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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-13567
Non-Argument Calendar
____________________
NAKAVA LLC,
a Florida Limited Liability Company,
Plaintiff Counter Defendant-Appellee,
versus
THE SOUTH PACIFIC ELIXIR COMPANY,
a Florida for Profit Corporation,
Defendant Counter Claimant-Appellant.
____________________
Appeal from the United States District Court
for the Southern District of Florida
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2 Opinion of the Court 22-13567
D.C. Docket No. 9:19-cv-81128-AHS
____________________
Before ROSENBAUM, JILL PRYOR, and MARCUS, Circuit Judges.
PER CURIAM:
This appeal concerns the affirmative defense of abandon-
ment in trademark suits. After a bench trial, the district court found
that the South Pacific Elixir Company (“SPEC”) infringed Nakava
LLC’s trademark of the word “Nakava” in violation of
15 U.S.C.
§ 1114(1)(a). The district court later denied SPEC’s post-trial mo-
tions, which essentially claimed that the record proved Nakava
LLC abandoned the mark. On appeal, SPEC argues that the district
court erred in concluding that Nakava LLC did not abandon the
mark and offers two theories of abandonment: (1) nonuse, and
(2) naked licensing. But, as the district court found, the record does
not support nonuse. Moreover, SPEC is estopped from arguing a
naked license under these facts. After careful review, we affirm.
I.
The facts, as presented at trial and found by the district court
after a bench trial, are largely undisputed. In 2001, Jeffrey Bow-
man, Diane Lysogorski, and Laurent Olivier formed SPEC to op-
erate a bar in South Florida that sold beverages made from the kava
root. SPEC initially named the bar “Nakamal” -- the word for a
traditional meeting place for drinking kava on the South Pacific is-
land of Vanuatu -- and the entrepreneurs decided to pursue fran-
chising opportunities. After the U.S. Patent and Trademark Office
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22-13567 Opinion of the Court 3
denied SPEC’s application to trademark “Nakamal,” however, the
company trademarked the name “Nakava” -- a combination of
Nakamal and kava.
A few years passed, and SPEC’s founders were advised to
create a limited liability company. They did so, naming it Nakava
LLC. On May 25, 2005, SPEC assigned the mark “Nakava” to
Nakava LLC. Nakava LLC hoped to sell franchises for kava bars
operating under the mark and to sell kava bearing the mark to
those franchises. Nakava LLC permitted SPEC to operate a bar
under the mark as its first franchise, but the parties did not execute
a written license for SPEC’s use.
Despite Nakava LLC’s best efforts, the franchise business
model flopped, and the company switched focus to selling kava
online. It is undisputed that from 2005 to 2015 and from 2019 to
2022, Nakava LLC sold its kava online using the mark. The district
court also found that Nakava LLC sold its kava with the mark from
2016 to 2018, although -- as discussed below -- SPEC disputes this
finding.
In 2012, the relationship between the founders of the two
companies fell apart, and, in 2015, Olivier sold his stake in SPEC to
a group of investors (“Olivier’s investors”). Around that time, the
founders filed several lawsuits against each other. The litigation
began when Olivier’s investors sent a letter to Bowman, asking to
inspect SPEC’s books and records. But that letter did more. It
threatened to contact the Internal Revenue Service and other agen-
cies and demanded a full forensic accounting for ten years. In
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4 Opinion of the Court 22-13567
addition, in the words of the district court, it added “the following
particularly menacing passage”:
My clients plan to come on to the premises to review
the books and records and determine its condition.
They may use force of arms if necessary.
...
What is your present address and place(s) of employ-
ment.
Eventually, though, Bowman and SPEC decided to walk away
from the litigation to save time and money. In December 2015, the
parties entered into an Agreed Order, which stated that Bowman
and Lysogorski relinquished control of SPEC to Olivier’s investors.
Bowman understood the Agreed Order to resolve the SPEC
litigation, but instead more claims popped up. In 2016, Olivier’s
investors brought new claims against Bowman, including actions
against him in his individual capacity for defamation, and Olivier
sued Nakava LLC and his former SPEC cofounders, Bowman and
Lysogorski. Concerned over the threat of arms and the prospect
that Olivier would attempt to claim ownership over the mark,
Nakava LLC removed the mark from its retail packaging that same
year. According to testimony and other evidence at trial, however,
the company continued to use the mark on its wholesale products.
The litigation between Bowman and Olivier’s investors set-
tled in January 2019, and Olivier dismissed his case against Nakava
LLC the next month. Nakava LLC then sent two letters to SPEC,
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22-13567 Opinion of the Court 5
terminating its rights to use the mark and demanding compliance
by May 30, 2019. But SPEC continued to use the mark. So, on
August 9, 2019, Nakava LLC sued SPEC for trademark infringe-
ment in the United States District Court for the Southern District
of Florida.
On January 10, 2022, the parties filed a joint pretrial stipula-
tion. Soon thereafter, the district court conducted a two-day bench
trial. A few months later, the district court found in favor of
Nakava LLC. The district court found that Nakava LLC never
abandoned the mark, and concluded that SPEC infringed Nakava
LLC’s property interest in the mark.
