An Illinois nonprofit organization formed for the purpose of acquiring and delivering computers to applicants with disabilities ("JMF") could pursue claims against another Illinois nonprofit organization ("WAF") for infringing the mark "New Freedom," an Illinois state appellate court has decided. Summary judgment against JMF should not have been granted on the basis of allegedly exclusive or superior third-party rights in the mark held by the U.S. Department of Labor.

Although the Department allegedly had the exclusive common-law right to "New Freedom" through first use, there was a factual issue as to whether JMF had rights in the mark that were superior to WAF's. JMF was only required to establish that it had some right in the "New Freedom" mark that was superior to WAF's right, not a right that was superior to the whole world, the court said.

The Department and JMF had entered into an agreement under which the Department assumed any right, title, and interest JMF had in the mark in exchange for an exclusive license to JMF to use the mark in Illinois. In addition, JMF had registered the mark in Illinois, which further indicated that there was an unresolved factual issue as to whether JMF had an enforceable right to use the mark in Illinois. WAF's assertion that JMF lacked the right to enforce the mark essentially amounted to a jus tertii defense, which had been recognized to be improper in a trademark action, according to the court.

There was a factual issue as to whether the Department's territorial use of the mark extended beyond the Washington, D.C. area to Illinois. The Department had sponsored an event in Washington, D.C. called "New Freedom Awards" and had solicited nominees for the awards through a notice in the Federal Register. Publication of the notice was not sufficient as a matter of law to constitute first use of the phrase in Illinois, the court said.

Whether publication of the notice was sufficiently public to identify or distinguish the mark and the underlying services in the minds of the public was a question of fact. The notice was not broadcast through traditional mass media intended to reach the Illinois general public. There was no evidence that people in Illinois were aware of the Department's awards program, excluding the Federal Register notice.

WAF had admitted that neither WAF nor JMF was even aware of the Department's awards program prior to JMF's use of the mark in Illinois. In contrast, JMF had conducted significant local media advertising to announce the launch of its "New Freedom Awards" project in the Chicago area.

Factual issues also precluded a determination on summary judgment as to whether JMF acquiesced in WAF's use of the mark, according to the court. JMF's apparent decision to allow WAF to pay $28,000 in unpaid bills from a "New Freedom Awards" event did not establish as a matter of law that JMF intended to give up rights in the mark. JMF continued to actively discourage WAF's supporters from donating and filed state and federal trademark applications in an apparent attempt to protect the mark.

The Jim Mullen Charitable Foundation, Ill. App. Ct., ¶61,515.