Shields of Strength v. U.S. Dep't of Def.
| Decision Date | 05 May 2023 |
| Docket Number | 6:21-cv-00484 |
| Parties | Shields of Strength, Plaintiff, v. U.S. Department of Defense et al., Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
1
Shields of Strength, Plaintiff,
v.
U.S. Department of Defense et al., Defendants.
No. 6:21-cv-00484
United States District Court, E.D. Texas
May 5, 2023
REVISED OPINION AND ORDER
J. CAMPBELL BARKER UNITED STATES DISTRICT JUDGE
Defendants move to dismiss this action for lack of jurisdiction and failure to state viable claims. Plaintiff, in turn, moves for a preliminary injunction. For the reasons given below, (1) the individual-capacity defendants' motion to dismiss is granted, (2) the official-capacity defendants' motion to dismiss is granted in part and denied in part, and (3) plaintiff's motion for a preliminary injunction is denied.
Table of Contents
Background ............................................................................... 2
Analysis .................................................................................... 9
I. Defendants' motions to dismiss ........................................... 9
A. Subject-matter jurisdiction ............................................ 9
1. Concreteness of the non-infringement claims ......... 10
2. Sovereign immunity from damages claims .............. 10
3. Action committed to agency discretion by law ......... 11
4. Six-year statute of limitations ................................. 14
5. Standing to assert the rights of others ..................... 14
B. Personal jurisdiction over individual defendants .......... 15
C. Pleading of claims on which relief can be granted ......... 15
1. Licensing challenges (Counts 1-3, 8-10) ................ 16
a. Abridgement of the freedom of speech ............. 17
b. Burden on religious exercise ............................. 24
c. Establishment of religion .................................. 27
2. Licensee-estoppel defense (Count 7) ...................... 28
3. Viability of individual-capacity relief ...................... 31
D. Summary ..................................................................... 35
II. Shields' motion for a preliminary injunction ...................... 35
Conclusion.............................................................................. 37
Background
1. Trademark rights arise from common law and serve two, complementary goals: they foster competition by “secur[ing] to the owner of the mark the goodwill of his business,” and they “protect the ability of consumers to distinguish among competing producers.”[1] Although Congress did not create trademark rights, it has helped protect them since at least the 1946 Lanham Act. The Lanham Act allows a trademark owner to register its marks with the Patent and Trademark Office, which confers certain enforcement advantages, and allows access to federal court for claims of trademark infringement.[2]
Section 45 of the Lanham Act defines a “person” who can register and protect trademarks to include the United States and any agency thereof.[3] That includes military departments. And the service branches of the Department of Defense have registered numerous trademarks related to the military.[4] Those trademark-registration efforts picked up in the past two decades as pride in military service saw more businesses using military branding.[5] At one point, Disney even tried to trademark the name SEAL Team Six.[6]
The service branches now have hundreds of registered trademarks, ranging the spectrum of popular familiarity.[7] For instance, the Department of the Army has registered a trademark in the name Explosive Ordnance Disposal Technology Directorate Picatinny Arsenal.[8] The department has also registered the name West Point[9]and the West Point crest[10] for use with shirts, hats, and other articles of clothing. And the department has registered the word Army[11] and applied to register the Army logo[12] as trademarks for use with articles of clothing.
