FreecycleSunnyvale

FreecycleSunnyvale (“FS”) is a member group of The Freecyele Network (“TFN”), an organization devoted to facilitating the recycling of goods. FS filed a declaratory action against TFN arising from a trademark licensing dispute, alleging noninfringement of TFN’s trademarks and tortious interference with FS’s business relations. FS moved for partial sum mary judgment on the issue of whether its naked licensing defense to trademark infringement allowed it to avoid a finding of infringement as a matter of law. TFN argued that it had established adequate quality control standards over its licensees’ services and use of the trademarks to avoid a finding of naked licensing and abandonment of its trademarks. The district court granted summary judgment to FS. We hold that TFN (1) did not retain express contractual control over FS’s quality control measures, (2) did not have actual controls over FS’s quality control measures, and (3) was unreasonable in relying on FS’s quality control measures. Because we find that TFN engaged in naked licensing and thereby abandoned its trademarks, we affirm.

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In March 2003, Deron Beal (“Beal”) founded TFN, an umbrella non-profit Arizona…