The Convoluted and Complicated History of the TROPICANA Hotel/Casino Trademark

Tropicana Las Vegas

Last year, I wrote about the Nevada lawsuit involving a dispute about use of the name Tropicana in connection with the famed Tropicana Resort & Casino in Las Vegas (link here). Pamela Chestek – well known for her many blog posts regarding convoluted assignments and related transactions with respect to intellectual property – provided her own unique insights into the matter around the same time (link here).

What started out as a simple declaratory judgment action by the new owners of the Tropicana Las Vegas regarding their long-time right to use the name Tropicana in connection with the hotel/casino located at the intersection of Las Vegas Blvd. and Tropicana Avenue has recently expanded into a fight over actual ownership of the TROPICANA trademark. While the Las Vegas Sun published an succinct article last week (link here) regarding the lawsuit filed in Delaware Bankruptcy Court by a group of companies lead by Carl Icahn's Tropicana Entertainment Inc. (a copy of the complaint can be downloaded here), the actual factual circumstances giving rise to the instant dispute regarding ownership of the TROPICANA mark are interesting enough (and so amazingly convoluted) that I felt a more detailed discussion of the facts underlying the ownership dispute was merited – if anything to provide another illustration of how trademark rights are handled in the course of multiple large scale corporate transactions (including bankruptcy proceedings) and how certain things can (and indeed do) fall through the cracks.

The Tropicana’s Early Years
The story begins back in 1957 when the Tropicana hotel and casino first opened in Las Vegas (the “Tropicana Las Vegas”). The Tropicana Las Vegas was originally operated by a company named Hotel Conquistador, Inc. (“Conquistador”) on land that was owned by the Jaffe Family (“Jaffe Group”). Under the terms of a 1972 lease agreement between Conquistador and the Jaffe Group, Conquistador was required to transfer to the Jaffe Group whatever right it had, if any, in the “Tropicana” name after the termination of the lease.

Later, in 1977, the Jaffe Group formed a partnership with Edward and Fred Doumani (the “Doumanis”) named Tropicana Enterprises which succeeded the Jaffe Group as the lessor in the lease agreement with Conquistador. On June 26, 1979, a company named Hotel Ramada of Nevada, a subsidiary of Ramada Inns, Inc., acquired from Conquistador the land lease of the Tropicana Las Vegas and the right to use the “Tropicana” name. Then on July 25, 1979, the Doumanis sold their 50% interest in Tropicana Enterprises to Adamar of Nevada Inc. (“Adamar of Nevada”), also a subsidiary of Ramada Inns, Inc.

So at this stage, you have Ramada Inns, Inc. owning 100% of the company which operates the Tropicana Las Vegas and owning 100% of a company which owns a 50% interest in a partnership which is the lessor on the land lease for the Tropicana Las Vegas. The Delaware court filing even includes the following handy chart to illustrate the corporate relationship:

The Tropicana Trade Name Agreement
In September 1980, Tropicana Enterprises entered into the so-called 1980 Trade Name Agreement with Ramada Inns, Inc., the Jaffe Group, Hotel Ramada of Nevada, and Adamar of New Jersey, Inc (another wholly owned subsidiary of Ramada Inns, Inc.). This agreement authorized Ramada Inns, Inc. to file federal trademark registrations in its name for the “TROPICANA” mark, but also required that proof of such registrations be provided to the Jaffe Group. Ramada Inns, Inc. did subsequently register several trademarks with the U.S. Patent and Trademark Office including, among others, the mark TROP and TROPICANA (the “Tropicana Trademarks”).

Here is where the situation starts to gets messy. The 1980 Trade Name Agreement also included a reversionary interest (also sometimes referred to herein as the “contingent assignment right”) that upon the termination of Tropicana Enterprises land lease, Ramada “shall immediately cease to use the name TROPICANA and all of their interest in said name shall become the property of Enterprises, and they shall promptly execute and deliver to Enterprises such instruments as Enterprises may reasonably require; assigning and transferring to Enterprises all of their said right, title, and interest in such name, together with the good will of the business symbolized by such name . . . .”

In a subsequent 1984 lease between Tropicana Enterprises (as lessor) and Hotel Ramada of Nevada (as lessee), a separate reversionary interest clause provided that: “Lessee shall upon termination of this Lease for any reason whatsoever, immediately cease to use such name and all interest of Lessee in said name shall become the property of the Lessor, and Lessee shall if requested so to do by Lessor, execute and deliver to Lessor such instruments as Lessor may reasonably require, assigning to Lessor any right, title, and interest Lessee has in such name.”

