Miller v. Glenn Miller Productions, Inc.

• Decision Date: 19 July 2006
• Docket Number: No. 04-55874.,No. 04-55994.,04-55874.,04-55994.
• Citation: 454 F.3d 975
• Parties: Jonnie D. MILLER, an individual; Steven D. Miller, an individual; CMG Worldwide Inc., a corporation, Plaintiffs-Appellants, v. GLENN MILLER PRODUCTIONS, INC., a corporation, Defendant-Appellee. Jonnie D. Miller, an individual; Steven D. Miller, an individual; CMG Worldwide Inc., a corporation, Plaintiffs-Appellees, v. Glenn Miller Productions, Inc., a corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

454 F.3d 975

Jonnie D. MILLER, an individual; Steven D. Miller, an individual; CMG Worldwide Inc., a corporation, Plaintiffs-Appellants, v. GLENN MILLER PRODUCTIONS, INC., a corporation, Defendant-Appellee.

Jonnie D. Miller, an individual; Steven D. Miller, an individual; CMG Worldwide Inc., a corporation, Plaintiffs-Appellees, v. Glenn Miller Productions, Inc., a corporation, Defendant-Appellant.

No. 04-55874.

No. 04-55994.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 7, 2005.

Filed July 19, 2006.

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Brian G. Wolf and Paul Karl Lukacs, Lavely & Singer, P.C., Los Angeles, CA, for the plaintiffs-appellants-cross-appellees.

Sheldon Eisenberg, Adam J. Thurston, and Melissa B. Bonfiglio, Bryan Cave LLP, Santa Monica, CA, for the defendant-appellee-cross-appellant.

Appeal from the United States District Court for the Central District of California; A. Howard Matz, District Judge, Presiding. D.C. No. CV-03-00529-AHM.

Before ROBERT R. BEEZER, CYNTHIA HOLCOMB HALL, and KIM McLANE WARDLAW, Circuit Judges.

PER CURIAM.

Steven and Jonnie Miller, adopted children of Helen Miller, wife of the world-renowned bandleader Glenn Miller, and their exclusive licensing agent CMG Worldwide Inc. (collectively "Appellants") appeal from the district court's order granting defendant Glenn Miller Productions, Inc. ("GMP") summary judgment and dismissing their complaint on the basis of laches. See Miller v. Glenn Miller Prods., 318 F.Supp.2d 923 (C.D.Cal.2004). GMP cross-appeals the district court's determination that it is engaged in unauthorized sublicensing. In his well-reasoned opinion, District Judge A. Howard Matz ruled that a licensee of trademark and related publicity rights may not sublicense those rights to third parties without express permission from the original licensor. Id. at 939. We agree with this extension of the well-established "sublicensing rule" from copyright and patent law to the licensing of trademark and related publicity rights such as occurred here, and with the district court's reasons for extending the rule. The district court also correctly ruled, however, that Appellants are barred by the doctrine of laches from taking legal action now, based on undisputed evidence establishing that they should have known of GMP's allegedly infringing activities well beyond the statutory period for bringing suit. Id. at 944-45. Accordingly, we affirm and adopt the district court's thorough opinion with the exception of Section C.5 (id. at 945-46) and the final three sentences of the opinion (id. at 946, beginning with "Alternatively, the Court rules"). We also reprint the incorporated portions as an appendix to this opinion.

We nevertheless address GMP's argument that the district court erred in concluding that it sublicensed the "Glenn Miller" mark rather than that it licensed its own separate and independently owned "Glenn Miller Orchestra" mark. A party that prevails on summary judgment may cross-appeal "any adverse finding that form[s] the basis for collateral estoppel in subsequent litigation." Schwartzmiller v. Gardner, 752 F.2d 1341, 1345 (9th Cir. 1984) (alteration in original) (internal quotation marks omitted).

We reject GMP's contention that because it registered the "Glenn Miller Orchestra" mark and the mark has become incontestable, it has rights to the mark independent of the rights to the "Glenn Miller" mark licensed by Helen Miller in the 1956 agreement. This argument misapprehends a fundamental principle of trademark law: Registration does not create a mark or confer ownership; only use in the marketplace can establish a mark. See Cal. Cooler, Inc. v. Loretto Winery, Ltd., 774 F.2d 1451, 1454 (9th Cir.1985) ("[A] trademark is a common law property right that exists independently of statutory provisions for registration." (internal quotation marks omitted)); 3 McCarthy on Trademarks and Unfair Competition § 19:3, at 19-15 to -16 (4th ed.2005). Neither the registration nor the incontestable status of the "Glenn Miller Orchestra" mark affects Appellants' ownership of the "Glenn Miller" mark, which (a jury could find) was acquired through use in the marketplace.¹ See 15 U.S.C. § 1065 (providing that a registered mark is not incontestable "to the extent, if any, to which the use of [the] mark . . . infringes a valid right acquired under the law of any State or Territory by use of a mark or trade name continuing from a date prior to the date of registration under this chapter of such registered mark"). GMP's "Glenn Miller Orchestra" mark does not foreclose Appellants from establishing that GMP breached the 1956 agreement and infringed upon their rights to the "Glenn Miller" mark.

