IP UPDATE
Exploring the latest in intellectual property law
IP UPDATE
Exploring the latest in intellectual property law
Trademarks
Subscribe to Trademarks's Posts

A prescription for liability: Injunction in gray-market drug case based on material differences

by | Aug 27, 2026 | ,

Affirming a preliminary injunction, the US Court of Appeals for the Fourth Circuit found that companies importing foreign-market pharmaceuticals for domestic patients were likely liable for trademark infringement, and that healthcare administrators and pharmacy benefit managers that continued facilitating those transactions despite reason to know of the infringement were likely liable for contributory infringement. Gilead Sciences, Inc. v. Meritain Health, Inc., Case No. 25-1828 (4th Cir. Aug. 13, 2026) (Agee, Harris, Keenan, JJ.)

Gilead sued a group of companies involved in filling US patient prescriptions for the HIV drug Biktarvy® with a Gilead-branded version of the drug intended for Turkey. Gilead alleged that the defendants’ importation and distribution of the Turkish-market product infringed its trademarks under the Lanham Act. In addition to suing companies directly involved in sourcing and supplying the prescriptions, Gilead sued Meritain Health, the third-party administrator of the relevant healthcare plan, and ProAct, a pharmacy benefit manager, for contributory infringement.

Shortly after filing suit, Gilead moved for a temporary restraining order and then a preliminary injunction enjoining the defendants from importing gray-market versions of Biktarvy®. The district court granted the requested relief, finding that Gilead had demonstrated a likelihood of success on its direct infringement claims against certain defendants and its contributory infringement claims against others. Meritain, ProAct, and the other defendants appealed.

The defendants first argued that the Federal Food, Drug, and Cosmetic Act (FDCA) precluded Gilead’s Lanham Act claims. Although the Turkish version of Biktarvy® was not US Food and Drug Administration approved, Gilead did not premise its trademark claims on that fact. The Fourth Circuit therefore concluded that adjudicating Gilead’s claims did not require enforcement or interpretation of the FDCA.

The defendants also challenged the district court’s likelihood-of-confusion finding, emphasizing that Gilead itself manufactured the Turkish version of Biktarvy® and that the product bore authentic Gilead trademarks. The Fourth Circuit disagreed, explaining that goods bearing a genuine trademark may nevertheless be considered nongenuine for trademark purposes if they materially differ from the authorized domestic product or are sold outside the trademark owner’s quality-control procedures.

Although the Turkish and US versions of Biktarvy® were chemically identical, the Fourth Circuit found material differences between them. Among other things, the Turkish product contained foreign-language labeling and lacked certain warnings and patient information provided with the US version. The Turkish product also was not transported through Gilead’s quality-control system. Those differences were sufficient to support the district court’s finding of material differences.

The Fourth Circuit also rejected Meritain and ProAct’s challenges to the contributory infringement ruling. The Court explained that contributory infringement does not require actual knowledge of another party’s infringement. Liability may arise where a defendant knew or should have known of the infringement and nevertheless continued supplying products or services that facilitated it.

The Fourth Circuit further rejected Meritain and ProAct’s argument that contributory infringement required proof that they exercised control over the direct infringers. In doing so, the Court declined to adopt the Ninth Circuit’s control requirement. The Fourth Circuit also concluded that even if [...]

Continue Reading



read more

Senate passes bill to improve CBP mechanisms to block importation of counterfeit goods

by | Aug 20, 2026 | ,

Blocking the importation of counterfeit goods could soon become easier. On August 7, 2026, the US Senate unanimously passed S 2677, a bill that would allow greater coordination between US Customs & Border Protection (CBP) and relevant stakeholders in determining whether imported goods violate trademark or copyright law.

