In a previous post, I wrote about the wind energy eco-mark suit between two competing Minnesota wind system companies, Jacobs Wind Electric Co. (Jacobs) and Wind Turbine Industries Corp. (WTIC), over rights to the JACOBS word mark and the JACOBS WIND ENERGY SYSTEMS ”whale tail” design mark (shown above) (collectively “JACOBS marks”).
Last month, a federal court in Minneapolis granted WTIC’s motion for partial summary judgment (jacobs_order.pdf), holding that WTIC has priority over Jacobs and therefore has the right to use the JACOBS marks.
There were two reasons for the court’s decision. First, Jacobs had assigned the rights to the JACOBS marks to another entity in 1980.
That year, the rights to the JACOBS marks were transferred to a separate corporation, Jacobs Delaware, which subsequently changed its name to Earth Energy Systems, Inc. (EESI). Jacobs also became subject to a non-compete agreement at that time and agreed not to use the JACOBS marks in connection with the manufacture or sale of wind energy equipment.
In 1986 Jacobs Delaware/EESI assigned all rights to the JACOBS marks to WTIC. Jacobs Delaware/EESI ceased operations in 1988.
Although Jacobs contended that it never sold its wind energy business to Jacobs Delaware and that the subsequent assignment to WTIC was invalid, the court disagreed on both counts.
Specifically, Jacobs argued that Jacobs Delaware was a joint venture with Jacobs that relied on Jacobs to maintain the quality of the wind energy systems. Because this right and duty was non-assignable and WTIC was not responsible for quality control, Jacobs asserted, Jacobs Delaware/EESI’s assignment to WTIC was null and void.
The court rejected these arguments and held that the assignment to WTIC was valid:
Because the assignment at issue provided that [WTIC] would exercise reasonable supervision of the quality of goods sold by EESI, and because EESI’s use of the JACOBS mark would be a continuance of its previous use, the Court finds that the assignment of the JACOBS mark to [WTIC] in 1986 is valid.
Second, the court held that Jacobs had abandoned its use of the JACOBS marks. The record showed that Jacobs ceased using the marks in 1980 when it sold the business to Jacobs Delaware and had not manufactured any new wind energy systems in the last thirty years.
The long time frame created a presumption of abandonment, and Jacob’s resale of a small number of wind energy systems was deemed insufficient to overcome the presumption.
The court ordered cancellation of Jacobs’ U.S. Trademark Registration 1,532,714 for the JACOBS WIND ENERGY SYSTEMS ”whale tail” design mark (’714 Registration) (714_reg.pdf) and further ordered the U.S. Patent and Trademark Office to refuse registration of Jacobs’ U.S. Trademark Application No. 76/677,473 for the JACOBS word mark (’473 Application) (473_app.pdf).
Jacobs is appealing the decision (appeal_notice.pdf).
Eric Lane is a patent attorney at Luce, Forward, Hamilton & Scripps in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at email@example.com.