GC Files a Lawsuit

[LynnDel]

Luke 9:

49“Master,” said John, “we saw someone driving out demons in your name and we tried to stop him, because he is not one of us.”

50“Do not stop him,” Jesus said, “for whoever is not against you is for you."

[Dr. Shane]

When I was in college, a good friend of mine owned a silk-screening business.  The got a license from FOX to print shirts with the Simpsons characters on it.  He was thrilled.  The Simpsons had just come out on TV and were very popular and in a college town it made him a lot of money and provided stability for his business.

I don't know enough to have a firm opinion but it would be interesting to see what the Conference was offering them when they first approached them.  They may have passed up an opportunity to partner with the Conference.  They may have been able to negotiate a good deal and have their products sold in ABC stores.  

One never knows how judges are going to rule.  As a rule, the further one can stay away from the court system the better.  Which is another reason why the defendant should have made a deal with the Conference.  From the looks of this, I hope the defendants are diversifying their business because they will may well be out of the Pathfinder business soon.

[Gregory Matthews]

The problem, as I see it is this:

While we  do not know the terms of the license that the GC offered to give to the defendants, I must assume that it either was time-limited or that it had a clause in it that would allow the GC to revoke the license.  I simply cannot assume that the license would have been granted forever.

Based upon my assumption, I believe that the defendants did not want to operate under a plan where they had to look over their shoulder to see if the GC was about to revoke their license.  They preferred to settle it once and f or all.  In addition, I believe that the defendants believed that the GC had lost the right to trademark protection for some of the logos.

I personally believe that it is most likely that the GC position will be sustained as to some of the issues.  But, I also believe that the position of the defendants could be sustained in regard to some of the issues.  So, I can suggest a split decision with each side winning something.  However, the problem with this is:  This will depend upon the strength of the legal representation that the defendants have.  In reality, I suspect that they are "outgunned" and the odds favor the GC.

I totally agree with the comment of Shane to the effect that one cannot predict how a judge will rule.  In the event of a jury trial, as the GC has requested, it is less likely that one can predict the decision.

NOTE:  As I have a Pacer account, perhaps I will see how the defendants responded to the charge?

 

 

[teresaq]

I could never be anything other than SDA as I study the bible, Ellen White, some of the Pioneer writings...I'm convicted this church, in doctrine only, is as close to the bible as a church will get

and I thank God for the few Adventists I've known personally and some online that lived close to God

But for the most part I've been so disgusted with us a people since my childhood.

May God act...

[Gail]

5 hours ago, Shane said:

When I was in college, a good friend of mine owned a silk-screening business.  The got a license from FOX to print shirts with the Simpsons characters on it.  He was thrilled.  The Simpsons had just come out on TV and were very popular and in a college town it made him a lot of money and provided stability for his business.

I don't know enough to have a firm opinion but it would be interesting to see what the Conference was offering them when they first approached them.  They may have passed up an opportunity to partner with the Conference.  They may have been able to negotiate a good deal and have their products sold in ABC stores.  

One never knows how judges are going to rule.  As a rule, the further one can stay away from the court system the better.  Which is another reason why the defendant should have made a deal with the Conference.  From the looks of this, I hope the defendants are diversifying their business because they will may well be out of the Pathfinder business soon.

Not knowing much about the case, but knowing how things can go with licensed material, I agree with Shane here. I am thinking that they should have come to an agreement, yes, way long before this.

Years ago, when my ex used to sell T-shirts and runners at the Flea Markets and at events like concerts, cops would arrest sellers caught with pirated goods. People don't like their creations and inventions out there without controls in place. 

[Dr. Shane]

Quote

The General Conference asked the Lillards to sign a licensing agreement if they wanted to continue selling merchandise with Adventist insignia. Michael Lillard said in a phone interview for this story, “We would have signed these contracts, but lawyers advised against it because they [the GC] could shut us down.”

This is the part of the story I was responding to.  Who were the lawyers that advised against signing a licensing agreement?  And look at the reasoning.  Because the GC could shut them down?  Really?  The GC couldn't shut them down if they had a licensing agreement.  The agreement would allow them to use the logo and they would have to pay the GC a royalty.  They would pass that cost onto the consumers and the GC would make sure that no other company would be competing with them.  The licensing agreement would make the Lillards the only authorized company to produce Pathfinder shirts.  Of course I am making some assumptions there but since the GC doesn't have their own clothing print shop, it is reasonable to assume they were offering the Lillards an agreement to make them the exclusive apparel company for Pathfinder items.  By not signing the agreement, they set themselves up for this law suit which does allow the GC to shut them down.  

[Gregory Matthews]

I will suggest the following about the licensing agreement:

1)  It is possible for a licensing agreement to be forever.  If so, the legal phrase would likely include the words "in perpetuity."   

