Ninth Circuit: Unincorporated Groups Can Own and Enforce Trademarks

On August 11, 2014, the Ninth Circuit Court of Appeals held that unincorporated associations have the capacity to own their own trademarks and to sue to enforce them.  In Southern California Darts Ass’n v. Zaffina, No. 13-55780, the Court affirmed the United States District Court for the Central District of California’s entry of summary judgment and issuance of a permanent injunction against a former member of “SoCal”—a forty-year-old unincorporated association—who incorporated a same-named, competing corporation.

Even though SoCal is unincorporated, the Court affirmed summary judgment, holding that SoCal owns its marks.  Unincorporated associations must be evaluated on a case-by-case basis, but “[t]here is no reason . . . why such questions in specific circumstances should preclude the universe of unincorporated associations from owning trademarks. . . .  An entity of this character may engage in commercial activities, and may use names and marks in connection with those activities.”

Under California law, SoCal lacks the capacity to sue as a corporation because its corporate powers were suspended by the State of California in 1977.  See United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir. 1985) (applying California law).  But Rule 17(b)(3)(A), Federal Rules of Civil Procedure, permits an “unincorporated association” to “sue or be sued in its common name to enforce a substantive right existing under the United States Constitution or laws.”  So the Court held SoCal was permitted to bring suit in federal court as an unincorporated association for the purpose of enforcing its trademark rights.