Sponsored by Senator Chuck Grassley and co-sponsored by Senator Margaret Wood Hassan, S 2677 would amend 19 U.S.C. § 1628a to authorize CBP to share nonpublic information to rightsholders for examination when assessing potential copyright or trademark violations. The bill would also expand the parties with which CBP may share information. While current law permits disclosure only to certain rightsholders, S 2677 would allow CBP to share information with “any other party with an interest in the merchandise, as determined appropriate by the Commissioner.” The bill would also permit such information sharing when CBP has a “reasonable suspicion” of a violation, rather than requiring officials to “suspect” one.

The US House of Representatives passed a very similar bill, HR 4930, on April 27, 2026, and the two versions will need to be reconciled. During House Ways and Means Committee proceedings, Chief Trade Counsel Joshua Snead and Representatives Blake Moore and Bradley Schneider explained that the legislation responds to concerns raised by CBP about constraints under existing law. According to Snead, CBP requested the changes and expressed concerns under both the Biden and Trump administrations that the Defend Trade Secrets Act could prevent it from sharing information useful to intellectual property enforcement. Representative Moore said the legislation would help CBP “recognize and flag patterns of behavior” by repeat offenders.



read more

Keyword bidding alone doesn’t constitute trademark infringement

by | Aug 13, 2026 |

Addressing trademark infringement arising from online advertising, the US Court of Appeals for the Eleventh Circuit held that purchasing a competitor’s trademark as a keyword (keyword bidding), without displaying or otherwise referencing the mark in the resulting advertisement, does not constitute trademark infringement because the behind-the-scenes use is not likely to confuse consumers. The Court nevertheless upheld the jury’s infringement finding based on the defendant’s visible use of the protected mark in advertising copy, product descriptions, and customer communications. Deltona Transformer Corporation v. The NOCO Company, Case No. 24-13590 (11th Cir. Aug. 4, 2026) (Lagoda, Kidd, Newsom, JJ.)

Deltona Transformer Corporation manufactures vehicle battery chargers that charge a battery to capacity and then maintain the charge without overcharging it. Deltona owns federally registered trademarks for BATTERY TENDER and DELTRAN BATTERY TENDER. One of Deltona’s founders coined the term “battery tender,” drawing on the maritime use of “tender” for a vessel that services or supplies another vessel.

The NOCO Company makes similar battery chargers. Beginning in 2014, NOCO promoted its products using “battery tender” in several ways, including bidding on the term as a search keyword, placing the term in advertisements and product descriptions, and referring to its products as battery tenders in communications with customers and marketing firms. Deltona sued for federal and state trademark infringement and unfair competition. A jury found for Deltona and awarded damages, and the district court later ordered disgorgement of NOCO’s profits and entered a permanent injunction. NOCO appealed.

NOCO first argued that Deltona’s marks were generic and therefore unprotectable. The Eleventh Circuit disagreed. Federal registration provided prima facie evidence of validity, and the Court concluded that “battery tender” was at least descriptive (and potentially suggestive) because “tend” metaphorically rather than literally describes what the charger does. The Court further concluded that a reasonable jury could find secondary meaning based on Deltona’s decades of use, advertising, promotion, and industry recognition.

The Eleventh Circuit also rejected NOCO’s argument that “battery tender” had subsequently become generic. Although NOCO introduced survey evidence indicating that many respondents understood the term as identifying a type of product rather than a brand, the survey was not conclusive, and the jury was entitled to weigh it against the remaining evidence supporting trademark significance.

Turning to infringement, the Eleventh Circuit addressed for the first time whether purchasing another party’s trademark as an online advertising keyword can itself constitute infringement. The Court concluded that it cannot in circumstances such as those presented here. Keyword bidding occurs “behind the scenes,” meaning consumers do not see the purchased keyword and instead see the resulting advertisement. Accordingly, likelihood of confusion depends on what the consumer sees in the advertisement, not on the invisible mechanism that caused the advertisement to appear.

The result was different where NOCO visibly used Deltona’s marks. NOCO used “battery tender” and similar language in the text of advertisements, including advertisements describing NOCO products as battery tenders. The Eleventh Circuit found sufficient evidence for the jury to conclude that these uses were likely to [...]

