South-Western Legal Studies in Business

Bad Behavior by Parties to Trademark Dispute Leads Court to Refuse to Enforce Rights
Description Former business partners fought with each other over many issues, including a trademark. The court held that because both behaved badly, it would invoke the unclean hands doctrine and not enforce the trademark rights held by one party.
Topic Intellectual Property
Key Words Trademark; Infringement; Unclean Hands
C A S E   S U M M A R Y
Facts The Andersons and the Worthingtons ran several bakeries under the name "Kneaders." After a falling out, they ran bakeries separately. As required by their agreement, they submitted their dispute to arbitration, where the business was divided. The arbitrator ordered the trademark to "Kneaders" given to the Worthingtons, which was done. The parties continued to fight with each other, resulting in more arbitration and, eventually, litigation. The Worthingtons claimed the Andersons infringed on the trademark. The trial court held that neither party complied in good faith with the arbitration awards and dismissed the suit. The Worthingtons appealed.
Decision

Affirmed. While it is true that the Andersons infringed on the trademark by continuing to use the name, they suffered financial problems caused by bad acts of the Worthingtons on other matters. When a plaintiff interferes with a defendant's ability to comply with his or her responsibilities, the court of equity will not ignore the net effect on the parties' equitable relationship. Hence, the unclean hands doctrine comes into play. Relief will not be granted to a party who has failed to live up to its obligations.

Citation Worthington v. Anderson, 386 F.3d 1314 (10th Cir., 2004)

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