Voice-Tel Enterprises, Inc. v. Joba, Inc.
| Decision Date | 31 March 2003 |
| Docket Number | Civil Action No. 1:01-CV-3359-TWT. |
| Citation | 258 F.Supp.2d 1353 |
| Parties | VOICE-TEL ENTERPRISES, INC., et al., Plaintiffs, v. JOBA, INC., dba Voice-Tel of South Florida, et al., Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
Michael J. Gorby, Michael Singleton Reeves, Mary Donne Peters, James W. Standard, Jr., Gorby Reeves & Peters, Atlanta, GA, for Voice-Tel Enterprises, Inc., plaintiff.
Cary Ichter, Mark Gerald Trigg, Thomas Joshua Archer, Matthew B. Ames, Meadows Ichter & Bowers, Atlanta, GA, Jeremy E. Slusher, phv, Broad and Cassel, West Palm Beach, FL, for Joba, Inc. dba Voice-Tel of South Florida, Digital Communication Services, Inc. dba Voice-Tel of South Florida, defendants.
This is an action for trademark dilution and breach of contract. It is before the Court on multiple Motions for Summary Judgment.
Voice-Tel Enterprises, LLC, f/k/a Voice-Tel Enterprises, Inc. ("Voice-Tel") is a Delaware corporation having its principal place of business in Georgia. From 1986 to March 2002, Voice-Tel marketed and sold voice messaging products and services to end users throughout the nation. Voice-Tel itself designed, produced, marketed and sold voice messaging services under the Voice-Tel trademark from 1986 to March 2002. Until April, 1997, these services were provided to end users primarily through franchisees. Voice-Tel was the holder of the federally-registered trademark "Voice-Tel." (Master Appendix of Exs., Ex. A, ¶ 4.) Through an assignment in March 2002, Voicecom Telecommunications, LLC now owns the "Voice-Tel" mark and is currently working to update the registration of the mark with the United States Patent and Trademark Office. (Master Appendix of Exs., Ex. A, ¶ 15.)
In the late 1980s, Voice-Tel attempted to build a nationwide system connecting all major cities to provide local access voice messaging. Voice-Tel relied on its franchisees to market, sell and service certain digital voice messaging services pursuant to its contracts with these franchisees from 1986 to March 2002. (Master Appendix of Exs., Ex. A, ¶ 7.) JOBA, Inc. ("JOBA") is a Florida corporation. In an agreement between Voice-Tel and JOBA dated December 13, 1989, JOBA became a Voice-Tel franchisee authorized to sell Voice-Tel's voice messaging systems. (Master Appendix of Exs., Ex. C.) Pursuant to this agreement, JOBA provides this voice messaging system in certain sales territories in South Florida. (Master Appendix of Exs., Ex. C, Art. III, ¶ A.) Voice-Tel granted JOBA limited rights to use the Voice-Tel trademark and trade name pursuant to the Franchise Agreement. The JOBA Agreement granted JOBA franchise rights for twenty years until December 13, 2009, with an option to extend the agreement for another ten years. Article I of the JOBA Agreement provides that Voice-Tel is the exclusive owner of, and has exclusive rights in, the "Voice-Tel" trademark, and that JOBA's right to the use of the "Voice-Tel" trademark exists only by virtue of the Franchise Agreement. In pertinent part, the Agreement provides that:
D. Franchisor is the owner of the entire right, title, and interest in the trade name, trademark, and service mark "Voice-Tel," and other such service marks, trade names, and trademarks as are now designated herein (hereinafter referred to as "Proprietary Marks"), ...
E. In connection with the development of this system, Franchisor franchises to others the right to operate businesses and franchises for the use of the service mark "Voice-Tel," and other trademarks, services marks, and rights residing in the design and appearance of signs and symbols as a symbol and name[.]
(Master Appendix of Exs., Ex. C, Art. I, ¶¶ D, E.) Article VII of the JOBA Agreement addresses the ownership and use of Voice-Tel's trademark:
A. USE OF NAME. Franchisor hereby grants to Franchisee, upon the terms and conditions herein contained, during the term hereof, the right to use and display Franchisor's Proprietary Marks, but only in connection with the operation and services granted by this Agreement. .. . Nothing herein shall give Franchisee any right, title, or interest in or to any of Franchisor's Proprietary Marks ...
B. STANDARDS UNDER MARKS. Franchisee understands and acknowledges that each and every detail of Franchisor's system is important ... in order to develop and maintain high and uniform standards of quality and service and hence to protect and enhance the reputation and goodwill of Franchisor. Franchisee accordingly agrees: 1. To use the Proprietary Marks only for the operation of the business franchised hereunder.... 2. To refrain from using any of the Proprietary Marks in conjunction with any other word or symbol without Franchisor's prior written consent. 3. To use, promote, and offer for sale under the Proprietary Marks only those Voice-Tel services, which include digital voice communications and messaging services, merchandise and marketing techniques which meet Franchisor's prescribed standards and specifications....
