Antitrust Law Daily Wrap Up, ADVERTISING—D. Utah: Assignment of publicity rights to non-party precluded standing to assert those rights, (Sep 17, 2015)

By Jody Coultas, J.D.

General Charles E. “Chuck” Yeager did not have standing to assert publicity rights and Lanham Act claims against Fort Knox Security Products, Inc., for selling safes bearing Yeager’s name, because he had assigned those rights to a company called PMN II, Inc., in January 2011, the federal district court in Salt Lake City has decided (Yeager v. Fort Knox Security Products, Inc., September 14, 2015, Stewart, T.). PMN II’s claims had previously been adjudicated on the merits.

Fort Knox manufactures and sells gun safes and other security products, including a product line the “Yeager safes.” In the 1980s, General Yeager entered into an oral agreement with Fort Knox, allowing the use of Yeager’s name and likeness to promote Fort Knox products in return for free safes for Yeager and members of his family. Inquiries into the agreement in 2008 led Fort Knox to be concerned about the potential for difficulties arising over the continuing use of Yeager’s name and likeness. Fort Knox ceased using Yeager’s name and likeness with the exception of a poster of Yeager at a convention in January 2009, attended by the General.

Yeager alleged that Fort Knox exceeded the terms of the oral agreement, which limited use of his name and likeness to the annual Safari Club International convention, and continued to use his name and likeness despite outright termination of the agreement sometime in 2008.

The district court concluded that all of the claims were barred by the doctrine of laches and entered summary judgment in favor of Fort Knox. PMN II did not obtain counsel after its former counsel withdrew and was dismissed for failure to prosecute.

The Tenth Circuit Court of Appeals affirmed the dismissal, except with respect to claims that Fort Knox uploaded a promotional video to the Internet that referred to the Yeager line of safes and displayed the General’s name and likeness at a convention in 2009.

Yeager did not have standing to bring the claims at issue, according to the court. On remand, Fort Knox argued that Yeager lacked standing to assert his remaining claims because the proprietary rights at issue were assigned to PMN II, and PMN II’s claims were dismissed on the merits.

In a surreply, Yeager purported to “concede[] what Defendant has always maintained, namely, that there was no valid assignment to PMN II.” For the court to accept Yeager’s argument that he had not assigned his rights to PMN II, it would have to conclude that a witness for Yeager committed perjury and that plaintiffs’ former and current counsel advanced improper and unsupported arguments. The court declined to believe that all of these individuals would engage in such unprofessional, unethical, and perhaps illegal behavior. There was undisputed evidence that Yeager assigned all interests and rights in his image as it relates to safes, safe products, and/or filing cabinets to PMN II. Therefore, PMN II owned the proprietary rights at issue in this case, and it alone had the authority to bring the claims at issue.

Yeager cannot assert those claims possessed by PMN II at the time of PMN II’s dismissal, according to the court. Dismissal for failure to prosecute operates as a final judgment on the merits. A final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action. PMN II and Yeager were in privity based on the General’s assignment of certain rights to PMN II and PMN II purported reassignment of those rights to Yeager.

The purported reassignment of the rights at issue to Yeager did not give him standing to adjudicate the claims, according to the court. An assignee stands in the shoes of the assignor and cannot stand in a better position than the assignor. PMN II and Yeager signed the Assignment of Interest on June 22, 2015, after PMN II’s claims had been adjudicated on the merits. PMN II could only assign those adjudicated claims to Yeager. The General argued that he always retained some rights to his name and likeness and the retention of those rights should allow him to proceed. However, Yeager never clarified what rights he allegedly retained.

The case is No. 2:11-CV-91 TS.

Attorneys: D. David Lambert (Howard Lewis & Petersen) for Charles Yeager and PMN II, LLC. Heinz J. Mahler (Kipp & Christian) for Fort Knox Security Products.

Companies: Fort Knox Security Products, Inc.; PMN II, LLC

Cases: Advertising UtahNews