The 1950’s Fabulous Foursome! This   is   a   fan   site   of   the   original   Diamonds   of   the   1950s. All hailing   from   Canada,   they   made   their   way   to      the   U.   S., and   with   their   songs   and   energy,   endeared   themselves   to their fans forever.

United States Court of Appeals for the Second Circuit Glenn STETSON, Plaintiff-Appellant, v. HOWARD D. WOLF & ASSOCIATES; Howard D. Wolf and Bob Duncan, Defendants-Appellees. February 6, 1992

The Reason For The Court Case It   sometimes   is   difficult   even   for   an   expert   to   distinguish   between   real   diamonds   and   paste.   We   are   called   upon   to identify   the   real   Diamonds   in   a   dispute   between   two   competing   vocal   groups.   Plaintiff-appellant   Glenn   Stetson   appeals from   a   judgment   entered   in   the   United   States   District   Court   for   the   Southern   District   of   New   York   (Martin,   J.)   declaring that   defendants-appellees   Howard   D.   Wolf   &   Associates,   Howard   D.   Wolf,   and   Bob   Duncan   (collectively,   the   "Duncan Group")   have   the   exclusive   right   to   use   the   trade   name   and   trademark   "the   Diamonds"   for   a   singing   group,   and permanently   enjoining   plaintiff-appellant   Stetson   from   future   use   of   the   name   and   mark.   Stetson   brought   this   action   in an   effort   to   have   himself   declared   sole   owner   of   the   trade   name   used   by   his   singing   group.   The   district   court   found   no merit   in   Stetson's   assertion   of   legal   title   to   the   Diamonds   name.   In   particular,   the   trial   judge   found   that   the   trade   name's original   owner,   Nathan   D.   Goodman,   never   abandoned   the   name   and   properly   conveyed   all   interest   in   it   to   the   Duncan Group's predecessors in interest. Stetson   argues   on   appeal   that   the   district   court,   in   determining   his   claim   that   Goodman   abandoned   the   mark,   should have   applied   the   standard   formulated   in   Silverman   v.   CBS   Inc.,   870   F.2d   40   (2d   Cir.1989).   The   Duncan   Group   contends that   even   under   that   test,   the   court   reached   the   correct   result.   We   believe   the   district   court   erred   in   failing   to   apply   the standards set forth in Silverman, but find that even under the appropriate criteria the Duncan Group must prevail. The   1950's   saw   the   rise   of   vocal   quartets,   with   many   groups   becoming   overnight   sensations   in   the   United   States   and selling   millions   of   records.   The   Diamonds   were   one   if   those   groups.   Ted   Kowalski,   Phil   Levitt,   Bill   Reed,   and   David Somerville   (the   "Original   Diamonds"),      Nathan   D.   Goodman   managed   the   group   from   its   inception.   Several   personnel changes   occurred   over   time,   and   in   1958,   when   Goodman   and   the   Diamonds   entered   into   a   new   contract,   the   group consisted   of   Somerville,   Mike   Douglas,   Evan   Fisher,   and   John   Felten. According   to   the   new   contract,   Goodman   was   to serve   as   manager   and   representative   for   the   band   in   all   business   dealings,   and   would   have   certain   duties   in   connection with   arranging   music   and   staging   the   performances.   More   importantly,   the   contract   provided   that   the   four   singers   would not,   "without   the   written   consent   of   [Goodman]   first   obtained,   use,   nor   cause   to   be   used,   nor   in   any   way   exploit   the   trade or   professional   name   The   Diamonds."   A   later   partnership   agreement   in   1963,   signed   by   Douglas,   Fisher,   Felten,   and Somerville's   replacement   James   Malone,   reconfirmed   Goodman's   exclusive   right   to   control   and   use   the   Diamonds   trade name, as well as Goodman's managerial duties and royalty entitlements. In   1967,   the   partnership   dissolved.   Under   the   terms   of   the   dissolution   agreement,   the   Diamonds   name   became   the exclusive   property   of   Goodman.   Douglas,   Fisher,   Felten,   and   Malone   continued   to   perform   as   the   Diamonds   pursuant   to a    license    granted    them    by    Goodman,    with    Goodman    still    acting    as    manager.    Shortly    after    the    execution    of    the dissolution   agreement,   Goodman   began   experiencing   difficulties   collecting   from   the   singers   the   royalties   due   him,   and the    group    refused    to    acquiesce    to    Goodman's    management    decisions    on    bookings    and    promotion.    