Ted Ritter v. Tony Farrow ( 2021 )

2021 WI 14SUPREME COURT OF WISCONSIN
CASE NO.: 2018AP1518
COMPLETE TITLE: Ted Ritter and Carolyn Ritter d/b/a Ritter
Enterprises, Inc.,
Plaintiffs-Respondents,
v.
Tony Farrow and Arlyce Farrow d/b/a Farrow
Enterprises, Inc.,
Defendants-Appellants-Petitioners,
Bibs Resort Condominium, Inc.,
Intervenor-Respondent.
REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 388 Wis. 2d 421,933 N.W.2d 167PDC No:2019 WI App 46 - Published
OPINION FILED: February 23, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: September 8, 2020
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Vilas
JUDGE: Michael H. Bloom
JUSTICES:
KAROFSKY, J., delivered the majority opinion for the Court, in
which REBECCA GRASSL BRADLEY, DALLET, and HAGEDORN, JJ., joined.
ROGGENSACK, C.J., filed a dissenting opinion in which ANN WALSH
BRADLEY and ZIEGLER, JJ., joined.
NOT PARTICIPATING:
ATTORNEYS:
For the defendants-appellants-petitioners, there were
briefs filed by Jennifer L. Gregor, Allison W. Reimann, and
Godfrey & Kahn, S.C., Madison. There was an oral argument by
Jennifer L. Gregor.
For the intervenor-respondent, there was a brief filed by
John E. Danner and Harrold, Scrobell & Danner, S.C., Minocqua.
There was an oral argument by John E. Danner.
2
2021 WI 14NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2018AP1518
(L.C. No. 2010CV212)
STATE OF WISCONSIN : IN SUPREME COURT
Ted Ritter and Carolyn Ritter d/b/a Ritter
Enterprises, Inc.,
Plaintiffs-Respondents,
v.
FILED
Tony Farrow and Arlyce Farrow d/b/a Farrow FEB 23, 2021
Enterprises, Inc.,
Sheila T. Reiff
Clerk of Supreme Court
Defendants-Appellants-Petitioners,
Bibs Resort Condominium, Inc.,
Intervenor-Respondent.
KAROFSKY, J., delivered the majority opinion of the Court, in
which REBECCA GRASSL BRADLEY, DALLET, and HAGEDORN, JJ., joined.
ROGGENSACK, C.J., filed a dissenting opinion in which ANN WALSH
BRADLEY and ZIEGLER, JJ., joined.
REVIEW of a decision of the Court of Appeals. Reversed and
cause remanded.
¶1 JILL J. KAROFSKY, J. The subjects of this case are a
logo depicting a pair of red bib overalls with a handkerchief
hanging out of the back pocket and the names "Bibs Resort" and
"Bibs." These designations relate to a lakefront resort in St.
No. 2018AP1518
Germain, Wisconsin, and we are asked to determine their
ownership.1
¶2 The three parties involved in this case are: (1) Ted
and Carolyn Ritter, original owners of Bibs Resort; (2) Tony and
Arlyce Farrow, purchasers of the Ritters' resort management
business; and (3) Bibs Resort Condominium, Inc., the condominium
association at Bibs Resort ("Association"). The Farrows claim
that they assumed ownership of the Bibs Resort marks when they
purchased the Ritters' resort management business, and that the
Ritters subsequently infringed on those marks. The Ritters and
the Association disagree with the Farrows.
¶3 The circuit court granted summary judgment to the
Ritters and the Association and denied the Farrows' motion.2 The
circuit court concluded that the Bibs Resort marks "became part
of" the Association in 1998 when the resort was converted to a
condominium form of ownership. Finding that no one exclusively
owned the Bibs Resort marks after that conversion, the circuit
court ruled that the Farrows could not have become exclusive
owners of the marks when they purchased the Ritters' resort
1 The court of appeals correctly noted that there are three
designations at issue, but "the Farrows do not argue that any
legal principle applies to only one particular designation, nor
do they argue that any material facts exist that differentiate
between the designations." Ritter v. Farrow, 2019 WI App 46, ¶4
n.2, 388 Wis. 2d 421, 933 N.W.2d 167. We agree and will
collectively refer to the designations at issue as the "Bibs
Resort marks" unless otherwise noted.
2 The Honorable Michael H. Bloom of the Vilas County Circuit
Court presided.
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management business in 2006. The court of appeals affirmed on
other grounds, ruling that the 1998 resort-to-condominium
conversion resulted in the Ritters impliedly transferring the
Bibs Resort marks to the Association. The court of appeals
reasoned that because of that transfer, the Ritters no longer
owned the marks and, as a result, could not have sold them to
the Farrows in 2006.
¶4 It is a well-settled legal principle that trademarks
and their associated goodwill pass with the sale of a business.
Therefore, we conclude as a matter of law that: (1) the
Association did not acquire the Bibs Resort marks in 1998; and
(2) the Farrows became the exclusive owners of the Bibs Resort
marks in 2006 when they purchased the resort management business
from the Ritters. Consequently, since the circuit court did not
apply the well-settled principles surrounding trademarks and
trade names, we reverse the grant of summary judgment to the
Ritters and the Association and remand to the circuit court to
reconsider the Farrows' summary judgment motion in light of our
legal conclusions.
I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE
¶5 In the spring of 1986, the Ritters3 purchased a
lakefront resort in St. Germain, Wisconsin and named it "Bibs
Resort." The property included a permanent residence, 11 rental
units, and an on-site bar. Ted and Carolyn Ritter lived in the
3 All references to "the Ritters" are to Ted and Carolyn
Ritter doing business as Bibs Resort, Inc. or its subsequent
name, Ritter Enterprises, Inc., unless otherwise noted.
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No. 2018AP1518
permanent residence while renting the other units to the public
and operating the bar. To represent the resort, the Ritters
created a logo depicting a pair of red bib overalls with a
handkerchief hanging out of the back pocket. The name "Bibs
Resort" was incorporated into the logo.
¶6 Under the Bibs Resort marks, the Ritters provided
resort management services to guests and patrons of the resort.
These services included marketing rental units to the public,
collecting payments, tracking expenses, maintaining the grounds,
cleaning the units, operating the on-site bar, and organizing
activities such as picnics, waterskiing lessons, volleyball
tournaments, campfires, and fishing lessons for guests.
¶7 In 1998, the Ritters converted the resort to a
condominium form of ownership. Pursuant to Wis. Stat. ch. 703
(2017-18),4 the "Condominium Ownership Act," the Ritters recorded
a condominium declaration5 and plat with the Vilas County
Register of Deeds. The "Declaration of Condominium"
("Declaration") specifically excluded any transfer of the resort
management services the Ritters had provided since 1986, stating
that "nothing in the paragraphs in these Declarations shall be
construed to prohibit [the Ritters] from continuing to operate
the property, or any part thereof, as a resort, or to prohibit
4 All subsequent references to the Wisconsin Statutes are to
the 2017-18 version unless otherwise indicated.
5 A condominium declaration contains, among other things, a
condominium's name and address and a description of the land,
units, and common elements. See Wis. Stat. § 703.09(1)(a)-(j).
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any of the units [sic] owners from renting out the unit or
units." Said differently, the Ritters would continue to provide
resort management services after the condominium conversion in
the same manner as they had before the conversion.
¶8 The Declaration identified the newly established
condominium's legal name as "Bibs Resort Condominium." The
Declaration referenced the transfer of the "real property" of
Bibs Resort and described the condominium as consisting of 13
units (12 dwellings and the on-site bar) and 15 garage units.
It also established that each unit owner had exclusive rights to
use certain limited common elements and owned a fractional
interest in the condominium's common elements. Included within
the Declaration's description of the common elements was "[a]ll
the tangible personal property required for the operation of the
condominium." (Emphasis added.) The Declaration did not
contain any reference to the conveyance of intangible personal
property.6
¶9 The Declaration also recognized the Association as the
entity responsible for the operation of the condominium, in
compliance with the Condominium Ownership Act. See Wis. Stat.
§ 703.15(1).7 At the time of the condominium conversion, the
6Tangible property is "[p]roperty that has physical form
and characteristics," whereas intangible property is "[p]roperty
that lacks a physical existence." Tangible property, Black's
Law Dictionary 1412 (10th ed. 2014); Intangible property, id. at
1411.
7The articles of incorporation and the bylaws for the
Association were also filed in 1998.
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No. 2018AP1518
Ritters were the sole members of the Association because they
owned all 13 units of the condominium. Additionally, they
continued to rent out 11 units and, as noted above, provide
resort management services to guests and patrons under the Bibs
Resort marks.
