Beating the "Light Up Night" Gremlins

Not quite a year ago, I posted some thoughts about how local towns could beat back threats by the Pittsburgh Downtown Partnership over rights to the phrase "Light Up Night."

With news emerging that the PDP is following through on its threats -- demanding small but meaningful "license" fees from towns that want to hold their own light up nights -- I have another idea.

Step 1:  Pay the fee.

According to this morning's Post-Gazette story about the PDP and its trademark claim:

Communities who sign licensing agreements will be able to link their event to the Downtown light-up night events on the partnership website, but they must use the PDP's "Light Up Night" logo in their literature. They also must agree to hold their own event on a different night than Pittsburgh's "Light Up Night," which will be held Nov. 19 and 20.

That would supposedly make each other town part of "a regional Light Up Night celebration."

Step 2:  Next year, don't pay the fee.   Hold a local Light Up Night.  Don't use the logo.  Wait for the PDP to sue.  If there is no suit, then great, but wait until the year following.  If and when the PDP sues, then:

Step 3:  Argue that the PDP had forfeited *all* of its trademark rights in the phrase "Light Up Night" by engaging in what trademark lawyers know (and fear) as "naked" licensing -- licensing a trademark without simultaneously doing a deal to transfer the "goodwill" that the mark signifies.

Is this a winner of a strategy?  There's no saying for sure.  I was a practicing lawyer for a long time, and I spend a lot of time thinking about and teaching trademark law, but I can't offer legal advice, and no one can guarantee an outcome.  But it sure would be fun to watch this play out!

The basic legal landscape is this:

The PDP does *not* own the phrase "Light Up Night," no matter what the federal Trademark Office might say, and no matter how much the PDP complains that its fundraising efforts have been muddied.  The PDP has the exclusive right to use the phrase "Light Up Night" in connection with certain goods and/or services.  (Actually, it may not; that was the point of my earlier post on the subject.)  The basic idea is that when consumers see or hear that phrase, they think "some specific supplier produced that good or service."  If that supplier doesn't have anything to do with that good or service, then the trademark isn't doing what it is supposed to be doing, because consumers aren't getting that consistent experience.  McDonald's Corporation can license the Golden Arches to its franchisees -- but McDonald's has to require that the franchisees adhere to McDonald's quality standards, or use McDonald's supplies, or submit to McDonald's on-site inspections, or some combination of those things.  Trademark law punishes the mark owner who allows the mark to be used in this unconnected way.  "Naked" licensing leads to forfeiture.  Anyone can use that mark for anything.  Boom!

Is the PDP bundling a transfer of "goodwill" into its offer to extract little license fees from local towns?  Despite the reference to a "regional" celebration, the PG story makes it sound like the PDP is not.  (Collaborating on a "regional" celebration shouldn't count as a transfer of goodwill, because such a "regional" celebration would be a new thing -- not part of an existing PDP service.  Requiring local towns to use the logo wouldn't count, either.)  What a transfer of goodwill that really means is that the PDP would not only want a little money, but that the PDP -- like McDonald's -- would also want a little control. 

In other words, before paying the fee, towns have to figure out whether they're getting into bed with the PDP over things like planning and execution of their celebration.  Is that stuff in the licensing documents?  If not, then the strategy might work.  If so, then the strategy won't work -- but, of course, that's one more great reason not to sign up.  The region's municipalities have enough problems in their relationship with the City of Pittsburgh.  Why should they hand over a bit of local business to Downtown poohbahs?