Purported Assignment of ITU Application Void In Absence of Ongoing, Existing Business

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The widow of jazz band leader Cab Calloway was not operating any “ongoing and existing” business for which “Cab Calloway” could serve as a trademark and thus her attempt to assign an intent-to-use application was void, the U.S. District Court for the Southern District of New York ruled Dec. 27 (Creative Arts by Calloway L.L.C. d/b/a C.A.B. Calloway L.L.C. v. Brooks d/b/a Cab Calloway Orchestra, S.D.N.Y., No. 7:09-cv-10488-CS, 12/27/12).

Granting summary judgment in favor of Cab Calloway's grandson, the court rejected the argument that accepting royalties and authorizing uses of Cab Calloway's works were sufficient to establish the existence of a valid trademark.

Cab Calloway's Descendants Tussle

Cabell Calloway III, known as Cab Calloway, was a jazz singer and band leader who first became popular in the 1930s. His biggest musical hit was “Minnie the Moocher,” composed by Calloway and Irving Mills and first recorded in 1931. Calloway performed extensively in live concerts, in stage theatrical productions, and in films.

He performed under his own name and also under the names Cab Calloway and the Cab Jivers, Cab Calloway and the Hi De Ho Orchestra, Cab Calloway and His Famous Orchestra, and Cab Calloway and the Cotton Club Orchestra. Calloway died in 1994, at nearly 87.

Zulme McNeil “Nuffie” Calloway was Cab Calloway's third wife and was married to him at the time of his death. In 2000, Zulme--along with two of her daughters, Chris Calloway and Cabella Calloway Langsam, and son-in-law Andrew Langsam--established Creative Arts by Calloway L.L.C. d/b/a C.A.B. Calloway L.L.C. to manage Calloway's intellectual property rights, principally copyrights in more than 100 musical compositions. Zulme Calloway and Chris Calloway died in 2008 while the instant dispute was pending.

Christopher W. Brooks--son of Zelma Calloway Brooks, daughter of Cab Calloway from his first marriage--is a singer and musician who performed with Calloway for 15 years prior to his death. Brooks sometimes performs under the names “C.B.,” “C. Calloway Brooks,” “Calloway Brooks,” “Chris Calloway,” and other similar combinations.

Brooks has performed with the Duke Ellington Orchestra, the Lionel Hampton Orchestra, the Fairfield Counts, and with several other jazz and big band performers.

In 1998, Brooks formed the Cab Calloway Orchestra to give live performances in tribute to Calloway. Brooks also released sound recordings under the name of the Cab Calloway Orchestra. Brooks maintains a website promoting the group.

In 1999, Zulme Calloway submitted an intent-to-use application to the Patent and Trademark Office that sought to register the mark “Cab Calloway” for retail sales of music and video programs and online multimedia software services and later executed an instrument purporting to assign the intent-to-use application to Creative Arts.

In 2001, Creative Arts sued Brooks, alleging trademark infringement and other claims under the Lanham Trademark Act of 1946. Brooks eventually won summary judgment in that proceeding after the U.S. Court of Appeals for the Second Circuit concluded that because at the time of Calloway's death he was not using “Cab Calloway Orchestra” or any confusingly similar name as part of a going concern, he could not have transferred any trademark rights to his heirs. Creative Arts by Calloway L.L.C. v. Brooks, 48 Fed. App'x 16 (2d Cir. 2002).

TTAB Decision Disputed in District Court

The trademark registration application filed by Creative Arts was published in 2004.

In 2005, Creative Arts again sued Brooks, alleging copyright infringement based on the sales of audio and video works as well as the posting of lyrics of Calloway songs on the Cab Calloway Orchestra website. The U.S. District Court for the Southern District of New York ruled that most of the claims were estopped on the basis that they could have been raised in the 2001 action. Creative Arts by Calloway L.L.C. v. Brooks, 82 U.S.P.Q.2d 1319 (S.D.N.Y. 2007).

Brooks then filed an opposition to the Creative Arts' trademark registration in 2009, arguing that the mark as registered would cause confusion with his use of the Cab Calloway Orchestra name.

In 2010, the Trademark Trial and Appeal Board ruled that Creative Arts could not register the term “Cab Calloway” because of the prior use of “Cab Calloway Orchestra” by Brooks (35 PTD, 2/24/10).

