The registered collective association mark owned by Mongols Nation Motorcycle Club of West Covina, CA

A novel attempt to seize a registered mark is captivating headlines in Los Angeles. The U.S. Attorney’s Office has prosecuted a motorcycle club known as Mongols Nation on charges of racketeering and conspiracy to commit racketeering. The club is alleged to be operating as a gang and the Government has argued that the gang bears responsibility for several violent crimes and drug dealing committed by some of its members. The recent case is a culmination of a lengthy investigation begun in 2005 by the Bureau of Alcohol, Tobacco, Firearms and Explosives, known as Operation Black Rain.  In 2008, approximately 79 full-fledged members of Mongols Nation plus some associates of the group pleaded guilty to various crimes. Prosecutors also sought at that time to gain control of the motorcycle club’s distinctive mark (shown above), but the judge denied the forfeiture request on the grounds that none of the individuals who were prosecuted in the case actually owned the mark.  In the current case, the sole defendant is the Mongols Nation Motor Club (the formal name of the motorcycle club) and the only remedy sought by prosecutors is forfeiture of the mark.

A jury verdict of guilty on the racketeering and conspiracy charges was returned on Thursday, December 12, 2018 in the Santa Ana branch of the Central District of California. According to the Los Angeles Times, at the sentencing phase of the trial scheduled for January 8, 2019, prosecutors will seek to “strip the gang” of the mark registered in the name of Mongols Nation that provides a sense of identity for members. The mark shows a rather cheeky caricature of a figure resembling Genghis Khan, riding a motorcycle. (See image.) Accredited members of Mongols Nation display the image on their motorcycle jackets and as patches on other paraphernalia. According to reports, the Government is persuaded that if it can ban use and display of the image, the allure of the gang and its bonds of criminal brotherhood will fade and the Mongols Nation will atrophy.

Requiring forfeiture of a mark in a criminal proceeding is a novel gambit. In this case, the Government appears to have overlooked a few considerations flowing from trademark law that may pose some obstacles to its objective. First, the mark in question is what’s known as a collective membership mark indicating membership in an association. The registration at issue in this case was properly filed under 15 U.S.C. 1054 (Section 4 of the Lanham Act) that provides for registration of a collective mark “by persons, nations, States, municipalities, and the like, exercising legitimate control over the use of the marks sought to be registered, even though not possessing an industrial or commercial establishment, and when registered, shall be entitled to the protection provided in this chapter in the case of trademarks.”) The mark MONGOLS M.C. mark was registered at the USPTO on May 15, 2015 to indicate membership in an association dedicated to motorcycle riding appreciation. The owner of the registration is Mongols Nation Motorcycle Club of West Covina, CA.  It’s interesting to note that the application to register this mark was filed only in 2014, several years after the prosecution of the gang members stemming from the Operation Black Rain investigation. Perhaps the club believed that registration would thwart the Government’s avowed interest in seizure, dating back to the 2008 case.

The registration alleges a date of first use of MONGOLS M.C. of December 1, 1969. This comports perfectly with the history of the motorcycle club as recounted in the filings and by the press. The Mongols trace their formation to a group of Latino Viet Nam veterans and other southern California men who sought membership in the Hells Angels motorcycle gang but were rejected. The solution was to establish their own rival organization. The Los Angeles Times reported that Mongols Nation today has several hundred members spread across various chapters in Southern California and beyond. The club has association bylaws, a constitution and officers, and designates a “mother chapter” in West Covina, CA.