Continue Reading



read more

In the doghouse? Tarnishment requires proof of reputational harm

by | Aug 13, 2026 |

In the latest chapter of a long-running dispute, the US Court of Appeals for the Ninth Circuit vacated a permanent injunction against VIP Products’ “Bad Spaniels” dog toy, finding that Jack Daniel’s Properties, Inc., (JDPI) failed to establish that the parody was likely to harm the reputation of its famous marks. The Court also explained that although parody does not automatically escape dilution liability when used as a source identifier, a product’s parodic nature remains relevant to whether consumers are likely to form a damaging association with the famous mark. VIP Products LLC ⁠v. Jack Daniel’s Properties Inc., Case No. 25-2027 (9th Cir. August 4, 2026) (Berzon, Smith, Hurwitz, JJ.)

VIP Products sells a line of dog toys parodying well-known alcohol bottles. Its Bad Spaniels toy mimics the appearance of a Jack Daniel’s whiskey bottle but replaces “Jack Daniel’s” with “Bad Spaniels,” “Old No. 7” with “Old No. 2,” and “Tennessee Whiskey” with “Tennessee Carpet,” along with references to dog waste.

JDPI sued VIP for trademark infringement and dilution. The dispute ultimately reached the US Supreme Court, which in 2023 held that VIP could not invoke the Trademark Dilution Revision Act’s statutory parody exclusion because VIP used the challenged designations as source identifiers for its own goods.

On remand, the district court found no likelihood of confusion but concluded that Bad Spaniels diluted JDPI’s trademarks by tarnishment and entered a permanent injunction. VIP appealed.

The Ninth Circuit explained that a dilution-by-tarnishment claim requires the trademark owner to establish, among other things, that the asserted mark is famous and that the challenged use creates an association likely to harm the famous mark’s reputation. The Court emphasized that the analysis must be conducted on a mark-by-mark basis. Fame established for one mark cannot automatically be attributed to related marks.

Applying that framework, the Ninth Circuit found that JDPI had established fame for the Jack Daniel’s word mark and registered trade dress, but not for certain other asserted marks, including “Old No. 7.” That distinction was significant because some of Bad Spaniels’ more overt scatological references corresponded to marks that JDPI had not independently shown to be famous.

The Ninth Circuit also found JDPI’s evidence of likely reputational harm insufficient. JDPI’s expert relied on general consumer psychology research suggesting that associations between food or beverages and defecation may produce disgust, but he did not conduct a study examining consumer reactions to Bad Spaniels itself. The Court concluded that such generalized evidence did not establish that consumers would transfer negative associations from the parody dog toy to JDPI’s famous marks.

The Ninth Circuit further faulted the tarnishment analysis for failing to account for the toy’s parodic character. Although parody is not categorically exempt from dilution liability when the challenged use itself functions as a trademark, the Court explained that parody remains relevant to whether consumers are likely to make an association that harms the famous mark’s reputation. Because Bad Spaniels unmistakably mocked Jack Daniel’s, as opposed to presenting itself as Jack Daniel’s, the Court [...]

Continue Reading



read more

Safety-enhancing color is functional, not protectable as trademark

by | Aug 13, 2026 |

The US Court of Appeals for the Eighth Circuit affirmed cancellation of a trademark covering chartreuse-colored water hoses, finding that the color was functional because it improved visibility and therefore enhanced safety. The Court also affirmed a $3 million attorneys’ fee award based on the trademark owner’s lack of candor before the United States Patent & Trademark Office (USPTO), litigation conduct, and continued reliance on an incorrect interpretation of the functionality standard. Weems Industries, Inc. d/b/a Legacy Manufacturing Co. v. Teknor Apex Co., Case No. 25-2956 (8th Cir. July 30, 2026) (Colloton, Arnold, Grasz, JJ.)