C. BUSINESS NAME. Franchisee agrees that the franchised business shall be named "Voice-Tel." ... Upon expiration or sooner termination of this Agreement, or any extension or renewal thereof, Franchisor may, if Franchisee does not do so, execute in Franchisee's name, on Franchisee's behalf, at Franchisor's sole expense, any and all documents necessary in Franchisor's sole and exclusive judgment to terminate and cause the discontinuance of Franchisee's use of Franchisor's Proprietary Marks....
(Master Appendix of Exs., Ex. C, Art. VII, ¶¶ A, B, C.)
Digital Communication Services, Inc. ("Digital") is a Florida corporation. On November 15, 1993, Voice-Tel entered into a Franchise Agreement with Digital, wherein Digital became a franchisee of Voice-Tel authorized to sell Voice-Tel's voice communication and messaging systems. (Master Appendix of Exs., Ex. D.) Like JOBA, Digital provides services, and operates its franchise within certain sales territories, as set forth in the Digital Agreement. (Master Appendix of Exs., Ex. D, § 1.1 and § 1.4.) Voice-Tel granted Digital limited rights to use the Voice-Tel trademark and trade name pursuant to the Franchise Agreement. (Master Appendix of Exs., Ex. D, § 8.) The Digital Agreement granted Digital franchise rights for sixteen years until November 15, 2009 with an option to extend the agreement for another ten years.
The Digital Agreement provides that Voice-Tel is the owner of the "Voice-Tel" trademark, and that Digital's right to use this trademark exists only by virtue of the Franchise Agreement. That agreement provides that:
WHEREAS, Franchisor, as the result of the expenditure of time, skill, effort, and money, has developed a distinctive digital voice messaging system ("the System") ...
WHEREAS, the System is identified by means of certain trade names, service marks, trademarks, ... including but not limited to, the mark "Voice-Tel," as are now designated and may hereafter be designated by Franchisor in writing for use in connection with the System ("the Proprietary Marks");
WHEREAS, Franchisor continues to develop, use, and control the use of the Proprietary Marks in order to identify for the public the source of the products and services marketed under the System, and to represent the System's high standards of quality and service;
WHEREAS, Franchisee desires to enter into the business of operating a digital voice messaging service center under the System and using the Proprietary Marks, and wishes to enter into an agreement with Franchisor for that purpose ....
(Master Appendix of Exs., Ex. D, at 1.) Section 1.1 of the Digital Agreement provides that "Franchisor grants to Franchisee the rights, and Franchisee undertakes the obligations, upon the terms and conditions set forth in this agreement, to operate a digital voice messaging service center, and to use the Proprietary Marks and the System solely in connections therewith." (Master Appendix of Exs., Ex. D, § 1.1.) Section 8.2 of the Digital Agreement specifically addresses limitations on Digital's use of the "Voice-Tel" trademark. Specifically, this Section provides, in pertinent part:
8.2.1 Franchisee shall use only the Proprietary Marks designated by Franchisor, and shall use them only in a manner authorized and permitted by Franchisor;
8.2.2 Franchisee shall use the Proprietary Marks only for operation of the Franchised Business or in advertising for the Franchised Business;
8.2.3 Franchisee will use the Proprietary Marks only in accordance with the System and the standards and specifications attendant thereto which underlie the goodwill associated with and symbolized by the Proprietary Marks;
8.2.4 Unless otherwise authorized or required by Franchisor, Franchisee shall operate and advertise the Franchised Business only under the name "Voice-Tel,"
....
8.2.6 Franchisee's right to use the Proprietary Marks is limited to such uses as are authorized under this Agreement, and any unauthorized use thereof shall constitute an infringement of Franchisor's rights ...
8.2.9 ... If Franchisor, in its sole discretion, determines that Franchisee has not used the Proprietary Marks in accordance with this Agreement, the cost of such defense, including the cost of any judgment or settlement, shall be borne by Franchisor.
(Master Appendix of Exs., Ex. D.) Subsection 8.3 goes on to provide, in pertinent part, that "Franchisee expressly understands and acknowledges" the following:
8.3.1 Franchisor is the owner of all right, title, and interest in and to the Proprietary Marks and the goodwill associated with and symbolized by them
....
8.3.3 During the term of this Agreement and after its expiration or termination, Franchisee shall not directly or indirectly contest the validity of, nor take any other action which tends to jeopardize, Franchisor's ownership...
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