In Brief: If you intend to get your trademarks back after a transfer, be sure that’s what your documents say.
Here’s What Happened:
Coin-Tainer Company made paper products for storing and handling coin currency. Coin-Tainer entered into a joint venture agreement with PRP and the new venture was called PRT. Both parties transferred all of their Intellectual Property, including the Coin-Tainer registered trademarks, to the joint venture.
PRT failed and, not surprisingly, litigation ensued.
The parties settled. PRP paid $200,000 to Coin-Tainer in exchange for 100% of Coin-Tainer’s interest in PRT and all of Coin Tainer’s assets. The settlement agreement also granted PRT a temporary, exclusive, royalty-free license to use the trademarks, “Coin-Tainer” and “The Coin-Tainer Company”, from the date of settlement until December 31, 2018. On December 31, 2018, Coin-Tainer was supposed to get the trademarks back and PRT was required to cease shipping products containing these trade names**.** But that didn’t happen.
So, Coin-Tainer sued PRT, PRP, and the sole shareholder of PRP for infringing Coin-Tainer’s trademarks and other intellectual property.
Coin-Tainer argued that it granted PRT an implied license. So Coin-Trainer didn’t actually transfer the trademarks to the joint venture. And, since the joint venture was supposed to stop using the trademarks and selling branded products after December 31, 2018, by implication, all intangible and intellectual property rights reverted back to Coin-Tainer.
The court looked at all of the agreements between the parties, including the original joint venture agreement and the settlement agreement. The court saw a conveyance from Coin-Tainer to PRT in the original agreement. And then a conveyance from Coin-Tainer to PRP in the settlement agreement. The parties were pretty clear and detailed about property interests. There was nothing in any of the documents that showed an intent to reconvey the trademarks back to Coin-Tainer. The court determined that if the parties intended to reconvey the other properties such as the “brand” or “trademarks,” they were free to express this intention at least in the settlement agreement. Since the language was absent, Coin-Tainer didn’t have any interest in the trademarks and couldn’t enforce them.
WHY YOU SHOULD KNOW THIS: Sometimes the obvious is not that obvious when you’re in the midst of a transaction or trying to settle litigation. Coin-Tainer’s intent was probably to go back into business using its trademarks at the end of a black out period between the settlement and the end of PRT’s right to use the trademarks. But that intent didn’t make it into any of the documents. So Coin-Tainer lost its trademarks.