The Tropicana Spinoff
In 1989, Ramada, Inc. (formerly named Ramada Inns, Inc.) decided to spin off its gaming assets and properties into a newly formed subsidiary, Aztar Corporation (“Aztar”). As part of the spinoff, on December 20, 1989, Aztar, Ramada Inc., Hotel Ramada of Nevada, Adamar of New Jersey, Inc., Tropicana Enterprises, the Jaffe Group, and a company named TROP C.C. entered into a Trade Name Agreement Assignment, Guaranty, and Agreement (the “1989 Agreement”) whereby all of the Ramada parties’ rights under the 1980 Trade Name Agreement were assigned to Aztar and Ramada was obligated to transfer to Aztar all of Ramada’s trademark registrations with respect to the “Tropicana” name (which Ramada subsequently did).

So as of January 2002, Aztar was the owner of the company which operated the Tropicana Las Vegas, Hotel Ramada of Nevada, and owned 100% of the company, Adamar of Nevada, which owned 50% of the partnership interests in Tropicana Enterprises, the lessor of the Tropicana Las Vegas land lease and the holder of the aforementioned reversionary interest. Again, the Delaware court filing includes a handy chart to illustrate the corporate relationship at this stage:

The Tropicana Consolidation by Aztar
The situation then becomes a little more convoluted. According to the Delaware complaint, on February 1, 2002, Aztar caused Adamar of Nevada to purchase the Jaffe Group’s 50% interest in Tropicana Enterprises, thereby causing Aztar to become the “beneficial owner” of the equity interests in Tropicana Enterprises.

As described in the Delaware complaint, Aztar’s purchase of the remaining 50% interest held by the Jaffe Group rendered the reversionary interest right that Tropicana Enterprises had in the Tropicana trademark meaningless “because the grantor and grantee of the contingent assignment right were now one entity under common ownership and management” for the first time since the opening of Tropicana Las Vegas in 1957. Stated differently, when “the Jaffe Group had an interest in Tropicana Enterprises, there was a reason for the Jaffe Group to have some ability to prevent Aztar from using the Tropicana name elsewhere (either in competition or in ways that might dilute the value of the brand) if Aztar were no longer operating the Tropicana Las Vegas.” But since Aztar’s purchase of the Jaffe Group’s 50% interest in Tropicana Enterprises “brought the lessor and the lessee under common ownership under the Aztar umbrella, . . . there was no longer any reason for the contingent assignment right to continue.”

However, even the corporate chart provided in the Delaware complaint shows that what apparently really happened is that the Jaffe Group’s 50% partnership interest in Tropicana Enterprises was divided and transferred to two newly formed companies, Tropicana Real Estate Co., LLC (acquiring a 40% interest in Tropicana Enterprises) and Tropicana Development Co., LLC (acquiring the remaining 10% interest in Tropicana Enterprises). Both of these new companies were wholly owned by Hotel Ramada of Nevada, which in turn was wholly owned by Aztar.

One other complicating factor was that also in 2002, Tropicana Enterprises and Hotel Ramada of Nevada entered into an amended lease agreement that expressly terminated the prior land lease and contemporaneously effectuated a new land lease; however, the amended lease agreement failed to reference the 1980 Trade Name Agreement or address whether the reversionary provision of the 1980 Trade Name Agreement was terminated. While this new lease effectively triggered the reversion under the 1980 Trade Name Agreement (there was never any express consent to the termination of the reversionary interest obtained from the entities which held the reversionary interest), there was never any demand for the transfer of the rights to the trade name made by the entities which held the reversionary interest.

Nonetheless, the “extinguishment” of the contingent assignment right from the 1980 Trade Name Agreement was expressly mentioned in subsequent SEC filings by Aztar. Later, in 2004, as part of a loan transaction pledging Aztar’s assets as collateral, Aztar entered into an Amended and Restated Trademark and Collateral Agreement with Bank of America (as administrative agent) which represented that Aztar owned the Tropicana Trademarks. As noted in the Delaware complaint, this particular agreement was signed by the all of the signatories to the 1980 Trade Name Agreement, or their successors-in-interest, with the exception of the Jaffe Group.

The Aztar Leveraged Buyout
On May 19, 2006, a company named Wimar Tahoe Corporation purchased Aztar for $2.1 billion – structured so that Aztar became a subsidiary of a newly formed company named Wimar OpCo LLC, which was later renamed Tropicana Entertainment, LLC, and became the holding company for the acquired assets, which based on representations by Aztar in the purchase agreement included the Tropicana Trademarks.