¶10 Between May 1998 and September 2005, the Ritters sold
four of the condominium units. The Ritters entered into rental
management agreements with each of the new unit owners, renting
and marketing these units on the new owners' behalf. At the
time of the sale of each unit, the Bibs logo, which prominently
displayed the associated unit number, was affixed to the
exterior wall of the unit.
¶11 In April 2006, the Farrows8 sought to purchase the
entirety of the Ritters' resort management business and
presented them with an offer to purchase "the Business known as
Bibs" and Unit 13, the on-site bar. The offer to purchase
stated that the sellers, the Ritters, "shall include in the
purchase price and transfer . . . goodwill . . . and business
personal property . . . ." The offer defined "business personal
property" as "all tangible and intangible personal property and
rights in personal property owned by Seller and used in the
business as of the date of [the] Offer, including . . . trade
names . . . ."9 An "Amendment to Offer to Purchase" similarly
8 The Farrows operated under the corporate entity "Farrow
Enterprises, Inc."
9 While the offer was still pending, the Farrows also
purchased unit 12, the permanent residence.
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No. 2018AP1518
described the sale as including "Unit 13 Bibs Resort
Condominiums and the business known as Bibs Resort."
¶12 The Ritters accepted the Farrows' offer, and the sale
closed on June 23, 2006. The Ritters executed a document that
"authorize[d] the sale of BIB's [sic] Resort, Inc. property
management, its management contracts, listed inventory, all
associated equipment and Unit #13." The Ritters also signed a
bill of sale that conveyed to the Farrows the personal property
necessary for resort management, including fishing boats,
canoes, paddle boats, a golf cart, bedding supplies, and
cleaning supplies. That bill of sale also conveyed to the
Farrows the business equipment needed to manage the resort,
including a computer, business records, business
licenses/registration, the website, and office supplies.
¶13 Additionally, the Ritters filed a "Report of Business
Transfer" with the Wisconsin Department of Workforce
Development, as required by Wisconsin's unemployment insurance
law. This report indicated that there was a "total transfer" of
the Ritters' business, which the Ritters described as
"management of vacation resort." Included within the list of
"assets" transferred, the Ritters selected the box titled
"Goodwill." This report also identified the former
owner/operator's trade name as "Bibs Resort" and the new
owner/operator's trade name as "Bibs Resort."
¶14 In September 2006, the parties also sent a joint
letter to the Wisconsin Department of Revenue ("DOR"). In that
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No. 2018AP1518
letter, the Ritters and the Farrows explained the change in
business names as follows:
In June of this year, the management of the resort and
some of the buildings were sold to Farrow Enterprises,
Inc. . . . . Anthony and Arlyce Farrow, corporate
officers of Farrow Enterprises, Inc., would like to
use the name BIBS Resort as a trade name since they
are handling advertising, reservations and payments
under that name. Ted and Carolyn Ritter are amenable
to that change.
BIBS Resort, Inc. . . . still owns business property
(some rental cottages) at the resort. Corporate
officers Ted and Carolyn Ritter wish to maintain the
business corporate status but change the current name
of BIBS Resort, Inc. to Ritter Enterprises,
Inc. . . .
Anthony and Arlyce Farrow wish to keep Farrow
Enterprises, Inc. as their legal entity and use BIBS
Resort as their trade name . . . .
¶15 After the sale, the Farrows stepped into the role of
resort managers and provided services to guests and patrons
under the Bibs Resort marks. The Farrows signed new rental
agreements with each unit owner. They also entered into an
agreement with the Association's board of directors, pursuant to
which the Farrows assumed responsibility for maintenance,
repair, landscaping, and groundwork for the common elements.
¶16 Not long after the sale, the relationship between the
Ritters and the Farrows soured. In February 2008, the Ritters
terminated their rental management agreements with the Farrows
for the seven units that the Ritters still owned. Over the next
two years, the four other condominium unit owners followed suit.
After the rental agreements were terminated, the Ritters started
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No. 2018AP1518
renting out their units and the units of the other owners. The
Ritters rented out the units and provided services under the
name "The Cottages at Bibs Resort" and "Bibs Cottages" and also
used the logo of a pair of red bib overalls.
¶17 Meanwhile, the Farrows were taking steps to officially
register the Bibs Resort marks with the State. In November
2008, unbeknownst to any of the other unit owners, the Farrows
filed an "Application for Registration of Marks" with the Office
of the Secretary of State of Wisconsin, seeking to register a
"pair of red bibs with a kerchief sticking out of pocket" and
the resort name of "Bibs." In February 2010, the Farrows filed
another application, seeking to register the mark "Bibs Resort."
¶18 Several months later, the Ritters filed an action
against the Farrows which set in motion the decade of litigation
that preceded this appeal. The Farrows counterclaimed with
multiple causes of action, including trademark infringement.
The circuit court eventually dismissed all of the Ritters'
claims, and the case proceeded to trial on the Farrows'
counterclaims.
¶19 A month prior to trial, the Association filed a motion
to intervene, which the circuit court denied. At trial, the
jury found in favor of the Farrows on three points: (1) the
Farrows had established use of the name "Bibs Resort" as a trade
name; (2) the Ritters' use of the name "Bibs Cottages" and "The
Cottages at Bibs Resort" infringed on that trade name; and
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No. 2018AP1518
(3) the Ritters' infringement was a cause of damages to the
Farrows.10
¶20 The Association appealed the order denying its motion
to intervene and the Ritters appealed the entry of judgment;
these actions were consolidated on appeal. The court of appeals
reversed the circuit court's order denying the motion to
intervene and remanded the case for further proceedings. See
Ritter v. Farrow, Nos. 2012AP781 & 2013AP927, unpublished slip
op. (Wis. Ct. App. June 24, 2014).
¶21 On remand, the circuit court determined that "[t]he
trial of this case on remand from the Court of Appeals shall
include the common law and statutory trade name claims at issue
in the first trial . . . ." The Farrows and the Association
filed competing motions for summary judgment "regarding trade
name and trademark infringement." The circuit court granted
summary judgment to the Association and the Ritters and denied
the Farrows' motion.11 The circuit court concluded that:
(1) "Bibs Resort" was a trade name; (2) the name Bibs Resort
"became part of" the Association at the time of the 1998
conversion; (3) although there were disputed issues of fact as
10The jury ruled on the Farrows' other counterclaims, but
the disposition of those counterclaims is not relevant to this
dispute.
The Farrows raised federal trademark infringement claims
11
for the first time on summary judgment. The Association
objected to the Farrows raising these claims. The circuit court
declined to reach the issue, concluding that the federal claims
were moot in light of the court granting summary judgment to the
Association.
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No. 2018AP1518
to whether the marks were transferred to the Farrows as part of
the 2006 sale, that dispute was immaterial because the Ritters
did not have exclusive ownership of the marks in 2006; and
(4) because each individual condominium owner held rights to
"Bibs Resort," no one held exclusive ownership. The Farrows
appealed.
¶22 The court of appeals affirmed the circuit court on
different grounds, concluding that, in 1998, the Ritters
impliedly transferred the name "Bibs Resort" to the Association
when they converted their resort to a condominium form of
ownership; consequently, the Ritters could not have transferred
ownership of the name "Bibs Resort" to the Farrows in 2006.
Ritter v. Farrow, 2019 WI App 46, ¶5, 388 Wis. 2d 421, 933
N.W.2d 167. The Farrows petitioned this court for review, which
we granted.12
II. STANDARD OF REVIEW
¶23 "We review a grant of summary judgment independently,
applying the same methodology as the circuit court." Pinter v.
Vill. of Stetsonville, 2019 WI 74, ¶26, 387 Wis. 2d 475, 929
N.W.2d 547. Summary judgment shall be granted where the record
demonstrates "that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a
matter of law." Wis. Stat. § 802.08(2).
While the Ritters are still a party to this litigation,
12
they did not file a brief with this court or the court of
appeals. Instead, by letter brief, the Ritters asserted that
their interests were adequately represented by the Association's
brief.
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III. ANALYSIS
¶24 In order to determine whether summary judgment was
properly granted, we must ascertain whether the circuit court
applied the well-settled principles of trademark and trade name
law in determining exclusive ownership of the Bibs Resort marks.
We begin with a brief primer on trademarks and trade names and
then discuss the Bibs Resort marks at issue. We then address
the parties' arguments regarding how both the 1998 resort-to-
condominium conversion and the 2006 sale of the resort
management business impacted the ownership of the Bibs Resort
marks.
