Although trademark bullying is certainly an all too common occurrence, the bully in question typically owns the trademark it's swinging around, although this may not be the case with World Wide Entertainment Group Inc., something which has led to a lawsuit from a Croation festival promoter which World Wide was milking for cash over the trademark 'Ultra Europe'.
Guest post by Timothy Geigner of Techdirt
We see all kinds of dumb and frustrating examples of trademark bullying here at Techdirt. From questionable claims of infringement entirely, to the over-policing of broad or generic terms that never should have been granted trademark protection to begin with, to vice-like licensing terms that appear to be designed more to put licensees out of business rather than building any kind of long-term business model out of trademark rights. That said, at least in most of these stories the offending party has the trademark its bullying with. That may not be the case when it comes to Worldwide Entertainment Group Inc., which is being sued by a Croatian festival promoter after being milked over a trademark the promoter says Worldwide doesn't actually have.
In a federal complaint filed in Miami, plaintiff Adria MM Productions Ltd. says it has been the exclusive promoter of “Ultra Europe” and other “Ultra”-branded events since July 2013. It claims the inaugural electronic music festival attracted 100,000 fans, and that the audience has grown with each successive event. The defendant Worldwide Entertainment Group Inc., also identified as “Ultra” in the complaint, is the organizer and promoter of the Ultra Music Festival that takes place every year in Miami.
The complaint says Ultra entered into various licensing agreements to grow its brand around the world, and sought out AMM ” because AMM is one of the largest promotion companies in Croatia and holds exclusive licenses and rights to venues in Croatia and was a successful promoter of musical events in Croatia.” AMM says that Ultra made it believe that it owned the mark “Ultra Europe,” and the five-year licensing agreement required it to pay the defendant licensing and promotional fees for the use of its proprietary marks in Europe.
From there, the complaint details just how Worldwide put the squeeze on AMM through its evolving licensing terms, which only evolved in the direction of higher fees and more control for Worldwide. And the restrictions were fairly intense, including giving Worldwide the right to approve vendors at AMM festivals, providing for exhorbitant arrangements for Worldwide staff, and adding on fee after fee. All of this was, mind you, while AMM was entirely responsible for putting these concert events on. All Worldwide was doing was licensing the term "ultra" for these festivals. Because of all of this, AMM was losing money on its events.
When the original five-year licensing agreement expired, Worldwide demanded even more from AMM in a new five-year agreement. AMM attempted to negotiate, but Worldwide instead pulled the plug and cut AMM off from email and social media channels for the European events, prohibited AMM from promoting the 2017 festival in Croatia, and even sent a notice of default to AMM saying that it had breached the two companies' original agreement.
AMM says that at that time it discovered that Ultra didn’t have any rights over proprietary marks in Europe, specifically in Croatia.
Damn. Specifically, the complaint states that Worldwide "held no trademark rights in Europe and, specifically, Croatia at the time it entered into the agreement with AMM." If that ends up being proven, it's difficult to see how Worlwide isn't in an absolute bucket of trouble. It's one thing to bully and squeeze a licensee over a valid trademark, but to do all of this and not even own the rights that are the basis for the licensing agreement to begin with? That's all kinds of evil.