IP Law Daily, TRADEMARK—C.D. Cal.: Owner of registered DeLorean-related trademarks can go to trial on infringement claim against NBCUniversal arising from Back to the Future merchandise, (Feb 23, 2024)

By Robert Margolis, J.D.

NBCUniversal’s use of, and rights to use, the film’s “time machine car” under license agreement also involved use of DeLorean brand trademarks, according to trademark owner.

DeLorean Motor Company (“DMCT”), a Texas corporation that acquired certain rights from the original DeLorean Motor Company founded by John DeLorean, produced sufficient evidence to go to trial on its claim that NBCUniversal Media LLC (“NBCU”), the successor-in-interest to the rights in the DeLorean “time machine car” from the Back to the Future film series, has infringed DMCT’s trademarks, the federal district court in Santa Ana, California, has held. The court denied NBCU’s motion for summary judgment on the infringement claims, though it granted summary judgment and dismissed DMCT’s breach of contract and accounting claims (DeLorean Motor Co. v. NBCUniversal media, LLC, February 22, 2024, Carter, D.).

Time machine car. The dispute arises out of the well-known Back to the Future movie and its two sequels. Featured in each film was a modified DeLorean DMC-12 automobile, which served as the time machine used by the main characters to travel to various points in time. The DeLorean DMC-12 used in the film includes several notable exterior and interior modifications that distinguish it from the actual DeLorean DMC-12. In a 1989 agreement, Amblin Entertainment and Universal Pictures (a division of Universal City Studios, Inc., which is a predecessor-in-interest to the entity that is a wholly owned subsidiary of NBCU) were granted rights by John DeLorean in and to the name, logo, and appearance of the DeLorean car for use in merchandising and commercial tie-ups in connection with the Back to the Future films.

DeLorean Motor Company. The original DeLorean Motor Company was founded in 1975 by John DeLorean, and produced only one model of car, the DMC-12. The company declared bankruptcy in 1982, after which certain of its assets were purchased by the predecessor-in-interest to DMCT. The purchase agreement does not expressly provide for the acquisition of trademark rights, though DMCT alleges that the predecessor did acquire goodwill, trade names, and distribution rights, which includes the acquisition of trademarks. In 1997, DMCT purchased the original DeLorean Motor Company assets from that predecessor. In 2004, DMCT entered an agreement with John DeLorean allowing DMCT “non-exclusive right to produce and modify” DeLoran Motor Company service publications, and the agreement states that John DeLorean had previously acquired all of the original company’s intellectual property. Since 2009, DMCT has registered numerous trademarks with the USPTO, involving stylized versions of the DeLorean Motor Company name and initials.

Royalties. John DeLorean died in 2005, and in 2014 his estate sued DMCT alleging infringement of the estate’s rights. The parties settled that lawsuit, and in the settlement agreement the estate acknowledged DMCT’s trademark rights. NBCU contends that those rights are limited to DMCT’s own registrations, while DMCT contends those rights include common law trademark rights and the right to use the DeLorean brand. The settlement does not refer to the 1989 agreement discussed above, or state that any rights under that agreement were assigned or transferred to DMCT.

Armed with that settlement agreement, DMCT contacted NBCU about royalties under the 1989 agreement. NBCU began providing accounting statements and royalty payments (though DMCT contests their accuracy), and continued doing so until August 2021. The DeLorean estate sued DMCT in 2018 claiming it was entitled to those royalties, not DMCT, but the federal district court in New Jersey held that the prior settlement agreement from the 2014 lawsuit barred the estate from pursuing its claim.

Lawsuit. DMCT filed suit against NBCU in late 2022 for breach of contract, an accounting, and trademark infringement, alleging that (1) DMCT is the successor-in-interest to the 1989 agreement; (2) NBCU has not fully paid royalties owed; and (3) NBCU has exceeded its rights under the licensing agreement through which it acquired rights to DeLorean trademarks and has infringed DMCT registered DeLorean-related marks and trade dress. NBCU moved for summary judgment on all claims.

Contract; no standing. The court granted NBCU summary judgment on the breach of contract claim, holding that DMCT lacked standing to enforce the 1989 agreement. While DMCT alleges that it “stands in the shoes” of John DeLorean with respect to that contract, in fact, it is neither a successor nor an assignee of his rights under that agreement. DMCT could not and did not dispute that there is no assignment agreement or other document between DMCT and John DeLorean purporting to assign rights to DMCT. Instead, DMCT pointed to the court decisions and settlement agreements in the above-described federal lawsuits. But as the court pointed out, no prior court decision addressed whether the estate of John DeLorean assigned its rights to DMCT, and the settlement agreement between the estate and DMCT was silent about the assignment of rights.

No contract; no accounting. Because “an accounting” is a remedy not a free-standing legal claim, the dismissal of the underlying breach of contract claim was fatal to DMCT’s cause of action for an accounting, the court held.

Infringement claim. The court denied NBCU’s summary judgment motion as to the trademark infringement claim, finding the existence of fact issues on several of the likelihood-of-confusion factors.

First, the court determined there was sufficient evidence to show that DMCT has several valid and enforceable DeLorean-related trademarks. The court noted that DMCT’s registrations are entitled to presumptions of validity and enforceability, and that by paying royalties to DMCT, NBCU has acknowledged DMCT’s rights. Given the differences between the DMC-12 time machine car and an actual DeLorean vehicle, it is likely that NBCU has common law rights in the time machine car and is a senior user as to that particular car. But its use of DeLorean marks in connection with its rights as to the time machine car does not make it a senior user of those other DeLorean marks, according to the court.

Turning to the likelihood of confusion, the court found disputed factual issues on the strength of DMCT’s marks, the similarity of the marks and goods sold, and evidence of actual consumer confusion. For mark strength, while DMCT touted the public recognition of the DeLorean marks as well as the continued revenue to NBCU through its use of DMCT’s marks as evidencing mark strength. NBCU argued in response that its marketing and licensing activities reflect the strength of the time machine car separate from DMCT’s marks.

For similarity of marks and proximity of goods, NBCU argued that its grants for licenses are limited to the time machine car and there is no overlap of goods sold with DMCT. DMCT countered that in licensing the time machine car, NBCU also is using DMCT’s trademarks such that the DeLorean branding and products sold and licensed by NBCU is similar to DMCT’s. Finally, DMCT also cited instances of consumer confusion, though NBCU interprets those events differently. The court ultimately held that DMCT had the better of the arguments on summary judgment, such that the infringement claim should go to trial.

The Case is No. 8:22-cv-02189-DOC-DFM.

Attorneys: Roger N. Behle, Jr. (Foley Bezek Behle and Curtis LLP) for DeLorean Motor Co. Andrew Jackson Thomas (Jenner and Block LLP) for NBCUniversal Media LLC.

Companies: DeLorean Motor Company; NBCUniversal Media, LLC

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