The    singers attempted   to   revoke   the   dissolution   agreement   in   1968,   and   Goodman   responded   with   a   lawsuit   requesting   not   only   a declaration   of   his   exclusive   rights   to   the   trade   name,   but   also   an   injunction   to   force   the   group   to   comply   with   the management   contract   and   license.   Goodman   also   sought   damages   in   the   amount   of   the   royalties   owed   him   by   the singers   under   the   license   and   for   his   management   of   the   group.   Malone   apparently   never   was   served   with   process,   and Douglas   and   Fisher   took   so   little   interest   in   the   case   that   their   attorney   eventually   moved   to   be   relieved   of   representing them.   The   litigation   ended   in   February   1973   with   a   declaration   that   Goodman   possessed   sole   ownership   of   the Diamonds   trade   name,   a   judgment   by   stipulation   against   Felten   for   royalties   owed,   and   an   injunction   against   future   use of    the    trade    name    by    Felten    without    Goodman's    authorization.   The    other    three    who    had    signed    the    dissolution agreement   but   had   not   participated   in   the   litigation   had   no   judgments   rendered   specifically   against   them   for   monetary   or injunctive relief. For   some   of   the   time   the   lawsuit   was   pending,   Douglas   continued   to   lead   a   group   called   the   Diamonds,   which performed   around   the   country   without   Goodman's   imprimatur   or   acquiescence.   It   is   this   group   that   plaintiff-appellant Glenn   Stetson   joined,   first   in   1969   for   a   brief   stint,   then   on   a   permanent   basis   in   1971.   Douglas   quit   the   Diamonds around   June   1972,   apparently   turning   the   money   from   the   last   performance   over   to   Stetson   and   saying   "It's   all   yours." Stetson   proceeded   to   lead   the   band,   which   continued   to   tour   as   the   Diamonds.   He   applied   for   and   received   a   service mark   for   the   name   from   the   United   States   Patent   and   Trademark   Office   in   June   1974.   The   mark   lapsed   in   1980   due   to Stetson's failure to file the requisite affidavit. After   the   lawsuit,   in   late   1974   or   early   1975,   Goodman   licensed   the   Diamonds   trade   name   to   Felten,   who   resumed touring   under   that   billing.   Thus,   two   competing   groups,   containing   none   of   the   Original   Diamonds,   toured   the   country   at this   time.   In   1979,   Felten   hired   Bob   Duncan   to   join   the   group   as   a   vocalist.   When   Felten   died   in   an   airplane   crash   in 1982,   Duncan   assumed   leadership   of   the   group,   and   contracted   with   Goodman   for   a   license   to   use   the   Diamonds name.    Duncan    then    assigned    that    license    to    Diamond    Productions,    Inc.,    which,    in    1983,    instituted    suit    against Goodman's   son   (as   Goodman's   heir)   to   enjoin   his   promotion   of   another   version   of   this   often   reincarnated   group.   The case   ultimately   settled,   with   Diamond   Productions   obtaining   an   assignment   of   all   rights   the   Goodman   family   and   estate possessed   in   the   trade   name.   In   1984,   Diamond   Productions   additionally   purchased   all   rights   to   the   Diamonds   name from   the   members   of   the   Original   Diamonds.   When   the   Original   Diamonds   attempted   to   perform   in   1986,   Diamond Productions   initiated   legal   action,   resulting   in   an   injunction   against   the   very   people   who   first   popularized   the   music   that brought   fame   to   the   Diamonds.   The   parties   to   this   action   agree   on   at   least   one   thing--the   Original   Diamonds   have   no claim to the name. Stetson   filed   this   suit   in   January   1984   for   damages   for   the   alleged   infringing   use   by   the   Duncan   Group   and   for   a permanent    injunction    prohibiting    defendants    from    using    the    name.    Defendants    denied    Stetson's    ownership    and counterclaimed   for   an   injunction   and   damages   on   the   theory   that   they   were   Goodman's   successors   in   interest   to   the trade   name.   After   a   non-jury   trial,   Judge   Martin   determined   that   Goodman   never   abandoned   ownership   of   the   trade name   under   section   45   of   the   Lanham   Act,   15   U.S.C.   §   1127,   and   therefore   that   the   Duncan   Group,   as   Goodman's successor   in   interest,   held   rightful   title   to   the   mark.   