ABSTRACT

In its ruling on summary judgment, the Central District of Florida dismissed plaintiff Wayne Gray's challenge to X/Open's ownership of the UNIX trademark. Gray's lawsuit alleged violations of the federal RICO statute, the Lanham Act, and other laws. In the action, Gray alleged that X/Open fraudulently asserted ownership in the UNIX mark against Gray when it opposed Gray's INUX trademark in the TTAB and "conspired" with codefendants to conceal the true ownership of that mark, which Gray alleged was held by SCO. On cross-motions for summary judgment, the court held that X/Open owned the UNIX mark, as indisputably established by various prior agreements and dealings between the codefendants. Having found that X/Open owned the UNIX mark, the court held that X/Open was within its lawful rights to assert the UNIX mark against Gray in the TTAB proceeding and that, therefore, the codefendants could not have conspired to fraudulently deceive Gray, the PTO, or the relevant public over the UNIX mark's ownership. Finally, the Court ruled Gray's damage claims failed because the codefendants' alleged conduct was lawful.

CASE SUMMARY

FACTS

Defendant X/Open Company Limited ("X/Open"), which does business as The Open Group, is a nonprofit computer-industry consortium that owns the UNIX trademark, licenses the mark to companies whose operating-system products conform to X/Open's "interoperability" (i.e., compatibility) standards, and polices the mark on behalf of the industry. In 2001, X/Open opposed Gray's application to register the INUX trademark for operating systems in the TTAB. Five years later, Gray brought this lawsuit against X/Open and codefendants Novell, Inc. ("Novell") and The SCO Group, Inc. ("SCO") challenging X/Open's rights in the UNIX trademark.

Gray's federal RICO, Florida RICO, Florida Communications Fraud Act, and common-law fraud claims alleged that a document outside the chain of title to the UNIX trademark—a 1995 Asset Purchase Agreement ("APA") between Novell and SCO—established that X/Open did not own the UNIX mark. According to Gray, the APA transferred all of Novell's rights in the UNIX mark to SCO. Gray further alleged that the defendants engaged in a complex "conspiracy" to conceal the true owner of the UNIX mark from Gray and the relevant public, and engaged in "sham" trademark-enforcement actions, including X/Open's action against Gray in the TTAB, to control certain software markets and appropriate Gray's INUX mark and domain names, which Gray claimed the defendants wanted for themselves. Also, according to Gray, to further the alleged scheme, the defendants falsified certain documents concerning the UNIX mark. In addition, Gray's Lanham Act claims alleged that the defendants fraudulently procured the registrations for the UNIX trademark, fraudulently recorded the assignment of the UNIX mark to X/Open, and engaged in unfair competition by claiming ownership of the UNIX mark in the TTAB proceeding. Finally, Gray initially alleged that he suffered many millions of dollars in damages because the TTAB proceeding forced him to "suspend" his INUX business and eventually calculated those losses to exceed $100M.

X/Open moved for summary judgment on liability and damages, arguing that all of Gray's interrelated claims failed because the documents on the ownership of the UNIX mark and the defendants' conduct left no genuine issue of material fact as to X/Open's ownership. These documents included a 1993 term sheet between X/Open, Novell, and nonparties IBM, HP, Digital, and Sun contemplating (1) the creation of a new UNIX business, where X/Open would license the UNIX mark to companies whose products conform to its specifications; and (2) the transfer of full title to the UNIX mark to X/Open. The documents also included (1) a 1994 agreement between X/Open and Novell formalizing the 1993 term sheet; (2) a 1996 "Confirmation Agreement" between X/Open, Novell, and SCO confirming that the 1995 APA did not transfer the UNIX mark to SCO; and (3) a 1998 assignment of the UNIX mark from Novell to X/Open. Novell joined in X/Open's motion and moved for summary judgment on several additional grounds. Gray also moved for summary judgment, arguing that, because X/Open fraudulently claimed ownership of the UNIX mark, it lacked standing to oppose Gray's INUX mark in the TTAB proceeding.

ANALYSIS

After analyzing the documents concerning the ownership of the UNIX mark, the court granted defendants' motions and denied Gray's motion. The court found that Novell's 1998 assignment of the UNIX mark to X/Open was consistent with the 1993 term sheet and the 1994 X/Open-Novell agreement. As the court noted, the 1994 agreement granted X/Open "an exclusive, perpetual, irrevocable license" to license the UNIX mark to third parties, provided for the assignment of the UNIX mark to X/Open in a few years, authorized X/Open to state that "UNIX is a registered trade mark licensed exclusively through X/Open" (pending X/Open's acquisition of full title to the mark), and obligated X/Open to enforce the UNIX mark. The court also found that the 1995 Novell-SCO APA and the 1996 X/Open-Novell-SCO Confirmation Agreement were consistent with the subsequent assignment of the UNIX mark to X/Open. The court noted that both the APA and the Confirmation Agreement contained language indicating that Novell's rights in the UNIX mark and the terms of the APA were subject to the 1994 X/Open-Novell agreement. As such, the court held (as X/Open argued) that, "[r]egardless of whether [the Confirmation Agreement] is thought to merely clarify, or completely alter the [APA], the result is the same. . . . [T]he subsequent 1998 Deed of Assignment validly passed ownership of the UNIX trademark to X/Open."

The court also noted that the defendants' actions, such as SCO's public acknowledgments of X/Open's ownership, were consistent with X/Open's ownership claims and that Gray offered no evidence to support his allegation that the defendants falsified any of the documents concerning the UNIX mark. As the court stated, "Mere suspicions and unsupported theories are not enough to create a triable issue of fact."

As a result of its finding that X/Open owned the UNIX mark, the court held the defendants could not have conspired to conceal the true owner of the mark from Gray or the relevant public. Accordingly, the court dismissed Gray's federal RICO, Florida RICO, and Florida Communications Fraud Act claims. In addition, the court held that X/Open had the right to protect the UNIX mark by challenging Gray's INUX mark in the TTAB and that the defendants did not commit fraud on the PTO by recording the assignment of the UNIX mark to X/Open. The court also held that Gray lacked standing to allege unfair competition stemming from X/Open's assertion of the UNIX mark against Gray's INUX mark. As such, the court granted summary judgment to defendants on Gray's Lanham Act and common-law fraud claims. Finally, the court ruled that, because X/Open was within its rights to challenge Gray's INUX mark and the defendants otherwise acted lawfully, Gray could not establish any injury as a result of their actions.

CONCLUSION

This case shows that trademark-related claims based on "mere suspicions and unsupported theories" will not survive summary judgment. It also shows that, where the plaintiff's case lacks hard evidence, a summary-judgment motion can provide an effective remedy to dispose of the case without a full trial on the merits.

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