Licensees of a sovereign entity’s trademark—like a college sports team name—would have free rein to infringe if a lower court dismissal stands, the owner of a “Thee I Love” trademark registration told the US Supreme Court.
Business Moves Consulting Inc. said its suit against a company that makes Jackson State University merchandise was improperly dismissed because it didn’t name the school a defendant. “Thee I Love” is the title of the song that’s served as Jackson State’s alma mater for 80 years, but in 2017 Business Moves became the first to register it federally—as THEEILOVE design mark—and later sued Jackson State licensee Collegiate Licensing Co. for selling merchandise with the phrase.
The case turns on whether licensors have to be included in lawsuits against licensees whose use of the licensed marks is alleged to infringe a third party’s trademark—and what happens when the licensor enjoys sovereign immunity.
Letting the Fifth Circuit’s ruling affirming dismissal stand would “arm all manner of IP infringers with a novel and invincible defense,” as it would force rights owners to include a sovereign—and immune—rightsholder as a defendant. Such a requirement would effectively create a workaround that renders trademark rights unenforceable against anyone who’s licensed trademarks from state entities, Business Moves argued.
Historically requiring joinder of the licensor in trademark suits is meant to apply to plaintiffs to prevent double-recovery rather than to defendants, the petition said.
The petition also argues College Licensing is fully capable of defending Jackson State’s trademark rights and has no conflicting interests to do otherwise. Jackson State also has an independent ability to challenge the trademark and argue its common law trademark rights—rights stemming from use prior to that of the registered user—before the Trademark Trial and Appeal Board.
“Thee I Love” Triangle
The US District Court for the Eastern District of Louisiana dismissed the case for not including a required party months into Business Moves and BrandMixer Inc.’s 2020 lawsuit. The US Court of Appeals for the Fifth Circuit—while noting that “Thee I Love” has played “a significant role in the University’s lore” and that the school owns state trademark registrations on the phrase for license plates and shirts—concurred.
The appeals court held that Jackson State’s significant interest in defending its trademark rights and undermining Business Moves’ rights made it a required party. The three-judge panel recognized that College Licensing wouldn’t take a different position than one defending the university’s rights, but the university had a lot more to lose in the battle over who owns rights to “Thee I Love.”
The court also said that Jackson State is an arm of the state of Mississippi and therefore immune from suit, and the Supreme Court has held a suit involving non-frivolous interests of a sovereign absent from the litigation must be dismissed.
A separate consideration of equitable factors weighed strongly in favor of dismissal independent of sovereign immunity, the Fifth Circuit added. One of those considerations is whether Business Moves would have an adequate remedy after dismissal, and both the district and appeals courts said the basis of the dispute is ownership of the mark, and the proper venue for determining such rights is the US Patent and Trademark Office.
Lilly PLLC represents Business Movers.
The case is Paige Lee et al. v. Anthony Lawrence Collection LLC et al., U.S., No. 22-483, petition for review 11/21/22.
