Reed v. Marshall: Fifth Circuit Forecloses Lanham Act Suits Between Co-Owners of a Trademark

1. Introduction

Reed v. Marshall, No. 24-20198 (5th Cir. July 2 2025) resolves a modern twist on an old problem: What federal remedies exist when co-owners of a jointly-registered trademark fall out and one faction continues to exploit the mark without the other’s consent? The United States Court of Appeals for the Fifth Circuit, in an opinion by Judge James E. Graves, Jr., answers that question emphatically: the Lanham Act does not authorize infringement, dilution, or unfair-competition claims by one co-owner against another, nor against a licensee acting with a co-owner’s permission.

The dispute arose from JADE, an R&B trio whose 1990s hits remain in rotation today. After a failed reunion, two members (Marshall and Harris) hired a new singer (Holloway) and began touring as “Jade.” The third member, Di Reed, sued under the Lanham Act and Texas law. The district court granted summary judgment to defendants, and the Fifth Circuit has now affirmed, creating circuit-level precedent on the unavailability of Lanham Act causes of action between trademark co-owners.

2. Summary of the Judgment

• Procedural Holdings: The Fifth Circuit rejected Reed’s argument that the district court improperly converted a Rule 12 motion to a Rule 56 motion and denied her request for a new trial.
• Substantive Holdings:
  • The Lanham Act’s infringement provision, 15 U.S.C. § 1114(1), provides a cause of action only to a trademark’s owner against an infringer; co-owners stand on the same side of the statutory line, so one cannot sue another.
  • The federal dilution provision, 15 U.S.C. § 1125(c), likewise presupposes a famous mark owner suing “another person”; it therefore excludes intra-ownership suits.
  • Because use of the mark by co-owners (and their licensee) is authorized, the false-advertising and false-designation claims fail for lack of statutory standing and proximate cause.
  • No supplemental jurisdiction remained over the pendant Texas claims.

  3. Detailed Analysis

  3.1 Precedents and Authorities Cited

  • Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) – Provides the two-step test (zone of interests & proximate cause) for statutory standing under the Lanham Act.
  • Rex Real Estate I, L.P. v. Rex Real Estate Exchange, Inc., 80 F.4th 607 (5th Cir. 2023) – Reaffirms that only an “owner” may sue under § 1114(1).
  • World Carpets, Inc. v. Dick Littrell’s New World Carpets, 438 F.2d 482 (5th Cir. 1971) – Defines the “precise wrong” the Lanham Act seeks to prevent: consumer deception by non-owners.
  • Piccari v. GTLO Productions, LLC, 115 F. Supp. 3d 509 (E.D. Pa. 2015) – Directly holds that co-owners cannot sue one another for Lanham Act infringement; relied upon as persuasive authority.
  • Derminer v. Kramer, 406 F. Supp. 2d 756 (E.D. Mich. 2005) – Applies similar reasoning to dilution claims.
  • McCarthy, Trademarks and Unfair Competition § 16:40 – Leading treatise emphasizing that “a co-owner cannot infringe the mark it owns.”

  3.2 The Court’s Legal Reasoning

  1. Statutory Text Controls.
     • Section 1114(1)(a) targets “without the consent of the registrant” use of a mark. When both parties are “the registrant,” consent is inherent.
     • Section 1125(c) consistently speaks of “the owner of a famous mark” obtaining relief from “another person.” Co-owners are not “another person” in relation to each other.
  2. Purpose of the Lanham Act. Congress aimed to protect consumers and trademark owners from third-party imitators. A co-owner exercising her own rights is not an imitator.
  3. Policy Concerns Are for Contracts, Not the Lanham Act.

     Joint ownership is “disfavored” because it risks consumer confusion, yet federal law does not prohibit it; instead, parties must police the arrangement by private agreement. Absent such an agreement, courts will not retrofit trademark law to fill the contractual gap.

  4. Licensee Principle. If a co-owner may use the mark, she may also license it. Therefore, the licensee (Holloway) cannot be liable to another co-owner.
  5. No Injury or Causation for False Advertising/Designation.

     The alleged harms (lost opportunities, reputational harm) were either unsupported by record evidence or not proximately caused by the defendants’ authorized use. Statutory standing fails under Lexmark.

  3.3 Impact of the Decision

  • New Fifth Circuit Precedent. The court explicitly states this is an issue of first impression and aligns itself with the unanimous district-court trend. Future litigants in Texas, Louisiana, and Mississippi cannot invoke the Lanham Act to resolve co-ownership quarrels.
  • Shift Toward Contractual Governance. Artists, start-ups, and joint ventures will be driven to draft detailed trademark-use agreements (e.g., operating agreements, licenses, “band agreements”) because federal statutory remedies are off the table.
  • Strategic Litigation Considerations. Aggrieved co-owners must:
    • Seek relief under state theories (e.g., breach of fiduciary duty, accounting, unjust enrichment) or
    • Pursue partition/sale in state court or
    • Negotiate a buy-out or use-split.
  • Potential Circuit Split? To date, no circuit has recognized a contrary rule. The Fifth Circuit’s adoption solidifies an emerging consensus, reducing the likelihood of Supreme Court review absent a future split.

  4. Complex Concepts Simplified

  Statutory Standing (a/k/a “zone-of-interests” standing)

  Whether the plaintiff falls within the class Congress intended to protect by creating the cause of action. It is distinct from constitutional “Article III” standing.

  Joint (or Co-) Ownership of a Trademark

  Two or more persons each hold a full, undivided interest in the mark. Each can use it without consent of the others unless a contract says otherwise.

  Licensee

  A party allowed to use a trademark with the owner’s (or, here, a co-owner’s) permission. A valid license insulates the licensee from infringement liability to the licensor.

  Trademark Dilution

  Even absent confusion, using a famous mark in a different context can “blur” its distinctiveness or “tarnish” its reputation. Dilution is a claim available only to owners of “famous” marks.

  5. Conclusion

  Reed v. Marshall clarifies that in the Fifth Circuit the Lanham Act is a sword against outsiders, not a referee between co-owners. Where joint registrants fail to predetermine exit or deadlock scenarios, federal trademark law offers no safety net. The ruling encourages artists, business partners, and counsel to address governance, licensing, and dispute-resolution mechanisms at the front end. In doing so, it brings the Fifth Circuit into lockstep with other courts and the leading treatise view, signalling that litigation between co-owners must proceed under contract, partnership, or state tort theories, not under the Lanham Act’s umbrella.