Weems Industries sued competing water hose manufacturer Teknor Apex for trademark infringement and other claims. Weems asserted a federally registered trademark covering the chartreuse color used on its water hoses. Teknor countered that the color was functional and sought cancellation of the registration. Teknor also requested attorneys’ fees.

The district court agreed with Teknor, finding that chartreuse served a functional purpose because the bright color made hoses more visible against dark grass and therefore improved product safety. The district court also concluded that Weems had not established acquired distinctiveness in the color. It cancelled the registration and awarded Teknor approximately $3 million in attorneys’ fees. The district court based the fee award on three categories of conduct: Weems’ lack of candor before the USPTO, its conduct during the litigation and trial, and its continued reliance on an incorrect interpretation of trademark functionality. Weems appealed.

The Eighth Circuit reviewed the district court’s functionality determination for clear error. A product feature is functional and therefore not subject to trademark protection if it is essential to the product’s use or affects the product’s cost or quality. The Court explained that a feature that improves product safety may affect product quality and therefore be functional.

The record contained substantial evidence supporting the district court’s finding that chartreuse improved hose visibility. Weems’ own promotional materials described the visibility and safety benefits of the color. The record also included patent-related materials describing the utility of chartreuse and expert testimony addressing the color’s visibility.

The Eighth Circuit rejected Weems’ argument that a feature is functional only if it improves the mechanical operation of the product. Functionality, the Court explained, is not limited to whether a feature makes a product operate better. A feature that improves safety can also affect product quality and therefore fall within the functionality doctrine.

The Court also rejected Weems’ argument that chartreuse should remain protectable because Teknor could have selected a different highly visible color for its hoses. The availability of alternative colors did not require a competitor to design around a functional safety feature. Because the Court affirmed the finding that chartreuse was functional, it did not need to address whether the color had acquired distinctiveness.

The Eighth Circuit next considered the attorneys’ fee award. The Lanham Act permits fee awards in “exceptional cases,” which courts evaluate based on the totality of the circumstances. A case may be exceptional because of the substantive weakness of a party’s [...]

Continue Reading



read more

Late arrival: Fourth Circuit remands after mootness raised for first time on appeal

by | Jul 30, 2026 |

The US Court of Appeals for the Fourth Circuit remanded an insurance coverage dispute for the district court to determine whether settlement of the underlying lawsuit eliminated any concrete interest in the declaratory judgment action and rendered the case moot. Covington Specialty Insurance Company v. Omega Restaurant & Bar, LLC, Case No. 24-1364 (4th Cir. July 20, 2026) (Wilkinson, Wynn, Berner, JJ.)

Covington Specialty Insurance issued a commercial general liability policy to Omega Restaurant & Bar, which operated a nightclub in Virginia Beach, Virginia. The policy provided coverage for certain personal and advertising injuries.

In September 2020, several professional models sued Omega in Virginia state court, alleging that Omega used their images in advertisements without authorization. Omega removed the action to the US District Court for the Eastern District of Virginia.

In May 2021, Covington filed a separate action in the same district seeking a declaration that it had no duty to defend or indemnify Omega in connection with the models’ lawsuit. The parties filed cross-motions for summary judgment.

While the declaratory judgment action was pending, Omega settled the underlying lawsuit. Under the settlement, Omega consented to entry of a $155,000 judgment and assigned to the models its rights and claims against Covington under the insurance policy. The record did not show that Omega informed the district court presiding over the coverage action that the settlement had occurred.

The district court subsequently granted summary judgment for Covington and denied Omega’s cross-motion. The court found that the policy did not cover the injuries alleged in the underlying complaint and concluded that Covington had neither a duty to defend nor a duty to indemnify. Omega appealed.

Omega argued that the district court erred because the underlying complaint alleged conduct that potentially fell within the policy’s coverage. Covington responded by arguing for the first time that the settlement had rendered the dispute moot.

The Fourth Circuit explained that mootness is jurisdictional because Article III limits federal courts to deciding live cases and controversies. A case becomes moot when the parties no longer retain a legally cognizable interest in the outcome and the court cannot grant meaningful relief. The relevant inquiry is whether the parties retain any concrete interest, however small, in the litigation’s outcome.