A. Trademarks and Trade Names Generally
¶25 This litigation involves both a trademark and trade
names. Wisconsin law recognizes a common law and statutory
cause of action for infringement of trademarks and trade names.
See First Wis. Nat'l Bank of Milwaukee v. Wichman, 85
Wis. 2d 54, 63, 270 N.W.2d 168 (1978); Wis. Stat. ch. 132.
Although Wisconsin has long recognized a cause of action for
trademark infringement, Wisconsin courts have recognized that
the state's jurisprudence on trademark law is "undeveloped."
See Koepsell's Olde Popcorn Wagons, Inc. v. Koepsell's Festival
Popcorn Wagons, Ltd., 2004 WI App 129, ¶34, 275 Wis. 2d 397, 685
N.W.2d 853. Therefore, we look to federal law for guidance and
key principles, id., as well as to treatises.
¶26 A trademark is "a word, name, symbol, device, or other
designation, or a combination of such designations, that is
distinctive of a person's goods or services and that is used in
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a manner that identifies those goods or services and
distinguishes them from the goods or services of others."
Restatement (Third) of Unfair Competition § 9 (Am. L. Inst.
1995); see 15 U.S.C. § 1127 (2012) (defining "trademark"); Wis.
Stat. § 132.001(2) (defining "mark"); 1 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 3:1 (5th ed.
2019). "From an economic point of view, a trademark is a symbol
that allows a purchaser to identify goods or services that have
been satisfactory in the past and reject goods or services that
have failed to give satisfaction." 1 McCarthy, supra, § 2:3.
In other words, a trademark "helps consumers identify goods and
services that they wish to purchase, as well as those they want
to avoid." Matal v. Tam, 582 U.S. ___, 137 S. Ct. 1744, 1751
(2017).
¶27 A trademark is a form of intangible property that
cannot exist "separate from the good will of the product or
service it symbolizes." 1 McCarthy, supra, § 2:15. "Good will
is a business value that reflects the basic human propensity to
continue doing business with a seller who has offered goods and
services that the customer likes and has found adequate to
fulfill [his or] her needs." Id., § 2:17; see also Newark
Morning Ledger Co. v. United States, 507 U.S. 546, 555-56 (1993)
("Although the definition of goodwill has taken different forms
over the years, the shorthand description of good-will as 'the
expectancy of continued patronage' . . . provides a useful label
with which to identify the total of all the imponderable
qualities that attract customers to the business." (quoted
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No. 2018AP1518
source omitted)); Goodwill, Black's Law Dictionary 810 ("A
business's reputation, patronage, and other intangible assets
that are considered when appraising the business, esp. for
purchase. . . . "). Accordingly, a trademark cannot be sold or
assigned unless the associated goodwill is also sold. See 1
McCarthy, supra, § 2:15.
¶28 In contrast, a trade name is a "word, name, symbol,
device or other designation, or a combination of such
designations, that is distinctive of a person's business or
other enterprise and that is used in a manner that identifies
that business or enterprise and distinguishes it from the
businesses or enterprises of others." Restatement (Third) of
Unfair Competition § 12; see 1 McCarthy, supra, § 4:5 (defining
"trade name"). In short, a trademark identifies and
distinguishes goods and services, while a trade name denotes a
business or association. See 1 McCarthy, supra, § 4:5. In both
cases, the key is whether the designation serves as an indicator
of the source; i.e., whether it distinguishes the
goods/services/business from others so that consumers can
identify the source that is connected to the designation. See
Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI 33,
¶28, 261 Wis. 2d 4, 660 N.W.2d 666.
¶29 It is an "old and clear rule, universally followed"
that when a business is sold, "trademarks and the good will of
the business that the trademarks symbolize are presumed to pass
with the sale of the business. . . . " 3 McCarthy, supra,
§ 18:37. "The rule of law is well recognized that in a
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No. 2018AP1518
voluntary sale of a business as an entirety, trademarks and
trade names, which have been lawfully established and identified
with such business, will pass to one who purchases as a whole
the physical assets or elements of the business." Am. Dirigold
Corp. v. Dirigold Metals Corp., 125 F.2d 446, 453 (6th Cir.
1942) (citing Herring-Hall-Marvin Safe Co. v. Hall's Safe Co.,
208 U.S. 554, 558 (1908)); see Yellowbook Inc. v. Brandeberry,
708 F.3d 837, 846 (6th Cir. 2013)("[W]hen a business sells the
'entirety' of its assets, the trade name is presumably one of
those assets. A contract that sells 'as an entirety the
property of a corporation, including good will, passes title to
the business trademarks of the corporation.'" (quoted source
omitted)). Having outlined the relevant terms and legal
principles, we apply those concepts to the facts of this case.
B. The Bibs Resort Marks
¶30 We begin by emphasizing that the Bibs Resort marks
indicate the source of the provided goods or services. That is,
the Bibs Resort marks represent the resort management services
that the Ritters' business continuously provided from Bibs
Resort's founding in 1986 until 2006. These services included
marketing, maintenance, cleaning, and conducting social
activities. It is undisputed that the Ritters provided these
services uninterrupted and in the same fashion even after the
1998 resort-to-condominium conversion, a conclusion bolstered by
the plain language of the Declaration. The Declaration
expressly permitted the Ritters' business to continue providing
these resort management services: "nothing in the paragraphs in
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No. 2018AP1518
these Declarations shall be construed to prohibit [the Ritters]
from continuing to operate the property, or any part thereof, as
a resort or to prohibit any of the units [sic] owners from
renting out the unit or units."
¶31 During the 20 years that the Ritters provided the
resort management services, the Bibs Resort marks were
transformed into symbols of the resort management services,
including the resort activities and their associated enjoyment.
In other words, the Ritters' resort management business built up
the goodwill of the resort through activities such as picnics,
campfires, and other lakeside recreational events, as well as
maintaining the grounds, cleaning the units, and operating an
on-site bar, all while using the Bibs Resort marks. See 1
McCarthy, supra, § 3:2 (noting that a trademark "is the visual
symbol of the good will and reputation that a business has built
up in a product or service"). Because the Ritters provided
ongoing and uninterrupted resort services, returning customers
were able to identify their services, and the associated
goodwill, with the Bibs Resort marks. Having established this
link between the Bibs Resort marks and the resort management
services they symbolized, we turn to the Association's argument
about the 1998 resort-to-condominium conversion.
C. The Association's Claim of Ownership
¶32 The Association contends, and the court of appeals
agreed, that the 1998 resort-to-condominium conversion
transferred to the Association the Bibs Resort marks. The
Association's argument fails for two reasons. First, the
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No. 2018AP1518
argument violates longstanding trademark and trade name
principles. Second, neither the Condominium Ownership Act nor
the Declaration "mandate[d]" a transfer of the Bibs Resort marks
from the Ritters to the Association in 1998.
¶33 The Association asserts that the Bibs Resort marks
were tied to the resort's real property and thus automatically
transferred when the Ritters recorded the Declaration and
converted the property to a condominium. This argument violates
the longstanding principle that marks cannot exist separate and
apart from the goodwill of the product or service they
symbolize: the resort management services. See 1 McCarthy,
supra, § 2:15 ("A trademark has no existence separate from the
good will of the product or service it symbolizes. Good will
and its tangible symbol, a trademark, are inseparable.");
Marshak v. Green, 746 F.2d 927, 929 (2d Cir. 1984) (reasoning
that "[t]here are no rights in a trademark apart from the
business with which the mark has been associated; they are
inseparable"). Whether the lakefront property in and of itself
drew and attracted guests is irrelevant to the analysis here
because the Bibs Resort marks protect, and are associated with,
the goods and services that the Ritters provided through their
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No. 2018AP1518
business.13 By incorrectly linking the Bibs Resort marks to the
real property rather than the resort management services, the
Association misidentifies the source of the goodwill underlying
the Bibs Resort marks.
¶34 The Condominium Ownership Act lends no support to the
Association's argument that there was an automatic transfer of
the Bibs Resort marks to the Association in 1998. The court of
appeals concluded that the transfer "is mandated" by Wis. Stat.
§ 703.15, which says that "[t]he affairs of every condominium
shall be governed by an association" of unit owners. Ritter,
388 Wis. 2d 421, ¶25. But, even putting aside (1) the fact that
the Ritters continued to provide the resort management services
that the marks symbolized; and (2) that those marks cannot exist
separate and apart from the goodwill of the product or service
they symbolize, the plain language of chapter 703 did not
"mandate" the transfer of the Bibs Resort marks in 1998.
