IP Law Daily Owner of ‘Commodores’ trademark entitled to profits from use of mark by ex-band member
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Monday, July 27, 2020

Owner of ‘Commodores’ trademark entitled to profits from use of mark by ex-band member

By Robert B. Barnett Jr., J.D.

A permanent injunction preventing an ex-band member from touring as "The Commodores featuring Thomas McClary" extended extrajudicially to European performances.

In a long-running dispute in which Commodores Entertainment Corp. (CEC) has repeatedly prevailed in its efforts to stop former Commodores member Thomas McClary from using the "Commodores" name in musical performances, the U.S. Court of Appeals in Atlanta in an unpublished opinion has once again affirmed the lower court’s ruling, this time that CEC was entitled to damages from McClary’s profits resulting primarily from European performances because McClary was on notice as far back as 2014 that CEC’s judgment covered European performances. In addition, the Eleventh Circuit confirmed the lower court’s ruling that denied McClary’s right to modify the permanent injunction resulting from his having obtained licenses to use the name in Mexico, New Zealand, and Switzerland because the motion to modify was not timely filed (Commodores Entertainment Corp. v. McClary, July 23, 2020, per curiam).

Thomas McClary was an original member of The Commodores, but he left in 1984. CEC, the owner of "The Commodores" mark, sued McClary in 2014 in Florida to stop him from performing as "The 2014 Commodores" or "The Commodores featuring Thomas McClary."

In 2014, the district court granted CEC’s motion for a preliminary injunction. Hearing that European performances had been booked, the court ruled that the injunction had extraterritorial application. In 2016, the Eleventh Circuit affirmed the preliminary injunction. The district court then bifurcated the trial, with Phase I to determine trademark ownership rights and Phase II to resolve liability and damages.

In Phase I, the court granted summary judgment to CEC mid-trial and converted the preliminary injunction into a permanent injunction. The Eleventh Circuit confirmed that decision as well. In Phase II, the court granted partial summary judgment, and it granted summary judgment in favor of CEC on McClary’s counterclaims and third-party claims. At trial, the jury found that McClary had actual notice of the trademark registration in June 2009 and that CEC was entitled to damages from musical performances at the West Hampton Beach Performing Arts Center and five European venues. McClary then moved to modify the permanent injunction, contending that he had acquired licenses to use "The Commodores" in Mexico, New Zealand, and Switzerland. The court denied the motion, ruling that it was filed too late. McCrary appealed the various rulings and the motion denial, marking the third time that this case has made its way to Atlanta.

Damages. McClary argued that the lower court erred when it included the European performances in the damages award because those performances were not raised in the complaint or in the summary judgment motion. The Eleventh Circuit, however, agreed with the lower court that damages could include those venues. The summary judgment order did not limit CEC’s damages to any specific performance. In addition, McClary had been notice of potential liability from European performances. The 2014 complaint sought damages for infringing conduct that occurred after the complaint was filed.

In the two prior appeals to the Eleventh Circuit, the injunction’s extraterritorial scope was litigated in favor of CEC. As a result, McClary had been on notice since 2014 that the court considered European performances as a violation of its preliminary injunction (which later became a permanent injunction). In a pretrial statement, damages were to be based on McClary’s conduct "in the U.S. and overseas." CEC also said in a pretrial statement that it would seek damages for "performances in the U.S. and Europe." As a result, the Eleventh Circuit concluded that McClary was notice that damages could include European performances, and it affirmed the lower’s award of damages that included the European performances.

Actual notice. McClary also argued that the damages award for the one U.S. performance was improper because he did not actual notice of the trademark registration. The Eleventh Circuit concluded, however, that the jury had ample evidence that McClary had actual notice of the registration as of June 2009. For example, CEC had sent McClary a letter in 2009 notifying him of its claimed rights. As a result, the lower court’s decision to impose damages for the U.S. performance was affirmed.

Modification. McClary sought modification of the permanent injunction, contending that he had acquired licenses to use "The Commodores" in Mexico, New Zealand, and Switzerland. Fed. R. Civ. P. 60(b)(5) gives a party the right to seek modification of a judgment or order under certain conditions. The Eleventh Circuit, however, agreed with the lower court that the motion was not timely filed. It was filed more than five years after the preliminary injunction, three years after the order confirming extraterritorial reach, two-and-a-half years after the permanent injunction, and more than a year after the injunction’s scope was affirmed. The licenses, however, were obtained in 2017 and 2018. His motion was made two years after the first one was obtained and nine months after the last one. The lower court, therefore, was "well within its discretion to find this time frame unreasonable, especially in light of the extensive litigation over the injunction and McClary’s failure to explain the delay."

Counterclaims. McClary also sought appeal of the lower court’s decision to grant summary judgment to CEC on McClary’s counterclaims and third-party claims. The Eleventh Circuit concluded that the lower court correctly ruled that McClary failed to establish those counterclaims and claims as a matter of law. For example. McClary’s claim for interference with economic opportunities rested on his assertion that CEC unlawfully threatened the U.S. venue with legal action if the performance occurred. But tortious interference is not established by evidence that the defendant provided truthful information to a third party, the court noted. The statement that McClary had no right to use "The Commodores" mark was true, and it could not support a tortious interference claim as a matter of law.

The Eleventh Circuit, therefore, affirmed the lower court’s ruling in its entirety.

The case is Nos. 19-10791 and 19-12819.

Attorneys: Lindsay Patrick Lopez (Trenam Law) for Commodores Entertainment Corp. Marie Claire Mirch (Mirch Law Firm, LLP) for Thomas McClary.

Companies: Commodores Entertainment Corp.

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