Crystal Entertainment & Filmworks, Inc. v. Jurado

Circuit court affirms district court decision in action for infringement of unregistered trademark against defendant members of female dance band, Exposé, finding that plaintiff failed to show that it had acquired the trademark to the name Exposé, either through “prior use” or through its “joint endeavor” with defendants, as the defendant band members “controlled the qualities and characteristics that the public associates with the Exposé mark.”

The predecessors in interest to plaintiffs Crystal Entertainment & Filmworks, Inc. I and II (collectively, Crystal), Pantera Group Enterprises and Pantera Productions, Inc. (collectively, Pantera), formed a female dance band “Exposé” in 1984. The dance band enjoyed limited success and, in 1986, the band members were replaced with defendants Jeanette Jurado, Ann Curless and Gioia Bruno. Pantera attempted to register the Exposé mark with the U.S. Patent and Trademark office as a trademark, but that application was denied due to the mark’s common usage. Plaintiffs never obtained a registered trademark for Exposé.

Exposé’s first album, released in 1986, went triple platinum and the cover featured a picture of the defendants as members of the band. The band’s 1989 second album went gold and also featured defendants on the cover. In 1992, Expose temporarily replaced Bruno with a fourth member, Kelly Moneymaker, who appeared on the band’s third album with the rest of Exposé. The group disbanded in 1995. The group released only compilation albums between 1995 and 2003. In the interim, Pantera was dissolved, and Crystal alleged that Pantera had assigned its rights in and to the Exposé mark to Crystal.

In 2003 and again in 2006, defendants resumed performances as Exposé and executed trademark and licensing agreements with Crystal to continue using the mark. Among other things, the agreements acknowledged that Crystal owned the Exposé mark. Thereafter defendants, citing Crystal’s failure to promote Exposé’s tours, discontinued payment of licensing fees to Crystal, sought registration of the Exposé mark through their company, defendant Walking Distance Entertainment, LLC., and advertised their tours on the internet at “exposeonline.net” and “myspace.com/exposeonline.”

Crystal sued defendants for unregistered trademark infringement in violation of Section 43(a) of the Lanham Act, breach of contract and cybersquatting under the Anti Cybersquatting Consumer Protection Act, seeking injunction, damages, and a constructive trust for Exposé’s licensing fees. Defendants counterclaimed for rescission of the trademark and licensing agreements. After a bench trial, the district court found that defendants had breached their agreement to pay Crystal a portion of their tour and merchandising proceeds, but that defendants – and not Crystal – were the common-law owners of the Exposé mark. The court also ruled for defendants on Crystal’s claims for cybersquatting and denied Crystal’s demands for injunction and constructive trust.

The Eleventh Circuit affirmed the trial court’s decision on appeal. The court found that, under Section 43(a) of the Lanham Act, the plaintiff must demonstrate that it has an enforceable right to the mark and that defendants used the mark without authorization in a way that is likely to cause confusion among consumers. Defendants had used the mark publicly since 1986.

Crystal argued that it rightfully owned the rights to Exposé because it acquired the rights from Pantera, which hadowned the rights prior to defendants’ use of the mark. In order to establish ownership of an unregistered mark due to prior use, however, a party must show that it adopted the mark and used it in a way sufficiently public to identify or distinguish the marked goods among relevant segments of the public. Crystal offered only the uncorroborated testimony of one witness, whom the trial court found not to be credible. Crystal failed to demonstrate ownership through prior use.

Crystal also argued that it owned the trademark because Exposé was the product of joint endeavors. Where the mark is the product of a joint endeavor, however, the court first determines the characteristic for which the product or service under the mark is known and then examines which party controlled that characteristic. The court found that Exposé was best known for defendants’ personalities and styles as performers, and that plaintiff Crystal failed to show that it had exercised control over defendants or selected Moneymaker as a replacement member of Exposé. Because Crystal could not establish any enforceable rights to the mark, the Eleventh Circuit found it unnecessary to reach to issue as to whether defendants’ use of the mark was likely to cause consumer confusion.