However, the way the Wimar-Aztar purchase was structured is where it starts to get even more convoluted. The $2.1 billion purchase of Aztar was financed through two separate credit facilities – what are generally described as the OpCo Credit Facility (for the so-called OpCo Debtors) and the LandCo Credit Facility (for the so-called LandCo Debtors). The LandCo Debtors were those entities involved in the ownership and operation of the Tropicana Hotel and Casino in Las Vegas, Nevada; and the OpCo Debtors were those entities involved the operation of the Tropicana Casino & Resort Atlantic City in New Jersey, the Tropicana Express in Laughlin, Nevada, and other casinos.

As part of the OpCo Credit Facility transaction (which consisted of a $1.53 billion secured term loan and a $180 million secured revolver), the OpCo Debtors pledged as collateral any and all trademark assets they owned. One of the schedules of trademark assets pledged included Aztar’s ownership of the Tropicana Trademarks, which were to be pledged as security to the OpCo Lenders. On September 12, 2007, Aztar executed a written assignment of its interest in the Tropicana Trademarks to Tropicana Entertainment, LLC, which subsequently pledged such trademarks to the OpCo Lenders under the OpCo Credit Facility. As part of the LandCo Credit Facility, the LandCo Debtors were also required to identify any trademarks owned. None of the LandCo Debtors identified any ownership or contingent interest in the Tropicana Trademarks.

The Delaware complaint argues that the representations made by the relevant parties as part of this financing transaction shows the clear understanding of all parties involved – i.e., that the Tropicana Trademarks were owned unconditionally by Aztar at that time. Moreover, all of the secured financing provided under the credit facilities were loaned in reliance upon the representations made with respect to the Tropicana Trademarks.

The Tropicana Bankruptcy
Of course, like so many companies in the mid-2000s who engaged in large scale secured debt financing only to find themselves unable to make debt payments when the economy tanked in 2008, Tropicana Entertainment, LLC filed for bankruptcy in Delaware Bankruptcy Court on May 5, 2008.

On May 30, 2008, the Court entered a Cash Collateral Order which provided that the Liens acquired by the OpCo Lenders under the OpCo Credit Facility were “valid, binding, perfected, enforceable, first priority liens on the personal and real property described in the” OpCo Credit Facility, which included Tropicana Entertainment, LLC’s ownership interest in the Tropicana Trademarks. Moreover, there was no challenge against the Court’s Order regarding the OpCo Lenders’ liens lodged by any party during the 90 day challenge period.

The court’s Order also stated that no grant of security under the OpCo Credit Facility “shall be stayed, restrained, voidable or recoverable . . . , or subject to any defense, reduction, setoff, recoupment or counterclaim” after the challenge period, that the LandCo and OpCo Debtors waived and released the OpCo agent and OpCo Lenders from any and all claims arising out of the OpCo Credit Facility, including the extent, validity, priority and perfection of liens in the Tropicana Trademarks, and that that any other party-­in­-interest’s claims against the OpCo Credit Facility agent and the OpCo Lenders would be forever relinquished, released and waived after the expiration of the 90 ­day challenge period.

On July 7, 2008, the OpCo and LandCo Debtors each filed separate schedules of their assets and liabilities. Tropicana Entertainment, LLC filed schedules of assets and liabilities that listed the Tropicana Trademarks as assets; the LandCo Debtors’ schedules, on the other hand, did not assert any interest, ownership or otherwise, in the Tropicana Trademarks. The so-called OpCo Exit Facility Lenders (the designated post-bankruptcy lenders to the post-bankruptcy debtors of the OpCo assets) pledged an additional $150 million loan to the OpCo Debtors to help the OpCo Debtors reorganize – a loan based in part on the pledging of the Tropicana Trademarks as security for the loan. In contrast, the LandCo Lenders acquired interests in the $440 million LandCo secured term loan under the LandCo Credit Facility without any reliance on the Tropicana Trademarks as security.

The Tropicana Separation
With insufficient assets available to satisfy the secured obligations under the OpCo Credit Facility and the LandCo Credit Facility [ed.-big surprise], the decision was made to file two separate plans of reorganization -- the LandCo Plan concerned only the Tropicana Las Vegas and the OpCo Plan concerned all of the remaining casino properties which were part of the bankruptcy reorganization. Both plans provided that the respective secured lenders would take equity and management interest in the reorganized OpCo and LandCo debtors and that following bankruptcy, the reorganized OpCo and LandCo entities would operate as separate enterprises. This decision to separate the two companies into distinctive and separate enterprise is what set up the eventual dispute over the rights to the Tropicana name because before bankruptcy, the Tropicana Las Vegas was part of one big happy corporate family and used the Tropicana name without having to pay any royalty; however, post-bankruptcy, Tropicana Las Vegas would be a separate company that the OpCo entities would no longer be able to control with respect to usage of the Tropicana Trademarks and the quality control related thereto.

