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Official Opinion 99-4

Official Opinion 99-4

March 16, 1999
To: 

Commissioner
Georgia Department of Community Affairs

Re: 

The Georgia Music Hall of Fame Authority is the owner of the "GEORGIA MUSIC HALL OF FAME" and "GEORGY" marks. Additionally, the Georgia Constitution may prohibit the Georgia Music Hall of Fame Authority from delegating the exclusive right to select inductees into the Georgia Music Hall of Fame to any private entity.

You have asked for an official opinion regarding the following two issues.

1. Whether the claim of The Friends of Georgia Music (hereinafter “Friends”) as exclusive owners of all trademark and property rights in and to the marks “GEORGIA MUSIC HALL OF FAME” and “GEORGY” is valid.

2. Whether the Georgia Music Hall of Fame Authority (hereinafter “Authority”) has the legal authority to determine those individuals, living or dead, who will be inducted into the Georgia Music Hall of Fame.

BACKGROUND

In 1976, an initiative was begun on the part of the Georgia Senate to recognize Georgia’s music industry and heritage. The Friends of Georgia Music Festival (later changed to “The Friends of Georgia Music”) emerged out of a number of groups organized as a result of this initiative. Friends was incorporated as a nonprofit corporation in order to enter into contractual relations with the Department of Community Affairs (hereinafter “DCA”) so that various activities and events could be funded, such as the first Georgia Music Hall of Fame awards ceremony in 1979. Since its inception, the primary responsibility of Friends has been to produce the annual awards program and to participate in the selection of the inductees into the Georgia Music Hall of Fame. Friends has always been financially dependent upon grants provided by the State.

In 1990, the Authority was created to construct the Georgia Music Hall of Fame facility. The Authority was also charged with the responsibility of managing and operating the Georgia Music Hall of Fame. In 1993, planning and construction began. The grand opening of the Georgia Music Hall of Fame facility was held in September 1996.

In May and June of 1996, Friends applied to the United States Patent and Trademark Office for registration of the marks GEORGIA MUSIC HALL OF FAME and GEORGY, respectively. Registrations in the name of Friends were issued for GEORGIA MUSIC HALL OF FAME on July 1, 1997 (Reg. No. 2,075,451) and for GEORGY on March 11,1997 (Reg. No. 2,043,865). Based on these registrations, Friends now desires to participate in the revenues derived from the business associated with the marks, as well as to secure its role in the inductee selection process.

Friends has taken the position that Friends owns the marks and that the Authority uses the marks pursuant to an oral license from Friends. Your request for this opinion was apparently spurred by Friends demanding that a written license agreement be entered into and by Friends’ allegations that Friends has a proprietary right in the selection of inductees into the Georgia Music Hall of Fame.

ANALYSIS The Trademark Act of 1946, 15 U.S.C. § 1051 et seq. (hereinafter the “Trademark Act”) specifies that the owner of a mark is the only proper party to apply for registration. 15 U.S.C. § 1051. However, applicants for registration may rely on the use of a mark by a related company to support registration. 15 U.S.C. § 1055. Thus, while a mark may only be registered by its owner, that registration may be based upon the use of a mark by someone other than the owner, such as a related company.

The Trademark Act defines a “related company” as:

any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used. 15 U.S.C. § 1127. Companies need not possess common ownership interests in order to be related.

According to the Trademark Manual of Examining Procedure, § 1201.01:

The owner . . . is the party who controls the nature and quality of the goods sold or services rendered under the mark.

Use of the mark by a related company inures, for ownership purposes, to the benefit of the party controlling the use of the mark. The presence of a related company situation does not create any corresponding “related” rights of ownership by the party who only uses the mark. Smith Int’l, Inc. v. Olin Corp., 209 U.S.P.Q. 1033, 1044 (TTAB 1981). Thus, control of the mark, not mere use of a mark, is what determines who is the owner. The controlling party is the owner of the mark and the proper party to apply to register the mark.

Friends’ legitimate use of the marks established Friends as a “related company” to the State, and Friends’ use inured to the benefit of the State. This use is what should have provided the basis for registration of the marks by their proper owner: the State of Georgia. The State, through DCA and later the Georgia Music Hall of Fame Authority, has always maintained control of the marks and, therefore, is the rightful owner of the marks.

The State maintained control of the GEORGIA MUSIC HALL OF FAME mark by engaging Friends, through numerous contracts, to produce the Georgia Music Hall of Fame awards program. The State has contracted with Friends to produce this event since 1980 and the role Friends has played in producing the event is generally dependent upon the terms of the contract. In producing the event, Friends’ use of the mark neither indicates that Friends has control over the mark nor suggests that Friends owns the Georgia Music Hall of Fame mark. Friends uses its own name in connection with the awards program only to receive recognition as one of many hosts of the events.

The State also controls the marks through its own advertising. The Authority currently runs numerous public service announcements about the Georgia Music Hall of Fame, advertises in national magazines and sends out press kits in response to inquiries about the Georgia Music Hall of Fame. Few if any newspaper articles regarding the Georgia Music Hall of Fame make reference to Friends. The public perception is that the State, through the Georgia Music Hall of Fame Authority, owns the Georgia Music Hall of Fame mark.

