Nation. Bd. Certif. Occup. v. Amer. Occup. Therapy

• Decision Date: 30 September 1998
• Docket Number: No. CIV. AMD 97-767.,CIV. AMD 97-767.
• Parties: NATIONAL BOARD FOR CERTIFICATION IN OCCUPATIONAL THERAPY, INC., Plaintiff v. AMERICAN OCCUPATIONAL THERAPY ASSOCIATION, et al., Defendants.
• Court: U.S. District Court — District of Maryland

24 F.Supp.2d 494

NATIONAL BOARD FOR CERTIFICATION IN OCCUPATIONAL THERAPY, INC., Plaintiff v. AMERICAN OCCUPATIONAL THERAPY ASSOCIATION, et al., Defendants.

No. CIV. AMD 97-767.

United States District Court, D. Maryland.

September 30, 1998.

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Michael A. Grow, Bryan A. Sims, Evan S. Stolove, Arent Fox Kintner Plotkin & Kahn, Charles J. Steele, Foley & Lardner, John P. McAllister, Groom & Nordberg, Washington, DC, for Plaintiff.

Steven P. Hollman, Hogan & Hartson, Washington, DC, for Defendants.

MEMORANDUM

DAVIS, District Judge.

This case involves a bitter familial dispute between two prominent national organizations in the occupational therapy profession. The battle is for control of the authority to define certification standards in the profession. One disputant is the progeny of the other. Plaintiff, the National Board for Certification in Occupational Therapy, Inc., ("NBCOT"), operates a nationally-recognized certification program for licensed occupational therapy practitioners. Defendant, the American Occupational Therapy Association, ("AOTA"), is a member trade association comprised of occupational therapists and occupational therapy assistants.

The dispute centers around NBCOT's decision to establish a recertification program requiring practitioners to disclose illegal behavior. AOTA vehemently opposes this plan. Among other attempts to scuttle the recertification plan, AOTA has petitioned the Patent and Trademark Office to cancel NBCOT's registered certification marks¹ since, without control of the marks, NBCOT's ability to control the certification process would be fatally undermined. Consequently, NBCOT has brought suit asserting the following claims: declaratory judgment as to the validity and enforceability of NBCOT's certification marks (Count I); declaratory judgment as to the ownership of NBCOT's marks and registrations (Count II); declaratory judgment as to alleged violations of the Lanham Act (Count III); unlawful group boycott (Count IV); unlawful attempted monopolization (Count V); certification mark disparagement (Count VI); breach of contract (Count VII); tortious interference with prospective advantage (Count VIII); statutory and common law infringement, counterfeiting, unfair competition, and dilution of trademark (Counts IX-XIII, as counterclaims). Defendants brought several counterclaims, seeking cancellation of NBCOT's trademark registrations (Count I); declaratory judgment as to the invalidity of the marks (Count II); injunctive relief as to the renewal program (Count III); Lanham Act violations (Count IV); and antitrust violations (Count V).

Pending before the court are NBCOT's and AOTA's cross motions for partial summary judgment. The motions have been exhaustively briefed and no hearing is necessary. For the reasons discussed below, I will grant plaintiff's motion in part, grant defendant's motion in part, and deny both in part. In particular, I am persuaded that NBCOT is entitled to judgment as a matter of law on its principal trademark and contract claims.

I. FACTS

A. The Parties

The historical relationship between the parties is critical to an understanding of the current dispute. AOTA was created during World War I and has since served to provide information, publications, and resources for occupational therapists and occupational therapy assistants. In the 1930's, AOTA began certifying occupational therapy practitioners and maintaining a registry of qualified individuals. Concerned about potential antitrust liability for its involvement in certifying practitioners while also providing membership services, AOTA decided to withdraw from all certification activities. It elected to create a separate organization with the power and responsibility of certifying practitioners. Thus, in April 1986, AOTA created the American Occupational Therapy Certification Board ("AOTCB"), an autonomous unit within AOTA with sole responsibility for certifying practitioners. Pursuant to its creation of AOTCB, AOTA transferred relevant certification documents and materials to AOTCB. AOTA then ceased any responsibility for certification. AOTCB existed within AOTA until 1988, when it separately incorporated. At that time, AOTA transferred all of the finances, office equipment, certification records, and test materials to the independent organization. AOTCB renamed itself NBCOT in 1996.

