What Will the Gov’t Do With the Mongol Trademark?

[WSJ_law_blog]

The first-day stories on the push by Thomas O?Brien, the U.S. Attorney for the Central District of California, to cause a forfeiture of the Mongol trademark raised as many questions as they answered. The government can own a trademark, sure, but what happens when they acquire the mark through forfeiture? Can they turn around and sue the prior owner for infringement? That’d be tough.



A Mongols’ motorcycle gang member vest is displayed during a news conference Tuesday, Oct. 21, 2008, in Los Angeles. (AP/Ric Francis)

But before we get down to business, a refresher: Yesterday, authorities filed a 177-page indictment charging 79 Mongols, a West Coast motorcycle gang, with an assortment of racketeering, drug and money laundering offenses. Prosecutors identified for potential forfeiture, among other things, the Mongols’ trademark, which typically depicts the profile of a Mongolian warrior wearing sunglasses. Forfeiture would follow conviction. O’Brien, the U.S. Attorney, reportedly said: “If the court grants our request . . . then if any law enforcement officer sees a Mongol wearing his patch, he will be authorized to stop that gang member and literally take the jacket right off his back.”

We wish Mr. O’Brien luck with that. In the meantime, we checked in with Kaye Scholer’s Paul Llewellyn, a seasoned trademark lawyer who says he’s never come across anything like this before, to get a sense of how the situation could play out.

“It’s a basic principle of trademark law that you don’t own the trademark divorced from your actual use of the mark,” Llewellyn told us. “In theory, if the government gets the trademark through forfeiture then they could own it if they continue to use it for services covered by the mark. In order to enforce the trademark against an unauthorized user, it would have to show that the unauthorized use is causing a likelihood of confusion.”

So what are the services covered? According to the registration, the services covered are “Association services, namely promoting the interests of persons interested in the recreation of riding motorcycles.”

Llewellyn says: “It’s an odd thing. It would put the government in the business of offering services under that mark. They could start a motorcycle association, I suppose.”

The federal government has seized trademarks before.

The most noteworthy instance was the seizure by the IRS of all the assets of the Mustang Ranch (including the MUSTANG RANCH trademark) which, ultimately, ended up being owned by the Bureau of Land Management. The BLM then auctioned off all the assets, including the trademark, on eBay. In a contest over who owned the trademark, the Ninth Circuit of Appeals agreed with the district court that the non-use of the mark by the federal government DID NOT result in the mark being abandoned and so the eBay purchaser was the rightful owner of a valid and subsisting MUSTANG RANCH trademark.

What will the US Attorneys Office do with the MONGOLS trademark? Hard to say. The trademark is not owned by any of the criminal defendants individually but by an unincorporated association called the Mongol Nation. If the trademark was properly seized under whatever criminal seizure statute applies, then I see no barrier to that asset being sold assuming the defendants are convicted and a restitution order is entered.

Wouldn't it be interesting if a rival gang purchased the mark and started to enforce their MONGOLS trademark rights against the members of the Mongols? Civilized warfare could break out.

Hmmm

I did not know the gov. could even do that, interesting.