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Can a Delinquent Corporation Own a Trademark?

A dispute between darts associations led to an interesting recent court ruling concerning whether a delinquent corporation can own a trademark. The case is Southern California Darts Association v. Zaffina in the 9th Circuit Court of Appeals.

The Southern California Darts Association is referred to as “SoCal” in the court’s opinion. SoCal has been putting on and promoting darts tournaments since 1963. They stopped paying their corporate taxes at some point, causing the state to suspend their corporate status in 1977. Nonetheless, they continued with their dart-related activities.

Fast forward to 2010, when, as you know if you follow the Southern California darts community as closely as…well, somebody probably does, a darts player (dartist?), Dino M. Zaffina, had a dispute with SoCal over – you guessed it – whether his middle initial should appear in the scoring reports. The record doesn’t show whether Zaffina was for or against the middle initial.

Anyway, Zaffina either left or was kicked out and, in 2011, went on to register his own corporation, also called the Southern California Darts Association, which the court refers to as “SoCal, Inc.”

“SoCal Inc.”

“SoCal Inc.”

OK, so we’ve got SoCal, formed in 1963, suspended since 1977, and SoCal, Inc., formed in 2011. Are you confused? Well, you’re not alone. That’s why trademark cases so often have to do with likelihood of confusion.

Well, as you might imagine, Zaffina ended up suing SoCal and SoCal ended up suing Zaffina for trademark infringement and so on. The District (lower) court ruled in favor of SoCal (that’s the 1963 group), granting an injunction against Zaffina’s use of the trademark Southern California Darts Association. Zaffina appealed, which led to the ruling linked above.

You might be asking, how can “Southern California Darts Association” be a trademark in the first place? We know that geographic terms are disfavored in trademark law. And the words “Darts Association” are clearly generic. Maybe in 1963 the name would not have been a protectable trademark. However, the court ruled that the mark had “acquired distinctiveness” over its many years of use, and therefore dispensed with the issue of protectability.

Zaffina claimed that SoCal’s case should be thrown out on the grounds that a delinquent corporation can’t bring legal claims under California law. The court ruled that was true, citing United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir.1985.) However, this was a federal case, and an unincorporated association can bring suit in federal court under Federal Rule of Civil Procedure 17(b)(3)(A). The court noted that an unincorporated association is “a voluntary group of persons, without a charter, formed by mutual consent for the purpose of promoting a common objective.” Presumably, the court’s position was that SoCal became an unincorporated association at the moment their corporate status became delinquent. When else could it have happened?

United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir.1985) – See more at: http://caselaw.findlaw.com/us-9th-circuit/1675164.html#sthash.UunXjrl2.dpuf Presumably, the court’s view is that SoCal became an unincorporated association at the same time as their corporate status became delinquent.

Once the court made that determination, the game was over. The court held that unincorporated associations have the right to hold trademarks, citing caselaw from other circuits. Since Zaffina was using the exact same mark in the exact same fashion, there was no question that the injunction would be upheld.

Rest easy, folks. Order has been restored to the world, and there is once again only one Southern California Darts Association.

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