ORT America, Inc. v. U.S. ORT Operations, Inc.

Background

ORT America, Inc. and Women’s American ORT Foundation (WAOF) brought claims against U.S. ORT Operations, Inc. (U.S. ORT), Bramson ORT College (Bramson), and Los Angeles ORT Technical Institute (LAOTI). The complaint asserted federal trademark infringement, federal unfair competition and false designation of origin, common-law trademark infringement and unfair competition, and a request for a declaration that a license agreement between ORT America and U.S. ORT terminated on December 31, 2017.

WAOF owns the federally registered “ORT” mark. ORT America and U.S. ORT entered into a license agreement on May 14, 2007, giving U.S. ORT rights to use the mark. Bramson and LAOTI were not signatories to that agreement. ORT America notified U.S. ORT on October 5, 2017, that it would not renew the agreement, which plaintiffs contended therefore ended on December 31, 2017. Defendants continued using the mark after that date, and plaintiffs sent U.S. ORT a cease-and-desist letter in June 2018. The parties later discussed a new licensing agreement, but no new agreement is described in the opinion.

Defendants’ motion

Defendants moved for partial summary judgment, a procedure that permits judgment before trial when the evidence shows no genuine dispute about a material fact. They argued that: (1) plaintiffs could not obtain a declaration that the school defendants breached the license agreement because the schools did not sign it; (2) the school defendants had the defense of laches, meaning that plaintiffs waited too long to sue and the delay unfairly prejudiced the defendants; and (3) the trademark infringement and unfair-competition claims failed because there was no likelihood of confusion.

License-related claim

In their opposition, plaintiffs withdrew Count IV solely as to the school defendants because those defendants did not sign the license agreement. The opinion states that this withdrawal resolved defendants’ first argument. It does not state that the court dismissed Count IV as to U.S. ORT.

Laches defense

The court explained that laches requires defendants to show that plaintiffs knew of the challenged use, unreasonably delayed taking action, and caused prejudice by asserting their rights later. The parties agreed that New York’s six-year limitations period applied. Defendants argued that the schools had used “ORT” in their names for decades with plaintiffs’ knowledge.

The court denied summary judgment on laches because material facts remained disputed about when the schools’ allegedly infringing conduct began. Plaintiffs contended that the schools were intended to be sublicensees under the licensing arrangement and that plaintiffs believed they were sublicensees. Under plaintiffs’ view, the relevant date could be 2018, when the schools continued using the mark after the license ended. The court identified letters referring to the schools as sublicensees and a declaration from WAOF’s treasurer as evidence supporting plaintiffs’ position. It held that it could not weigh that evidence or resolve credibility disputes on summary judgment.

Likelihood of confusion

Defendants also argued that Counts I, II, and III should be resolved in their favor because the parties’ marks were not likely to confuse consumers. The court applied the eight-factor test used in the federal appeals court covering New York, considering the strength and similarity of the marks, the closeness of the parties’ marketplace activities, the possibility that the mark owner would enter the defendants’ market, actual confusion, bad faith, product quality, and consumer sophistication.

The court found that factual disputes prevented summary judgment. Those disputes included whether plaintiffs controlled the ORT mark or third parties used it; whether the acronym “ORT” was the dominant feature despite differences in logo colors and fonts; and whether plaintiffs’ financial support for Jewish educational services and defendants’ operation of educational institutions could lead to confusion. The court therefore did not decide the ultimate merits of the trademark infringement or unfair-competition claims.

Disposition

The court denied defendants’ motion for partial summary judgment. Count IV was withdrawn solely as to the school defendants. The court directed the parties to file a joint pretrial order within 30 days and directed the clerk to terminate the motion at ECF No. 61.