Unincorporated Association Trademark Example: Southern California Darts Association
On August 11, 2014, the Court of Appeals for the Ninth Circuit, in which the states of Arizona, California, Nevada, Oregon, Idaho Washington and Montana are subject, held that unincorporated associations have the legal capacity and right to own trademarks and to sue infringers to enforce them. The issue in this case was ownership to the name and all the associated logos and colors of the Southern California Darts Association (SCDA), commonly referred to as “SoCal.” SCDA was at the time of the litigation a forty-year-old unincorporated association of darts players and aficionados.
In the case of Southern California Darts Association v. Zaffina, the Court of Appeals affirmed the entry of summary judgment and issuance of a permanent injunction by the federal district court against Dino Zaffina, a former member of SCDA. Once Zaffina learned that SCDA had inadvertently allowed its official registration with the state to lapse, he promptly incorporated an entity under the exact common reference, “SoCal, Inc” and then sued 60 darts players and eight liquor establishments that hosted the darts group for allegedly violating his trademark in the name. The darts players and bars were successful in having the state court litigation dismissed, and then they went on the offensive against Zaffina by filing suit in federal court.
The group filed suit against Zaffina and his company, alleging violations of federal trademark law (Lanham Act, 15 U.S.C. 1051 et seq.); common law trademark infringement; the California Business and Professions Code; and unfair competition. The Circuit Court affirmed the district court’s rulings on threshold issues. It held that the district court had subject matter jurisdiction because, even though SCDA had not registered any trademarks or trade dress, its claim arose under a provision of the Lanham Act that protects against infringement of unregistered marks and trade dress as well as registered marks. The Circuit Court also held that even though SCDA lacked the capacity to sue as a corporation because it had lost its corporate powers years before, it could bring suit in federal court as an unincorporated association for the purpose of enforcing a substantive right existing under federal law.
According to the appellate court, unincorporated associations must be evaluated on a case-by-case basis, but “[t]here is no reason . . . why such questions in specific circumstances should preclude the universe of unincorporated associations from owning trademarks. . . . An entity of this character may engage in commercial activities, and may use names and marks in connection with those activities.” The Circuit Court relied upon the language of Rule 17(b)(3)(A) of the Federal Rules of Civil Procedure, in which an “unincorporated association” is allowed to “sue or be sued in its common name to enforce a substantive right existing under the United States Constitution or laws.” Based on this clear text, the appellate court held that SCDA was permitted to bring suit in federal court as an unincorporated association for the purpose of enforcing its trademark rights.
Defendant Zaffina was ordered to stop using any of SCDA’s marks and to pay the association’s legal bill of more than $115,000. The result was nothing short of a shocking reversal of fortunes for Zaffina and a great victory for all informal groups that associate around a common activity for fellowship and fun. The decision also demonstrates the high value that a name, a slogan, artwork and other distinguishing designs and marks have in contemporary society.