2)  However, the majority of licensing agreements include terms under which the license can be revoked.  I cannot imagine the GC entering into a  licensing agreement that would not allow the GC to end the license.  I believe that the concern of the defendants was justified.

3)  The GC could license them without requiring them to pay a royalty, or, it could require such.

4)  I doubt that the GC would issue a non-competitive license.  IOW, I suspect that any such license that the GC would issue would also allow others to compete.  IOW, it would not be exclusive.

 

In short, as the defendants believed that the GC had allowed certain trade marks to become public, I can fully understand why they did not seek a license.

Yes, it can be said, as Shane has done, that they set themselves up for litigation.  But, they believed that their position had legal merit and with the disagreement of the GC, the only course of action was litigation. 

 

 

 

 

 

[Dr. Shane]

They were setting themselves up for this law suit because they did not have a licensing agreement.  The State Conference did not own the copyright for the insignia.  The State Conference did not enter into a licensing agreement with them.   

[Dr. Shane]

2 hours ago, Gregory Matthews said:

4)  I doubt that the GC would issue a non-competitive license.  IOW, I suspect that any such license that the GC would issue would also allow others to compete.  IOW, it would not be exclusive.

 

I doubt license agreement the GC offered them was non-competitive however that is something the Lilards could have negotiated into it - or at least tried.  It is a common business practice that the company holding the copyright gives territory protection to those they licence to produce and distribute products.

The Pathfinders logos have not been around that long.  Micky Mouse is older and don't try to use that without a licensing agreement with Disney.  The Pathfinders logo isn't something as plain and generic as the name "Seventh-day Adventist."  I have been both a Pathfinder and an Adventurer director.  A lot has gone into the programs.  The GC has spent a lot of money developing programs, investing in camp grounds, leasing parks for camporees, etc.  I suspect the GC does want some money from the sales of Pathfinder apparel and they deserve it.  The GC has developed this brand and money made from it can by invested in growing the brand.  Pathfinders is an awesome ministry.  I know people that have been involved in the Boy Scouts and I think the Pathfinders has a much better program than the Boy Scouts.

[Gregory Matthews]

Shane:  In my opinion the Pathfinder logos are some of which I think that the GC will prevail.

As I said.  I think that the GC will prevail on some.

 

[Dr. Shane]

This is a little off topic but may be appropriate to the topic.  Pathfinder Clubs depend a lot on the local Conference leadership.  The Texas Conference invests a lot more into the Pathfinder and Adventurer programs than the Conference where I use to live (I won't name them).  If someone reading this thread lives in a Conference that doesn't spend many resources in the Pathfinder program, they may not know what the fuss is all about.  Here in Texas it is a major part of our youth ministries and our youth ministries is one of our biggest departments.

[phkrause]

23 hours ago, LynnDel said:

I Don't Know.

I didn't see that one!!  Thanks

[Gregory Matthews]

Earlier today I printed off the response that the defendant, made to the amended complaint filed by the General Conference.  This document was quite instructive as it related to the position of the defendants, who allege:

*  The GC had previously issued them a license to use GC  trademarks!

*  Nine (9) named and other unnamed entities   have used the GC  trademarks in business enterprises.

*  The GC has failed to exercise required control over the use of its trademarks and therefore lost its protection.

*  Some of the GC trademarks are so generic that trademark protection has been lost.

*  This is an action by the defendants to cancel certain of the GC trademarks.

*  The defendants have in good faith attempted to enter into a licensing agreement with the GC.  That attempt has failed.

*  The defendants have sustained damage due to the GC interference in their  business activities, which has caused contracts to be cancelled.

*  The defendants are entitled to payments for their legal expenses.

NOTE:   There are more, the above is simply a listing of major ones that are of interest to me.

It is clear that this case has more than one side to it and probably should go to trial.

If you want to research this litigation you can review documents at:

http://pacer.psc.uscourts.gov

You will need to establish an account and you will be required to pay a very small fee for each page that you review.   You can print the document for no additional charge as  long as you still have it in view.

 

 

 

 

 

 

 

[Gregory Matthews]

In the amended complaint the GC makes slightly more than 100 statements to which the defendants believed that they should respond.  For legal reasons some of these statements essentially repeated previous ones.

In their response, the defendants:

*  Admitted to the truth of some 20 statements in the amended complaint.

*  Denied some 55 of the statements.

*  Admitted to and denied parts of some 12 statements.

*  Stated a lack of knowledge that would be required judge the truth of some 11 statements.

NOTE:  As this totals 98 responses, there are a few to which I have not decided on a category to which I should put their response.

Why am I listing the above?
 

The above illustrates a reason why litigation is so expensive.   Lawyers generate billable hours when they come up with 100+ statements that must be responded to.

 

 

[Gregory Matthews]

The respective parties to this case have been involved in mediation for some time.  This mediation is expected to end at the close of business tomorrow, April 28, 2017.

Just keeping you informed.