Section 703.15(3) lists the powers of condominium associations,
The court of appeals relied upon ABKA for the proposition
13
that "in the context of resort properties, the 'product' that
attracts prospective renters is not the type of fungible
services identified by the Farrows." See Ritter, 388
Wis. 2d 421, ¶35 (citing ABKA Ltd. P'ship v. Bd. of Rev. of
Vill. of Fontana-On-Geneva Lake, 231 Wis. 2d 328, 342, 603
N.W.2d 217 (1999)). However, ABKA is inapposite because it is a
property tax decision in which this court held that management
income that is "inextricably intertwined with" the resort
property may be included in a tax assessment, even if the
services are provided offsite. ABKA, 231 Wis. 2d at 331. ABKA
has no bearing on this case and the bedrock principles of
trademark and trade name law that dictate that marks indicate
the source of goods or services.
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No. 2018AP1518
including the conditional power of an association to "[a]cquire,
hold, encumber and convey any right, title or interest in or to
real property." (Emphasis added.) The Bibs Resort marks are
intangible property, the ownership of which is not enumerated
among the powers granted by the Condominium Ownership Act. It
is a well-established principle of statutory interpretation that
"the express mention of one matter excludes other similar
matters [that are] not mentioned." FAS, LLC v. Town of Bass
Lake, 2007 WI 73, ¶27, 301 Wis. 2d 321, 733 N.W.2d 287 (quoting
Perra v. Menomonee Mut. Ins. Co., 2000 WI App 215, ¶12, 239
Wis. 2d 26, 619 N.W.2d 123). The legislature, in drafting the
Condominium Ownership Act, was fully capable of granting
condominium associations the power to own intangible property
such as trademarks and trade names. It did not do so.
¶35 To be sure, Wis. Stat. § 703.15(3)(a)4. grants to
associations broad authority to "[e]xercise any other power
conferred by the condominium instruments[14] or bylaws."
(Emphasis added.) Despite this open-ended grant to a
condominium association to construct its bylaws as it sees fit,
the statute explicitly states that any non-enumerated powers
held by an association must be expressly conferred in either the
condominium instruments or bylaws. Here, even assuming,
incorrectly, that the Bibs Resort marks can be separated from
the resort management services they represent, there is no
Pursuant
14 to Wis. Stat. § 703.02(5), condominium
instruments include "the declaration, plats and plans of a
condominium together with any attached exhibits or schedules."
19
No. 2018AP1518
evidence that the Bibs Resort condominium's bylaws conferred on
the Association the ability to own any items of intangible
property and it is undisputed that the Association never
provided goods or services in the resort management service
industry.15
¶36 Additionally, the Declaration does not contain any
references to the transfer of intangible property to the
Association. Nor does it evince any transfer of the Bibs Resort
marks or any part of the business and associated goodwill that
those marks represent. To the contrary, the Declaration
specifically and unambiguously excludes that business from the
Association's authority, reserving it for the Ritters. And the
Ritters continued to provide those resort management services to
guests and patrons under the Bibs Resorts marks for years
following the resort-to-condominium conversion.
¶37 In sum, both the Association's argument that there was
a transfer of the Bibs Resort marks to the Association in 1998
and the circuit court's conclusion that the Bibs Resort marks
"became part of" the Association violate basic principles of
trademark and trade name law. Additionally, there is no reading
The Farrows have consistently reiterated that they do not
15
dispute the Association's use of the marks in a non-business
context, such as affixing the logo to the exterior wall of each
unit, since these uses are not uses in the marketplace and do
not indicate a source of goods or services.
20
No. 2018AP1518
of the Condominium Association Act or the condominium
instruments that supports such a "mandated" transfer.16
D. The Farrows' Claim of Ownership
¶38 Having determined that there is no support for the
proposition that the Bibs Resort marks transferred to the
Association in 1998, we turn next to the 2006 sale. In 2006,
the Ritters sold the on-site bar and "the Business known as
Bibs" to the Farrows. Included in the offer to purchase were
the "goodwill" and "business personal property," defined as "all
tangible and intangible personal property and rights in personal
property owned by Seller and used in the business as of the date
of [the] Offer, including . . . trade names. . . . " (Emphasis
added.) The Ritters also signed a bill of sale that transferred
the personal property and business equipment necessary to
operate the resort management business to the Farrows. The
parties confirmed the sale of the entirety of the Ritters'
resort management business to the Farrows in subsequent
We also note that the court of appeals relied in part
16
upon Carolyn Ritter's affidavit, in which she averred that she
and her husband did not sell the trademark rights at issue to
the Farrows in 2006 because the "name and logo [of Bibs Resort]
was and is the property of the [Association.]" Likewise, the
dissent exclusively relies upon Carolyn Ritter's unsupported
averment that "Each unit [the Ritters] sold included the right
to use the name as well as the logo." See, e.g., Dissent, ¶¶61,
72, 73. We decline to rely upon this self-serving affidavit
since the averments violate longstanding trademark and trade
name law and her averments find no independent support in the
Declaration or the Condominium Ownership Act. See TMT N. Am.,
Inc. v. Magic Touch GmbH, 124 F.3d 876, 884 (7th Cir. 1997)
(recognizing the danger of allowing parties to "us[e] self-
serving testimony to gain ownership of trademarks").
21
No. 2018AP1518
documentary filings with the State. Indicative of selling their
business to the Farrows, Ted and Carolyn Ritter changed their
business name from "Bibs Resort, Inc." to "Ritter Enterprises,
Inc."
¶39 Following the "old and clear rule, universally
followed," the Bibs Resort marks and their associated goodwill
passed from the Ritters to the Farrows in 2006 with the sale of
the resort management business. See 3 McCarthy, supra, § 18:37
("When a business is sold . . . trademarks and the good will of
the business that the trademarks symbolize are presumed to pass
with the sale of the business."); Am. Dirigold Corp., 125 F.2d
at 453 ("The rule of law is well recognized that in a voluntary
sale of a business as an entirety, trademarks and trade names,
which have been lawfully established and identified with such
business, will pass to one who purchases as a whole the physical
assets or elements of the business . . . .").
¶40 To summarize, the language in the 2006 documents
clearly shows that the Ritters sold the Farrows the entirety of
their resort management business, which included the associated
goodwill and exclusive ownership of and rights to the Bibs
Resort marks. The offer to purchase made explicit the Farrows'
intention to purchase the goodwill that was inextricably
associated with the resort management services. The bill of
sale signed by the Ritters further indicates that the resort
management business and related goodwill were transferred
together in accordance with longstanding practice. The Report
of Business Transfer filed by the Ritters and the joint letter
22
No. 2018AP1518
the parties sent to the DOR subsequent to the sale provide even
more evidence demonstrating the parties' intent to transfer the
goodwill and trade names from the Ritters to the Farrows. Based
on the ample evidence in the record and well-settled trademark
and trade name law, the ownership of the Bibs Resort marks
passed with the sale of the Ritters' resort management business
in 2006.17
¶41 Having determined that the Ritters and the Association
were not entitled to summary judgment because: (1) applying
well-settled principles of trademark and trade name law, the
Bibs Resort marks did not transfer to the Association in 1998;
and (2) the Farrows owned the Bibs Resort marks as of 2006 when
they purchased the Ritters' business, we reverse the circuit
court's grant of summary judgment. This case must be remanded
The Association also asserts that the Bibs Resort marks
17
are a collective mark of the Association. We need not address
this argument based on the foregoing analysis and our conclusion
that the Farrows were the exclusive owners of the Bibs Resort
marks as of 2006.
23
No. 2018AP1518
to the circuit court to reconsider the Farrows' summary judgment
motion in light of our legal conclusions.18
IV. CONCLUSION
¶42 Because it is a well-settled principle that trademarks
and their associated goodwill pass with the sale of a business,
we conclude as a matter of law that the Farrows became the
exclusive owner of the Bibs Resort marks in 2006 when they
purchased the resort management business from the Ritters. We
reverse the grant of summary judgment to the Ritters and the
Association and remand the case to the circuit court to
reconsider the Farrows' summary judgment motion in light of our
legal conclusions.
By the Court.—The decision of the court of appeals is
reversed and the cause is remanded.
