AFL Philadelphia LLCl v. Krause: Fame Helps Sales Director Survive Bon Jovi's Motion to Dismiss

AFL Philadelphia LLCl v. Krause, June 4, 2009, No. 09-614.

Slip Opinion hosted by Exclusive Rights.

On June 4, 2009, Judge Baylson of the Eastern District of Pennsylvania denied Philadelphia Soul's motion to dismiss defendant Joe Krause's counterclaims for trademark infringement and misappropriation of name in AFL Philadelphia LLC v. Krause. The judge allowed both counterclaims to go forward because Krause had sufficiently alleged that his name had acquired the necessary "secondary meaning" for trademark protection under the Lanham Act.

Ex©lusive Rights and Shannon Duffy provide summaries of the case, paying particular attention to Judge Baylson's inclusion of Bon Jovi song references in the opinion. An earlier post by Ex©lusive Rights summarizes the ongoing Pennsylvania State Court litigation between the same parties. 

Philadelphia Soul, an arena football league (AFL) team partially owned by Jon Bon Jovi, sued Joseph Krause in federal court after Krause filed suit in state court for almost $125,000 in unpaid commissions. Philadelphia Soul had terminated Krause and other staff members after AFL suspended the 2009 season. Among other things, Philadelphia Soul alleged that Krause infringed its copyright and trademark by making and selling championship rings using the team's logo. Krause counterclaimed for Lanham Act violations and for misappropriation of his name based on an email sent out to season ticket holders by Philadelphia Soul discussing the season suspension. The email indicated that it came from "Joe Krause [mailto: jkrause@philadelphiasoul.com]."

Before analyzing the elements of the Lanham Act claim, the court applied the 5 factor Conte test to determine whether Krause had prudential standing under the Lanham Act. The court held that 4 of the factors favored prudential standing and that the fifth factor was neutral. Although the court recognized that "the nature of [Krause's] injury [was] somewhat remote from the type of injury that Congress sought to protect in the Lanham Act," it found that Krause's pleadings justified prudential standing because the Act protects against harm to one's commercial reputation and goodwill. Judge Baylson found that Krause pled damage to his commercial reputation by alleging that Philadelphia soul had "diverted some of their reputational damage to Defendant by associating him with their actions."

The court held that Krause had sufficiently pled all three elements of the Lanham Act claim. First, Krause's name was a protectable mark because it had acquired "secondary meaning" by becoming synonymous in the public mind with the sports and entertainment industry. The secondary meaning was evidenced by the length of time in which Krause's favorable reputation was used, the extent and number of sales under Krause's directorship, Philadelphia Soul's use of his name to send the email, and because the email caused actual confusion among recipients. Second, Philadelphia Soul admitted that Krause owned his own name. Third, the court found that Krause had sufficiently pled a likelihood of confusion because consumers viewing the email would probably assume that the email was associated with Krause. 

The court also held that Krause had sufficiently pled misappropriation of name. Although Judge Baylson found that Krause did plead that Philadelphia Soul appropriated Krause's name for commercial benefit, he held that misappropriation of name, in contrast with the right of publicity, does not require commercial benefit. Misappropriation of name takes place even when the defendant "makes use of the plaintiff's name or likeness for his own purposes and benefit, even though the use is not a commercial one, and even though the benefit sought to be obtained is not a pecuniary one."

This case suggests that an individual may demonstrate that her name has achieved legally protected distinctiveness through secondary meaning by being publicly viewed as synonymous with a specific industry, as opposed to being synonymous with a specific business.