National Marks: Who Owns the Trademarks to America’s Famous Landmarks

National Park Concessionaires

In September 2015, a seemingly innocuous contract dispute was filed in the United States Court of Federal Claims (“CFC”) that could lead to the United States losing the trademark rights to some of its most popular national attractions.1 Though the suit is ostensibly based on failed contract negotiations between private national park concessionaire DNC Parks & Resorts at Yosemite, Inc. (“Delaware North”) and the United States Department of Interior (“National Park Service”), the damages claimed by Delaware North directly implicate whether a private entity should—or even can—own trademark protection for national landmarks like The Ahwahnee Hotel and even Yosemite National Park itself.

The National Park Service regularly administers guest services operations within its national parks through private companies, awarding “concession contracts” to these various entities. Delaware North was selected as Yosemite National Park’s official concessionaire in 1993, and came to operate over 1,500 hotel rooms, 25 food and beverage stands, and nearly 20 retail establishments.2 During its tenure, Delaware North also registered several trademarks for places traditionally associated with Yosemite National Park, including THE AWAHNEE, CURRY VILLAGE, WAWONA, BADGER PASS, and YOSEMITE NATIONAL PARK.3

As part of the concession contract renewal process, the National Park Service agreed that any successor concessionaire would be required to pay Delaware North “fair value” for its Yosemite-related property. In the dispute, Delaware North argues this should include at least $44 million in compensation for the Yosemite trademarks. The National Park Service, however, contends the trademarks are likely invalid and, thus, “fair value” is more accurately estimated at $3.5 million. In fact, in response to this lawsuit, the National Park Service filed a Consolidated Petition for Cancellation before the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) in an attempt to cancel Delaware North’s various Yosemite-related trademarks.4 That TTAB proceeding was suspended, however, because of the action already pending at the CFC. Accordingly, the court will likely be forced to wrestle with whether Delaware North’s trademarks are valid as the civil action seeks to determine if Delaware North was properly compensated though the parties vehemently dispute the value of the relevant intellectual property.

Of note, another concessionaire giant, Xanterra, filed a series of similar trademark applications in October and November 2014, for landmarks related to Grand Canyon National Park—EL TOVAR, HERMITS REST, LOOKOUT STUDIO, BRIGHT ANGEL LODGE, and PHANTOM RANCH.5 These applications came during a similar contract dispute with the National Park Service, though each was expressly abandoned in March 2015 after Xanterra was awarded a temporary, one-year contract.

Arguments for Cancellation

As part of the cancellation analysis, it is important to remember a trademark is entitled to protection only where it is functions as “a source identifier.”6 Through this lens, the U.S. Government argues that Delaware North’s trademarks should be cancelled because they falsely suggest a connection to the National Park Service. Delaware North counters that some of these marks have been in use by Yosemite’s concessionaires for nearly 100 years, with The Ahwahnee Hotel, for example, having been established by Delaware North’s predecessor in 1927. The PTO Examiner agreed with the National Park Service, initially, denying Delaware North’s original application for YOSEMITE NATIONAL PARK because of its false suggestion of a connection and descriptiveness.7 That office action was traversed, however, when Delaware North submitted a heavily redacted version of its 1993 concessionaire contract, allegedly establishing the necessary connection, and a declaration of acquired distinctiveness.

Legislative Efforts

In response to this high profile case, legislatures have taken to banning the registration of trademarks related to popular outdoor destinations. At the federal level, for example, Congress recently enacted a statute intended to prevent similar disputes.8 54 U.S.C. § 302106 prevents the trademark registration of a name historically associated with “buildings and structures on or eligible for inclusion on the National Register (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government.” This language would have precluded almost all of Delaware North’s registrations and may prohibit any future attempt to register Xanterra’s presently-abandoned applications.

At the state level, California (home to the most national parks) recently adopted a similar bill that prohibits state park concessionaires from registering or obtaining any ownership interests in “the name or names associated with a state park venue.”9

Overall, these statutory proscriptions appear to embody the notion that parks—national, state, and regional—are held in the public trust, for all people, and thus, their associated property (including trademarks) should be part of that trust, too.10

Moving Forward

The future of this dispute is unclear. In its Opposition to suspend the TTAB proceeding, the National Park Service argues that Delaware North’s CFC complaint intentionally avoids mentioning issues of trademark validity or infringement, though such issues are arguably implicated by Delaware North’s claim for damages. Thus, the Government contends, these issues may not even be addressed.