18 The dissent claims that this opinion "gets all tangled up
in asserted connections between goodwill and tradenames, which
issues are not relevant to the dispute before us." Dissent,
¶91. Yet, the connection between goodwill and the Bibs Resort
marks is the crux of this case, as it is determinative of the
trademark ownership issues before us. The dissent erroneously
conflates trademark use with trademark ownership. Instead of
grappling with either of the ownership issues the parties
presented to this court, the dissent concludes that the Ritters
did not have "exclusive use" of the marks when they sold the
resort management business in 2006 because they had "dispersed
the right to use Bibs Resort and its logo to others long before
their 2006 transaction with the Farrows." Id., ¶87. But in
reaching this determination, the dissent glosses over the key
fact that although the Association and the individual unit
owners used the name and logo for non-commercial purposes,
nowhere does the record demonstrate that they used the marks to
provide resort management services.
24
No. 2018AP1518.pdr
¶43 PATIENCE DRAKE ROGGENSACK, C.J. (dissenting). The
majority opinion errs when it fails to apply summary judgment
methodology, which is the same for us as it is for the circuit
court, and thereby ignores uncontested material facts developed
during summary judgment. Those uncontested facts preclude
Anthony and Arlyce Farrows' (the Farrows) claim for tradename or
trademark infringement. The majority opinion compounds its
error when it ignores the common law of Wisconsin in regard to
what must be shown at summary judgment to make or defeat a prima
facie claim of infringement of tradename or trademark and relies
instead on federal case law that is grounded in the Lanham Act.
¶44 I conclude that application of Wisconsin common law to
the questions presented requires affirming the court of appeals'
decision that a claim for tradename or trademark infringement
sufficient to withstand the summary judgment motion to dismiss
has not been made here. I employ the rationale on which the
circuit court granted summary judgment, which also was presented
to us. Accordingly, I respectfully dissent from the majority
opinion.
I. BACKGROUND
¶45 On December 6, 1985, Ted and Carolyn Ritter (the
Ritters) formed a Wisconsin corporation, Bibs Resort, Inc. In
early 1986, the corporation purchased resort property on Little
St. Germain Lake. They improved the resort property and gave
the resort a new name, Bibs Resort. They also created a logo,
1
No. 2018AP1518.pdr
which included "BIBS Resort" with a pair of bibbed overalls that
have a handkerchief hanging out of the back pocket.
¶46 Bibs Resort consisted of 11 cottages, a bar and game
room and the Ritters' residence. The Ritters managed the resort
property, rented the cottages and operated the bar. The name,
Bibs Resort, and the logo have been associated with this resort
on Little St. Germain Lake since 1986.
¶47 On May 19, 1998, Bibs Resort, Inc., as the Declarant,
formed Bibs Resort Condominium and transferred all real property
and improvements thereon into the condominium form of use and
ownership pursuant to Wisconsin Statutes.1 That same day, the
Bibs Resort Declaration of Condominium was recorded at the
Office of the Register of Deeds for Vilas County, Wisconsin.2
¶48 The Declaration of Condominium named Bibs Resort
Condominium, Inc., a nonstock corporation, as the managing
entity of Bibs Resort Condominium.3 The bylaws of the
association were designated as the bylaws of Bibs Resort
Condominium.4 The Board of Directors of Bibs Resort Condominium
"A condominium is a form of ownership of real property
1
that combines two separate forms of ownership interest: the
individual ownership of the dwelling unit and the undivided
common ownership, with other unit owners, of the common elements
of the condominium parcel." Solowicz v. Forward Geneva Nat'l
LLC, 2010 WI 20, ¶19, 323 Wis. 2d 556, 780 N.W.2d 111 (citing
Joseph W. Boucher et al., Wisconsin Condominium Law Handbook
§ 1.17 (3rd ed. 2006)).
2 R. 36 at 8.
3 R. 36 at 10, 20.
R. 36 at 20-21. The bylaws of the condominium association
4
are not part of the record before us.
2
No. 2018AP1518.pdr
Association had the right to contract with any firm, person or
corporation for the maintenance and repair of the condominium
common area and properties.5
¶49 The Ritters continued to operate Bibs Resort as they
had in the past, by maintaining the grounds, renting cottages
and operating the bar. They did so through written contracts
with Bibs Resort Condominium, Inc. that could be cancelled with
90 days written notice by either party.
¶50 On May 24, 1998, Unit 10 of Bibs Resort Condominium
was sold to the Sorensens, and on June 30, 1998, Unit 9 was sold
to the Sorensens. The Sorensens' purchases included the right
to use the name Bibs Resort and the logo when they rented their
cottages, which name and logo were affixed to their individual
cottages.
¶51 On April 8, 2002, Unit 1 was sold to the McGinns, with
Bibs Resort and logo attached to their individual cottage. They
too obtained the right to use the name and logo. On September
16, 2005, Unit 6 was sold to the Abrahams, again with Bibs
Resort name and logo affixed to their cottage. They too had the
right to use the name and logo of Bibs Resort when they marketed
their cottage.
¶52 On May 27, 2006, unit number 12 was sold to the
Farrows, again with the Bibs Resort logo affixed to cottage 12
and the right to use the name, Bibs Resort. At that time, the
Farrows were given copies of all Bibs Resort Condominium
documents, including the Declaration of Condominium, the
5 R. 36 at 30.
3
No. 2018AP1518.pdr
Condominium Plat, By-laws and Rules and Regulations.6 The
Farrows knew that the rental agreements the Ritters had in place
could be terminated by either party with 90 days written notice.7
The Farrows' attorney insisted that new rental agreements be
prepared.8 Those new rental agreements also contained the right
of either party to terminate the agreement with 90 days written
notice.9 On June 23, 2006, Unit 13 (Northwoods Pub and Grill)
was sold to the Farrows, once again with the Bibs Resort name
and logo affixed. The Ritters continued to own seven units in
the condominium, which cottages were available for rental.
¶53 On June 23, 2006, the Farrows also purchased the
opportunity to enter into contracts with Bibs Resort Condominium
to manage the common areas and with owners of individual
condominium units to manage their individual cottages.
¶54 That same day, the Farrows reported a business
transfer for the "management of vacation resort" between Bibs
Resort, Inc. and Farrow Enterprises, Inc. to the Wisconsin
Division of Unemployment Insurance.10 BIBS Resort was stated as
the "tradename." On September 7, 2006, the Ritters and the
Farrows sent the Wisconsin Department of Revenue a letter
stating: "Anthony and Arlyce Farrow, corporate officers of
6 R. 77 at 3, 4.
7 R. 77 at 4.
8 Id.9 Id.10 R. 36 at 50.
4
No. 2018AP1518.pdr
Farrow Enterprises, Inc., would like to use the name BIBS Resort
as a trade name since they are handling advertising,
reservations and payments under that name. Ted and Carolyn
Ritter are amenable to that change."11
¶55 In 2006, the Bibs Resort Condominium Association and
the owners of cottages 10, 9, 6 and 1 entered into management
agreements with Farrow Enterprises, Inc., which included the
option for either party to terminate the agreement with 90 days
written notice, just as the management contracts had when the
Ritters were providing management services.
¶56 Several years later, problems developed with the
Farrows' management of the resort, although there are no
findings in the record as to what they were. In September and
October of 2009 and in March of 2010, the Farrows' contracts
with the condominium association and the individual cottage
owners were terminated with the required 90-day written notices.
¶57 On November 19, 2008, Farrow Enterprises, Inc.,
applied to the Wisconsin Secretary of State to register Bibs
Resort logo as a trademark. In her application, Arlyce Farrow
represented that the date of first use of the Bibs Resort logo
was "June 1, 2006." After being duly sworn, she averred that:
[T]he registrant has the right to the use of the
subject of the registration applied for, and that no
other person or persons, firm, partnership,
corporation, association or union of workers has such
right either in the identical form or in any such near
resemblance thereto as may be calculated to
deceive.[ ]
12
11 R. 36 at 58.
12 R. 77 at 15-17.
5
No. 2018AP1518.pdr
¶58 On February 17, 2010, Farrow Enterprises, Inc. applied
to the Wisconsin Secretary of State to register "Bibs Resort" as
a tradename. On her application, Arlyce Farrow represented that
the date of first use of the Bibs Resort name was "June 23,
2006." After being duly sworn, she again averred that in regard
to Farrow Enterprises right to use the name Bibs Resort, "no
other person or persons, firm, partnership, corporation,
association or union of workers has such right either in the
identical form or in any such near resemblance thereto as may be
calculated to deceive."13
¶59 In her affidavit supporting summary judgment of
dismissal of the Farrows' claim of tradename/trademark
infringement and based on personal knowledge, Carolyn Ritter
averred that the right to use the name Bibs Resort was given to
Bibs Resort Condominium when that form of ownership was created
in 1998 by Bibs Resort, Inc., the corporation of which she and
her husband, Ted, were the sole shareholders.