Although Covington did not raise mootness until more than two years after the settlement, the Fourth Circuit explained that a jurisdictional objection cannot be waived or forfeited. The timing of the argument, however, left the appellate record insufficiently developed because the district court had never considered the effect of the settlement.

The record did not establish whether any cognizable interest remained in the coverage dispute or whether Covington had withdrawn or otherwise abandoned its defense of Omega in the underlying action. Without those facts, the Fourth Circuit could not determine whether the case remained live.

The Fourth Circuit therefore remanded for the district court to determine whether the settlement rendered the declaratory judgment action moot. It did not reach the merits of the coverage dispute and left Omega free [...]

Continue Reading



read more

Heirs’ lights flicker out: Sixth Circuit affirms MillerKnoll’s Bubble Lamp rights

by | Jul 23, 2026 |

The US Court of Appeals for the Sixth Circuit affirmed summary judgment for the manufacturer of an iconic lamp design, finding that the designer’s heirs could not pursue trademark infringement and related tort claims based on the contractual transference of ownership and use of the intellectual property associated with the lamp. The Court concluded that the governing agreements authorized the manufacturer’s conduct and that the designer’s family later ratified the manufacturer’s ownership by accepting royalties with knowledge of its ownership claim. Nelson v. MillerKnoll, Inc., Case No. 25-1940 (6th Cir. July 7, 2026) (Boggs, Clay, Gilman, JJ.)

George Nelson, a prominent mid-century furniture designer, created the cloth-covered hanging fixtures known as the Bubble Lamp while serving as design director of Herman Miller, now MillerKnoll. George and Herman Miller did not enter into a formal written agreement addressing ownership of the Bubble Lamp’s intellectual property during the designer’s employment.

After George’s death, his widow, Jacqueline Nelson, entered into a 2006 agreement under which Herman Miller agreed to pay royalties on certain products designed by George. In 2015, while a related foundation was litigating against another company that had registered and sold Bubble Lamp trademarks, George’s son, Mico Nelson, executed an addendum on Jacqueline’s behalf. The addendum expanded the royalty arrangement to include “Nelson branded Lamp Products” and granted Herman Miller exclusive worldwide rights to manufacture, use, sell, and license those products.

Herman Miller later acquired the Bubble Lamp business and related trademark registrations, including two product-configuration marks and the BUBBLE LAMP word mark.

The Nelson family sued MillerKnoll, alleging that it had improperly obtained the Bubble Lamp’s intellectual property as part of a broader scheme to deprive the family of George’s rights. The complaint asserted federal and state trademark infringement, fraud, conspiracy, unjust enrichment, and cancellation of the trademark registrations. The district court granted summary judgment to MillerKnoll on all claims. The Nelson family appealed.

The principal issue on appeal was whether the 2006 agreement and 2015 addendum merely licensed MillerKnoll to use the Bubble Lamp’s intellectual property or also authorized MillerKnoll ownership of that intellectual property.

Applying Michigan contract law, the Sixth Circuit concluded that the agreements unambiguously granted MillerKnoll both ownership and use rights. Although the agreements referred to “Licensed Products,” that term was contractually defined to include products whose rights MillerKnoll owned. Other provisions granted MillerKnoll “exclusive right, title, and interest” in the covered designs and the sole right to enforce the associated proprietary rights.

That contractual authorization defeated the Nelson family’s Lanham Act claim. The Sixth Circuit explained that authorized use of a mark cannot support an infringement claim under § 43(a) because authorized conduct does not create the type of source confusion the statute is intended to prevent.

The same reasoning foreclosed the state-law trademark and tort claims. Because the agreements authorized MillerKnoll’s ownership and use of the Bubble Lamp’s intellectual property, the Nelson family could not recover for conduct to which it had consented.

