318 F.3d 900 (9th Cir. 2003), 01-57095, Brother Records, Inc. v. Jardine

Docket Nº:01-57095.
Citation:318 F.3d 900
Party Name:BROTHER RECORDS, INC., a California Corporation, Plaintiff-counter-defendant-Appellee, v. Alan JARDINE, an individual, Defendant-counter-claimant-Appellant.
Case Date:January 28, 2003
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 900

318 F.3d 900 (9th Cir. 2003)

BROTHER RECORDS, INC., a California Corporation, Plaintiff-counter-defendant-Appellee,


Alan JARDINE, an individual, Defendant-counter-claimant-Appellant.

No. 01-57095.

United States Court of Appeals, Ninth Circuit

January 28, 2003

Argued and Submitted Nov. 6, 2002.

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Jeffrey S. Benice, Irvine, CA, for the defendant-counter-claimant-appellant.

Phillip H. Stillman, Del Mar, CA, Edwin McPherson, McPherson & Kalmansohn, Los Angeles, CA, for the plaintiff-counter-defendant-appellee.

Appeal from the United States District Court for the Central District of California; Harry L. Hupp, District Judge, Presiding. D.C. No. CV-99-03829-HLH.

Before PREGERSON, NOONAN, and TASHIMA, Circuit Judges.


TASHIMA, Circuit Judge.

Alan Jardine appeals the district court's grant of summary judgment in favor of Brother Records, Inc. ("BRI"), on BRI's Lanham Act, 15 U.S.C. §§ 1051-1129, trademark infringement action alleging that Jardine infringed BRI's "The Beach Boys" trademark. Jardine also appeals the district court's grant of summary judgment in favor of BRI on Jardine's counterclaims that BRI breached a lifetime employment agreement and license agreement. Finally, Jardine appeals the district court's denial of his motion to amend his counterclaim to add third-party claims and an additional counterclaim. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.


In 1961, Al Jardine, Mike Love, Brian Wilson, Carl Wilson, and Dennis Wilson formed The Beach Boys. The band shortly thereafter achieved huge commercial success, producing numerous hit songs and touring to huge audiences throughout the country. In 1967, the members of the Beach Boys incorporated BRI to hold and administer the intellectual property rights for The Beach Boys. Currently, BRI is equally owned by four shareholders, who are also its directors: Al Jardine, Mike Love, Brian Wilson, and the estate of Carl Wilson. BRI is the registered owner of "The Beach Boys" trademark.

Over the years, personal difficulties arose between some of the members, and some members of the band decided to not tour full time, or at all. In 1991, the members of the Beach Boys incorporated

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Brother Tours, Inc., which handled their touring and distributed their touring income. In 1993, the directors of BRI agreed to devote a certain percentage of the touring income to the corporation for use of the trademark and designated a larger percentage of the income to those members who actually toured. By 1998, Carl Wilson had died, Love and Jardine no longer wanted to tour together, and Brian Wilson did not want to tour at all. Love began negotiating with BRI the terms of a license to use "The Beach Boys" trademark in connection with his own band.

BRI's directors met on July 14, 1998, to discuss how the trademark should be used. The representative of Carl Wilson's estate suggested that BRI issue non-exclusive licenses to each shareholder on the same terms and conditions as the license that was being negotiated with Love, thus giving each member an equal right to tour. Three of the four board members, including Jardine, voted to grant each Beach Boy a non-exclusive license. On October 1, 1998, BRI executed a non-exclusive license agreement with Love (the "Love license"). The Love license contained clauses designed to protect the value of the trademark, requiring the licensee to preserve The Beach Boys style and to choose from a list of approved booking agencies and managers.

The parties dispute whether BRI and Jardine entered into a non-exclusive license agreement. After the July 1998 BRI board meeting, Jardine began touring with his own band, using a booking agent and manager that were not included in the list approved by the Love license. On October 25, 1998, Jardine's attorney sent BRI a letter saying that Jardine would be performing as "Beach Boys Family and Friends," and that therefore, "a license from BRI [was] unnecessary." On October 28, 1998, BRI told Jardine that his unlicensed use of the trademark would be an infringement.

