Trademark Case Law Study: Southern Univ. Sys. Foundation. v. Henderson

"This recently decided case reinforces the fundamental trademark principle that substantive trademark rights are only acquired through actual usage of the trademark in commerce, not merely through registration of the trademark."

By Marc Whitfield
Partner, Taylor Porter
marc.whitfield@taylorporter.com

Southern Univ. Sys. Foundation. v. Henderson, No. CV 14-00288-JJB-RLB, 2016 WL 5796898, at *4–6 (M.D. La. Oct. 3, 2016)

This recently decided case reinforces the fundamental trademark principle that substantive trademark rights are only acquired through actual usage of the trademark in commerce, not merely through registration of the trademark.

In this case, the Louisiana Secretary of State’s Office refused to allow SUSF to register a number of BAYOU CLASSIC that SUSF has been using for years. The refusal was based upon the fact that Mr. Shelton was the record owner of several BAYOU CLASSIC trademark registrations that he had purchased from Mr. Henderson. SUSF filed suit against Mr. Shelton and Mr. Henderson seeking cancellation of the BAYOU CLASSIC registrations based upon SUSF’s rights as the senior user of the BAYOU CLASSIC marks, dating back several years.

In the court’s analysis of the parties’ cross motions for summary judgment, the court ruled in favor of SUSF and ordered cancellation of Mr. Sheltons’s BAYOU CLASSIC trademark registrations, finding as follows:

Despite their substantive arguments on this point, both parties agree that under Louisiana law, “the registry of a trade mark or a service mark confers only procedural advantages, and not substantive rights. It confers no greater proprietary rights than exist without registration, and thus the registration by one party, or the lack of registration by the other, is not decisive as to the right of either party to use the trade mark or trade name.” “Substantive rights in a trade name may be acquired only by actual usage.” Federal jurisprudence echoes this principle. For instance, in Dallas Cowboys Football Club, LTD v. America's Team Properties, Inc., the district court for the Northern District of Texas stated that “t is a fundamental premise that ‘[t]he exclusive right to a trademark belongs to one who first uses it connection with specified goods’.” The Dallas Cowboys court further explained how “[n]either application for nor registration of a mark at the federal level wipes out the prior nonregistered, common law rights of others. The nonregistered rights of a senior user continue and are not erased by the later federal registration of a junior user.” Hence, the “ ‘senior user’ who first uses the mark in the marketplace ‘is entitled to enjoin other ‘junior’ users from using the mark, or one that is deceptively similar to it’.”

Based on the foregoing state and federal law, it is clear that while Shelton is in possession of the trademark registrations for the BAYOU CLASSIC mark and logo, this fact alone does not resolve the parties' battle. Within the Fifth Circuit, “[o]wnership of a mark is established by use in the market, not by registration.”

In this case, SUSF has presented uncontested evidence that while it may not presently hold the trademark registrations, it has continuously used the BAYOU CLASSIC mark and logo in commerce since 1974. As previously discussed, in 1974 Southern University and Grambling registered the word mark for class 41 (education and entertainment), and Southern University has continued to use the word mark without interruption even after the registration expired. In 1984, the universities registered the logo mark for class 25 (clothing), and class 16 (for paper goods). Again, even after the registrations for these marks expired, the universities and SUSF have continued without interruption to use the BAYOU CLASSIC logo. Shelton has offered no evidence to create a genuine issue of material fact to show any interruption in the Plaintiff's use of the BAYOU CLASSIC mark and logo in commerce. In fact, Shelton's own deposition testimony lends further support for SUSF's argument. Shelton testified that of the five classes in which his trademark is registered, he has only used the BAYOU CLASSIC mark in commerce for the limited purpose of selling t-shirts and hats (class 25) during the two days of the Bayou Classic in November of 2013 and 2014. Further, Shelton offers the deposition of Judge Byron Williams who acknowledged that Southern University, Grambling, and SUSF “consistently used” the BAYOU CLASSIC over the last forty years.

The Court finds that based on the undisputed evidence in the record, no reasonable juror could conclude that Shelton is the senior user of the BAYOU CLASSIC marks or logos. Rather, the record evidence clearly establishes that SUSF is the senior user of the BAYOU CLASSIC marks and logos based upon its priority of use. Accordingly, SUSF has established ownership in the BAYOU CLASSIC marks and logos.

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