During negotiations regarding the OpCo and LandCo plans, the OpCo Debtors advised the LandCo Lenders that the Reorganized LandCo Debtors (i.e., the LandCo Debtors after the reorganization) would need to obtain a license from the Reorganized OpCo Debtors to use the Tropicana Trademarks after the plans became effective. Understandably, the LandCo Lenders – in particular Onex Corporation, the largest secured lender under the LandCo Credit Facility – rejected the idea of paying any license fees for use of the Tropicana Trademarks and countered with a request to use the Tropicana Trademarks for free, in perpetuity, and without control of such use of the trademarks by the Reorganized OpCo Debtors – an idea that the OpCo Debtors rejected.

In order to allow the reorganizations to move forward, the parties agreed to postpone the dispute over a royalty payment for the Tropicana Trademarks. The Delaware complaint describes the understanding of the parties as one which recognized “that the OpCo Debtors owned the Tropicana Trademarks but that the LandCo Debtors may or may not have had a right to use the Tropicana Trademarks, and if so, could they use it without paying a royalty” but which said nothing about ownership or which challenged the Court’s original order.

On May 5, 2009, the Delaware Court issued its Confirmation Order for the OpCo Plan, which went into effect on March 8, 2010. The Order approved the OpCo Exit Facility and held that the OpCo Exit Facility Lender liens were “valid, binding, perfected and enforceable liens and security interests in the real and personal property described in the OpCo Exit Facility and its attendant documents” and that such liens “shall not be subject to avoidance, recharacterization, recovery, subordination, attack, offset, counterclaim, defense or ‘claim’ . . . of any kind under any Applicable Laws as of the Effective Date.” On May 5, 2009, the Delaware Court also issued its Confirmation Order for the LandCo Plan, which went into effect on July 1, 2009, and did not include any claim to any kind of ownership interest in the Tropicana Trademarks.

The Nevada Tropicana Trademark Lawsuit
On July 20, 2009, two of the Reorganized LandCo Debtors, Tropicana Las Vegas, Inc. and Hotel Ramada of Nevada, LLC (together “Tropicana LV”), filed a lawsuit in Clark County District Court in Las Vegas, Nevada (previously mentioned above) seeking a declaration that they have a right to use the Tropicana Trademarks in connection with the Las Vegas resort and casino property without control by or payment to the OpCo Debtors. See Tropicana Las Vegas, Inc., et al. v. Aztar Corporation, et al., Case No. A09595469­B (Nev. D. Ct., Clark County) (the “Nevada Action”).

In order to allow the Nevada Action to proceed (because the OpCo Plan was not yet effective at the time), the Reorganized LandCo Debtors had to seek permission from the Bankruptcy Court to lift the automatic stay to permit the Nevada Action to proceed. In certain representations to the Bankruptcy Court during motion practice regarding lifting the stay, counsel for the Reorganized LandCo Debtors supposedly stated that Tropicana LV was not challenging “ownership questions” that were “plainly answered” prepetition and that it was merely seeking to preserve longstanding rights concerning the use of the Tropicana name without a royalty through “a declaration that Tropicana Las Vegas may continue to operate the Tropicana under the Tropicana name without interference by OpCo or payment to them. . . . Just a straightforward request to preserve what we view as our pre­existing right to operate as we’ve always done.” The Bankruptcy Court lifted the stay and allowed the Nevada Action to proceed.

The Nevada Action was was subsequently removed to federal court. However, as part of a motion to remand the case back to Nevada state court, Tropicana LV argued that they were not challenging ownership of the Tropicana Trademarks, but rather seeking a declaration under Nevada Revised Statute 30.100 that they have a right to use the name that has been associated with that particular hotel/casino in Las Vegas since 1957 based on Nevada state law contract principles and estoppel.

Adding fuel to the dispute, on November 18, 2009 – four months after the LandCo Plan’s Effective Date – certain LandCo Debtors filed supplemental schedules of assets and executory contracts, in particular, a property interest in the “name ‘Tropicana’ and the goodwill of the business symbolized by and associated with the name ‘Tropicana’” was listed as an asset and the 1980 Trade Name Agreement was listed as an executory contract.