Creative Arts then initiated the instant action, seeking to have the TTAB's ruling overturned. Brooks countered by arguing that the assignment of the ITU application was not valid because, at the time of the assignment, Zulme Calloway was not operating an ongoing business for which the term “Cab Calloway” could serve as a trademark.

Creative Arts argued that the following constituted ongoing businesses in which Zulme Calloway was engaged, as summarized by the district court:  

(1) authorizing the Cab Calloway School of the Arts to sell clothing and other items bearing the mark Cab Calloway pursuant to a license from Cab Calloway …; (2) founding the Cab Calloway Foundation to promote the arts and education …; (3) commencing negotiations for a Broadway musical based on Cab Calloway's music and life story …; (4) licensing and receiving royalties from Cab Calloway's musical compositions …; and (5) retaining the services of professional accountants and attorneys to aid with management and enforcement of her Cab Calloway-related rights ….  





Brooks moved for summary judgment, arguing that none of these activities constituted operating an ongoing and existing business whose goods or services were identified by the mark “Cab Calloway.”

'In Gross' Transfer of Trademark Barred

Judge Cathy Seibel first set forth the principle that exclusive rights in a purported trademark may accrue “only in connection with an existing business.” Furthermore, a trademark may not be transferred “in gross,” absent transfer of the goodwill of the business with which it is associated.

Furthermore, the Lanham Act, at 15 U.S.C. §1060(a)(1), bars assignment of an ITU application without some portion of use, the court noted. The purpose of Section 1060(a)(1), the court said, “is to provide assurance that an ITU applicant's intention to use the mark is bona fide by prohibiting assignments unless the application is assigned with the business to which the mark pertains, preventing 'trafficking or profiting from the sale of an ITU application.' ”

To the extent that language of the instrument of assignment purported to transfer any such ongoing business, the court said that it must still determine whether that ongoing business existed.

According to the court, deposition testimony by Cabella Calloway Langsam in the record supported the conclusion that there was no provision of services as set forth in the ITU application and that Zulme Calloway's “activities related to the mark 'CAB CALLOWAY' were limited to rights she acquired through his will--receiving royalties and approving the use of Cab Calloway's name or image in exchange for payment--and were not organized as a business during the relevant time period.”

These activities did not “rise to the level of operating a business to which the mark 'CAB CALLOWAY' pertains,” the court said.

Furthermore, the deposition revealed that at the time of the assignment, Zulme Calloway and Creative Arts were essentially trying to get its operations off the ground by trying to identify various rights and properties and holders of such rights and properties. The court said:  

Not only did [Creative Arts'] management include three additional members beyond [Zulme] Calloway … but [Creative Arts] describes its nascent business as largely involving cataloguing and enforcing its Cab Calloway-related rights, which is neither the offering of a product or service nor even the same activities (receiving royalties and licensing his name or image) in which [Zulme] Calloway was engaged before the assignment.  




Purported Uses Rejected by Court

Turning to the specific business operations alleged by Creative Arts, the court first rejected the argument that authorizing the Cab Calloway School of the Arts to use Calloway's name and to use the mark on clothing and other goods constituted an “ongoing and existing” business.

“[I]t seems clear that it is personnel at the school who run the small business of selling clothing and school supplies with the school's logo,” the court said. “Martin Luther King Jr. High School in Manhattan probably sells items with its logo, but that would hardly constitute a business of Dr. King's heirs, and Cab Calloway's heirs giving permission for others to run the business does not itself constitute a business,” the court said.

Regarding the Cab Calloway Foundation, the court found no evidence in the record that Zulme Calloway had any involvement with that entity amounting to an “ongoing and existing” business. Similarly, with respect to the contemplation of the production of a Cab Calloway Broadway musical, there was no evidence that Zulme Calloway was engaged in any business activity.

Similarly, the accepting of royalties for or authorizing use of Calloway's works did not constitute ongoing business activities, but merely “stewardship or management of assets.”

The court thus concluded that the purported assignment of the ITU application to Creative Arts was void.

Creative Arts was represented by Marc A. Karlin of Karlin & Karlin, Los Angeles. Brooks represented himself.

By Anandashankar Mazumdar  

Text is available at http://pub.bna.com/ptcj/Calloway2012Dec27.pdf.

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