The State also controls and owns the GEORGY mark. Despite Friends’ claims regarding control over GEORGY, Friends neither uses the GEORGY mark nor presents the GEORGY awards. Friends merely obtains the awards as part of its responsibility to produce the awards program. The State Seal that appears on the award itself evidences the fact that the GEORGY award is given to the inductee into the Georgia Music Hall of Fame as an official act of the State. State officials also routinely present the awards.

The Authority, without any mention of Friends, often uses the GEORGY and GEORGIA MUSIC HALL OF FAME marks in connection with one another. In fact, there is a reproduction of the GEORGY award in the lobby of the Georgia Music Hall of Fame facility. Thus, the public perceives the GEORGY award as an award bestowed by the State through the Georgia Music Hall of Fame Authority and memorialized in the State’s Georgia Music Hall of Fame facility. As between the State and Friends, a broader basis for ownership and control of the GEORGY exists with the State.

With respect to the selection process, Friends takes the position that it is responsible for the selection of the award recipients, that the quality of the marks is directly related to the quality of its recipients, and that Friends has always maintained control over the nature and quality of the marks in this way. This statement of the facts does not appear to be accurate. The selection process is controlled by the State as much as it is controlled by Friends. However, even if Friends’ allegation is true, it is difficult to conceive of a legal basis upon which Friends can rest its claim of a “proprietary right” in the selection of the inductees into the Georgia Music Hall of Fame. Conversely, there is legal precedent indicating that it may be an unconstitutional delegation of power for the Authority to grant to Friends the sole discretion to determine who should be inducted into the Georgia Music Hall of Fame. See generally Rogers v. Medical Ass’n of Ga., 244 Ga. 151 (1979) (Court found that delegating the power to fill vacancies on the State Board of Medical Examiners to the Medical Association of Georgia was an nconstitutional delegation of power.).

CONCLUSION The Georgia Music Hall of Fame Authority is the owner of the “GEORGIA MUSIC HALL OF FAME” and “GEORGY” marks. The Friends of Georgia Music is not now, and was not the owner of the marks at the time it applied to the United States Patent & Trademark Office for the registration of these marks. Additionally, the Georgia Constitution may prohibit the Georgia Music Hall of Fame Authority from delegating the exclusive right to select the inductees into the Georgia Music Hall of Fame to any private entity, including The Friends of Georgia Music.

Prepared by: DENISE E. WHITING-PACK Assistant Attorney General

WILLIAM H. NEEDLE Special Assistant Attorney General

1 Prior to the creation of the Georgia Music Hall of Fame Authority by the General Assembly, the Department of Community Affairs was the state agency that worked with Friends in matters relating to the Georgia Music Hall of Fame. See O.C.G.A. § 12-3-520 et seq.

2 See O.C.G.A. § 12-3-520 et seq.

3 A Federal trademark registration is prima facie evidence of the validity of a mark. 15 U.S.C. § 1057(b). The validity of a mark is determined initially by its substantive examination in the Trademark Office. Validity later becomes an issue of how an owner uses and protects its mark, as well as who the public perceives to be the owner of the mark. This opinion evaluates the ownership of otherwise valid marks.

4 “Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies, such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration, provided such mark is not used in such manner as to deceive the public.” 15 U.S.C. § 1055.

5 Friends’ applications for registration required Friends to declare ownership of the marks. Such declarations by Friends in its applications were in effect denials that the State controlled and therefore owned the marks. The State can show that Friends is not now and was not the owner of the marks at any time, including when Friends applied for registration, because the State and not Friends, controls the marks.

6 For example, the 1997 and 1998 contracts entitled “CONTRACT FOR SERVICES BY AND BETWEEN THE DEPARTMENT OF COMMUNITY AFFAIRS AND FRIENDS OF GEORGIA MUSIC FESTIVAL, INC.,” state that “the Contractor [Friends] shall produce the Georgia Music Hall of Fame Program.” No contracts were awarded in 1994-1996 due to budget cuts.

7 Many advertisements appear in the programs of the Georgia Music Hall of Fame’s annual program; the vast majority of them give thanks and recognition to the Georgia Music Hall of Fame Authority.

8 Friends did not conceive of the award, the name “GEORGY” was conceived of by Senator Sam Doss.

9 Pursuant to O.C.G.A. § 50-3-31 the State Seal can only be used if authorized by the Governor unless the use falls within the permitted uses outlined in O.C.G.A. § 50-3-32, which authorizes executive directors of state authorities and agency heads to use the seal for official state purposes. It does not appear that Friends obtained the authorization required to use the seal.

10 The Senate Music Industry Committee, chaired by Senator Nathan Dean, forms a selection committee every year that chooses the nominees as well as the inductees. Senator Dean personally selects this committee from members of the Senate Music Industry Committee, Friends, and individuals at large. Friends’ claim of a proprietary right in the selection process most likely comes from the fact that some members of the Senate selection committee are directors of Friends.