But the apparent final straw was that on January 8, 2010, Tropicana LV moved for summary judgment in the Nevada Action and requested a declaration that Tropicana LV owned the Tropicana Trademarks. The district court in the Nevada Action denied Tropicana LV’s motion for summary judgment finding genuine issues of material fact regarding the Reorganized OpCo Debtors’ status of a bona fide purchase for value which would be a defense to the Tropicana LV’s new claims for damages arising from the use of the Tropicana Trademarks over which Tropicana LV now claimed ownership.

The Delaware Bankruptcy Lawsuit

Nonetheless, Carl Icahan’s Tropicana Entertainment, Inc. (along with other related companies having interests in the OpCo assets), believing that Tropicana LV’s request for a declaration of ownership from the Nevada Court constituted an improper modification of the Bankruptcy Court’s approved reorganization plans, decided to move the matter back to Delaware Bankruptcy Court with the filing of the most recent lawsuit which seeks various claims for relief to stop the Reorganized LandCo Debtors’ efforts to now claim ownership to the Tropicana Trademarks despite all of the Bankruptcy Court’s Orders. In particular, the Delaware Complaint seeks a declaratory judgment that the Tropicana Trademarks were part of the OpCo Debtors’ assets, a declaratory judgment that the supplement schedules provided by the LandCo Debtors are void, a declaratory judgment that the Nevada Action violated the automatic stay by raising trademark ownership issues in the Nevada Action before the OpCo Plan effective date, a finding that the Reorganized LandCo Debtors’ are in contempt of the court’s Confirmation Order based on the assertions made in the Nevada Action regarding ownership of the Tropicana Trademarks, injunctive relief pursuant to the OpCo Plan and bankruptcy law., a claim for unjust enrichment, and a claim for declaratory relief that, regardless of who owns the Tropicana Trademarks, and the Exit Facility Agent has a valid and perfected security interest in the Tropicana Trademarks for the benefit of the OpCo Exit Facility Lenders.

The Nevada Action will likely be stayed pending a determination by the Delaware Court of the status of the conditional assignment right/reversionary interest that appears to have been long forgotten by all of the relevant parties and yet never formally terminated (nor was there any demand for transfer).

While Tropicana LV’s claim of ownership to the Tropicana Trademarks by virtue of this conditional assignment right/reversionary interest is an interesting one, this latest attempt to lay claim to the ownership rights is more likely just a means for Tropicana LV to bolster its bargaining position in order to get the relief that it ultimately wants – basically, the ability to continue to use the name Tropicana for the Tropicana Las Vegas without having to pay a license fee. Of course, the fact that Tropicana LV might actually be able to stake a claim of ownership over assets that had an appraised value of approximately $200 million in 2007 could also have something to do with it.

Ozzy Osbourne and Tony Iommi Settle Dispute Over BLACK SABBATH trademark

Multiple sources (Blabbermouth.net, Musicnewsnet.com, Toronto Sun) reported on the joint statement issued by Ozzy Osbourne and Black Sabbath band partner Anthony Iommi announcing that the two had reached a settlement of the ongoing trademark litigation between the two over the ownership of the BLACK SABBATH mark (see John Osbourne (p/k/a Ozzy Osbourne) v. Anthony Iommi, Case No. 09-cv-04947 (S.D.N.Y. Filed May 26, 2009) (previously blog posts on the dispute here and here):

Ozzy Osbourne and Tony Iommi of the legendary heavy metal band BLACK SABBATH have amicably resolved their problems over the ownership of the BLACK SABBATH name and court proceedings in New York have been discontinued. Both parties are glad to put this behind them and to cooperate together for the future and would like it to be known that the issue was never personal, it was always business.

According to the reports, Ozzy became interested in resolving the dispute after the death of their mutual friend Ronnie James Dio back in May. As usual, the terms of the settlement have not been disclosed.

Judge Allows Ozzy Osbourne to Continue Lawsuit Over BLACK SABBATH

Back in June 2009, I wrote (link here) about the lawsuit filed by Ozzy Osborne against Tony Iommi over the rights to the BLACK SABBATH name. Ozzy’s lawsuit sought a declaration that he is at least a joint owner of the BLACK SABBATH mark (after rejoining the band in 1997 and revitalizing the brand) and that Iommi is not the sole owner of the mark as well as a cancellation of the BLACK SABBATH federal registration that Iommi currently owns on the basis that Iommi, when he filed the application in March 1999, made a knowingly false statement to the PTO when he declared that no other person had any right to use the BLACK SABBATH mark in commerce.

Today, the New York Post reported that District Court Judge John Koeltl ruled in favor of allowing Ozzy to move forward with his suit – while at the same time urging the parties to resume mediation in order to resolve the case instead of proceeding to trial. No other details have been reported. Other coverage by Blabbermouth.net.

So it looks like the Iron Man will Rock On.