GMP misplaces reliance on Holiday Inns, Inc. v. Trump, 617 F.Supp. 1443 (D.N.J.1985), for the proposition that a licensee, by developing a trademark based on a name it has been licensed to use, may acquire rights in the licensed name adverse to the original licensor. In Trump, two hotel companies entered into a partnership with Donald Trump to develop and operate a casino hotel in Atlantic City, New Jersey. Id. at 1446. Trump granted the partnership a license to use his name, and the partnership named its property the "Trump Casino Hotel." Id. at 1453-55. When Trump subsequently opened a casino hotel named "Trump's Castle Casino Hotel" in Atlantic City, the hotel companies sued to enjoin Trump from using his name in association with the new property. Id. at 1446-47. The district court rejected the hotel companies' contract law claims, finding that Trump had not bargained away his right to use his name for competing facilities. Id. at 1462-63. It also held that the hotel companies had acquired some rights in Trump's name through the development of goodwill associated with the Trump Casino Hotel, id. at 1469-70, but it ultimately denied injunctive relief based on equitable considerations, id. at 1474. Because GMP is not seeking to enjoin Appellants from competing with its Glenn Miller Orchestra business, but rather contends that its "Glenn Miller Orchestra" mark is independent of Appellants' "Glenn Miller" mark and may be freely licensed to third parties, Trump is inapposite.

We also reject Appellants' challenge to the district court's laches ruling. It is well-established that we examine when a plaintiff "knew or should have known" of the infringing activity to determine whether the plaintiff unreasonably delayed in bringing suit. E.g., Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 838 (9th Cir.2002); Kling v. Hallmark Cards, Inc., 225 F.3d 1030, 1039 (9th Cir.2000). Thus in E-Systems, Inc. v. Monitek, Inc., we held that laches barred a trademark infringement action even though the plaintiff did not acquire actual knowledge of the defendant's activities until the year of suit, where the "[p]laintiff ought to have discovered defendant's use sooner had it been diligently seeking to enforce its mark." 720 F.2d 604, 607 (9th Cir.1983), as amended; see also Bridgestone/Firestone Research, Inc. v. Auto. Club De L'Ouest De La France, 245 F.3d 1359, 1362, 1364 (Fed.Cir.2001) (holding that a petition for cancellation of a registered trademark was barred by the doctrine of laches based on the petitioner's constructive knowledge); 5 McCarthy on Trademarks § 31:38, at 31-82(laches requires determining when the plaintiff was "actually or constructively on notice of defendant's activities").

Undeterred, Appellants cite several cases supposedly holding that laches is applicable only where the trademark holder "knowingly allowed" the infringing mark to be used without objection for a lengthy period of time. See Brother Records, Inc. v. Jardine, 318 F.3d 900, 909 (9th Cir.2003); GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1209 (9th Cir. 2000); Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1061 (9th Cir.1999). In the asserted cases, however, constructive knowledge was not at issue; rather, we declined to apply laches because there was no undue delay between the inception of infringing activity and the filing of a lawsuit. See Brother Records, 318 F.3d at 902-03(plaintiff filed suit within one year of the inception of defendant's infringing activity); GoTo.com, 202 F.3d at 1204 (plaintiff filed suit within two months of the inception of defendant's infringing activity); Brookfield Commc'ns, 174 F.3d at 1061 ("Brookfield filed suit the very day that West Coast publicly announced its intention to launch [the allegedly infringing website]."). The phrase "knowingly allowed" in these opinions is dictum and cannot bear the weight Appellants seek to place on it.

Appellants also assert that the district court made a finding that Steven Miller had actual knowledge of GMP's unauthorized activities several years before filing suit. While GMP is not entitled to summary judgment on the issue of laches based on Steven's actual knowledge in light of Steven's sworn declaration that he lacked such knowledge until 2000 or 2001, the district court did not make a finding of actual knowledge. Cf. Leslie v. Grupo ICA, 198 F.3d 1152, 1157-59 (9th Cir.1999) (holding that a sworn statement by a non-movant must be accepted as true on summary judgment unless the statement contradicts other sworn statements by the non-movant). The district court's finding of unreasonable delay rests on Appellants' constructive knowledge.²

The district court correctly held that Appellants may have had constructive knowledge of GMP's activities as early as 1981, more than twenty years before the current suit was filed, and certainly no later than 1994, when Steven Miller's attorney began receiving GMP's financial statements, and thus that they unreasonably delayed in bringing suit. See, e.g., E-Systems, 720 F.2d at 607(holding that a delay of six to eight years was unreasonable). Because we affirm the district court on the basis of laches, we do not review...