The Sixth Circuit also concluded that Mico independently ratified MillerKnoll’s ownership. [...]

Continue Reading



read more

Lanham Act vs. First Amendment: Clarifying the proper scope of commercial speech

by | Jul 23, 2026 |

The US Court of Appeals for the Tenth Circuit affirmed in part and reversed in part the dismissal of a false advertising complaint, clarifying that courts must take a “holistic” approach when determining whether challenged statements constitute commercial speech under the Lanham Act. KetoNatural Pet Foods, Inc. v. Hill’s Pet Nutrition, Inc., Case No. 24-3185 (10th Cir. July 14, 2026) (Tymkovich, Phillips, McHugh, JJ.)

KetoNatural Pet Foods sells grain-free pet food while Hill’s Pet Nutrition sells more traditional pet food containing grains. KetoNatural alleged that Hill’s lost sales and market share after KetoNatural and other nontraditional pet food companies entered the market. According to KetoNatural, Hill’s responded by working with veterinarians and nonprofit organizations to publicize false claims that boutique, exotic, and grain-free (BEG) diets are associated with an increased risk of dilated cardiomyopathy in dogs.

KetoNatural sued Hill’s for false advertising under the Lanham Act. To state a false advertising claim, a plaintiff must plausibly allege, among other elements, that the defendant made a false or misleading representation of fact in commercial advertising or promotion.

Hill’s moved to dismiss KetoNatural’s complaint. The district court granted the motion, finding that KetoNatural had not adequately alleged either that Hill’s engaged in commercial speech or that the challenged statements were false. KetoNatural appealed.

The Tenth Circuit concluded that KetoNatural plausibly stated a claim for false advertising based on some of the statements made by Hill’s on its website, but Hill’s was not vicariously liable for the statements made by certain veterinarians and nonprofit organizations. In drawing these conclusions, the Tenth Circuit relied on the Supreme Court’s 1983 decision in Bolger v. Youngs Drug Products Corporation, which enunciated three factors for determining whether speech is commercial in character:

  • It is an advertisement,
  • It references a specific product, and
  • It is made with economic motivation.

The Hill’s website stated that BEG diets were linked to a higher risk of canine heart disease without promoting any particular product. Although such statements did not constitute “a classic advertising campaign” and did not reference a specific product, they functionally served to promote Hill’s products given the company’s position as one of three dominant market players in the traditional dog food industry. And critically, Hill’s was clearly economically motivated to make such statements to regain its waning market share.

Furthermore, the Tenth Circuit found that KetoNatural had adequately alleged that these statements were false because, under the establishment claim doctrine, which had been adopted by other federal appellate courts, KetoNatural sufficiently pleaded that “the scientific studies” that Hill’s relied on did “not establish the assertion for which they are cited.”

By contrast, the Tenth Circuit concluded that Hill’s was not vicariously liable for the statements made by veterinarians and nonprofit organizations. According to the Court, the veterinarians and other third parties were too attenuated from Hill’s such that a reasonable inference could not be drawn that their statements were promoting Hill’s products. Moreover, the veterinarians and other third parties lacked an adequate economic motive. Importantly, KetoNatural [...]

Continue Reading



read more

Who decides trademark strength: Judge or jury?

by | Jul 16, 2026 | ,

The Supreme Court granted certiorari to decide whether the strength of a trademark in a likelihood-of-confusion analysis under 15 U.S.C. § 1114 is a question of law for the court or a question of fact for the jury. RiseandShine Corp. v. PepsiCo, Inc., Case No. 24-1016 (Supr. Ct. June 29, 2026).

RiseandShine sued PepsiCo in the US District Court for the Southern District of New York, alleging that PepsiCo’s Mtn Dew Rise Energy drink infringed RiseandShine’s RISE marks for cold-brew coffee products. The district court granted RiseandShine a preliminary injunction, but the US Court of Appeals for the Second Circuit vacated and remanded.