The National Park Service has also argued the CFC is an inappropriate venue for the trademark dispute because it does not have jurisdiction to either (a) hear Lanham Act claims, or (b) cancel trademark registrations.11 The National Park Service specifically noted cases in which the CFC, itself, proclaimed “we have no jurisdiction over claims for trademark infringement”12 and “this court does not have jurisdiction over plaintiff’s claim for [trademark] cancellation.”13 Delaware North responded to these claims by asserting the CFC has jurisdiction by virtue of its “authority to decide incidental legal issues that arise in the course of deciding a claim within its Tucker Act jurisdiction, even if those issues would be outside the Court’s jurisdiction if asserted as standalone claims.”14 Thus, the issues of trademark validity and infringement may or may not be appropriately raised before the CFC.

Alternatively, the parties may simply come to a settlement, similar to that seen in the National Park Service’s dispute with Xanterra, though the Yosemite contract-at-issue has already been awarded to a different concessionaire. We await further developments.
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1 See DNC Parks & Resorts at Yosemite, Inc. v. United States of America, No. 1:15-cv-01034-PEC (Fed. Cl. 2015).
2 Another popular concessionaire, Xanterra Parks & Resorts, controls operations at Crater Lake National Park, Death Valley National Park, Glacier National Park, Grand Canyon National Park, Rocky Mountain National Park, Yellowstone National Park, and Zion National Park.
3 See U.S. Trademark Reg. Nos. 2772512, 2685968, 2739708, 2720778, and 2715307.
4 United States Dept. of Interior v. DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225 (T.T.A.B. 2016).
5 See U.S. Trademark App. Serial Nos. 86446998, 86444313, 86444295, 86434643, and 86444229.
6 Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 12 (1st Cir. 2008) (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992)).
7 See DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 1 TTABVUE 12-15.
8 See 54 U.S.C. § 302106 (2016).
9 AB 2249, 2015-2016 Leg. (Cal. 2015).
10 See AB 2249 §§ 2(a), (f).
11 See DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 9 TTABVUE 9-11.
12 Id. at 10 (quoting Lockridge v. United States, 218 Ct. Cl. 687, 690 (1978)).
13 Id. at 10-11 (quoting Boyle v. United States, 44 Fed. Cl. 60, 65 (1999)).
14 DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 15 TTABVUE 10.

A Lasting Impression: Federal Circuit Credits Own Precedent More Than Recent Supreme Court Authority

In Lexmark International, Inc. v. Impression Products, Inc.,1 the Federal Circuit declined to follow the Supreme Court’s recent decisions in Quanta Computer, Inc. v. LG Electronics, Inc.2 and Kirtsaeng v. John Wiley & Sons, Inc.,3 but instead affirmed its long-standing precedent allowing limits on the post-sale use or resale of patented goods and held foreign sales of patented goods do not exhaust the patentee’s rights in the United States.

These questions arose in a dispute between Lexmark, the manufacturer of printers and ink cartridges, and Impression Products, the operator of a refurbished ink cartridge business. Lexmark manufacturers and sells two types of ink cartridges, a full-priced model that includes no use restrictions and a discounted model that limits the consumer’s right to refill and reuse the cartridge. Impression collects the used cartridges—both full-priced and discounted models—and modifies the hardware, allowing them to be reused, then imports and resells them in the United States.

1. Post-Sale Use Limits

In the first portion of its opinion, the Federal Circuit held a patentee’s single-use or no-resale restrictions were permissible limitations on the otherwise presumptive “patent exhaustion” doctrine.4 Specifically, the Court allowed the sales, so long as they were “made under a clearly communicated, otherwise-lawful restriction[.]”5 The Federal Circuit relied heavily on its decision in Mallinckrodt, Inc. v. Medipart, Inc.,6 which paved the way for patentee “single use” restrictions, in part because of the Patent Act’s explicitly grant of a “right to exclude.”7