Cancellation

A registered collective association mark may be cancelled at the USPTO on several grounds. If the owner association no longer exercises legitimate control over the mark — such as by failing to act in accordance with its bylaws or to control the membership or members’ uses of the mark — it would likely not meet the statutory requirements for a collective association mark. This might occur, for example, if the association itself is banned or dissolved or the bylaws are nullified. Legitimate control in such circumstances would obviously be compromised. Another ground for cancellation, available to all types of marks within the first 5 years of registration at the USPTO, may apply.  Any person who believes he would be damaged by the registration can file a petition to cancel a registration.  Typically, the type of damage considered relevant by the Trademark Trial and Appeals Board which conducts the cancellation proceedings is commercial harm of unfair competition, for example, that the mark in question is deceptive or likely to create confusion in the public mind about the source of a product or service, or that it falls into a category of marks that never should have been registered in the first instance, such as generic or functional marks. A novel approach to a damage claim might be argued by victims of a gang if they could make out a case that the continued registration of the mark harms their safety or well-being. However, since the Federal Circuit opinion in In re Brunetti (and Supreme Court denial of certiorari), a mark may no longer be denied registration or cancelled because it is offensive or scandalous, a claim that might have held water vis-a-vis the MONGOLS M.C. mark just a few years ago. Rather, since the Supreme Court’s decision in Tam (concerning the registrability of the allegedly disparaging mark THE SLANTS for a band), the expressive and viewpoint aspects of trademarks have been found to be protected speech.

Forfeiture

Seeking forfeiture of the registration MONGOL M.C. treats the mark as an asset of the association-owner, akin to a property interest. Forfeiture has been used in the last decade as a remedy in several high-profile in rem proceedings brought by the Department of Justice against websites offering pirated movies and counterfeit goods. In several such cases, the domain name registrars for the pirate sites were operating in the United States or in countries with IP enforcement treaties with the U.S.  After seizure, the domain names became the custody of the federal government and were shut down, effectively blocking the use of the sites to advertise and distribute pirated content and counterfeit goods.

But unlike domain names, trademarks are a hybrid form of intellectual property. They are not purely an ownership interest like patents or copyrights. Marks obtain value through the goodwill developed over time that connects the mark in the public mind to the source of a good or service (or in this case, associates the mark with a particular membership organization.) And unlike copyrights or patents whose protections flow from Section 1, Article 8 of the U.S. Constitution, which provides authors and inventors with exclusive rights in their writings and inventions in order to “promote the Progress of Science and useful Arts,” the source of authority for trademarks is the Commerce Clause of the Constitution. Rights in trademarks attach as the marks are used in commerce; their purpose is not only to protect the investments of those who identify their businesses or endeavors by marks, but also to protect the consuming public against deception and confusion in the marketplace.

Moreover, registration of marks is not required to obtain enforceable rights. Rather, use of marks is critical to establish and sustain trademark rights. Although registered marks are entitled to certain presumptions, the Lanham Act accords broad protections to unregistered marks.

Which brings us back to MONGOLS M.C.  Seizing the registration through the court case does not by itself prevent members (or associates or aspiring members) from using the mark and may not even prevent the association from continuing to exercise control over use of the mark on an unregistered basis. How then might the Government achieve its real aim which appears to be to ban use of the imagery altogether? Can the Government ask the court to enjoin the Motor Club from exercising its association rights, including by prohibiting use of the club patch by members, on the grounds that the association itself has been found to be a criminal enterprise and is no longer protected? Can the Government prevent individual members or even nonmembers from exercising their free speech rights by wearing their own clothing emblazoned with the Genghis Khan image? And if the higher courts have already indicated that as a society we must tolerate even disparaging and offensive marks as part of our defense of freedom of expression, on what basis can the Government ban the MONGOL M.C. mark altogether?

This situation presents a sticky wicket to be sure. The January 8th hearing is bound to be interesting!

 

 

L Fishman

Lois R. Fishman is founder of the Law Office of Lois R. Fishman, a transactional law practice in Los Angeles, CA focusing on copyright, publishing, technology, entertainment, trademark and non-profit law. She was previously Assistant General Counsel with The Walt Disney Company handling…

Lois R. Fishman is founder of the Law Office of Lois R. Fishman, a transactional law practice in Los Angeles, CA focusing on copyright, publishing, technology, entertainment, trademark and non-profit law. She was previously Assistant General Counsel with The Walt Disney Company handling a variety of matters involving digital content. She graduated from Yale College and Georgetown University Law Center and currently teaches at Chapman University’s Fowler School of Law. She has familiarity with international intellectual policy matters as well as administrative proceedings before the Trademark Trial and Appeal Board, the Federal Trade Commission, and the Federal Communications Commission.