The Second Circuit concluded that the district court erred in its analysis of the strength of the RISE marks and the similarity of the parties’ marks. Treating trademark strength as a question of law, the Second Circuit found that the RISE marks were weak because of the “strong logical associations between ‘Rise’ and coffee.” After reviewing images of the parties’ cans, the Second Circuit also concluded that the district court erred in finding PepsiCo’s mark confusingly similar to the RISE marks.

On remand, the district court entered summary judgment for PepsiCo, relying on the Second Circuit’s determination that the RISE marks were “inherently weak as a matter of law” and that the similarity factor “weigh[ed] strongly against” RiseandShine. The Second Circuit affirmed, reiterating that trademark strength is a question of law.

RiseandShine petitioned for certiorari, which the Supreme Court granted. The question presented is: Whether trademark strength is a question of fact in a likelihood-of-confusion analysis under 15 U.S.C. § 1114.



read more

Up in smoke: Eighth Circuit sends Lanham Act dispute to state court

by | Jun 25, 2026 |

The US Court of Appeals for the Eighth Circuit affirmed dismissal of a trademark dispute on forum non conveniens grounds, finding that the Lanham Act claims concerning ownership and scope of trademark rights arose out of a stock purchase agreement and therefore belonged in the state court designated by the parties’ forum selection clause. Vaughn Boyd v. Deadwood Tobacco Company, Case No. 25-1659 (8th Cir. June 8, 2026) (Smith, Kelly, Grasz, JJ.)

The dispute stemmed from the 2018 sale of Deadwood Tobacco, a South Dakota cigar business associated with the DEADWOOD family of marks. Prior to the sale, Deadwood Tobacco and Drew Estate had collaborated on a successful cigar line sold under names including Sweet Jane, Fat Bottom Betty, and Crazy Alice. The stock purchase agreement reserved trademark registrations associated with those three brands from the transaction. After acquiring the company, the new owners launched additional cigar products under other Deadwood Tobacco branding. Vaughn Boyd and Drew Estate (the sellers under the agreement) subsequently alleged that the new products infringed trademark rights they had retained under the agreement.

After the parties failed to reach a resolution, Boyd and Drew Estate filed suit under the Lanham Act in federal district court in Florida. The district court concluded that the asserted trademark claims arose out of the stock purchase agreement and therefore fell within the scope of the agreement’s South Dakota forum selection clause.

Following that dismissal, Deadwood filed a related contract suit in South Dakota state court and Boyd and Drew Estate countered with a Lanham Act claim in federal district court in South Dakota. The South Dakota district court likewise determined that the dispute arose from the agreement and that the forum selection clause was valid and mandatory. Boyd and Drew Estate appealed the district court decision.

On appeal, Boyd and Drew Estate argued that their claims arose exclusively under federal trademark law rather than contract law and therefore did not “arise out of” the agreement. They further contended that the forum selection clause was permissive rather than mandatory and could not divest federal courts of jurisdiction. Finally, they asserted that public policy favored adjudication of Lanham Act claims in federal court.

The Eighth Circuit rejected each argument. Beginning with trademark ownership, the Court emphasized that trademark rights are inseparable from the goodwill they represent. Because determining the scope of Boyd and Drew Estate’s retained trademark rights required analyzing what goodwill, if any, accompanied the reserved marks, resolution of the dispute necessarily depended on interpreting the stock purchase agreement. The Court therefore concluded that the trademark claims arose out of the agreement, notwithstanding that they were pleaded solely under the Lanham Act.

The Eighth Circuit also found that the forum selection clause was mandatory. The agreement provided that disputes arising out of the agreement “shall” be venued in Lawrence County, South Dakota, and that the Lawrence County circuit court “shall have jurisdiction.” Applying South Dakota law, the Eighth Circuit found the language unambiguously mandatory and concluded that the reference to [...]

Continue Reading



read more

BLOG EDITORS

Paul Devinsky

Amol Parikh

Jodi Benassi

STAY CONNECTED

Subscribe

TOPICS

ARCHIVES