Commodores Entm't Corp. v. McClary

• Decision Date: 09 January 2018
• Docket Number: No. 16-15794,16-15794
• Citation: 879 F.3d 1114
• Parties: COMMODORES ENTERTAINMENT CORPORATION, Plaintiff–Counter Defendant–Appellee, v. Thomas MCCLARY, Fifth Avenue Entertainment, LLC, Defendants–Counter Claimants–Third Party Plaintiffs–Appellants, David Fish, et al., Third Party Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

879 F.3d 1114

COMMODORES ENTERTAINMENT CORPORATION, Plaintiff–Counter Defendant–Appellee,

v.Thomas MCCLARY, Fifth Avenue Entertainment, LLC, Defendants–Counter Claimants–Third Party Plaintiffs–Appellants,David Fish, et al., Third Party Defendants.

No. 16-15794

United States Court of Appeals, Eleventh Circuit.

January 9, 2018

Dean Adrian Kent, Stephanie Smith Leuthauser, Lindsay Patrick Lopez, Brigid Anne Merenda, Trenam Law, Tampa, FL, for Plaintiff–Appellee.

Dorothy Easley, Easley Appellate Practice, PLLC, Miami, FL, Beryl B. Thompson-McClary, Thompson McClary Law Office, Orlando, FL, Gregory Gadson, Law Office of Gregory Gadson, Noblesville, IN, Marie Claire Mirch, Mirch Law Firm, LLP, San Diego, CA, for Defendants–Appellants.

Before MARCUS, MARTIN, and NEWSOM, Circuit Judges.

MARCUS, Circuit Judge:

In this common-law trademark case, Thomas McClary appeals from an order granting judgment as a matter of law to Commodores Entertainment Corporation (CEC) and converting a preliminary injunction into a permanent one against McClary and his corporation, Fifth Avenue Entertainment, LLC. The dispute concerned ownership of the mark "The Commodores," the name of a famous Grammy Award–winning rhythm and blues, funk, and soul music band. McClary was an original member of The Commodores, but, by his own admission, he "split from the band" in 1984 to strike out on his own in the world of music. He later formed a musical group that performed as "The 2014 Commodores" and "The Commodores Featuring Thomas McClary." When CEC—a corporation run by two original Commodores who remain active with the group—found out about McClary’s group, it filed this lawsuit against McClary and Fifth Avenue claiming trademark infringement, trademark dilution, passing off, false advertising, and unfair competition.

The district court granted CEC a preliminary injunction and enjoined McClary from using the marks; a panel of this Court affirmed. Then, after a two-week trial, the district court granted judgment as a matter of law to CEC and converted the preliminary injunction into a permanent one. McClary and Fifth Avenue appeal that order, as well as the district court’s oral ruling denying their motion to dismiss for failure to join an indispensable party.

After careful review, we hold we lack jurisdiction to review the denial of the motion to dismiss and that the district court did not abuse its discretion in excluding expert testimony from an attorney who proffered only legal conclusions. We also conclude that when McClary left the band, he left behind his common-law rights to the marks. Those rights remained with CEC. Moreover, we conclude that the scope of the injunction was not impermissibly broad, that McClary’s arguments about the validity of the federal registration of the marks are irrelevant to this determination, and that McClary did not establish any affirmative defenses. Accordingly, we affirm.

I.

A.

The Commodores was formed in 1968. The group has released over forty albums, has charted seven number-one singles and numerous top-ten hits, and continues to record music and play for audiences around the world. The group’s big break came in 1971, when it opened for the Jackson 5 on a world tour. Shortly after the tour, the group signed a recording contract with Motown Record Corporation. The group’s first album, "Machine Gun," was released in 1974. Throughout the 1970s, The Commodores became internationally acclaimed with hits including "Easy," "Brick House," "Three Times a Lady," and "Too Hot ta Trot."

Although three other individuals were also involved at the early stages of the group, the "original" members are generally regarded as William King, Ronald LaPread, Thomas McClary, Walter Orange, Lionel Richie, and Milan Williams.¹ On March 20, 1978, these six members, along with their manager, Benjamin "Benny" Ashburn, formed a general partnership governed by a General Partnership Agreement. The agreement included a section expressly addressing the use of the name "The Commodores" upon the withdrawal of a partner: "Upon the death or withdrawal of less than a majority of the Partners, the remaining majority of the Partners shall continue to have the right to use the name THE COMMODORES for any purpose." Each partner was permitted to withdraw at any time so long as he provided the group with six months' written notice; notably, one partner’s withdrawal would not end the partnership. Two months later, the partners registered CEC as a Nevada corporation.

