderson, Farabow, Garrett & Dunner, LLP to consider representing you, in order to establish an attorney-client relationship you must first enter a written representation agreement with Finnegan. Contact us for additional information. One of our lawyers will be happy to discuss the possibility of representation with you. Additional disclaimer information.

Tagged , , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: