Mercado-Salinas v. Bart Enterprises International, Ltd.

747 F. Supp. 2d 265, 2010 U.S. Dist. LEXIS 101785, 2010 WL 3810636
CourtDistrict Court, D. Puerto Rico
DecidedSeptember 27, 2010
DocketCivil 09-1509 (GAG/BJM)
StatusPublished
Cited by2 cases

This text of 747 F. Supp. 2d 265 (Mercado-Salinas v. Bart Enterprises International, Ltd.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mercado-Salinas v. Bart Enterprises International, Ltd., 747 F. Supp. 2d 265, 2010 U.S. Dist. LEXIS 101785, 2010 WL 3810636 (prd 2010).

Opinion

OPINION AND ORDER

GUSTAVO A. GELPI, District Judge.

Plaintiffs, Walter Mercado-Salinas (“Mercado”) and Astromundo, Inc., brought this case in the Puerto Rico Court of First Instance against Defendants, Bart Enterprises International, Ltd. (“Bart”); Walter International Productions, Inc.; Watervision, Inc.; Waltervision Productions, Inc.; Walter Mercado Radio Productions, Inc.; Walter Mercado Enterprises Corp.; Arcane Creative LLC; and Guillermo Bakula. (See Docket Nos. 1; 4.) Defendants removed this case to the federal district court. (See id.) Plaintiffs accuse Defendants of, inter alia, trademark infringement and unfair competition in violation of federal law. (See Docket No. 4-3 at 23-26.)

Plaintiffs seek a preliminary injunction to protect their trademark rights. (See Docket No. 74.) Defendants move to strike Plaintiffs’ motion for preliminary injunction (see Docket No. 82) and to impose a preliminary injunction, asserting their rights to the same mark (see Docket No. 126). This court referred these motions to Magistrate Judge McGiverin, who submitted a Report and Recommendation on August 23, 2010, 2010 WL 3372575, recommending a partial preliminary injunction in favor of Plaintiffs and denial of Defendants’ cross-motion and motion to strike. (See Docket No. 194.) The parties object to the Report and Recommendation. (See Docket Nos. 206; 207.)

I. Standard of Review

Under Federal Rule of Civil Procedure 72(b), if the parties object to a magistrate judge’s findings, “[t]he district judge must *268 determine de novo any part of the magistrate judge’s disposition” that is subject to objection. “The district judge may accept, reject, or modify the recommended disposition. ...” Fed.R.Civ.P. 72(b)(3).

II. Relevant Factual and Procedural Background

Because the Report and Recommendation amply sets forth the background of this case and the parties’ stipulations and submissions (see Docket No. 194 at 1-9), the court repeats only the facts relevant to the instant disposition. Mercado is a well-known astrologer and psychic in Puerto Rico, the U.S. mainland, and Latin America. Astromundo, Inc., is a Puerto Rico corporation. Defendants are five business concerns and their principal, Bakula, with operations in Florida.

On August 4, 1995, Mercado and Bart entered into a contract (the “Agreement”) governed by Puerto Rico law (Docket No. 133-6). 1 Under paragraph 2 of said Agreement, the parties identify “Walter Mercado” as a common-law trademark and service mark (the “Mark”) that had become associated with certain “Preexisting Materials.” {See id. at 3.) Mercado

irrevocably assign[ed] to Bart throughout the Territory during the Term, all right, title and interest in and to the Mark, together with that part of the goodwill of Mercado’s business connected with and symbolized by said Mark, for use in connection with the Pre-existing Materials and the New Materials, if any. Such assignment includes but is not limited to the right to use the Mark in connection with Preexisting Materials and the New Materials in any and all media now known or hereafter developed ..., the right to merchandise and the right to utilize the Mark in all advertising, promotion and publicity created in connection therewith.

{See id. at 4.) Furthermore,

Bart shall have all rights in the Mark which are afforded to owners of trademarks and service marks, including but not limited to the right to seek and obtain trademark protection and/or registration of the Mark in its name, and the right to enforce or defend Bart’s rights against third parties.

{See id.)

Mercado also granted to Bart for the same duration and extent the right and license to use Mercado’s name, likeness, and other indicia of his identity “in connection with the Preexisting Materials and the New Materials” in all forms of media, “subject, however, to Mercado’s right to prior approve [sic] any such use, such approval not to be unreasonably withheld.” {See id. at 4-5.)

The Agreement references “Schedule A” for the “Preexisting Materials.” {See id. at 2.) Schedule A is a list of extant recordings of Mercado’s psychic and astrological activities, without specifying the media used for the recordings. {See id. at 22-23.) The Agreement mentions “New Materials” in reference to print, audio, and visual media transmissions and recordings of Mercado’s psychic and astrological services that would be created under the Agreement. {See id. at 3.)

The Agreement defines “Territory” as the universe and “Term” to be “in perpetuity ... subject to the provisions of paragraph 12.” {See id. at 5.) Paragraph 12 of the Agreement pertains to the parties’ *269 right to terminate the Agreement upon the occurrence of specific conditions. (See id. at 13.) Under one of these conditions, Mercado may terminate the Agreement with fifteen days’ notice if Bart fails to pay Mercado any agreed compensation under paragraph 6 within sixty days of the due date. (See id.)

Under paragraph 6(c) of said Agreement, Bart agreed to pay Mercado “in consideration of all services rendered by Mercado and the use of the results thereof and all rights granted by Mercado to Bart” (1) $25,000 per month; (2) $5000 per month for costumes; (3) $2000 per month for up to twenty-five three-minute segments per month; and (4) additional fees contingent upon gross receipts from sales in foreign countries reaching specified targets. (-See id. at 7.) Paragraph 6(b) stipulates that Mercado shall provide “Additional Services” under the Agreement for a period of ten years, with two possible two-year extensions at Bart’s option. (See id. at 6.)

In November 2006, Mercado attempted to terminate the Agreement and stopped rendering services to Bart. (See Docket No. 133-23 at 5.) Bart has not paid Mercado under the Agreement since November 2006. (See Docket No. 194 at 7.) Mercado has not rendered any personal services to Bait since November 2006. (See id.)

On January 17, 2007, Defendants filed suit against Plaintiffs in the U.S. District Court for the Southern District of Florida, alleging breach of contract by Plaintiffs. (See Docket No. 133-7.) On February, 7, 2007, Plaintiffs filed a separate suit against Defendants in the U.S. District Court for the District of Puerto Rico, seeking, inter alia, an injunction to protect their federal trademark rights. (See Docket No.

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747 F. Supp. 2d 265, 2010 U.S. Dist. LEXIS 101785, 2010 WL 3810636, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercado-salinas-v-bart-enterprises-international-ltd-prd-2010.