Ozzy Osbourne Files Lawsuit Against Anthony Iommi Over BLACK SABBATH Trademark

Multiple news sources (Reuters, E! Online, Entertainment Weekly) reported over the weekend on the lawsuit filed last week in the U.S. District Court for the Southern District of New York by Ozzy Osbourne against his Black Sabbath band partner Anthony Iommi over ownership of the BLACK SABBATH mark. See John Osbourne (p/k/a Ozzy Osbourne) v. Anthony Iommi , Case No. 09-cv-04947 (S.D.N.Y. Filed May 26, 2009). Blabbermouth.net has a posting of the complaint here.

In December 2008, Iommi filed his own trademark infringement lawsuit against Signature Network (previously blogged here) over the sale of unlicensed “Black Sabbath” Merchandise. As part of that complaint, Iommi described how he came to be the sole owner of the “Black Sabbath” trademark. Particularly, with respect to Ozzy Osbourne, on June 30, 1980, Osbourne and his company, Monowise, Ltd. assigned and transferred

any and all rights of any kind or nature that they have or have had in the name 'BLACK SABBATH' .... OSBOURNE further agree[d] that he will not hereafter, directly or indirectly, use, permit, or authorize the use of the name 'BLACK SABBATH' or any part of it or any similar name in connection with any activities in and throughout the entertainment industry.

Interestingly, it was that dispute with Signature Network that may have started the dispute leading up to Ozzy’s present lawsuit. According to correspondence dated April 2008 from Ozzy’s attorney to Iommi’s attorney (attached as exhibits to Ozzy’s complaint), Ozzy became aware of Iommi’s cease and desist letter to Signature Network and Iommi’s claim to be the sole owner of the BLACK SABBATH mark. Apparently at that time the letter was sent out, Iommi and Ozzy had been negotiating some kind of agreement memorializing their joint ownership of the BLACK SABBATH mark as well as negotiating a renewal of the license agreement by Signature Network.
In a letter from Ozzy’s attorney sent on January 29, 2009 (after Iommi’s lawsuit against Signature Network had been filed), Ozzy’s response to the aforementioned assignment is that Ozzy and his wife, Sharon Osbourne, had been in charge of controlling the nature and quality of the services rendered under the BLACK SABBATH mark since 1997 (when the BLACK SABBATH reunion tour began).

This same sentiment is echoed in Ozzy’s official press release statement regarding the lawsuit which explains in the following manner why his prior assignment of the BLACK SABBATH name in the early 1980s may not be relevant to the goodwill inherent in the BLACK SABBATH name today:

Throughout the last 12 years, it was my management representatives who oversaw the marketing and quality control of the “Black Sabbath” brand through OZZFEST, touring, merchandising and album reissues. The name "Black Sabbath" now has a worldwide prestige and merchandising value that it would not have had by continuing on the road it was on prior to the 1997 reunion tour.

Ozzy also apparently was not even aware of the federal trademark registration that Iommi had obtained from the U.S. Patent and Trademark Office until recently.

Ozzy’s seeks a declaration that he is at least a joint owner of the BLACK SABBATH mark and that Iommi is not the sole owner of the mark. Ozzy also seeks cancellation of the BLACK SABBATH federal registration on the basis that Iommi, when he filed the application in March 1999, made a knowingly false statement to the PTO when he declared that no other person had any right to use the BLACK SABBATH mark in commerce. Two additional causes of action for monies owed and misappropriation of Ozzy’s right of publicity are also claimed.

District Court Rules Against Florida Man Who Sued Owners of UNIX Trademarks

Wayne R. Gray, a Florida man who sought to register (and use) the trademark iNUX in connection with a computer operating system, has suffered a defeat in his lawsuit against the companies behind the UNIX trademarks. U.S. District Court Judge Virginia Hernandez Covington of the U.S. District Court for the Middle District of Florida decided that the company which sought to prevent Grey’s application for the mark iNUX from being registered by the U.S. Patent and Trademark Office (“PTO”) was indeed the valid owner of the UNIX trademarks and therefore the Defendants did not commit any of the alleged fraudulent actions related to the ownership of the UNIX trademarks alleged in Gray’s complaint. See Gray v. Novell, Inc. et al, Case No. 06-cv-1950, 2009 U.S. Dist. LEXIS 13185 (M.D. Fla. Feb. 20, 2009).

The UNIX trademarks were originally registered by AT&T in 1986 (Registration Numbers 1,392,203 and 1,390,593, for computer programs and computers, respectively). In May 1990, AT&T assigned the UNIX marks to Unix Systems Laboratories, Inc., which was later purchased by software company Novell, Inc. in April 1994.