¶60 She averred that individual cottages were rented using
Bibs Resort as their name, and she attached a Vilas County
Public Health Department license permitting rentals of units of
"Bibs Resort Condominium."14 She also attached pictures of
signage that gave directions to the location of "BIBS Resort"
and employed the Bibs logo, which signs were created, paid for
and maintained by Bibs Resort Condominium Association.15
13 R. 77 at 18, 19.
14 R. 77 at 11.
15 R. 77 at 23.
6
No. 2018AP1518.pdr
¶61 Carolyn Ritter further averred that the Town of
St. Germain's real estate tax bills for individual units at Bibs
Resort Condominium used the name "Bibs Resort Condominium" as
identification. She attached examples of the Town of
St. Germain's tax bills.16 She said that every person who
purchased a unit in Bibs Resort Condominium had the right to use
the name Bibs Resort and the logo in marketing their cottages.
During the summary judgment proceedings before the circuit
court, the Farrows did not offer any evidence to dispute Carolyn
Ritters' statement that owners of individual units and the Bibs
Resort Condominium association had been given rights to use the
Bibs Resort name and logo.
¶62 In its summary judgment decision, the circuit court
concluded that, based on uncontested material facts, in 2006 the
Farrows could not have received the right to exclusive use of
the name, Bibs Resort, or the logo from either the Ritters or
the Bibs Resort Condominium because neither the Ritters nor the
Bibs Resort Condominium had the right to exclusive use to impart
to anyone. The court further explained:
Prior to the 2006 transaction between the Ritters
and the Farrows the Ritters had already granted the
other unit owners -– the Sorensens, the McGinns, and
the Abrahams -– the right to use the Bibs name and
logo in marketing the cabins. Those unit owners
already had a vested interest in the use of those
trademarks, and the interests of those third parties
cannot be extinguished by an agreement between the
Farrows and the Ritters alone.
. . . .
16 R. 77 at 13, 14.
7
No. 2018AP1518.pdr
The individual unit owners had the right to use
the Bibs name and logo, the logo was posted on each
unit, just as the Farrows had been given that right
when they bought their units.[17]
¶63 The Farrows appealed, and the court of appeals
affirmed. The court of appeals concluded that based on
undisputed material facts when the Farrows purchased two units
in the condominium and the opportunity to manage Bibs Resort
Condominium, others already had obtained the right to use the
Bibs Resort name and logo; therefore, the Farrows did not obtain
the right to exclusive use of the Bibs Resort name or logo when
they purchased the business opportunity. See Ritter v. Farrow,
2019 WI App 46, ¶36, ¶38 n.12, 388 Wis. 2d 421, 933 N.W.2d 167.
II. DISCUSSION
A. Standard of Review
¶64 This case presents as a review of the decision of the
court of appeals that affirmed the summary judgment decision of
the Vilas County Circuit Court18 dismissing the Farrows' claim
that the Ritters infringed their tradename/trademark. Whether
summary judgment was properly granted is a question of law that
we review independently, while applying the same methodology as
the circuit court and the court of appeals. Hoida, Inc. v. M&I
Midstate Bank, 2006 WI 69, ¶15, 291 Wis. 2d 283, 717 N.W.2d 17(citing Cole v. Hubanks, 2004 WI 74, ¶5, 272 Wis. 2d 539, 681
N.W.2d 147); see also Sands v. Menard, 2017 WI 110, ¶28, 379
Wis. 2d 1, 904 N.W.2d 789. In our review, we benefit from the
17 R. 335 at 8.
18 The Honorable Michael H. Bloom presided.
8
No. 2018AP1518.pdr
previous courts' discussions. Showers Appraisals, LLC v. Musson
Bros. Inc., 2013 WI 79, ¶21, 350 Wis. 2d 509, 835 N.W.2d 226.
B. Summary Judgment Principles
¶65 Every decision on a motion for summary judgment begins
with a review of the complaint (here, a counterclaim) to
determine whether, on its face, it states a claim for relief.
Hoida, 291 Wis. 2d 283, ¶16. If it does, then we examine the
answer to see if issues of fact or law have been joined. Id.After determining that the complaint and answer are sufficient
to join issue, we examine the moving party's affidavits to
determine whether they establish a prima facie case for summary
judgment in the movant's favor.19 Id. When they do, we review
the opposing party's affidavits to determine whether those
affidavits establish that there are material facts in dispute,
A moving party's affidavits based on personal knowledge
19
and submitted during a summary judgment proceeding should not be
discarded as "self-serving," and "unsupported" which is how the
majority opinion discounts them. Majority op., ¶37 n.16.
Affidavits given under oath and based on personal knowledge are
an evidentiary portion of the statutory process that is employed
when a court is deciding a summary judgment motion. Wis. Stat.
§ 802.08(3).
The majority opinion's disregard for established rules of
summary judgment will cause confusion in circuit courts who are
expected to follow Wis. Stat. § 802.08(3) and case law in regard
to summary judgment motions. Augustine v. Anti-Defamation
League of B'Nai B'Rith, 75 Wis. 2d 207, 221, 249 N.W.2d 547(1977) (explaining that when affidavits based on personal
knowledge present material facts they may make a prima facie
case for summary judgment); Physicians Plus Ins. Corp. v.
Midwest Mut. Ins. Co., 2002 WI 80, ¶18, 254 Wis. 2d 77, 646
N.W.2d 777 (concluding that to defeat summary judgment there
must be a genuine issue of material fact apparent in the
affidavits submitted).
9
No. 2018AP1518.pdr
or inferences from undisputed material facts, that would entitle
the opposing party to a trial to determine those facts. Id. We
affirm a grant of summary judgment when this process shows that
there are no disputes of material fact. Id. "'[T]he mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment,' so long as there is no disputed fact that is
material to the claim or defense made." Id. (quoting City of
Elkhorn v. 211 Centralia St. Corp., 2004 WI App 139, ¶18, 275
Wis. 2d 584, 685 N.W.2d 874).
C. Infringement Principles
¶66 The sole remaining claim from the Farrows'
counterclaims is whether the Ritters infringed their
tradename/trademark.20 Wisconsin recognizes a claim for relief
at common law for tradename or trademark infringement.
"Infringement actions, even against a non-competitor, protect
the reputation and goodwill exclusively appropriated to the
trademark holder." Spheeris Sporting Goods, Inc. v. Spheeris on
Capitol, 157 Wis. 2d 298, 312, 459 N.W.2d 581 (1990). As
claimed in First Wis. Nat. Bank of Milwaukee v. Wichman, 85
Wis. 2d 54, 270 N.W.2d 168 (1978), the plaintiff must allege
infringement of its common law rights to the exclusive use of
certain words, there, "First Wisconsin." Id. at 60.
Notably, there can be no claim for the violation of a
20
non-compete agreement in the case before us. A non-compete
agreement was not alleged to have been agreed to or breached.
However, to me, the Farrows really are complaining that they are
injured because the Ritters competed with them.
10
No. 2018AP1518.pdr
¶67 Without the right to exclusive use, an action for
tradename or trademark infringement cannot be maintained.
Marshall v. Pinkham, 52 Wis. 572, 590, 9 N.W. 615 (1881).
Marshall involved a liniment that the father, Samuel Marshall,
first prepared and sold under his name, with a label that
contained a particular vignette of a horse's head. Id. at 574-
75. Over the course of several years he gave his seven children
the formula for the liniment, which they manufactured and sold
on their own. Samuel generally provided the labels for them to
use. Id. at 575. After Samuel died, his widow, Mary, continued
to manufacture and sell the liniment, as did a number of their
children. Id.
¶68 Some years later, one son, Charles H., bought out the
liniment business his mother had operated. Id. He then brought
a suit for trademark infringement to enjoin the manufacture and
sale of the liniment by others. He claimed that his father had
left the rights for the liniment to Mary and that he had
purchased those rights from her. The trial court dismissed the
suit after determining that plaintiff did not have the right to
exclusive use of the name or label. Id. at 577. We agreed
stating:
[I]t would seem to be very certain that Charles H.
never acquired an exclusive right to the use of the
word "Marshall's" or "Old Dr. S. Marshall's" upon the
liniment put up by him, as against his father, mother,
brothers or sisters. If the plaintiff Charles H.
never acquired any such exclusive right as against
them, it would seem quite doubtful whether he ever
acquired it as against any one. . . . The question
occurs, [w]hom does the word "Marshall's" point out as
the true source, origin, or owner of the original
genuine mixture, or what particular place of business
11
No. 2018AP1518.pdr
or sale has it designated during these many years? If
it never in fact truly so pointed out or designated,
or if by its distributive use, . . . it ceased to
perform that function, then it can no longer be
protected as a trade-mark.
