MGA v. T.I. Decision

There were big headlines last week when MGA Entertainment Inc. lost in a jury verdict to Grand Hustle LLC (and others) in a trade dress and/or name, image, and likeness rights of the OMG Girlz. But, no articles seem to really discuss the substance of the case in any degree. It is difficult. The Pacer docket for this case is more than one thousand entries long. There was a prior jury verdict from June 2023 that was overturned

In essence, OMG Girlz – which was promoted by Grand Hustle and several other entities including the individual artists – sued because their trade dress and name, image, and likeness rights were exploited by MGA. MGA actually is the plaintiff in this suit because it sought declaratory judgment of non-infringement first. Grand Hustle answered and counter-claimed for the claims it had already been making in letters to MGA for several months in 2021. MGA had previously announced that it would be making a line of dolls modeled on the OMG Girlz.

OMG Girlz

MGA and Grand Hustle were unable to reach any agreement regarding the dolls, and MGA went forward with dolls having similar appearance to the OMG Girlz. See examples below from the OMG Girlz answer:

Following the first, unsuccessful verdict. Grand Hustle successfully convinced the court that it needed a new trial. Initially, an appeal was lodged, but when the court granted a new trial, the appeal was dismissed. The new trial was primarily granted by Judge Selna in the Central District because of the intervening authority of the Jack Daniels Props., Inc. v. VIP Prods. LLC, 143 S. Ct. 1578 (2023). In essence, the judge had instructed the jury that the first amendment protected MGA’s expression under the so-called Rogers test. Now, the judge reasoned that Jack Daniels applied, and the jury instructions had been incorrect. Therefore, a new trial was ordered.

Under the new jury instructions, MGA lost – its works did not escape liability under Rogers for being “works of expression” because the trade dress and name, image, and likeness were still misappropriated (at least as far as the jury is concerned). There will no doubt be an appeal, but other than the large flashy $71 million damages number, the most interesting portion of this case is that it is a post-Jack Daniels case that demonstrates how a broader availability of infringement, even over first amendment possibilities, can result in significantly different outcomes.

The New Reexamination and Expungement Procedure

The USPTO introduced new Reexamination and Expungement procedures for trademarks as a part of the 2020 Trademarks Modernization Act. The associated rules, and the procedures themselves, became effective December 18, 2021. In general, these procedures are intended  to combat fraudulent or inappropriately registered marks. The purpose is to provide a quicker and simpler method for prospective trademark owners to clear the registry of clearly-unused marks or marks that were otherwise fraudulently registered.

Expungements are generally intended to “expunge” marks that were never used in commercial on some or all of the goods in the registration. Reexaminations are intended to remove marks that were not in use on some or all of the goods and/or services in the registration as of the “relevant date” (e.g. the filing date for use-based registrations or the amendment to allege use or statement of use for registrations originally filed as intent-to-use applications). These petitions may be filed by anyone, essentially, including by the Director.

If or when the petition is granted, the process begins and is somewhat similar to an ex parte reexamination in patent practice. The registration owner is required to demonstrate use of the mark by the “relevant date” through the submission of evidence. Expungements may only be filed in the first ten years of an application’s registration. Reexaminations may be filed only until the fifth anniversary of registration. A successful defense of a reexamination limits the ability of anyone to request reexamination a second time. Expungements are less-limiting, because it may be shown that the mark was in use at some point in time prior to the petition and there may not be use presently. In general, co-pending cancellation petitions are stayed pending either proceeding.

These procedures may provide a suitable outlet for inexpensively eliminating fraudulent or weak marks. Since they are generally ex parte, the involvement of counsel is not required post-filing. So, one would do well to put forward the best case possible in proving a negative – namely, that the mark is not in use.

Please join us Monday, October 28, 2024, at noon where we will discuss these issues. Partner Jonathan Pearce will lead the discussion.