Around a year later, in 1979, CEC entered into an Exclusive Artist Production Agreement with Motown Record Corporation. This agreement also restricted use of the name: band members could perform as "sidemen" for other artists and groups, but "in no event" could they use the name "Commodores" in connection with that engagement. And the members and the group as a whole were, "joint and not severally, the sole and exclusive owner of all rights in and to the Name." Much like the General Partnership Agreement, this agreement provided that if a member withdrew from the group, neither he nor his heirs would have the right to make individual use of the name. In addition, if "one or more Members [became] a Leaving Member(s), then the Remaining Member(s) [would] automatically and without notice become (jointly and not severally) the sole and exclusive owner of the rights" to the name.

In 1982, Lionel Richie left the group to pursue his solo career; The Commodores continued without him and notified Motown of the change. CEC and Motown entered into a new agreement whereby CEC again "warrant[ed] and represent[ed] that it and [the signee] [were], jointly and not severally, the sole and exclusive owner of all rights in and to the Name" and that "its agreement with the Group provide[d] that no Leaving Member, nor heirs of any member have or will have the right to make any individual use of the Name." This agreement described "Leaving Members" as a member or members who "separate[d] from, and/or ceased to perform with, the remaining Member(s)."

Around the time that Richie left the group, Ashburn passed away. In March 1984, the remaining members of the group (King, LaPread, McClary, Orange, and Williams) executed an "amendment in toto" to the General Partnership Agreement that read this way, in part:

The principal business activity of the Partnership no longer is to engage in the entertainment business as the Group but is to own, maintain and lease certain motor vehicles and musical and studio equipment to Commodores Entertainment Corporation, a Nevada corporation, (the "Corporation"), which now conducts the business of the Group, and to hold all rights in and to the Group name "THE COMMODORES," the logo thereof, and any service mark, trademark, service name, or tradename associated therewith, and all goodwill inherent therein (collectively referred to as the "Group Name").

Like the other contractual arrangements, this amendment also clarified the use of the group’s name: "Upon the death or withdrawal of less than a majority of the Partners, the remaining majority of the Partners shall continue to have the right to use the Group Name for any purpose."

Later in 1984, and by his own admission, McClary "split from the band" to pursue his own solo career. On August 6, 1984, McClary allegedly sent a letter confirming his withdrawal from the band to King, LaPread, Orange, and Williams, as well as to several lawyers affiliated with the group. The letter was addressed to Lawrence J. Blake, a lawyer who had done legal work for The Commodores. It read in full: "I hereby confirm my withdrawal from the Commodores Effective as of May 31, 1984. I have certainly enjoyed fourteen years of being with you guys and I wish you the best." The letter was on the letterhead of "Thomas McClary Productions, Inc." and was marked with Blake’s firm’s "received" stamp, which Blake later swore was part of the firm’s procedure to indicate when documents were received. However, McClary said that he had not seen the letter until the lawsuit began. At the later trial, McClary presented a forensics expert who testified that it was "highly probable" that the signature on the letter was not McClary’s.

Although the formalities of McClary’s departure are contested, it is undisputed that McClary did not perform with The Commodores from 1985 through 2010. Soon after McClary’s departure, J.D. Nicholas joined the group. In 1986, The Commodores received its only Grammy for the single "Nightshift." McClary had no part in that single and did not receive the Grammy with the group.

Over time, LaPread and Williams also departed from the group, leaving King and Orange as the only remaining original members. At some point, King and Orange transferred their common-law trademark rights in The Commodores' name and logo to CEC. In 2001, CEC registered four trademarks ("the marks" or "the Commodores marks") with the United States Patent and Trademark Office (PTO). The trademarks were for the word mark "THE COMMODORES" and the word mark "COMMODORES" with a design. They granted CEC exclusive rights to the marks for "[e]ntertainment services, namely live performances by a musical and vocal group," as well as for "[m]usical sound and video recordings, namely, pre-recorded audio cassettes, video tapes, compact discs of live and in-studio musical performances." For three of the marks, first use was listed as April 1, 1972; first use in commerce was on April 30, 1972. For the fourth mark, first use was listed as December 31, 1968; first use in commerce was on the same day. The marks were renewed in March 2010, and are still active and in use today.

In 2002, King, Nicholas, and Orange executed an amended and restated partnership agreement for a new partnership, Commodores New, LLP, so that Nicholas could also share in the partnership. This agreement recounted that the partners had previously agreed to "transfer ownership of the trademark and/or service mark ‘COMMODORES’ " to CEC.

B.

This...