Id. at 582-83. We explained that "[a]s no exclusive right of
either of the plaintiffs was invaded, they were not entitled to
an injunction by reason of any mere absence of such right on the
part of the defendant." Id. at 590.
D. Farrows' Infringement Claim
¶69 The Farrows would like to return to the circuit court
to pursue a claim for infringement of tradename/trademark based
on their purchase of a business opportunity from the Ritters.
In order to do so, they must allege material facts sufficient to
prove that they have the right to exclusive use of the name,
Bibs Resort, and its overalls logo. First Wisconsin, 85 Wis. 2d
at 60; Marshall, 52 Wis. at 582; Spheeris, 157 Wis. 2d at 312.
¶70 As I begin the required summary judgment methodology,
I examine the Farrows' counterclaim allegations and the
responses that are asserted by the Ritters relative to the
Farrows' infringement claim. The Farrows' alleged that they
"own the common law and state-registered trademark, 'BIBS
Resort.'"21 The Ritters respond that "Defendants do not have an
exclusive propriety interest in the [logo], 'BIBS Resort,' as
said [logo] is part of the name and legal description of the
condominium in which all unit owners have an interest, including
the right to use the same."22 They further contend that
21 R. 2 at 12, ¶44.
22 R. 30 at 9, ¶26.
12
No. 2018AP1518.pdr
"Defendants have no exclusive proprietary interest in the name
of 'BIBS Resort.'"23 The Ritters further contend, as an
affirmative defense, that the Farrows pleadings fail to state a
claim.24
¶71 In determining whether pleadings state a claim for
relief, we liberally construe what has been alleged. John Doe 1
v. Archdiocese of Milwaukee, 2007 WI 95, ¶12, 303 Wis. 2d 34,
734 N.W.2d 827. The word, "own," which the Farrows used to
describe their interest in the Bibs Resort logo, is an undefined
term that could convey a number of properties. Therefore, I
conclude that their complaint could state a claim for trademark
infringement. The Ritters deny the Farrows' allegations and
affirmatively allege that in order to proceed with a claim of
infringement, the Farrows must have the right to exclusive use
of the name, Bibs Resort, and its logo, which they do not have.
Accordingly, at that stage of the summary judgment methodology,
I conclude that issue has been joined on whether the Farrows
have a claim for tradename/trademark infringement.
¶72 The Ritters moved for summary judgment dismissing the
Farrows' infringement claim. They provided the affidavit of
Carolyn Ritter, which is based on her personal knowledge. To
her affidavit, they attached documents showing that since at
least 1998, when Bibs Resort Condominium was formed, others in
23 R. 30 at 10, ¶28.
24 R. 30 at 15, ¶41, H.
13
No. 2018AP1518.pdr
addition to the Ritters have had the right to use the name, Bibs
Resort, and its logo.25
¶73 Her affidavit averred that when individual units in
Bibs Resort Condominium were sold in 1998, 2002 and 2006, the
unit owners were given the right to use the name, Bibs Resort,
and its logo to advertise rentals of their individual cottages.
The documents attached to the affidavit showed that the Town of
St. Germain also used the name, Bibs Resort Condominium, when it
taxed individual unit owners, and the Vilas County Department of
Health issued rental permits to unit owners for property known
as Bibs Resort.26 The affidavit also attached pictures of signs
showing directions to the location of "Bibs Resort"; the signs
used the BIBS Resort logo too.27 Those advertisements were
created, maintained and paid for by the condominium association
for Bibs Resort Condominium.28
¶74 These submissions made a prima facie case for
dismissal of the Farrows' infringement claim because the
undisputed, material facts demonstrated that in 2006 the Ritters
no longer had the right to exclusive use of the name, Bibs
Resort, or its logo; and therefore, the Ritters could not
transfer the right to exclusive use of the name or logo to the
Farrows. First Wisconsin, 85 Wis. 2d at 60; Marshall, 52 Wis.
25 R. 77 at 11.
26 R. 77 at 13, 14.
27 R. 77 at 23.
28 R. 77 at 23.
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at 582; Spheeris, 157 Wis. 2d at 312. The Farrows submitted
nothing in opposition to the Ritters' submissions in support of
their motion for summary judgment dismissing the Farrows'
infringement claim.
¶75 Although Farrow Enterprises, Inc. twice attempted to
register Bibs Resort and its logo with the Wisconsin Secretary
of State pursuant to Wisconsin Statutes, and they alleged
infringement of a "registered mark" in their counterclaim, the
Farrows did not continue with the contention that they had a
registered mark during the summary judgment proceedings.
However, if they had, they would have had to prove that they
have the right to exclusive use of the name, Bibs Resort, and
its logo, because exclusivity of use is a requirement for
registering a trademark in Wisconsin.
¶76 The requirement of exclusivity of use is apparent from
the statement that the Secretary of State requires be given
under oath on the registration form and also from the plain
meaning of Wis. Stat. §§ 132.01(1) and (7)(a). The Secretary of
State's form provides:
[T]he registrant has the right to the use of the
subject of the registration applied for, and that no
other person or persons, firm, partnership,
corporation, association or union of workers has such
right either in the identical form or in any such near
resemblance thereto as may be calculated to
deceive.[ ]
29
The plain meaning of §§ 132.01(1) and (7)(a) is consistent with
the Secretary of State's form. They provide a protectable mark
29 R. 77 at 15-17 (emphasis added).
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if the registrant has the right to exclusive use of the mark.
The plain meaning of those statutes are consistent with
Wisconsin common law, as related in my discussion above.
Section 132.01 provides in relevant part:
(1) [Registration requires] . . . that the party, on
whose behalf such mark is to be filed, has the
right to the use of the same, and that no other
person, or persons, firm, partnership,
corporation, association, or union of workingmen
has such right . . . .
. . . .
(7) The department shall do all of the
following:
(a) Cancel from his or her register any
registration . . . if a final judgment in any court of
competent jurisdiction finds that . . . the registrant
does not have the right to the exclusive use of the
registration.
(Emphasis added). Accordingly, if a registrant obtains
Wisconsin registration by representing registrant has the right
to exclusive use of a trademark and a court determines that the
registrant does not have the right to exclusive use, the
registration will be cancelled. Therefore, the right to
exclusive use is critical to a claim of infringement, whether
under statutory or common law.
¶77 Few cases employ Wisconsin's trademark statutes, and
those that I found are not on-point with the dispute before us.
For example, Mil-Mar Shoe Co., Inc. v. Shonac Corp., 75 F.3d
1153 (7th Cir. 1996), which relied on Wis. Stat. ch. 132, turns
on whether an alleged trademark is generic or descriptive, an
issue not present in the dispute before us.
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¶78 D.L. Anderson's Lakeside Leisure Co., Inc. v.
Anderson, 2008 WI 126, 314 Wis. 2d 560, 757 N.W.2d 803 is
somewhat helpful in regard to common law. Over the years, D.L.
Anderson developed a business of selling marine services and
products. In 2000, Scott Statz and Steven Statz (the Statzes)
purchased that business for $891,000. Under the sales
agreement, the Statzes purchased "restrictions on competition,"
for which they paid $400,000, and the right of the "use" of the
tradename, D.L. Anderson Co., for which they paid $200,000.
Id., ¶7.
¶79 About two years after the Statzes' purchase, Anderson
began working in areas that the Statzes believed violated the
noncompetition provision of their asset purchase agreement.
Id., ¶¶10-13. In 2004, the Statzes filed suit against Anderson,
alleging breach of the noncompetition provisions of the purchase
agreement, infringement of tradename, unfair competition and
breach of contract. Id., ¶14. The jury found in favor of the
Statzes. Id., ¶15.
¶80 On review, Anderson claimed that the jury instructions
were erroneous. The Statzes said that Anderson waived the error
because he did not raise it before the circuit court. We agreed
Anderson did not raise it, however, we exercised our discretion
and reviewed the instructions given. Id., ¶41.
¶81 While there are parts of D.L. Anderson's Lakeside
Leisure that address infringement issues not present in the case
before us, D.L. Anderson's Lakeside Leisure confirms that an
infringement claim must be grounded in the right to exclusive
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use of the tradename. Id., ¶42. We cited First Wisconsin,
which concluded that infringement claims require exclusivity of
use of a trademark, and Spheeris, which, again, relied on
exclusivity of use as a requirement for an infringement claim.
Id.