SPEC then moved the district court, pursuant to Federal
Rules of Civil Procedure 59(e) and 60(b), to alter the judgment.
SPEC argued that it proved at trial that Nakava LLC abandoned
the mark through naked licensing, and that the district court over-
looked evidence that Nakava LLC abandoned the mark through
nonuse. Nakava LLC responded that SPEC failed to follow the
proper procedure in filing its motion and that the motion improp-
erly sought to relitigate the case and raised new arguments un-
addressed at trial. In a short order, the district court denied SPEC’s
motion. The court found that SPEC had attempted to relitigate the
case. The motion, however, did not point to any new evidence nor
did it reveal any manifest errors of law or fact.
SPEC timely appealed the district court’s findings of fact and
conclusions of law and its order denying the post-trial motions.
II.
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6 Opinion of the Court 22-13567
Following a bench trial, we review a district court’s findings
of fact for clear error and its conclusions of law de novo. U.S. Com-
modity Futures Trading Comm’n v. S. Tr. Metals, Inc.,
894 F.3d 1313,
1322 (11th Cir. 2018). “Clear error is a highly deferential standard
of review” that will not lead to reversal unless “the reviewing court
on the entire evidence is left with the definite and firm conviction
that a mistake has been committed.” Eggers v. Alabama,
876 F.3d
1086, 1094 (11th Cir. 2017) (quotations omitted). We review the
denial of both Rule 59 and Rule 60(b) motions for abuse of discre-
tion. Arthur v. King,
500 F.3d 1335, 1343 (11th Cir. 2007); Waddell v.
Hendry Cnty. Sheriff’s Off.,
329 F.3d 1300, 1309 (11th Cir. 2003).
A.
First, we are unpersuaded by SPEC’s claim that Nakava LLC
abandoned the mark through nonuse. Under the Lanham Act, a
trademark is abandoned “[w]hen its use has been discontinued with
intent not to resume such use.”
15 U.S.C. § 1127. “Thus, a defend-
ant must establish two elements in order to show that a plaintiff
has abandoned his trademark: [1] that the plaintiff has ceased using
the mark in dispute and [2] that he has done so with an intent not
to resume its use.” Nat. Answers, Inc. v. SmithKline Beecham Corp.,
529 F.3d 1325, 1329 (11th Cir. 2008) (alterations in original) (quota-
tions omitted). Nonuse for three consecutive years is prima facie
evidence of abandonment, which creates a rebuttable presumption
of an intent not to resume use.
Id. at 1329–30; see also
15 U.S.C.
§ 1127.
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SPEC argues that the district court clearly erred by finding
that Nakava LLC used the mark from 2016 to 2018. It claims that
the evidence showed that Nakava LLC did not use the mark for
those three years, and that Nakava LLC failed to rebut the pre-
sumption established by that nonuse. This argument is without
merit.
For starters, SPEC failed to meet its burden to prove nonuse.
Abandonment by nonuse “works an involuntary forfeiture of
rights,” so defendants “face a stringent, heavy, or strict burden of
proof.” Cumulus Media, Inc. v. Clear Channel Commc’ns, Inc.,
304 F.3d
1167, 1175 (11th Cir. 2002) (quotations omitted). If a defendant
meets that heavy burden, then the burden of production shifts to
the plaintiff to show an intent to resume use, but “the ultimate bur-
den of persuasion on the issue of abandonment remains with the
defendant.”
Id. at 1176–77. Here, SPEC failed to meet its initial
burden of production, let alone its ultimate burden of persuasion.
It presented no evidence at all about nonuse. In fact, its corporate
representative admitted that he lacked “any knowledge of anything
Nakava LLC has done other than what’s in the public domain and
on the internet.”
Further, as for SPEC’s argument that Nakava LLC ceased
using the mark from 2016 to 2018, the district court expressly made
a finding of fact that Nakava LLC used the mark from 2005 to 2022.
“[A] finding of fact is clearly erroneous only if the record lacks sub-
stantial evidence to support it.” Johnson v. Hamrick,
296 F.3d 1065,
1074 (11th Cir. 2002) (quotations omitted). The district court’s
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8 Opinion of the Court 22-13567
finding here was supported by the record. Nakava LLC offered pic-
tures of wholesale packages with the mark, as well as invoices prov-
ing that this wholesale product was sold during the relevant time
period. And Bowman testified that Nakava LLC sold the wholesale
kava with the mark on the packaging throughout this period.
SPEC does not dispute these factual findings directly. In-
stead, it claims that the wholesale invoices, which have Nakava
LLC’s name on them, are “not sufficient to constitute bona fide
‘use’” under the Lanham Act. The Lanham Act defines “use in
commerce” to include a mark’s display on the goods or its con-
tainer, “or if the nature of the goods makes such placement imprac-
ticable, then on documents associated with the goods or their sale.”
15 U.S.C. § 1127. SPEC says that this definition precludes Nakava
LLC from using invoices to prove use, because the wholesale
goods could have borne the mark. But SPEC is mistaken. The ev-
idence at trial showed that the wholesale goods were branded with
the mark, and the invoices were simply introduced as evidence that
the branded wholesale goods were sold in commerce.
