Blockbuster Videos, Inc. v. City of Tempe

Opinion by Judge THOMPSON; Partial Concurrence and Partial Dissent by Judge BROWNING.

We consider a question of first impression: whether section 1121(b) of the Lanham Act, 15 U.S.C. § 1121 (b) (1994), preempts a municipality’s zoning authority to regulate signs for aesthetic purposes when those signs display registered service marks. We hold that a municipality may not enforce zoning regulations if those regulations require the alteration of a registered mark.

Blockbuster Videos, Inc. (“Blockbuster”) and Video Update, Inc. applied to the City of Tempe for sign permits for storefront signs which would incorporate their registered service marks. Because the proposed signs violated Tempe’s zoning ordinances, Tempe denied the applications. The district court granted a preliminary injunction, ordering Tempe to allow both stores to display then-registered marks. Tempe appeals. We have jurisdiction under 28 U.S.C. § 1292 (a)(1), and we affirm in part and reverse in part.

FACTS

Blockbuster and Video Update are national retail chains, which rent and sell videos and other related entertainment. Both have registered service marks. Video Update’s registered service mark consists of the…

concurring in part and dissenting in part.

I concur in the majority’s opinion insofar as it affirms Tempe’s authority to condition the approval of a permit to display exterior signage in the Albertsons Plaza Shopping Center on conformance with that shopping center’s sign package, which stipulates that exterior signs in the shopping center will be flat. I dissent, however, from the majority’s holding that Tempe cannot condition the display of exterior signage at the Valley Fair Shopping Center on conformity with the requirement that such signage. employ white letters against a turquoise background and I disagree with the underlying interpretation of Section 1121(b) that led the majority to this result.

Section 1121(b) prohibits states and localities from applying regulations to federally registered trademarks that require changes in the marks themselves, alterations that will be reflected in every subsequent use of the affected marks. Section 1121(b) does not preempt local aesthetic zoning controls that affect the display of federal trademarks in exterior signage at particular locations. Tempe is not, for example, preempted under Section 1121(b) from enacting and enforcing zoning…