National Association For The Advancement Of Colored People v. N.A.A.C.P. Legal Defense & Educational Fund, Inc.

753 F.2d 131 (D.C. Cir. 1985)

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Nature of the Case

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Facts

P, known as 'the NAACP,' was founded in 1909. As early as 1936, P’s Board of Directors voted to organize a national defense fund to raise money for its litigation program. It created the LDF (D) which provided an important tax advantage because the IRS ruled that contributions to P were not deductible for federal income tax purposes because of P’s lobbying work. P was informed by the New York Secretary of State that a certificate of incorporation could be processed only if the new corporation obtained 'consent' from P for the use of the NAACP initials. P then passed the following resolution on October 9, 1939: BE IT RESOLVED, That the Board of Directors of the National Association for the Advancement of Colored People grant permission for the use of the initials, 'N.A.A.C.P.' by the 'N.A.A.C.P. Legal Defense and Education Fund, Inc.' and authorize the President and Secretary to execute whatever papers might be necessary to carry out this resolution. D was under P’s direct control. The two organizations had common directors, offices, and staff. Throughout the 1940s and into the 1950s, D was guided by P’s policy decisions regarding the handling of litigation. In particular cases, P’s approval was sought before proceeding. D, as the legal branch of P, routinely handled general legal matters of P. The U.S. Treasury Department and several Southern state officials challenged D’s tax-exempt status. The Southern state officials claimed that D had too close a relationship with P, which was engaged in lobbying and political activities. P decided that D should retain its NAACP initials but should sever all direct connections with P. On May 16, 1957, D’s board adopted a resolution that 'no person should be a Board member, officer or employee of the N.A.A.C.P.' By the 1960s, tensions between the two organizations became evident. These strained relations resulted from a heightening of direct competition in fund-raising. There was also a dispute over who should take public credit for successful civil rights litigation. In July 1965, P wanted D to stop using NAACP in its name, but the immediate crisis was avoided. During the next twelve years, from 1966 through 1978, P remained silent concerning D’s use of the NAACP initials. On June 28, 1979, P’s board adopted a resolution that rescinded the resolution of October 9, 1939, and revoked permission to use the NAACP initials. P registered the NAACP initials with the Patent and Trademark Office on January 26, 1982. On May 25, 1982, P initiated this suit. The court held that: (1) the 1939 resolution was intended as a revocable license to use the NAACP initials; (2) P did not lose exclusive control of its initials by acquiescence, estoppel, or laches; and (3) the potential for future public confusion between these two parties as a result of the shared trademark was substantial. The district court thus granted P’s motion for summary judgment. This appeal resulted.