Trademark rights among community developer and trustees

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Legal_Beagle

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This seems to be a complicated fact pattern as follows: decades ago, a developer began to develop a large condominium and townhouse community development in State C under Trademark A and using Logo Design B. The development in question was comprised of myriad buildings and sub-divisions ("communities"), and homeowner's associations. The developer also developed other similar communities in other states under Trademark A and Logo Design B (collectively "IP"). The developer was granted US registration at the PTO for Trademark A and Logo Design B. For further development of the community in State C, the developer then partnered with another developer to complete future phases, also under Trademark A and Logo Design B. Many of the subdivisions had names that used, in part, Trademark A, such as "Riverside at Trademark A". At the entrance to the development is a large statue of Logo Design B. At some point, the development was completed, and the original developer had no further control over the community.

The clients are (1) the trustee of the common facilities shared by all the constituent communities, with the corporate name containing Trademark A; (2) a separate company owned by the trustee which manages all of the constituent communities and the operations of the trustee, with the company name containing Trademark A; (3) the individual homeowner's associations whose names also contain Trademark A; and (4) the individual communities whose names contain Trademark A. It is believed that for all instances the clients are using Trademark A more as a trade name, rather than a trademark since it is not being used to identify goods/services offered "for sale" to the public. Prior to contact by the developer, the clients were not aware that the developer owned US trademark registrations for the IP.

For the community in State C, to our knowledge there exists no documents or agreements which speak to which party owns or operates the use of Trademark A or Logo Design B, or the manner in which this IP may be used. The IP in question has been used for decades for these communities and companies, and the developer has been silent in its enforcement. Furthermore, at one time the developer and the clients entered into an easement agreement related to the statue of Logo Design B, with no apparent reference to trademark rights. The second developer that was joined to complete the development promotes the development in State C, in conjunction with a development in another State, on its website under Trademark A and Logo Design B. We are unclear on whether the first developer licensed to the second developer rights to the IP, but it appears that the use by the second developer inured to the benefit of the first developer for the purposes of the first developer renewing its PTO registrations for Trademark A and Logo Design B. The developer's PTO registrations might be subject to cancellation, in whole or in part, depending on the level of control, or lack thereof, it has exerted over the IP and quality control.

Now, after several decades of use of Trademark A and Logo Design B by the clients, and silence from the first developer, the first developer has sent a cease and desist letter to one of the individual communities alleging trademark infringement of Trademark A, and has sent to the trustee a proposed License Agreement demanding a fee for license of the IP and attempting to define the scope of control over operations and use of the IP. The clients want to be able to continue using the IP as it has in been in its development for the name of its trustee and managing company, community names, and homeowner's association names, and further, are considering embarking on a branding campaign featuring the IP but needs to first define its rights to the IP. The clients also want to define their position should the parties enter into litigation over the IP.

In this fact pattern, who owns the rights to the IP in State C?
Even if the developer is considered the "rightful owner" as to developments in other States, has it lost its rights to the development and related companies in State C because of decades on non-control?
Can the developer now attempt to exert control over the IP and quality of the services that it failed to exercise prior?
What are the clients' chances of success in continuing to use the IP without entering into the License Agreement? In defending a potential infringement suit? In bringing a declaratory judgment action to establish rights to the mark in State C?

THANK YOU!
 
I read part of this. The only answer I can give you is this:

(1) All of the rights are heavily dependent upon what is contained in the agreements made. These questions cannot be answered adequately without them.

(2) With messy fact patterns, typically there is no easy answer and opinions will vary.
 
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