Questions As To Ownership Of Trademark And Existence Of Trade Secrets Precluded Summary Judgment On Infringement And Misappropriation Claims

Case: Doeblers' Pennsylvania Hybrids, Inc. v. Taylor Doebler, III, et. al., Case No. 03-cv-01079 (3d Cir. 3/23/06)

The One Sentence Summary: The Third Circuit reversed and remanded summary judgment for plaintiff on its claims for trademark infringement and trade secret misappropriation, because there were questions of fact as to whether defendant still owned the trademark, and whether Plaintiff’s information was a protectable trade secret.

What They Were Fighting About: Two sets of family members used the surname “Doebler” as a trademark selling corn seed. The Plaintiff, “Doebler’s Pennsylvania Hybrids, Inc.” (“Hybrids”) sued for trademark infringement and misappropriation of trade secrets against “Doebler Seeds, LLC” (“Seeds”). Hybrids claimed that although Seeds had first owned the mark “Doebler,” it had either assigned or abandoned it, or was divested of ownership of the mark due to Hybrids’ use. Hybrids also claimed that Seeds had misappropriated its trade secrets because one if Hybrids’ former employees had taken a disk which contained the names of its seeds, and then began working for Seeds.
Third Circuit Holdings:

• As to plaintiff’s assignment theory, the court held that because there was no written assignment and no other conclusive evidence of assignment, there was a question of fact as to whether an assignment took place.
• As to plaintiff’s abandonment theory, the court found there was evidence showing that Seeds did not cease in its use of the Doebler mark, but instead likely increased its use after Hybrids began to use it. The court also rejected Hybrids’ position that if Seeds did use the mark, it was used only with license from Hybrids. The court again found that there was no conclusive written or oral agreement between the parties establishing a license of the Doebler mark.
• The court rejected plaintiff’s divestment theory, stating "The Lanham Act expressly provides how ownership may be divested through abandonment and how ownership of registered marks may be divested through assignment. To follow a divestive balancing test where initial ownership is already established, and where assignment or abandonment cannot be shown, would flout the Lanham Act by permitting a finding of abandonment under another name, when abandonment cannot be established under the statute. Considering that abandonment must be “strictly proved,” we will not permit it to be found under a different name through a balancing test (citations omitted)."
• In reversing summary judgment on the trade secret claim, the court found that the plaintiff had not established that the brand names for its hybrid seeds were a trade secret. The court discussed the Federal Seed Act, which generally requires the same variety of seed to carry the same name from supplier to supplier, thereby raising a question of fact as to whether the brand name for a hybrid seed could ever be a trade secret. Moreover, there was evidence that some of Hybrids’ claimed trade secret information had been discussed with at least one other company, indicating that Hybrids did not consider the information to be a trade secret, or employ the proper means of protecting same.