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Buffalo Bill and Trademark Enforcement—Protect Your Marks

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Buffalo Bill and Trademark Enforcement—Protect Your Marks

By Daniel Graham, Faegre Baker Daniels LLP, CBA Franchise Subsection Chair

From the Colorado Bar Association Business Law Newsletter, March 2015

Businesses need to protect their trademarks. This is not a novel idea, but it is worth repeating. If a trademark holder neglects to police infringement, the mark will weaken and eventually become less enforceable and less valuable. 3 McCarthy on Trademarks and Unfair Competition § 17:17 4th ed.. This weakening results naturally from a failure to prosecute infringement because if multiple competitors are using the trademark, then the trademark loses its ability to identify the source of the goods. Id. citing Herman Miller, Inc. v. Palazzetti Imports & Exports, Inc., 270 F.3d 298, 317 6th Cir. 2001. A company started by Buffalo Bill learned this lesson the hard way. Col. W.F. Cody Historical Picture Co. v. Colonial Amusement Co., 284 F. 873, 877 D. Colo. 1922.

In Col. W.F. Cody, Buffalo Bill’s company sought a temporary injunction to stop the defendant from using the name Buffalo Bill in the name of its movie. Id. at 874. The court denied the motion for temporary injunction after emphasizing how widespread the use of the name Buffalo Bill had become. Id. at 878. In particular, the court noted that the name Buffalo Bill had been used in “plays, stories of adventure, circuses, and Wild West performances, for many years before the discovery of motion pictures, and thereafter for moving picture purposes before the complainants produced their picture.” Id. at 876. In its ruling, the court stated that if Buffalo Bill had wanted to protect a right to the name Buffalo Bill, he should have done so sooner:

If Col. Cody had desired to assert or keep in himself any exclusive use of the name, he should have asserted his rights with reasonable promptness many years ago, and it is too late now for anyone to assert the same in his behalf.Id. at 877.

The situation in Col. W.F. Cody is analogous to the situation where a trademark holder neglects to enforce its mark, and it shows the importance of protecting marks from use by infringers. A party that fails to protect its mark can eventually lose its ability to protect that mark.

Franchisors must keep this lesson in mind. A franchise relationship often focuses on the use of the franchisor’s mark by the franchisee. The franchisor must carefully monitor use of its marks by franchisees and non-franchisees to ensure that its marks remain valuable and enforceable. In particular, the termination of a franchise agreement may cause the franchisor to police the franchisee’s unauthorized use of the franchisor’s marks post termination. This situation arose in Steak N Shake Enters., Inc. v. Globex Co., LLC, No. 13-cv-01751-RM-CBS, 2013 WL 4718757 D. Colo. Sept. 3, 2013.

In Steak N Shake, the franchisor terminated the franchisee after the franchisee failed to participate in meal promotions and failed to open a third store as scheduled. Id. at 8–10. After termination, the franchisee continued to use the franchisor’s trademarks. Id. at 12. The franchisor filed suit and later a motion for preliminary injunction in part to stop the unauthorized use of its marks by the franchisee. Id. at 1, 6. The court found that the franchisor had established a strong likelihood of success on the merits of its infringement claims and noted that unauthorized use of a mark by one that was previously authorized to use that mark—like a franchisee—is more likely to cause consumer confusion than unauthorized use by a “random infringer.” Id. at 11–12 citing 4 McCarthy on Trademarks and Unfair Competition § 25:31 4th ed.. Thus, unauthorized use of a trademark by a franchisee or former franchisee is a potentially more urgent matter. Among other relief granted to the franchisor in Steak N Shake, the court ordered the franchisee to immediately stop using the franchisor’s marks. Id. at 16.The rulings in Col. W.F. Cody and Steak N Shake provide an important reminder regarding the value of trademarks and the need to police for infringement. Prompt action can save a company’s valuable marks, while inaction can lead to weak and potentially unenforceable marks.



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