The Mongols Patch Court Case

The Feds were trying to set a precedent so that they could eventually take trademarked property from anyone and then anyone’s personal property for whatever reason.

Judge Florence-Marie Cooper of the Central District issued an interesting order last week barring the government from seizing any property displaying the “Mongols” trademark. The word “interesting” gets thrown around a lot on the internet (to the point of dilution), but this dispute is darn “interesting.” [Rivera v. U.S., Case No. 2:09-cv-2435-FMC-VBKx (C.D. Cal.; Aug. 3, 2009)] [link to opinion at Scribd ].

In October 2008 it was widely reported that the United States seized the “Mongols” trademark. The Mongols are a motorcycle club, and in late 2008, the government obtained an indictment against certain members of the club. Based on this indictment, the government sought forfeiture of various items of Mongols property, one of which the Mongols registered mark. The seizure order extended to items of property bearing the mark. Plaintiff Ramon Rivera was a member of the club who was not included in the indictment. He brought suit to enjoin the government's seizure of his property bearing the mark.

Trademark/Seizure: The court agreed with Rivera and held that the mark was not subject to seizure. Based on the indictment. Basically, the entities who owned the mark were not indicted, and none of the defendants who were indicted had a “forfeitable interest” in the property. On the propriety of forfeiture, it was a basic case of wrong parties. It's tempting at a quick read to come away with the impression that trademarks are never subject to forfeiture, but the court didn't need to get to that point. And it's not true anyway, trademarks are subject to involuntary conveyance under certain limited circumstances. See Evan Brown's discussion of a recent case here where the court issued an injunction preventing transfer of the “Bodog” trademarks, essentially agreeing with the plaintiff's premise that the mark was an asset that had been transferred in an attempt to evade creditors. (I was counsel in that case and there was an interesting domain name component to it as well. Speaking of which, I wonder if the government went after the domain names here.) I think this particular type of a mark is probably not subject to forfeiture, and in any event, the government didn't seem to make any effort to dress up its obviously punitive approach.

Seizure of Property Bearing the Mark: Interestingly, the government argued that separate from whether it was entitled to seize the mark, it was entitled to seize property bearing the mark. Supposedly, seizure of the property baring the mark was “necessary to preserve the availability of the mark for forfeiture.” The court didn't buy this, and also rejected the government's argument that continued use of the mark would tarnish it. I'm not sure how the government made this last argument with a straight face, but it did. The discussion delves into areas that are pretty far outside my range of experience, but it was fun to wade through the court's order.

The First Amendment: The final part of the court's order was the real zinger and one I'm guessing the government did not see coming. The mark sought to be seized was not a typical trademark, but a “collective membership mark,” which as the court observes “directly implicate the First Amendment's right to freedom of association . . . in their use and display.” The court basically smacks down the government's entire approach to the case, noting that: [the items sought to be seized by the government] were expressive and denote[d] association with the Mongol Nation. [Because the mark] act[ed] as a symbol that communicates a person's association with the Mongol Nation, and his or her support for their views . . . [seizure of the property] to silence this expression constituted an attack on a particular viewpoint. Seizure of property bearing a Mongols membership mark should be considered viewpoint-discriminatory. Needless to say, the government did not make a sufficient showing that “a compelling reason” existed to justify the seizure.

Convoluted factual and procedural context to the case. The court reaches the right result I think and the order contains some good discussion of the issues. The last time I recall something like this coming up was when the government seized a domain name and propagated – or forced propagation – of its own message. Congrats to Rivera's lawyer!

–from Rogue

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