The Fifth Circuit’s recent ruling in Reed v. Marshall underscores the complexities of trademark co-ownership. The case, involving the R&B group Jade, illustrates how ambiguous ownership can lead to legal complications when agreements are absent. The dispute centered on the use of the “JADE” trademark after a lineup change, revealing the limitations of shared branding in the absence of formal structures.
A Fractured Reunion Tour
Jade, once a trio known for the 1990s hit “DON’T WALK AWAY,” originally registered the “JADE” mark for live performances. When a reunion tour collapsed in 2018, two members formed a new lineup with a third singer, continuing under the “JADE” name without the original member, Reed. Reed filed a lawsuit alleging trademark infringement, dilution, and unfair competition, but the court dismissed the claims.
The Fifth Circuit’s decision clarified that co-owners cannot pursue legal action against one another for trademark violations. Under the Lanham Act, the law safeguards against third-party misuse, not internal conflicts. Since all parties shared ownership, there was no “unauthorized” use to challenge. The court emphasized that co-owners, by definition, have equal rights - and thus, no standing to assert infringement.
Implications for Businesses
This case extends beyond music, offering critical insights for businesses navigating shared trademarks.
- Entertainment groups: Bands, production teams, and collectives often file joint trademarks early. Without a contract, disputes over lineups or brand strategy can leave members without legal recourse.
- Corporate joint ventures: Similar risks apply to co-branded ventures or spin-offs. Shared ownership without governance structures can lead to conflicting priorities and enforcement deadlocks.
- Licensees and promoters: A license from one co-owner doesn’t shield a third party from disputes with others. Without clear agreements, overlapping claims can complicate licensing and revenue.
Strategies for Legal Clarity
To mitigate risks, businesses must establish clear frameworks early.
- Draft a comprehensive co-ownership agreement. Define control mechanisms, decision-making processes, and exit strategies to prevent disputes from escalating.
- Centralize ownership where feasible. Placing the mark in a single entity or licensee avoids the “equal rights, no remedies” dilemma.
- Set quality-control standards. Consistency in branding is essential for maintaining consumer trust and legal protection.
- Plan for line-up changes. Include buy-out clauses or mediation terms to manage departures without disrupting the brand.
- Document all licenses. Third-party promoters or distributors must secure written approval from all co-owners to avoid disputes over royalties or usage rights.
Even with agreements in place, conflicting trademarks remain a risk. IP Defender provides a solution by monitoring national trademark databases for potential conflicts and infringements. By tracking 40+ databases, including the EU, USA, and Australia, IP Defender ensures no threats go unnoticed.
The Fifth Circuit’s ruling reinforces that shared trademarks demand shared responsibility. Without a contract, co-owners face equal risks and limited remedies. Proactive measures in ownership structures and licensing terms are vital to protecting both brands and relationships beyond the initial spotlight.