In reaching its conclusion, the Federal Circuit also declined to follow the Supreme Court’s decision in Quanta.8 The Court noted that Quanta only addressed the sale of patented goods by a manufacturing licensee, not sales by the patentee, “[a]nd the patentee’s authorization to the licensee to make (the first) sales was not subject to any conditions, much less conditions to be embodied in those sales.”9 As such, it did not address a situation where, as here, the sale as made subject to a use restriction. Accordingly, Quanta did not hold an “authorized sale” exhausted patent rights because it, in fact, did not involve any limitations on the buyer’s use. The Quanta decision also implicitly rejected petitioner and amici’s requests that Mallinckrodt be overturned.10

Ultimately, the Federal Circuit rejected the notion that any sale, even when rights are expressly restricted, qualifies as an “authorized sale of a patented item terminat[ing] all patent rights to that item.”11

2. Foreign Sales and U.S. Patent Rights

Next, the Federal Circuit moved to square its decades-old decision in Jazz Photo v. ITC12 with the Supreme Court’s recent decision in Kirtsaeng, and decide if Lexmark’s foreign sales—made without an explicit reservation of U.S. patent rights—granted authorization to import and sell those goods in the United States.13 At the outset, the Court was clear to acknowledge that Jazz Photo held U.S. patent rights are exhausted by a first sale, but only when that initial sale is in the United States.14 Thus, the present situation—where disputed products were sold outside the United States, modified, then imported and sold in the U.S.—was not covered.

The focus then turned to reconciling Kirtsaeng, with the Federal Circuit first noting how patent rights are necessarily different from those granted by copyright.15 The Patent Act, for example, specifically grants a patentee the exclusive right to make, use, sell, or import goods covered by the patent, while no such exclusive right exists the copyright. Therefore, Kirtsaeng was limited because it relied, quite explicitly, on the text of the Copyright Act.16 Although the Copyright Act allows certain actions “without the authority of the copyright owner,” a patent grants its owner broad rights “to exclude.” Accordingly, the Federal Circuit strictly construed the decision, determining “Kirtsaeng is not controlling in this case.”17

Ultimately, patent exhaustion is territorial because “what the statute expressly provides to a U.S. patentee is the reward available from the right to exclude ‘in the United States.’”18 In support of this textual anchor, the Court explained how “American markets differ substantially from markets in many other countries” and, thus, foreign sales of patented goods are inherently different from their domestic counterparts.19 The unauthorized importation of patented articles sold abroad therefore constitutes infringement, because foreign sales do not amount to authority for “the buyer to import the article and sell and use it in the United States.”

3. Implications

Initially, it will behoove all patentees looking to implement post-sale restrictions to use explicit language, but the limitations will only apply to their domestic sales. Next, patentees are urged to keep globalization considerations in mind, but only in so far as foreign customers may be looking to import patented goods purchased abroad. In this regard, other factors may strongly influence the discussion, such as where the first sale actually occurred (i.e. was it domestic or abroad). Finally, caution is warranted for those engaged in foreign transactions because, despite the comprehensive analysis, the Federal Circuit did not address the question of whether U.S. rights may be exhausted by a licensed foreign sale as there was no such licensee before the Court.

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1 Nos. 14-1617, 14-1619, 2016 U.S. App. LEXIS 2452 (Fed. Cir. Feb. 12, 2016)
2 553 U.S. 617 (2008)
3 133 S. Ct. 1351 (2013)
4 Lexmark Int’l, Inc., 2016 U.S. App. LEXIS 3452, at *31-32.
5 Id. at *32.
6 976 F.2d 700 (Fed. Cir. 1992)
7 Lexmark Int’l, Inc., 2016 U.S. App. LEXIS 3452, at *31-40.
8 Id. at *36-40.
9 Id. at *37 (citing Quanta Comp., Inc., 553 U.S. at 636-37) (emphasis in original).
10 Id. at *40.
11 Id. at *41-42.
12 264 F.3d 1094 (Fed. Cir. 2001)
13 Lexmark Int’l, Inc., 2016 U.S. App. LEXIS 3452, at *80-82.
14 Id. at *82-85.
15 Id. at *86-89.
16 Id. at *89 (quoting Kirtsaeng, 133 S. Ct. at 1370) (noting the Supreme Court “stressed that it was determining ‘the best reading of [15 U.S.C.] § 109(a).”) (emphasis in original).
17 Id. at *98.
18 Id. at *98 (quoting 35 U.S.C. §§ 154(a)(1), 271(a)).
19 Id. at *100-03.