But even if SPEC had met its initial burden of proving non-
use, it failed to meet its burden to prove that Nakava LLC did not
intend to resume use. The district court found that “the evidence
at trial demonstrated that Nakava LLC intended to resume use of
the Mark once litigation with Defendant was substantially re-
solved,” thus rebutting any presumption that Nakava LLC’s non-
use may have created. SPEC’s only challenge to this finding on
appeal is that an intent to resume use after the three years of
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22-13567 Opinion of the Court 9
nonuse is irrelevant. But that argument is wrong as a matter of
law. As we’ve already noted, evidence of nonuse during the three-
year statutory window shifts the burden of production to Nakava
LLC to show it “either used the mark during the statutory period
or intended to resume use.” Nat. Answers,
529 F.3d at 1330 (quota-
tions omitted). The intent to resume use “cannot be far-flung or
indefinite” and must be “within the reasonably foreseeable future.”
Id. at 1329 (quotations omitted). But contrary to SPEC’s sugges-
tion, there is no requirement in this Circuit that Nakava LLC
needed a plan to resume use within the statutory three-year win-
dow of nonuse. And the district court found that Nakava LLC sold
branded products after settling its litigation with SPEC and it cred-
ited Bowman’s testimony that he always intended to continue to
use the mark. SPEC failed to rebut this evidence, and, accordingly,
did not satisfy its burden to prove an intent not to resume use.
All told, SPEC did not meet its heavy burden to prove aban-
donment through nonuse. The district court did not clearly err in
its findings of fact, nor did it err in its conclusions of law, nor, fi-
nally, did it abuse its discretion in denying the post-trial motions as
to this issue.
B.
We are also unconvinced by SPEC’s claim that Nakava LLC
abandoned the mark through a naked license. “[T]he law imposes
a duty upon a licensor (such as a franchisor) to supervise a licensee’s
use of the licensor’s own trademark.” Mini Maid Servs. Co. v. Maid
Brigade Sys., Inc.,
967 F.2d 1516, 1519 (11th Cir. 1992) (emphasis
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10 Opinion of the Court 22-13567
omitted). Because “the law attempts to ensure that the public will
not be deceived when purchasing goods and services that relate to
that trademark,”
id., an owner of a trademark “abandon[s] its mark
through ‘naked licensing’, or the failure to properly supervise its
licensee’s use of the mark,” Pro. Golfers Ass’n of Am. v. Bankers Life
& Cas. Co.,
514 F.2d 665, 671 (5th Cir. 1975). 1 But “a licensee is
estopped to contest the validity of the licensor’s title during the
course of the licensing arrangement.”
Id. That is, “a former trade-
mark licensee” (here, SPEC) may challenge the title of the licensor
(here, Nakava LLC) “on facts which arose after the contract has ex-
pired,” but not on facts before expiration.
Id. (emphasis added).
Here, the district court made a finding of fact that SPEC used
the mark under Nakava LLC’s implied license from 2005 to 2019,
and this finding is not clearly erroneous. Indeed, Bowman testified
that Nakava LLC gave SPEC permission to use the mark for an in-
definite period of time, and that SPEC paid a fee for its use. Then,
in 2019, Nakava LLC revoked that license, eventually leading to the
present case. Because “a licensee is estopped to contest the validity
of the licensor’s title during the course of the licensing arrange-
ment,” SPEC is estopped from arguing that Nakava LLC gave up
control of the trademark from 2005 to 2019.
Id. In other words,
during the relevant period, SPEC, “by virtue of the agreement, rec-
ognized [Nakava LLC’s] ownership.”
Id. Moreover, we are
1 All Fifth Circuit decisions handed down before the close of business on Sep-
tember 30, 1981, are binding precedent in the Eleventh Circuit. Bonner v. City
of Prichard,
661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).
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unpersuaded by SPEC’s unsupported and undeveloped argument
that only an express license can estop a naked license defense.
SPEC cites no law -- and we found none -- holding as much. 2
Because SPEC failed to provide any evidence that Nakava
LLC abandoned the mark through a naked license, it fell short of
its burden. As a result, the district court did not err in finding for
Nakava LLC, nor did it abuse its discretion in denying the post-trial
motions.
AFFIRMED.
2SPEC also argues that Nakava LLC forfeited its estoppel argument by failing
to raise it below. But we can exercise our discretion to consider an issue
where, as here, its “proper resolution is beyond any doubt.” Access Now, Inc.
v. Sw. Airlines Co.,
385 F.3d 1324, 1332 (11th Cir. 2004) (quotations omitted).
This is particularly appropriate in this case, where the relevant facts are not in
dispute and the legal issues are straightforward. “And this Court may affirm
on any ground supported by the record, regardless of whether that ground
was relied upon or even considered below.” PDVSA US Litig. Tr. v. LukOil Pan
Ams. LLC,
65 F.4th 556, 562 (11th Cir. 2023) (quotations omitted).