In October 1993, Novell signed a non-binding “term sheet” agreement with several companies (Hewlett Packard, IBM, Sun Microsystems) which set forth a framework for a future definitive agreement among the parties. Under that term sheet, the companies agreed that Novell would license the UNIX brand through X/Open Company Limited (“X/Open”), a United Kingdom Company, to companies whose products conformed to certain quality-control standard. At the end of three years, Novell agreed to transfer ownership of the UNIX brand to X/Open.

In May 1994, Novell and X/Open, in order to effectuate part of the “term sheet” agreement, executed a Trademark Relicensing Agreement in which Novell granted X/Open an exclusive, perpetual, irrevocable license to use, and to sub-license to third parties, the UNIX marks as well as agreed to assign the UNIX marks to X/Open at the end of three years (or any earlier or later time upon agreement by the parties).

The problems began in September 1995 when Novell and The Santa Cruz Operation (the predecessor-in-interest of Defendant The SCO Group, Inc. (“SCO”)) entered into an Asset Purchase Agreement (the “APA”) pursuant to which certain of Novell’s assets would be transferred to SCO. The APA schedule listed as a transferred asset "Trademarks UNIX and UnixWare as and to the extent held by [Novell] (excluding any compensation [Novell] receives with respect of the license granted to X/Open regarding the UNIX trademark)." Another section of the APA as well as minutes of Novell’s Board of Directors meeting discussing the APA both reference “the trademarks UNIX and UnixWare" as trademarks that would be transferred.

In September 1996, Novell, X/Open, and SCO entered into a Confirmation Agreement acknowledging that the APA conveyed the UNIX marks to SCO subject to the rights and obligations established in the May 1994 Relicensing Agreement. In that same agreement, the parties also agreed that to have X/Open draft an assignment for Novell to execute in order to document the transfer of title of the UNIX marks to X/Open, that Novell would be deemed the legal owner of the UNIX marks for purposes of such assignment, and that such assignment would not be a breach of the APA between Novell and SCO.

A second amendment to the APA was executed on October 16, 1996 (one month after the Confirmation Agreement), which provided that as of that date, “Excluded Assets” as the term was used in the APA was revised to exclude “All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the [1995] Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies." (without any specification for what trademarks were necessary nor any reference to the Confirmation Agreement or to Novell as the owner of the UNIX marks).

Two years later, Novell executed a Deed of Assignment dated November 13, 1998, which purportedly assigned all of its right, title, and interest in the UNIX marks along with the associated goodwill to X/Open. This assignment was recorded with the PTO in June 1999.

Wayne Gray began a computer software business in early 1998 (later incorporated under the name MegaChoice, Inc.). Sometime in late 1998, Gray supposedly began testing out the mark “iNUX” as a product name. In January 1999, Gray registered the domain name http://www.inux.com/ and http://www.inux.net/. On April 29, 1999, Gray applied to register the INUX mark with the PTO (for computer operating system software for use in consumer hardware systems). In August 1999, Gray changed the name of his corporation to iNUX, Inc. Gray claims to have introduced his first iNUX product in late 1999 with limited sales in December 1999 and shipping of products in early 2000.

In February 2001, Gray received a cease and desist letter from X/Open’s counsel regarding Gray’s use of iNUX. A few months later, X/Open filed an opposition against Gray's trademark application. See X/Open Company Ltd. v. Gray, Opposition No. 91122524 (T.T.A.B. Filed April 11, 2001). The parties were unable to negotiate a settled phase out of Gray’s products and a transfer of the inux domain names to X/Open. Meanwhile, Gray began investigating X/Open’s ownership of the UNIX trademarks and, according to Gray, uncovered a fraudulent scheme by X/Open, Novell, and SCO to unlawfully conceal the true owner of the UNIX marks. With copies of the APA showing a transfer of the marks to SCO at the time, Gray filed a counterclaim of fraud in the opposition. The opposition got bogged down in discovery disputes and was eventually suspended pending the outcome of the instant lawsuit.