¶82 Because there is little state law on
tradename/trademark infringement, courts sometimes look to
federal law. While such consideration may be helpful, it can
lead a court to err if the court does not recognize significant
differences in state and federal law relative to
tradenames/trademarks.
¶83 One significant difference is the effect of federal
registration under the Lanham Act. Such registration "shift[s]
the burden of proof from the plaintiff, who in a common law
infringement [claim] would have to establish his right to
exclusive use, to the defendant, who must introduce sufficient
evidence to rebut the presumption of plaintiff's right to such
use." Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366, 373
(1st Cir. 1980), repudiated on other grounds by Miller Brewing
Co. v. Falstaff Brewing Corp., 655 F.2d 5 (1st Cir. 1981).
"Under the Lanham Act, registration of a mark is prima facie
evidence of the 'the registrant's exclusive right to use the
registered mark in commerce [] or in connection with the goods
or services specified in the registration.'" Black Dog Tavern
Co., Inc. v. Hall, 823 F. Supp. 48, 53 (D. Mass. 1993) (quoting
15 U.S.C. § 1115(a)).
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¶84 Therefore, relying on federal cases with underlying
Lanham Act registration can be troublesome if a question
presented is whether the claimant has the right to exclusive use
of the tradename/trademark because federal cases with underlying
Lanham Act registration will presume that claimant has such a
right. Under Wisconsin common law, a claimant is required to
prove possession of the right to exclusive use of the
tradename/trademark. Marshall, 52 Wis. at 582.
¶85 Stated otherwise, relying on federal case law for a
Wisconsin common law claim can cause a court to fail to analyze
what state common law requires as the foundation for an
infringement claim, i.e., the possession of the right to
exclusive use of the tradename or trademark. Missing that
foundation can cause a court to get tangled in other issues that
may be presented but are not relevant to deciding an
infringement action where the right to exclusive use has not
been proved. As basic tradename/trademark hornbook law
provides, "[i]n a trade name infringement action, the plaintiff
is required to establish a right to exclusive use of the name."
Robin Cheryl Miller, 17 Causes of Action 579 § 5 Cumulative
Supp. (updated Nov. 2020).
¶86 Simply stated, because a tradename or trademark is
often employed to identify the source of goods or services, if
others have the right to use the same name or mark, the name or
mark does not identify the source of goods or services.30
One can license a tradename so that others can use it.
30
McDonald's is an example of such licensing, but licensing has no
relevance to the case before us.
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Accordingly, a seller who no longer has the right to exclusive
use of a tradename/trademark cannot sell it to someone else.
¶87 The case now before us was properly dismissed by the
circuit court in a well-reasoned opinion.31 At summary judgment,
it became apparent that based on uncontroverted material facts,
the Farrows' counterclaim for infringement failed. It failed
because the Farrows never provided any evidentiary proof that
the Ritters had the right to exclusive use of the name and logo
for Bibs Resort at the time of the Farrows' 2006 purchase. The
right to exclusive use of a tradename/trademark is required to
sue for infringement. First Wisconsin, 85 Wis. 2d at 60;
Marshall, 52 Wis. at 582; Spheeris, 157 Wis. 2d at 312. The
only proof on the right to exclusive use was uncontroverted.
Carolyn Ritter averred, based on personal knowledge, that she
and her husband had dispersed the right to use Bibs Resort and
its logo to others long before their 2006 transaction with the
Farrows.
E. Majority Opinion
¶88 The majority opinion leads itself into error because
it misstates the dispositive issue in the case, saying: "These
designations relate to a lakefront resort in St. Germain,
Because I employ the same rationale as the circuit court
31
(that the Farrows did not establish the right to exclusive use
of the Bibs' Resort name and logo), I need not address another
rationale utilized by the court of appeals. I observe, however,
that renters likely chose to visit Bibs Resort in part because
of its location rather than due to fungible management services.
See ABKA Ltd. P'Ship v. Bd. of Review of the Vill. of Fontana-
on-Geneva Lake, 231 Wis. 2d 328, 342, 603 N.W.2d 217 (1999).
20
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Wisconsin, and we are asked to determine their ownership."32 And
it repeats this concept frequently, "we must ascertain whether
the circuit court applied the well-settled principles of
trademark and trade name law in determining the exclusive owner
of the Bibs Resort marks."33 And further, "the Farrows owned the
Bibs Resort marks as of 2006 when they purchased the Ritters'
business."34
¶89 The word "ownership" creates a foundational problem in
the majority's analysis because the analysis does not recognize
that for ownership to matter in an infringement claim, it must
include ownership of the right to exclusive use of the name and
logo.35 First Wisconsin, 85 Wis. 2d at 60; Marshall, 52 Wis. at
582; Spheeris, 157 Wis. 2d at 312; see also Wis. Stat.
§§ 132.01(1) and (7)(a).
32 Majority op., ¶1.
33 Id., ¶24.
34 Id., ¶41.
In addition to missing the issue on which this
35
infringement claim turns, the majority opinion also is
internally inconsistent such that it will be difficult for
circuit courts to apply. To explain further, the majority's
holding rests upon its statement that "[i]t is a well-settled
legal principle that trademarks and their associated goodwill
pass with the sale of a business." Majority op., ¶4. However,
later in the opinion when hornbook and federal case law are
cited, this "well-settled principle" becomes a bit more
tentative. It morphs into only a presumption that trademarks
pass with the sale of a business. See id., ¶¶29, 40. So which
is it? Is it a well-settled principle or merely a rebuttable
presumption, i.e., a well-settled principle that absent contrary
evidence it is presumed to pass? This inconsistency may
undermine the ability of future courts to apply the majority
opinion.
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¶90 The majority opinion also ignores summary judgment
methodology even though it acknowledges it is to apply the same
methodology as the circuit court applied.36 If the majority
opinion had not skipped this critical step, it may have avoided
error.
¶91 However, the majority also relies on federal case law
when a tradename or trademark has been registered under the
Lanham Act, where the right to exclusive use is presumed once
registration has occurred.37 Keebler, 624 F.2d at 373. The
common law of Wisconsin requires the claimant in an infringement
action to prove it has the right to exclusive use. First
Wisconsin, 85 Wis. 2d at 60; Marshall, 52 Wis. at 582; Spheeris,
157 Wis. 2d at 312. The opinion also gets all tangled up in
asserted connections between goodwill and tradenames, which
issues are not relevant to the dispute before us.38
¶92 The majority opinion says that the dissent "conflates
trademark use with trademark ownership."39 That statement shows
a basic misunderstanding of the law. To explain, if the Farrows
"ownership" includes the right to exclusive use of the name,
Bibs Resort, and its logo, they can maintain a claim for
tradename/trademark infringement. If their ownership is a right
to shared use of the name and logo with others who were given
36 Majority op., ¶24
37 Id., e.g., ¶29.
38 Id., e.g., ¶34.
39 Majority op., ¶41 n.18.
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No. 2018AP1518.pdr
the right to use the name and logo when marketing their
cottages, then the Farrows cannot maintain a claim of
tradename/trademark infringement. The right to exclusive use is
required to be proved as a fact in order to maintain a claim for
tradename/trademark infringement. First Wisconsin, 85 Wis. 2d
at 60; Marshall, 52 Wis. at 582. When this matter returns to
the circuit court, the Farrows must prove that their "ownership"
includes the right to exclusive use of the name and logo;
otherwise, they cannot maintain a tradename/trademark
infringement action. Id.
¶93 At its core, this case is about whether the Ritters
had dispersed the right to use Bibs Resort and its logo to
others before the sale to the Farrows. The undisputed record
shows that they did. Individual condominium owners were given
the right to use the name and logo when they purchased their
individual cottages; the operating company, Bibs Resort
Condominium, Inc., also was given the right to use the name and
logo, which it did, as shown by the pictures in the record of
the signs that the association created and maintained.
¶94 Certainly, the Farrows had a right to use the Bibs
Resort name and logo; however, it was not the right to exclusive
use. And therein lies the problem. The right to exclusive use
of a tradename or trademark is required to maintain an
infringement action under Wisconsin law. Id.
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III. CONCLUSION
¶95 I conclude that application of Wisconsin common law to
the questions presented requires affirming the court of appeals
decision that a claim for tradename or trademark infringement
sufficient to withstand the summary judgment motion to dismiss
has not been made here. I employ the rationale on which the
circuit court granted summary judgment, which also was presented
to us. Accordingly, I respectfully dissent from the majority
opinion.
¶96 I am authorized to state that Justices ANN WALSH
BRADLEY and ANNETTE KINGSLAND ZIEGLER join this dissent.
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