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From Intellectual Property Law Daily, December 19, 2018

Port Authority owns rights in WORLD TRADE CENTER marks

By Joseph Arshawsky, J.D.

On cross-motions for summary judgment, defendant The Port Authority of New York and New Jersey ("Port Authority") was granted summary judgment and plaintiff World Trade Centers Association, Inc.’s ("WTCA") complaint was dismissed in its entirety, by a federal court in Manhattan. In reaching its ruling, the court decided that the Port Authority retained ownership in the trademarks WORLD TRADE CENTER or WTC as attached to goods sold at the New York site (World Trade Centers Association, Inc. v. The Port Authority of New York and New Jersey, December 18, 2018, Swain, L.).

The Port Authority is an agency administered jointly by the states of New York and New Jersey charged with operating "aviation, rail, surface, transportation and seaport facilities." The Port Authority also owns the World Trade Center ("WTC") site in Manhattan ("NYWTC") and is supervising the site’s reconstruction following the previous complex’s destruction as a result of the terrorist attacks of September 11, 2001. By November 14, 1985, the Port Authority had obtained six New York State service mark registrations for the term WORLD TRADE CENTER.

On February 18, 1986, after discussions concerning the transfer of marks to WTCA for management and enforcement purposes, the Port Authority executed a Confirmatory Assignment of its service marks in favor of WTCA (the "1986 Assignment"). Thereafter, on March 6, 1986, the Port Authority and WTCA executed a license agreement (the "1986 License"), in which WTCA agreed to license its "Licensed Marks" to Port Authority. On July 24, 2001, the Port Authority executed a set of "net lease" transactions whereby it leased 1, 2, 3, 4, and 5 World Trade Center to corresponding single-purpose entities. Each single-purpose entity, except the entity leasing 3 World Trade Center, signed a separate trademark license with Plaintiff WTCA on July 24, 2001 (collectively, the "2001 Licenses"). On November 16, 2006, WTCA, as "Licensor," entered into an Amended and Restated Trademark License Agreement (the "2006 Agreement") with 1 WTC LLC, "a limited liability company having an office and place of business c/o the Port Authority," as "Licensee."

Claims raising ownership issues. Plaintiff WTCA asserted in its 1st and 2nd causes of action that the Port Authority’s use of the WORLD TRADE CENTER and WTC marks infringes upon WTCA’s ownership rights in those marks and represents a breach of the contracts purportedly governing use of those marks. The Port Authority’s 1st Counterclaim seeks a declaration that WTCA lacks sufficient rights in the WORLD TRADE CENTER and WTC marks to "permit [WTCA] to interfere with the Port Authority’s use of the Marks in connection with goods or services offered at or in connection with the World Trade Center site," contending that the WTCA has abandoned the rights it claims, that the Port Authority’s use is consistent with its reserved rights, and, alternatively, that Port Authority’s use is "fair use" under the Lanham Act. In its 2nd Counterclaim, the Port Authority asserts that it has reserved the relevant rights and complied with any applicable licenses or agreements, and that WTCA’s licenses are invalid and/or unenforceable against the Port Authority.

The 1986 Assignment. The 1986 Assignment conveyed rights from the Port Authority to WCTA. The issue was the nature and scope of the rights that were conveyed, according to the court. The Port Authority produced uncontroverted evidence that it has used or licensed WORLD TRADE CENTER and WTC as a trademark for goods sold at the NYWTC gift shop since at least 1975. WTCA produced no evidence that it, rather than the Port Authority, used the trademark in commerce first. Thus, any rights in the trademark originate with the Port Authority, at least with respect to such use for goods sold at or in connection with the NYWTC, the court held.

The 1986 Assignment purports to transfer title "in and to said service mark WORLD TRADE CENTER, said service mark registrations, and the good will of PORT AUTHORITY’s business in the services in respect of which the mark is used." Although it was entered into at a time when the Port Authority was already selling or licensing sales of trademarked merchandise, the agreement unambiguously provides for the transfer of the Port Authority’s intellectual property in connection with services only. The assignment contains no language that the parties intended to transfer any other rights, including those in trademarks affixed to goods. Whatever the legal similarities between service and trademarks, the use of the term "service mark," particularly when used in reference to the provision of specific services, is not broad enough to suggest that the parties intended to refer to trademarks affixed to goods. As a matter of law, the 1986 Assignment did not function to assign the Port Authority’s rights in the WORLD TRADE CENTER or WTC trademarks as they pertain to goods to WTCA, and thus, no further licensing agreement could empower WTCA to restrict the Port Authority’s use on goods of a trademark that WTCA did not own, according to the court.

The 1986 License. Because the 1986 License is not susceptible to any reasonable interpretation that would encompass any trademarks and the 1986 Assignment did not convey any trademark ownership rights, the Port Authority’s use of the WORLD TRADE CENTER or WTC legend on merchandise as a trademark could not constitute a breach of the 1986 License. Accordingly, the court granted summary judgment in the Port Authority’s favor on its 2nd Counterclaim to the extent the Port Authority seeks a declaration that it is not in breach of the 1986 License, and dismissed WTCA’s 7th Claim for Relief to the extent it seeks a declaration that the Port Authority is bound by the 1986 License to refrain from affixing the relevant trademarks to goods without WTCA’s approval.

2006 Agreement. The court found that the Port Authority demonstrated that no reasonable jury could conclude that the Port Authority executed the 2006 Agreement on its own behalf. WTCA failed to carry its burden of establishing that the Port Authority is bound by the 2006 Agreement, which restricts co-branding of the WORLD TRADE CENTER or WTC service mark and use of the trademarks on goods without WTCA’s permission.

The court granted summary judgment dismissing WTCA’s infringement and unfair competition claims (1st and 2nd causes of action) based on the rights and duties WTCA asserted were established by the relevant documents. Correspondingly, the court granted summary judgment in favor of the Port Authority on its counterclaims for a declaration that it neither infringed upon the WTC marks nor breached the 1986 License or the 2006 Agreement (1st and 2nd Counterclaims) and denied WTCA’s motion for summary judgment dismissing the Port Authority’s 2nd Counterclaim. The Court also granted summary judgment dismissing WTCA’s 7th Claim for Relief, which seeks a declaration that the Port Authority is bound by the 1986 License and 2006 Agreement to refrain from affixing the relevant marks to goods without WTCA’s approval. Accordingly, the court granted the Port Authority’s request for a declaration that it is entitled to use the WORLD TRADE CENTER and WTC trademarks consistent with its prior use in connection with the NYWTC without interference from WTCA.

This case is No. 1:15-cv-07411-LTS-RWL.

Attorneys: Amanda Mary Prentice (Dorsey & Whitney LLP) and Michelle Kaki Ng (Pillsbury Winthrop Shaw Pittman LLP) for World Trade Centers Association, Inc. Leon Medzhibovsky (DLA Piper [US] LLP) for The Port Authority of New York and New Jersey.

Companies: World Trade Centers Association, Inc.; The Port Authority of New York and New Jersey

MainStory: TopStory Trademark NewYorkNews

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