Zioness Movement, Inc. v. The Lawfare Project, Inc.

Background

After an eight-day trial in March 2024, the jury found that both Zioness Movement, Inc. (ZMI) and The Lawfare Project, Inc. (LPI) owned the ZIONESS trademark. The jury also found that LPI did not prove by clear and convincing evidence that ZMI committed fraud against the U.S. Patent and Trademark Office when registering the mark. Judgment was entered on March 27, 2024.

The evidence concerned the creation and early use of “Zioness” in 2017. The court described evidence that LPI’s founder, Brooke Goldstein, and Amanda Berman developed and promoted the mark using LPI’s resources. Berman later incorporated ZMI, applied to register the mark in ZMI’s name, and continued promoting it after leaving LPI. The central trial question was whether Berman’s early work on ZIONESS was done as an LPI employee or independently. The jury was allowed to find that both entities owned the mark.

Motion for Judgment as a Matter of Law

ZMI argued under Federal Rule of Civil Procedure 50(b) that it was the sole owner because there was no evidence that LPI was a co-owner. Judge Hellerstein denied the motion. He held that the evidence could support a reasonable jury’s finding that LPI and Berman both contributed to the mark’s creation and first use. The court also held that co-ownership of a trademark is legally permissible. Evidence supporting LPI included its spending on the mark, Goldstein’s leadership role, and Berman’s concession that ZIONESS was an LPI program before September 2017. Evidence supporting ZMI included its incorporation, trademark application, and control of the brand after Berman left LPI. The resulting factual dispute was properly submitted to the jury.

Motion for a New Trial

ZMI sought a new trial under Rule 59(a), challenging the jury instructions and several evidentiary rulings. The court denied the motion.

The court concluded that the instructions fairly presented the main issue: whether Berman’s activities involving ZIONESS were attributable to LPI employment or were conducted independently. The court declined to add instructions concerning abandonment or the alleged invalidity of a “naked” trademark license because ownership, rather than licensing or abandonment, was the issue tried. The court also found no prejudicial error in separating liability and damages issues, particularly because co-owners could not infringe the mark against one another or recover infringement damages from one another. The court further held that an adverse-inference instruction was not appropriate because the witness whose destroyed emails had prompted the potential inference testified at trial and was examined by the parties.

The court also upheld its evidentiary rulings. It found that excluding a September 2019 email was not prejudicial because ZMI was allowed to cross-examine Goldstein about it. Testimony about the “zioness.org” domain name was cumulative. Evidence that LPI paid expenses connected to developing the mark was relevant to ownership and first use. The court also stated that an oral, at-will trademark license can be valid, although licensing was not the central issue. Finally, the court upheld the exclusion of accountant Nancy Kelly’s proposed testimony about LPI’s accounting treatment of the mark because ZMI had not identified her as an expert in nonprofit accounting and the testimony was properly excluded under Federal Rule of Evidence 403.

Motion to Amend the Judgment

ZMI moved under Rule 59(e) to amend the judgment, arguing that the jury’s co-ownership finding was internally inconsistent with its finding that ZMI had not committed fraud before the USPTO. Judge Hellerstein denied the motion. The court noted that ZMI had not objected to the alleged inconsistency before the jury was excused. It also held that co-ownership was not legally impermissible and that the fraud finding was not inconsistent with the co-ownership finding.

Disposition

The court denied ZMI’s motion for judgment as a matter of law, motion for a new trial, and motion to amend the judgment. The conclusion states that ZMI’s motion was denied on all grounds, and the Clerk was instructed to terminate ECF No. 232.