[Gregory Matthews]

Some may wonder what will happen if the respective parties do not reach an agreement.  Well  there will be further legal procedures.  Then, on February 5, 2018, this case is currently scheduled to go to trial.  Of course, that date could change.

The bottom line, going to trial is typically, as it true in this case, protracted and takes a long time.  This case has been before the court since a time in 2016.  In this process the billable attorney hours had mounted on both sides.  I will be interested to see if any attorney fees will be paid by the other party, if that becomes known in a negotiated settlement.

 

 

 

[Gregory Matthews]

In general terms, the respective parties have reached an agreement to settle the case.  There are a few details that need to be worked out.  It is expected that agreement will be reached on those details prior to May 5, 2017.

IOW, it is expected that this case will NOT go to trial.

Just a further comment:

In my work as a VA Chaplain in representing employees in relations with management, I became well aware of both arbitration and mediation--how they work to include what they each could and could not accomplish.

In arbitration, the arbitrator has the power to force the parties into a settlement.

But, in mediation, the mediator can not force any settlement.  The mediator can only suggest a settlement that any party can reject.  I have personally been involved in mediation where a party would reject a settlement.

So, if a mediated settlement has been reached in the case, we are being told that all of the involved parties, the General Conference and the opposing parties have all agreed to settlement terms.  IOW, no one has taken such a rigid stance that the other side felt a need to reject.

From this standpoint, it appears likely that each side got something.

 

[Gregory Matthews]

Judge Dalton, issued an order yesterday, directing the parties to inform him of the progress, or lack of progress, of the mediation.

NOTE:  Without reading the exact order itself, I looks on the surface that the Judge has directed them to complete their mediation by May 15, 2017.

 

 

[Gregory Matthews]

Mediation:  Who?  What?  How much?

For those of you who are interested, the following is the website of the firm that is providing mediation services in this litigation:

http://www.grillimediation.com/grillim/

If you are interested in how much this is costing,  that website has a listing of their fees.  Those listed fees are within the range of what I had expected, due to  my prior involvement in  multiple, formal, mediation efforts.  I consider them to be reasonable.

 

 

[Gregory Matthews]

This case is over.  It has been settled.  As it was settled by mediation, there is no record of the settlement terms and therefore it cannot be stated how it was settled.  All one can do is wait to see if Pathfinder Shirts continues to sell its product.

As it will be dismissed "with prejudice"  this case can not be further litigated.

The following quote contains all significant parts of the agreement.  I have not listed the various attorneys involved in the case.

 

 

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

THE GENERAL CONFERENCE CORPORATION OF SEVENTH-DAY ADVENTISTS,

Plaintiff,

v. Case No.: 6:16-cv-01375-RBD-KRS

PATHFINDER SHIRTS, LLC; MICHAEL LILLARD; and KAREN LILLARD,

Defendants.

JOINT STIPULATION AND MOTION FOR DISMISSAL WITH PREJUDICE

Plaintiff THE GENERAL CONFERENCE CORPORATION OF SEVENTH-DAY ADVENTISTS and Defendants PATHFINDER SHIRTS, LLC, MICHAEL LILLARD and KAREN LILLARD (collectively, “the Parties”), pursuant to Rule 41(a)(1)(A)(ii), Federal Rules of Civil Procedure, hereby jointly stipulate to the following:

1. The Parties have fully resolved all claims, counterclaims and defenses that were (or could have been) asserted by or against each other in this action related to any and all of the transactions and occurrences referenced in Plaintiff’s

Complaint.

2. The Parties jointly stipulate to the dismissal with prejudice of their respective claims, counterclaims and defenses in this action.

3. The Parties agree to bear their own attorneys’ fees, expert fees and costs incurred in or related to this action.

WHEREFORE, the Parties respectfully request the Court to render an Order dismissing this entire action with prejudice, denying all pending motions as moot and directing the Clerk of Court to close the case.

Respectfully submitted this 15th day of May, 2017.

. . . . .

 

[debbym]

However it turned out, i feel it is better to have quietly settled than to air this case in public court.  i am embarrassed it was not settled sooner.  I see it as much better to come to an agreement rather than a judge send down a decision that would leave one party of the other is deep disagreement.

[Gregory Matthews]

I have been involved, over an eight (8) year period of time, many attempts at mediation.  I can count on the fingers of one hand, the number of times that mediation has failed to bring the parties to an agreement--yes it does happen.

While it depends upon the individual case, mediation typically has much in the settlement confidential and information is very limited to that which is required to be known by an individual. 

So, I had a high degree of confidence that this case would fit the norm and would not be the exception.

One of the potential benefits to the General Conference is that there is now no possibility that this judge would find that certain trademarks of the GC no longer have trademark protection, which I believe could have happened if the attorney for the defendants had presented the evidence that I believe exists.

It should be noted that I also believe that certain SDA trademarks do continue to have protection.