In a recent Law360 article titled, “Navigating NFT Brand Management Risks And Rewards,” David Ervin, Kayvan Ghaffari and Carissa Wilson explain what brand and business owners should know about NFT opportunities and corresponding risks, particularly with respect to trademark, licensing, anti-counterfeiting and advertising law.
On March 4, 2021, the Federal Circuit spoke pointedly on its view of contract interpretation and contract obligations in the context of trademark licensing agreements between private and government actors. In Authentic Apparel Group, LLC v. United States, No. 2020-1412 (Fed. Cir. Mar. 4, 2021), the court upheld the Court of Federal Claims’ decision, on summary judgment, that the Army did not violate its obligations under a trademark licensing agreement with Authentic Apparel Group, LLC (“Authentic”). Authentic, the licensee, claimed that the Army violated the terms of the licensing agreement by refusing to approve certain products and marketing materials bearing Army trademarks. These included a proposed shoe line and an advertisement featuring Dwayne “The Rock” Johnson. The Federal Circuit disagreed.
The Federal Circuit emphasized the plain language of the trademark licensing agreement, which granted the Army “sole and absolute discretion” to approve or deny Authentic’s proposed uses of the Army’s marks. Additionally, an exculpatory clause provided that Authentic would have no cause of action based on the Army’s exercise of this discretion in failing or refusing to grant approval. “Contracting parties,” the court noted, “including parties who contract with the government, are generally held to the terms for which they bargained.” This precept does not change merely because the subject matter of the contract is a trademark.
Continue Reading Deep Sixed: Federal Circuit Boots Trademark Licensee for Meritless Claims Against U.S. Army