2. Shields of Strength is a private company based in east Texas. Since 1998, Shields has made and sold goods that feature Christian symbols, quote Bible verses, or draw on the Bible as inspiration for encouraging words and phrases.[13] Among those goods are pendants replicating the shape of soldiers' “dog tags.”[14]Two examples of Shields' dog tags are shown below:[15]
(Image Omitted)
Shields has distributed millions of dog tags with words or symbols meant to show military pride or connection.[16] The dog tags have even received presidential attention. In 2003, President George W. Bush's remarks at Arlington National Cemetery noted that Captain Russell Rippetoe, the first serviceman killed in action during Operation Iraqi Freedom, wore a dog tag with a Bible verse from Joshua 1:9.[17]
Before 2011, at least some Department of Defense officials appear to have acquiesced in Shields' production of dog tags displaying military words and insignia alongside Bible verses. For instance, in 2003, after Shields' founder gave invited remarks at the Pentagon, Department of Defense employees requested that Shields place its products in Army and Air Force Exchange Service outlets.[18]
In 2011, the military's approach shifted. At that time, the military had finished creating and staffing Trademark Licensing Program Offices (“trademark offices”) to implement trademark-licensing authority that Congress granted to the Secretary of Defense in 2004.[19] Those trademark offices license the military's registered marks for use on commercial products such as shirts,
hats, and mugs,[20] creating licensing fees used to pay for the trademark program and for morale, welfare, and recreation activities in the military.[21]
In licensing those trademarks, the offices are governed by Department of Defense Instruction 5535.12, issued in 2013. Its second enclosure provides in pertinent part, with emphasis added:
2. TRADEMARK LICENSING PROGRAM REQUIREMENTS AND PROCESS
a. Each OSD and DoD Component shall provide oversight and management of all marks owned or controlled by the Component. This includes but is not limited to establishing policies for the creation of marks for official use; monitoring marks for, and protecting them against, unauthorized use; and, as appropriate, licensing marks for authorized use by non-DoD entities, and registering marks with the USPTO.
....
d. In accordance with subpart 2635.702 of Title 5, Code of Federal Regulations (Reference (h)), DoD marks may not be licensed for use in a manner that creates a perception of DoD endorsement of any non-federal entity or its products and services. DoD marks may not be licensed for any purpose intended to promote ideological movements, sociopolitical change, religious beliefs (including non-belief), specific interpretations of morality, or legislative/statutory change. Marks may not be fraudulently or wrongfully affixed pursuant to sections 506 and 1017 of Title 18, U.S.C. (Reference (i)).
e. DoD marks may not be licensed for use in a manner that would reflect negatively on the DoD; degrade the name, reputation, or public goodwill of the DoD Components; or be contrary to community relations objectives established in DoDD 5410.18 (Reference (j)).[22]
Starting in 2011, the military's trademark offices informed Shields that it needed a license to sell products with marks registered by the military.[23] Three of the military's trademark offices (those of the Army, Marines, and Air Force) eventually issued licenses to Shields, and their license agreements or later review of Shields' products limited Shields' usage or citation of Bible verses near licensed marks.[24] The Navy denied Shields' request for a license altogether.[25]
In 2019, some of the trademark offices received a letter from the Military Religious Freedom Foundation, an organization that advocates the “separation of Church and state” in the military.[26]The letters threatened litigation unless the military acted on what the Foundation viewed as Shields' distribution of products using the military's trademarks outside the scope of Shields' license.[27]In response, various military officials sent Shields a cease-and-desist letter prohibiting it from producing or selling items with specified religious content alongside the military's registered marks.[28]
Shields' trademark licenses expired in 2020 and 2021, and its requests for license renewal were denied.[29]
3. Shields now sues, challenging the military's policy and decisions regarding trademark licensing (Counts 1-3 and 8-11) and the military's assertion that Shields' unlicensed dog tags infringe trademark rights (Counts 4-7).[30] Shields seeks the relief listed below.
(1) As to the denial or limitation of trademark licenses (Counts 1-3 and 8-11), Shields seeks:
(a) nominal and compensatory damages for past violation of Shields' rights under the Free Speech, Free Exercise, and Establishment Clauses of the First Amendment and under RFRA, the Religious Freedom Restoration Act of 1993 (relief on Counts 1-3 and 8);
(b) a declaration that the future denial or limitation of a trademark license for Shields' dog tags based on Instruction 5535.12 would violate the First Amendment and RFRA, and an injunction against such future conduct (relief on Counts 1-3 and 8-10);
(c) an order vacating the past denials and limitations of a trademark license for Shields' dog tags and vacating the pertinent provision of Instruction 5535.12, as violating the First Amendment and RFRA (relief on Counts 9-10); and
(d) an order vacating the past denials and limitations of a trademark license for Shields' dog tags, and vacating the pertinent provision of Instruction 5535.12, as arbitrary and capricious and an abuse of discretion within the meaning of the Administrative Procedure Act (relief on Count 11).
(2) As to the assertion of trademark rights against Shields' unlicensed dog tags (Counts 4-7), Shields seeks:
(a) a declaration that Shields' unlicensed distribution...
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