Here’s an interesting antitrust theory: Can alleged anticompetitive enforcement of trademark rights constitute an illegal restraint of trade? That’s the question the Eastern District of Washington is considering in Van Well Nursery, Inc. v. MONY Life Ins. Co., No. 04-0245, 2007 WL 716042 (E.D. Wash).
Third-party defendant National Licensing Association, LLC, is a for-profit company whose purpose is to enforce the plant patent and trademark rights of others at standardized rates and to share proceeds of its enforcement efforts with its plant nursery members. Defendant and third-party plaintiff MONY Life Insurance moved for partial summary judgment on its counterclaims against plaintiff Van Well Nursery, and third-party claims against National Licensing, for violations of Section One of the Sherman Act, 15 U.S.C. § 1.
National Licensing’s membership is comprised of 18 plant nurseries who otherwise compete with each other. Each nursery entered into a Plant Patent and Trademark Collection Agreement with National Licensing. In this agreement, each nursery agreed to assign to National Licensing its plant patent and trademark enforcement rights in return for a percentage recovery of the proceeds of National Licensing’s enforcement activities on behalf of all National Licensing members.
Earlier in the proceeding, the Eastern District ruled the plant patent and trademark assignments to National Licensing were invalid. Nonetheless, the court found, National Licensing never re-assigned those rights back to the nurseries or took steps to alter Patent and Trademark Office records, which continue to show that National Licensing has been assigned patent and trademark enforcement rights of various National Licensing members.
MONY’s motion argued that assignment of trademark “rights to sue” were invalid and unenforceable as a form of naked licensing. It also argued that by amassing the patent and trademark rights of individual plant nursery owners under the control of National Licensing, National Licensing gained tactical leverage in obtaining standardized licensing fees and recoveries from agricultural lenders. As a result of these tactics, MONY argued there was an increased unwillingness of agricultural lenders to grant loans, which increased the cost of such loans.
Judge Lonny Suko considered these arguments but declined to decide the issue on summary judgment. In his words:
“MONY argues that the purportedly frivolous [National Licensing] litigation coupled with the improper assignment of indivisible patent and trademark enforcement rights to a collective entity resulted in an impact upon competition thus constituting the antitrust liability. The record is not sufficient to satisfy the Court regarding the impact on the relevant market and competition for MONY to be entitled to partial summary judgment.”