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Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc.

United States Court of Appeals, Ninth Circuit

December 2, 2013

HERB REED ENTERPRISES, LLC, a Massachusetts company, Plaintiff-counter-defendant-Appellee,
v.
FLORIDA ENTERTAINMENT MANAGEMENT, INC., a Nevada company; Larry Marshak, Defendants-counter-claimants-Appellants.

Argued and Submitted March 12, 2013.

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Cameron Sean Reuber (argued) and Yuval H. Marcus, Leason Ellis LLP, White Plains, New York; Jacob A. Reynolds, Hutchison & Steffen, LLC, Las Vegas, NV, for Defendants-Appellants.

Eric Miller Sommers (argued), Sommers Law, PLLC, Portsmouth, New Hampshire; John Lund Krieger, Lewis and Roca LLP, Las Vegas, NV, for Plaintiff-Appellee.

Appeal from the United States District Court for the District of Nevada, Miranda Du, District Judge, Presiding. D.C. No. 2:12-cv-00560-MMD-GWF.

Before: J. CLIFFORD WALLACE, M. MARGARET McKEOWN, and SANDRA S. IKUTA, Circuit Judges.

Opinion by Judge MCKEOWN; Concurrence by Judge WALLACE.

OPINION

McKEOWN, Circuit Judge:

" The Platters" — the legendary name of one of the most successful vocal performing groups of the 1950s— lives on. With 40 singles on the Billboard Hot 100 List, the names of The Platters' hits ironically foreshadowed decades of litigation— " Great Pretender," " Smoke Gets In Your Eyes," " Only You," and " To Each His Own." Larry Marshak and his company Florida Entertainment Management, Inc. (collectively " Marshak" ) challenge the district court's preliminary injunction in favor of Herb Reed Enterprises (" HRE" ), enjoining Marshak from using the " The Platters" mark in connection with any vocal group with narrow exceptions. We consider an issue of first impression in our circuit: whether the likelihood of irreparable harm must be established— rather than presumed, as under prior Ninth Circuit precedent— by a plaintiff seeking injunctive relief in the trademark context. In light of Supreme Court precedent, the answer is yes, and we reverse the district court's order granting the preliminary injunction.

BACKGROUND

The Platters vocal group was formed in 1953, with Herb Reed as one of its founders. Paul Robi, David Lynch, Zola Taylor, and Tony Williams, though not founders, have come to be recognized as the other " original" band members. The group became a " global sensation" during the latter half of the 1950s,[1] then broke up in the 1960s as the original members left one by one. After the break up, each member continued to perform under some derivation of the name " The Platters."

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Marshak v. Reed, No. 96 CV 2292(NG)(MLO), 2001 WL 92225, at *4 (E.D.N.Y. and S.D.N.Y. Feb. 1, 2001) (" Marshak I " ).

Litigation has been the byproduct of the band's dissolution; there have been multiple legal disputes among the original members and their current and former managers over ownership of " The Platters" mark. Much of the litigation stemmed from employment contracts executed in 1956 between the original members and Five Platters, Inc. (" FPI" ), the company belonging to Buck Ram, who became the group's manager in 1954. As part of the contracts, each member assigned to FPI any rights in the name " The Platters" in exchange for shares of FPI stock. Marshak I, 2001 WL 92225, at *3. According to Marshak, FPI later transferred its rights to the mark to Live Gold, Inc., which in turn transferred the rights to Marshak in 2009. Litigation over the validity of the contracts and ownership of the mark left a trail of conflicting decisions in various jurisdictions, which provide the backdrop for the present controversy. What follows is a brief summary of the tangled web of multi jurisdictional litigation that spans more than four decades.

In 1972, FPI sued Robi and Taylor for trademark infringement in California, resulting in a 1974 judgment in Robi's favor, which held that FPI " was a sham used by Mr. Ram to obtain ownership of the name ‘ Platters.’ " Robi v. Five Platters, Inc., 838 F.2d 318, 320 (9th Cir.1988) (" Robi I " ) (quoting the 1974 decision). By contrast, an analogous dispute between FPI and Williams in New York resulted in a 1982 decision holding that FPI had lawfully acquired exclusive ownership of the name. Marshak I, 2001 WL 92225, at *7 (citing the 1982 decision). Williams attempted to circumvent the New York decision by seeking declaratory judgment in the Central District of California based on the 1974 judgment in favor of Robi. He was ultimately unsuccessful; on appeal, we reasoned that Williams could not avoid the claim preclusive effect of the New York judgment by relying on issue preclusion from another case in which he was not a party. Robi I, 838 F.2d at 328. We upheld the judgment in favor of Robi, id. at 330, and later affirmed the district court's award of compensatory and punitive damages to Robi as well as its cancellation of FPI's three registered trademarks using the words " The Platters." Robi v. Five Platters, Inc., 918 F.2d 1439, 1441 (9th Cir.1990) (" Robi II " ).

In 1984, FPI sued Reed for trademark infringement in the Southern District of Florida. Marshak I, 2001 WL 92225, at *9. The court denied Reed's motion for summary judgment based on the preclusive effect of the 1974 California judgment against FPI. Id. Preferring to avoid trial, Reed signed a court-approved stipulation of settlement in 1987, under which he assigned to FPI all rights he had in FPI stock, retained the right to perform as " Herb Reed and the Platters," and agreed not to perform under the name " The Platters." However, the settlement included an " escape clause" :

In the event that a court of competent jurisdiction enters a final order with all appeals being exhausted that provides that The Five Platters, Inc. has no right in the name " The Platters," then nothing contained herein shall be construed to limit Herbert Reed's rights in the name " The Platters" and this agreement shall not inure to any ...

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