Jardine then proposed a license that included terms different from those included in the Love license. Jardine's proposal contemplated only a five-percent royalty to BRI on the first $1 million of gross receipts and a 17.5 percent royalty thereafter. BRI proposed a 17.5 percent royalty across the board. Love's license required a royalty of 20 percent of the first $1 million and 17.5 percent of receipts thereafter. Also, Jardine wanted to use a booking agent and manager that were not on the approved list. Jardine stated that, whether or not BRI accepted the proposal, he would continue performing as the "Beach Boys Family and Friends."

The BRI board scheduled another meeting for November 24, 1998 to discuss Jardine's proposal. Before the meeting, Jardine's attorney sent a letter to the board with a proposed license agreement signed by Jardine. At the meeting, the BRI board voted to reject Jardine's proposal. In the months following the meeting, Jardine both attempted to negotiate an agreement and claimed he had a license.

Jardine and his band continued to perform using names that included "The Beach Boys" trademark. The performances were promoted under names such as: Al Jardine of the Beach Boys and Family & Friends; The Beach Boys "Family and Friends"; Beach Boys Family & Friends; The Beach Boys, Family & Friends; Beach Boys and Family; as well as, simply, The Beach Boys. Jardine and his band performed in locations and on dates close to Love's "The Beach Boys" shows. With two bands touring as The Beach Boys or as a similar-sounding combination, show organizers sometimes were confused about what exactly they were getting when they booked Jardine's band. A number of show organizers booked Jardine's

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band thinking they would get The Beach Boys along with special added guests, but subsequently canceled the booking when they discovered that Jardine's band was not what they thought it was. Numerous people who attended one of Jardine's shows said that they had been confused about who was performing. During this time period, BRI sent Jardine cease and desist letters objecting to Jardine's use of the trademark.

On April 9, 1999, BRI filed its complaint in the district court alleging that Jardine was infringing its trademark. Jardine answered, asserting the defenses of fair use, laches, estoppel, and unclean hands, and counterclaimed for breach of employment agreement, breach of license agreement, and for a declaratory judgment that Jardine could tour as the "Beach Boys Family and Friends." On March 28, 2000, the district court issued the preliminary injunction prohibiting Jardine from using "The Beach Boys," "The Beach Boys Family and Friends," and other similar combinations, but still allowing Jardine to refer to his past membership in the band "in a descriptive fashion."

On March 19, 2001, two weeks before the close of discovery, Jardine moved for leave to amend his pleading to add third-party claims against the shareholders and directors of BRI and an additional counterclaim against BRI for breach of fiduciary duty. The district court denied the motion. On June 4, 2001, BRI moved for summary judgment on its trademark infringement claim and Jardine's counterclaims. The district court granted summary judgment in favor of BRI and issued a permanent injunction against Jardine's use of the trademark. This timely appeal followed.


We review the district court's grant of summary judgment de novo. See Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1139-40 (9th Cir. 2002). Viewing the evidence in the light most favorable to the non-moving party, we must determine whether there are any genuine issues of material fact that remain for trial and whether the district court correctly applied the relevant substantive law. Id. at 1140. "Because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena." Id. (quoting Interstellar Starship Servs., Ltd. v. Epix, Inc., 184 F.3d 1107, 1109 (9th Cir. 1999)). "Therefore, a district court may grant summary judgment and we may uphold a grant of summary judgment only if no genuine issue exists regarding likelihood of confusion." Thane Int'l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901 (9th Cir. 2002).


I. Trademark Infringement

Jardine contends that his use of BRI's trademark is protected by either the classic fair use doctrine or the nominative fair use doctrine. In New Kids on the Block v. News Am. Publ'g Inc., 971 F.2d 302 (9th Cir. 1992), we noted that the classic fair use defense could not be applied in that case because "this is not the classic fair use case where the defendant has used the plaintiffs mark to describe the defendant's own product." Id. at 308. We then held that, "where the defendant uses a trademark to describe the plaintiffs product, rather than its own . . . a commercial user is entitled to a nominative fair use defense." Id. In Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150-52 (9th Cir. 2002), we reiterated the distinction between the classic fair use and nominative fair use doctrines.

The nominative fair use analysis is...

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