Trademark Protection Available for Unregistered Marks by Delinquent Corporations

In S. California Darts Ass’n v. Zaffina (2014 WL 3893093), the 9th Circuit held that a delinquent corporation with unregistered marks could maintain a claim for trademark infringement under the Lanham Act (15 U.S.C. §1125). Since the 1960s, the Southern California Darts Association (SoCal) promoted competitive darts.  Throughout that time the corporation used four different marks identifying SoCal.  SoCal initially held corporate status, but the failure to pay taxes suspended the status in 1977.  Zaffina was once a member of Socal and after a feud ended their relationship, Zaffina registered a corporation under the same name SoCal once had.  The Defendant also registered a web domain, promoted the corporation, and sued using SoCal’s name and marks.  SoCal brought suit shortly after, alleging violations of the Lantham Act and various other claims.  The district court granted partial summary judgment for the Lantham Act claims and SoCal withdrew the remaining claims.  Zaffina appealed the order of a permanent injunction on final judgment.

Zaffina challenged jurisdiction, capacity to sue, standing, service, and the merits of the Lantham Act claim.  The Defendant’s arguments focused on the fact that SoCal never registered the marks, nor maintained corporate status.  First, the Lantham Act provided jurisdiction for unregistered trademarks.  Next, although California prohibits suit by delinquent corporations, Fed. R. Civ. P. 17(b)(3)(A) provides standing for unincorporated associations enforcing substantive rights in federal court; SoCal met the definition for an unincorporated association.  The Ninth Circuit then found Zaffina’s claims against standing and service meritless.

The Court next examined the merits of the Lanham Act violation. Zaffina did not attempt to defeat the elements, but instead argued that SoCal either lacked capacity to own the marks, used the marks unlawfully, or abandoned them.  No authority existed to preclude unincorporated associations from owning trademarks.  The Court also rejected the unlawful use claim.  Only lawful use can establish trademark priority, but failing to pay taxes, as the Defendant alleged, was immaterial and collateral to the trademark use.  Because the abandonment claim was based on the lack of corporate status, the Court also rejected it.

Zaffina’s final two defenses, unclean hands and improper admission of evidence, were rejected. The Ninth Circuit affirmed summary judgment.