On October 23, 2006, Gray filed the instant lawsuit asserting eleven causes of action against Novell, X/Open, and SCO, including allegations of racketeering, fraudulent federal trademark registration, unfair competition, common law fraud, and conspiracy to defraud. Gray’s allegations were that Novell and X/Open engaged in an ongoing scheme to conceal Novell’s true ownership of the UNIX marks through the agreed-upon relicensing agreement entered into between Novell and X/Open, thereby allowing the public to believe that X/Open owned the UNIX marks when in fact Novell continued ownership of the UNIX marks. Moreover, SCO joined this scheme by agreeing to conceal SCO’s September 1995 purchase of the UNIX marks, to conceal the group’s “fraudulent acts,” and to continue to publicize X/Open as the owner of the UNIX marks. Gray alleged that the group conspired after the fact to create the Confirmation Agreement and backdate it to September 1996. Gray also alleged that the 1998 Deed of Assignment was a backdated agreement done by the parties with full knowledge that Novell was not the owner of the UNIX marks after 1995 and that the parties perpetrated a fraud on the PTO by recording the assignment – two months after Gray's April 1999 iNUX trademark application was filed

As further support for his position that the trademarks were transferred in 1995, Gray cited to a Utah District Court’s decision in the lawsuit filed by SCO in January 2004 against Novell for breach of the APA for failure to convey the copyrights to the UNIX software. The SCO Group, Inc. v. Novell, Inc., Case No. 04-cv-00139 (D. Utah Aug. 10, 2007) (decision here). The court in that case, after reviewing the APA and the subsequent amendments, bill of sale, business dealings between the parties, and other extrinsic evidence, concluded that the UNIX and UnixWare copyrights had not been included in the assets that were transferred to SCO pursuant to the APA and its two amendments. In deciding the copyright issue, the court noted that the UNIX marks were transferred as part of the APA and Gray argued that the instant court should be bound to the Utah court’s determination of trademark ownership.

X/Open and Novell both filed motions for summary judgment, and Gray file his own motion for summary judgment. The court granted both X/Open’s motion and Novell’s motion and denied Gray’s motion. In the end, the court found that the evidence supported Novell and X/Open's contentions that Novell granted X/Open an exclusive license for the UNIX marks in May 1994, that it intended to transfer ownership of the UNIX marks to X/Open sometime thereafter, that SCO documented its agreement of that transfer in the 1996 Confirmation Agreement, and that the UNIX marks were lawfully transferred to X/Open by operation of the 1998 Deed of Assignment.

With respect to the key language “as and to the extent held by Seller” in the APA that was in dispute between the parties, the court sided with X/Open and Novell that this limiting language meant that the APA was subject to the 1994 licensing agreement which required Novell to assign the UNIX marks to X/Open within a few years (and understanding which was confirmed in the Confirmation Agreement). The court found that the APA as modified or supplemented by the 1996 Confirmation Agreement (an agreement signed by all of the parties to the APA) granted Novell the legal authority to transfer ownership of the UNIX trademark to X/Open in the 1998 Deed of Assignment:

Thus, upon execution of the Confirmation Agreement, the terms of the 1995 APA relating to the UNIX trademarks were superseded to the extent that title to the UNIX marks remained with Novell for the purpose of assigning those marks to X/Open. Regardless of whether the language of the subsequent agreement is thought to merely clarify, or completely alter, the prior agreement, the result is the same. Consequently, based on the clear and unambiguous language of the 1996 Confirmation Agreement, the Court concludes that the subsequent 1998 Deed of Assignment validly passed ownership of the UNIX trademark to X/Open as of November 13, 1998.

Regarding Gray’s arguments about the validity and authenticity of both the Confirmation Agreement and the Deed of Assignment, the court stated that Gray offered “absolutely no evidence to support his allegation that Defendants fraudulently created these documents after the fact and back-dated them in an effort to validate the 1999 recording of assignment with the PTO. Mere suspicions and unsupported theories are not enough to create a triable issue of fact.”

As for the Utah district court's "holding" in SCO v. Novell, the court rejected Gray’s argument that the Utah’s court’s decision should be binding as proof that Novell had no title to pass to X/Open in 1998 – primarily because the issue addressed by the Utah court was transfer to SCO of the copyrights, and not the trademarks. Any statement by the Utah court on the transfer of trademarks “was not necessary to the decision in that case and therefore is non-binding dicta.” Moreover, the court added that the Utah court’s decision about a transfer of the trademarks in 1995 was not necessarily inconsistent with the current court’s findings since “some limited rights in the UNIX marks” did pass to SCO as part of the APA – however, given the execution of the Confirmation Agreement by the parties, the court need not consider to what extent the rights in the UNIX marks transferred to SCO under the APA.

The court found Novell’s 1998 assignment of the UNIX marks to X/Open lawful and valid, and thus the recording of such assignment with the PTO in June 1999 also valid. This determination pretty much undercut all of Gray’s fraud based claims. The court also added that Gray was unable to show standing for his claims of unfair competition nor any injury to support his racketeering claims.

With that, the court granted summary judgment in favor of the Defendants and against Gray on all eleven counts of Gray's complaint.