Lawn Managers, Inc. v. Progressive Lawn Managers, Inc.

959 F.3d 903 (8th Cir. 2020)

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Nature of the Case

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Facts

P and D are owned by Zweifel and Smith, respectively. Prior to Smith's incorporation of Progressive, she and Zweifel were married and together owned and operated P for nearly 20 years. In April 2012, Zweifel and Smith divorced and entered into a marital settlement agreement (MSA) that was incorporated into a divorce decree. Smith agreed to assign her 50% interest in P to Zweifel. Zweifel would retain the corporate name of Lawn Managers, Inc., and all right, title, and interest in the business, except for, as relevant here, some commercial and residential accounts and business equipment specifically awarded to Smith, who would now operate a separate business. The parties would share the use of the corporate name 'Lawn Managers' for two years after the dissolution of their marriage by establishing a new lawn care company 'using the name Progressive Lawn Managers, Inc. doing business as Lawn Managers.' A further Settlement Agreement extended Smith's ability to use the Lawn Managers name to December 31, 2014. Smith's company used the two names in advertisements, business materials, and representations to third parties. Some employees who worked for Lawn Managers before the divorce went to work for Smith. The public did not know of Zweifel and Smith's divorce or the terms of the licensing agreement. In February 2015, after Smith was to stop using the Lawn Managers name, P registered the word mark 'Lawn Managers' with the U.S. Patent and Trademark Office. Later that year, P sent D a letter stating that it considered D's logo to infringe on the P mark. P sued D asserting one count of federal trademark infringement under the Lanham Act, see 15 U.S.C. § 1114, and seeking injunctive and monetary relief. D asserted cancellation of the trademark registration by virtue of 'naked licensing.' The district court entered judgment in favor of P. The district court entered an injunction and awarded P damages of $80,688-comprising a percentage of D's profits during the relevant time period-and $71,346 for corrective advertising. The court also awarded D $138,925 in attorney's fees. D appealed. D argues that Zweifel granted a naked license to Smith, resulting in the abandonment of the P mark.