IP Law Daily, TRADEMARK—2d Cir.: Co-ownership of disputed mark affirmed on appeal; but denial of attorney fees under the Copyright Act reversed, (Aug 15, 2025)

By Kevin M. Finson, J.D.

A jury verdict that a mark was co-owned by opposing parties was affirmed because there was evidence from which the jury could find both parties developed and used the mark together.

Two different non-profit entities were both entitled to co-ownership of the shared mark ZIONESS, the U.S. Court of Appeals for the Second Circuit has held. Both had contributed to the development and cooperative use of the mark. However, the district court erred in finding that the plaintiff’s voluntary dismissal of a copyright claim precluded it from an award of attorney fees because it was not a “prevailing party” under the Copyright Act’s fee-shifting provision. A plaintiff’s “voluntary dismissal of an action with prejudice works” a material alteration of the legal relationship of the parties, entitling it to prevailing party status. The denial of attorney fees was remanded for reconsideration under the correct standard (Zioness Movement, Inc. v. The Lawfare Project, Inc., No. 24-974-cv (2d Cir. Aug. 13, 2025)).

The Lawfare Project, Inc. (LPI) was a non-profit organization devoted to the civil rights of Jewish people, and in 2017 began a new initiative aiming to “combat anti-Zionist sentiment permeating the progressive political movement.” This new initiative was created with its own mark and logo (the ZIONESS mark) and was spearheaded by Amanda Berman, LPI’s Director of Legal Affairs. The relationship between the two initiatives soured, and Berman eventually incorporated the Zioness Movement, Inc. (ZMI) entity and registered the ZIONESS mark.

LPI petitioned to cancel LPI’s ZIONESS mark with the USPTO. ZMI then filed suit for trademark infringement, seeking a declaratory judgment that it was the sole owner of the mark. LPI counterclaimed, seeking declaratory judgment that it was sole owner and asserting copyright claims. After an eight-day trial, the jury found that both parties were co-owners of the ZIONESS mark. ZMI appealed.

Co-ownership. ZMI challenged the jury verdict of co-ownership by motions under both Rule 50 and Rule 59, arguing that a finding of co-ownership was contrary to the principles of trademark law and would necessarily lead to consumer confusion. The district court denied the motions.

As to both Rules, the Second Circuit found that there was sufficient evidence for the jury to find co-ownership in the form of each parties substantial contributions to the creation of the mark and the fact that Berman formally created the ZMI entity while still employed by LPI. The court also held that ZMI had largely waived these issues by not objecting to the verdict sheet, which expressly contemplated a verdict of either or both parties owning the mark.

Discovery sanction. The district court had awarded discovery sanctions to ZMI as a result of LPI’s delayed production of witnesses and records. ZMI appealed the district court’s reduction of its requested sanction amount. The appellate court found no abuse of discretion in the trial court’s reduction of the award because it was based on the trial court’s determination that ZMI’s testimony about actual expenses was not credible.

Attorney’s fees. The district court had ruled that ZMI was not entitled to attorney’s fees on the copyright claims asserted by LPI. The court determined that LPI was not a prevailing party under Section 505 of the Copyright Act, 17 U.S.C. 505, because those claims had been dismissed voluntarily, with prejudice, before trial.

The appellate court determined that the district court applied an incorrect legal standard for awarding fees under the Copyright Act. The Second Circuit previously has held that when a voluntary dismissal with prejudice results in “a material alteration of the legal relationship of the parties,” as was the case here because it constituted a judgment on the merits for the purposes of res judicata, it was possible for the opposing party to “prevail” for attorney fee award purposes under Section 505. “In other words, because LPI voluntarily dismissed its copyright claims with prejudice, ZMI and Berman were the prevailing parties and were therefore eligible for attorneys’ fees under § 505,” the court said. The court vacated the order denying attorney fees and remanded for consideration under the proper standard.

The Second Circuit reversed the decision of the trial court as to the denial of attorney fees and affirmed in all other respects.

The Case is No. 24-974-cv.

Judge: Per Curiam.

Attorneys: Rosanne E. Felicello (Felicello Law PC) for Zioness Movement, Inc. Aaron Solomon (Oved & Oved LLP) for Lawfare Project, Inc.

Companies: Zioness Movement, Inc.; Lawfare Project, Inc.

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