This   appeal   followed,   presenting   us   with   the   task   of   identifying   the true Diamonds. Discussion To   determine   that   a   trademark   or   trade   name   is   abandoned,   two   elements   must   be   satisfied:   non-use   of   the   name   by the   legal   owner   and   no   intent   by   that   person   or   entity   to   resume   use   in   the   reasonably   foreseeable   future.   In   this   case, the   district   court   ruled   that   Goodman   "never   intended   to   abandon   his   right"   to   the   Diamonds   trade   name.   The   district judge   found   that   Goodman's   lawsuit   against   the   singing   members   of   the   group,   initiated   in   1968   and   ending   in   1973, was   "clearly   inconsistent   with   any   intent   to   abandon   the   name   'The   Diamonds',"   and   that   it   constituted   "further   evidence that   Goodman   never   intended   to   abandon   his   right   to   use   the   name   'The   Diamonds'."   The   "intent   to   abandon"   language directly contradicts Silverman's specific rejection of a test based on such an analysis. Stetson   challenges   the   district   court's   ruling   on   this   issue,   claiming   that   the   judge   erred   by   employing   the   improper standard   for   determining   abandonment.   By   phrasing   the   holding   in   terms   of   "intent   to   abandon,"   Stetson   argues,   the   trial court   ignored   the   controlling   precedent   of   Silverman.   Under   the   proper   criteria,   Stetson   contends,   Goodman   failed   to use   the   trade   name   between   1968   and   1973,   the   time   of   the   lawsuit,   and   Goodman   lacked   the   requisite   intent   to resume   use   in   the   foreseeable   future.   Defendants-appellees,   therefore,   could   not   have   obtained   good   title   from   their predecessor   in   interest   and   are   not   now   entitled   to   ownership   of   the   trade   name. The   Duncan   Group,   on   the   other   hand, argues   that   even   under   Silverman   the   evidence   supports   a   finding   that   Goodman   never   abandoned   the   mark   and hence, as Goodman's successor in interest, it possesses exclusive rights to the trade name the Diamonds. We   agree   with   Stetson   that   the   district   court   should   have   utilized   the   Silverman   criteria.   However,   while   the   district   court applied   the   wrong   standard,   we   need   not   remand   for   further   fact-finding   and   analysis   in   light   of   the   correct   legal standard. An   appellate   court   has   the   power   to   decide   cases   on   appeal   if   the   facts   in   the   record   adequately   support   the proper    result.    Where    the    facts    in    the    record    are    inadequate,    remand    is    appropriate.   The    facts    here    clearly    and sufficiently   establish   that   Goodman   never   ceased   using   the   trademark,   and   the   issue   of   intent   to   resume   use   need   not be confronted. It is therefore unnecessary for us to remand. Based   on   the   Silverman   analysis,   a   court   must   look   to   the   trademark   holder's   occupation   or   business   to   determine   what constitutes   use   of   the   mark.   For   example,   in   this   case,   if   the   Diamonds   singing   group   held   the   trademark   to   its   name and   ceased   touring,   making   and   releasing   records,   and   receiving   royalties,   it   would   be   deemed   to   have   ceased   use   of its   trade   name   because   the   public   would   no   longer   identify   the   group   name   with   its   members.   In   cases   of   the   kind before   us,   where   a   group's   manager   holds   the   trademark,   non-use   becomes   a   more   difficult   inquiry   because   the   mark receives   its   public   recognition   through   the   visibility   of   the   performers.   Yet   the   manager's   actions   certainly   contribute   to the   group's   publicity.   By   arranging   tours,   organizing   record   production,   negotiating   contracts,   finding   television   and   radio spots,   and   performing   other   managerial   activities,   the   manager   works   to   increase   the   popularity   of   the   group   by expanding   its   public   exposure.   But   what   activities   must   the   manager   engage   in   to   constitute   use   when   the   performers turn their backs on their agreement with him? The   facts   on   the   record   in   this   case   show   that   Goodman   pursued   litigation   against   the   group   then   under   contract   with him   to   perform   as   the   Diamonds.   Under   Silverman,   a   lawsuit   against   an   infringing   user   ordinarily   is   not   a   sufficient excuse   for   failure   to   use   a   trade   name.   This   is   because   continued   use   of   the   name   is   necessary   to   avoid   the   claim   of abandonment.     