B. The Marks

AOTA and NBCOT dispute the ownership and rights to use the OTR (Occupational Therapist Registered) and COTA (Certified Occupational Therapist Registered) marks. Initially, AOTA adopted an emblem to symbolize its organization, consisting of a caduceus with the letters OT. This emblem was registered with the Patent Office in 1963 as a collective membership mark; however, such registration expired in 1993. The emblem was redesigned at some point to include the words OTR and COTA. AOTA sold this emblem, on pins and patches, to its members. OTR or COTA certification was required for AOTA membership. Not all certified individuals joined AOTA, however, and these individuals were free to purchase such materials from AOTA with the marks on them.

After the transfer of certification activities, NBCOT applied to register the marks in the Patent and Trademark Office ("PTO"). Registration was granted in 1996. Currently, 38 states require NBCOT certification as a condition of state licensure in the field of occupational therapy.

In 1995, NBCOT and AOTA signed an agreement, denominated "License Agreement." Therein, AOTA acknowledged that NBCOT was the owner of the OTR and COTA marks. Under the terms of the agreement, NBCOT granted a nonexclusive license to AOTA to continue to sell pins, patches and other promotional materials embodying the marks to qualified individuals. The validity and enforceability of this agreement is a focus of conflict between the parties.

C. The Renewal Certification Program

Since taking over sole responsibility for certification of occupational therapy practitioners, NBCOT has required individuals to renew their certification every five years. In 1996, in response to input from physicians, hospital administrators, and assorted health-related and governmental agencies, NBCOT implemented a revised certification renewal program. Under this new program, all practitioners certified more than five years are required to renew their certification. This renewal requires the disclosure of information about illegal activity, e.g., felony convictions, information which NBCOT has been requiring of all certificants since 1988. A second phase of the program is scheduled to be implemented in 2002 and will require a more comprehensive competency screening process pursuant to as yet undetermined criteria. It is this certification renewal program that has prompted AOTA to petition for cancellation of the marks. Paradoxically, then, AOTA created NBCOT's predecessor in interest and outright granted it the power to conduct all certification activities. Now, since it no longer agrees with NBCOT's actions, it seeks to reorder history in its effort to diminish NBCOT's power.

II. SUMMARY JUDGMENT STANDARD

Pursuant to Fed.R.Civ.P. 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering a motion for summary judgment, the facts, as well as the inferences to be drawn therefrom, must be viewed in the light most favorable to the nonmovant. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party moving for summary judgment is entitled to a grant of summary judgment only if no issues of material fact remain for the trier of fact to determine at trial. Id. at 587, 106 S.Ct. 1348. A fact is material for purposes of summary judgment, if when applied to the substantive law, it affects the outcome of the litigation. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "Summary judgment is not appropriate when there is an issue of fact for a jury to determine at trial, which is the case when there is sufficient evidence favoring the non-moving party upon which a jury can return a verdict for that party." Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir.1991).

A party opposing a properly supported motion for summary judgment bears the burden of establishing the existence of a genuine issue of material fact. Anderson, 477 U.S. at 248-49, 106 S.Ct. 2505. The nonmovant "cannot create a genuine issue of fact through mere speculation or the building of one inference upon another." Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.1985). See O'Connor v. Consolidated Coin Caterers Corp., 56 F.3d 542, 545 (4th Cir.1995), rev'd on other grounds, 517 U.S. 308, 116 S.Ct. 1307, 134 L.Ed.2d 433 (1996). "When a motion for summary judgment is made and supported as provided in [Rule 56], an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in [Rule 56] must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). See Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson, 477 U.S. at 252, 106 S.Ct. 2505; Shealy, 929 F.2d at 1012.

III. OWNERSHIP OF THE MARKS

NBCOT seeks a declaratory judgment that it is the rightful owner of the OTR and COTA marks. Both parties seek summary judgment on this claim. Because AOTA has not established a genuine issue of material fact disputing NBCOT's ownership, and because the record establishes as a matter of law NBCOT's ownership of the marks, I will grant summary judgment...