IP Law Daily Facts in record do not support oral agreement for joint ownership of SARTO mark
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Friday, January 24, 2020

Facts in record do not support oral agreement for joint ownership of SARTO mark

By Brian Craig, J.D.

No reasonable jury could conclude from the facts in the record that a New Jersey marketing firm and an Italian company entered into an oral agreement to share the mark, which was used in connection with bicycle frames.

Actions taken by a New Jersey marketing firm to promote Italian bicycle frames under the name SARTO in the United States did not give rise to ownership rights in the SARTO mark, the U.S. Court of Appeals for the Third Circuit has held. Affirming the federal district court in Newark, the appeals court rejected the New Jersey marketing firm’s sole claim on appeal that the district court failed to consider whether it entered into an oral agreement with an Italian company to jointly own the SARTO mark. The Third Circuit held that it cannot reverse a district court ruling for failing to consider a legal argument predicated on a fact unsupported by the record (Liger6, LLC v. Sarto Antonio, January 22, 2020, Hardiman, T.).

Plaintiff Liger6 LLC, a New Jersey marketing firm, sued Sarto S.r.l., a limited liability company under Italian law, and Sarto Antonio, a sole proprietorship controlled by Italian residents (the "Sarto Entities"). In 2010, Liger6 and the Sarto Entities began working together to promote the defendants’ bicycle frames in the United States. By 2013, the parties’ business relationship had ended. Both sides sought a declaratory judgment that they are entitled to register the SARTO mark in the United States. The district court granted summary judgment in favor of the Sarto Entities on the trademark infringement and related claims concluding that Sarto acquired rights in the mark by selling bicycle frames in the United States before doing business with Liger6 and that the Italian bicycle manufacturer is rightful owner of SARTO mark in United States. The court permitted Liger6 to proceed to trial on other claims, including breach of contract, arguing that a jury could infer an oral agreement granting it such an interest, either from the joint trademark registration it obtained or from the draft agreements it sent to Sarto. After a jury found for the Sarto Entities on those claims, Liger6 appealed the summary judgment.

Trademark infringement and related claims. The New Jersey marketing firm’s sole claim on appeal was that the district court failed to consider whether Liger6 entered into an oral agreement with the Italian company to jointly own the SARTO mark when the court granted summary judgment on the trademark infringement and related claims. But Liger6 conceded for purposes of summary judgment that Sarto never granted it any ownership interest in the mark, and the Italian bicycle manufacturer alerted the district court to this concession repeatedly at summary judgment. The Third Circuit held that it cannot reverse the district court for failing to consider a legal argument predicated on a fact unsupported by the record.

Furthermore, the appeals could found that no reasonable jury could conclude from the summary judgment record that the parties entered an oral agreement to share the SARTO mark. Without any detail about the terms of the alleged agreement and the circumstances surrounding its formation, no reasonable jury could conclude that the parties formed an enforceable contract regarding the mark. The court also rejected Liger6’s reliance on the joint trademark application to prove that the parties jointly owned the mark. In its own complaint, Liger6 alleges that it surrendered its registration because it had "erroneously named" Sarto as a joint owner—not because the Sarto Entities changed their minds about joint ownership.

Finally, the court held that the mere fact that Liger6 devoted substantial resources to selling and promoting bicycle frames bearing the SARTO mark does not support a conclusion that Sarto agreed to share the mark. Investments are not significantly probative of whether the parties agreed to share the mark. Therefore, the Third Circuit affirmed the district court’s grant of summary judgment on the trademark infringement and related claims.

This case is No. 19-2027.

Attorneys: Mark Baghdassarian (Kramer Levin Naftalis & Frankel LLP) for Liger6 LLC. Eric A. Biderman (Arent Fox) for Sarto Antonio.

Companies: Sarto Antonio

MainStory: TopStory Trademark DelawareNews NewJerseyNews PennsylvaniaNews

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