A   lawsuit,   without   more,   is   not   sufficient   of   itself   to   overcome   a   claim   of   abandonment. A   trademark   must be   used   or   lost   to   another   economic   actor   more   willing   to   promote   the   mark   in   commerce.      (defining   abandonment   of trade name). We recognize the importance of this policy concern and reemphasize its validity and significance. Goodman's   suit,   however,   entailed   more   than   simple   enforcement   against   infringing   users   to   halt   use   of   the   trade   name. He   sued   for   royalties   owed   him   by   the   singers   and   for   an   injunction   to   force   them   to   comply   with   the   management contract.   He   also   sought   a   declaration   of   sole   ownership   of   the   mark.   During   the   same   time,   the   performers   Goodman was   suing   continued   to   sing   and   perform   as   the   Diamonds.   Goodman's   suit   was   not   merely   against   any   infringing   user, but   rather   was   against   the   people   who   were   contractually   entitled   and   obligated   to   perform   under   his   auspices   using   the Diamonds   name.   Goodman   did   not   stop   nor   seek   to   stop   the   use   of   the   trade   name   through   his   suit.   Rather,   he   desired the   monies   due   him   under   the   management   and   licensing   agreement   and   sought   an   injunction   to   force   the   singers   to conform   with   the   agreement   to   insure   that   the   trademark   remained   in   the   public   eye   in   a   fashion   its   owner   intended. The Diamonds   continued   to   glitter   in   the   public   eye,   and   Goodman   intended   that   they   do   so.   Therefore,   it   would   be   incorrect to   conclude   that   because   Goodman   sought   to   enforce   his   contractual   as   well   as   trademark   rights,   he   ceased   use   of   the trade   name.   Goodman   wished   to   continue   the   economic   activity   associated   with   the   Diamonds,   but   on   his   own   terms   as holder of the trademark and manager of the group. This   is   a   different   case   from   Silverman,   given   Goodman's   unique   position   as   manager   and   licensor.   By   the   nature   of their   status,   managers   such   as   Goodman   are   constrained   in   the   means   available   to   them   for   using   trademarks.   The constraints   are   not   present   for   performers   or,   as   in   Silverman,   broadcasters,   who   can   use   the   trademark   at   any   time simply   by   performing   or   airing   a   show.   Goodman   could   only   use   the   name   derivatively   through   the   musicians   who performed   under   his   management.   Here,   while   the   Diamonds   continued   to   perform,   their   manager,   the   owner   of   the mark,   sought   to   enforce   his   contract   with   them.   Goodman   could   only   sue.   He   could   not   be   expected   to   make   alternative uses   of   a   trademark   in   the   face   of   a   binding   contract   for   its   use   by   those   he   was   already   suing.   It   would   be   patently unreasonable to require Goodman to use the trade name in any other way under the circumstances. As   we   find   that   Goodman   continuously   used   the   trademark   throughout   the   period   in   question,   Stetson   cannot   rely   on   the rebuttable   presumption   of   abandonment   arising   under   15   U.S.C.   §   1127   (abandonment   presumed   after   two   years   of non-use).   Since   there   was   no   abandonment,   there   is   no   reason   for   us   to   consider   whether   Goodman   exhibited   an   intent to   resume   use   in   the   reasonably   foreseeable   future.   See   Silverman,   870   F.2d   at   45.   Goodman   never   having   abandoned the   Diamonds   trade   name,   the   Duncan   Group   clearly   obtained   good   title   to   it   from   its   predecessors   in   interest,   including Goodman. CONCLUSION For   the   foregoing   reasons,   we   affirm   the   district   court   judgment   declaring   that   defendants-appellees   have   the   sole   right to use the Diamonds name and permanently enjoining plaintiff-appellant from using the trade name or trademark.

This   is   an   edited   version   of   the   findings   of   a   court   case   involving   The   Diamonds.   With   an   issue   of   two   performing   groups calling   themselves   the   Diamonds,   the   decision   of   which   one   of   the   two   groups   were   the   legal   ones,   and   held   the copyright   to   the   name,   had   to   be   settle   by   legal   methods.   I   have   eliminated   some   references   of   the   cited   case   used   as   a precedent to prove a point. However, you can read it in the complete version at this link .