BOSTON (CN) – An entertainment company can continue using the name of psychic and astrologer who suddenly severed ties 10 years after he irrevocably assigned that company rights to his name, the 1st Circuit ruled.
Walter Mercado-Salinas, whom the court describes as a “popular psychic and astrologer,” entered into a contract in 1995 with Bart Enterprises International. The deal entitled Bart to produce materials featuring Mercado’s psychic services, using the “Walter Mercado” trademark as well as Mercado’s name and likeness.
Bart applied for the Walter Mercado trademark in October 1996, and Mercado signed a statement to authorize transfer of such rights the following year.
Mercado earned a $25,000 monthly base from Bart under the arrangement, plus about $7,000 a month for costumes and additional work.
Mercado suddenly stopped helping Bart create new materials in fall 2006, and he missed scheduled appearances. When Bart stopped paying Mercado in November 2006, the psychic cited unpaid compensation as grounds to formally terminate the contract. His company, Astromundo, applied for the Walter Mercado trademark around the same time.
Bart then sued Mercado in Florida, seeking an injunction for breach of contract and trademark law violations. Mercado countered with a lawsuit of his own, based in Puerto Rico.
After both cases were consolidated, a Florida jury said Mercado had breached the contract and did not deserve any compensation from Bart. Mercado nevertheless demanded $675,000 from Bart in owed compensation. When Bart balked at the letter, Mercado filed suit again in Puerto Rico. Both parties cross-filed for injunctions over use of the Walter Mercado trademark.
U.S. District Judge Gustavo A. Gelpi sided with Bart, leading the psychic to appeal. But the Boston-based federal appeals court was similarly unconvinced.
“Mercado has rendered no services to Bart since November 2006,” Chief Judge Sandra Lynch wrote for a three-member panel. “Because Puerto Rico law demands that Mercado comply with his contractual obligation to provide services in order to demand compensation, the district court reasonably concluded that Bart is relieved from its obligation to pay Mercado compensation. This, in turn, means that Mercado had no right to terminate the agreement and that the trademark rights have not reverted to him. The District Court therefore did not abuse its discretion in denying Mercado’s request for preliminary injunctive relief.”
“Nor did the district court abuse its discretion by granting Bart’s request for preliminary injunctive relief,” she added.
“There is a likelihood of consumer confusion,” the 27-page decision states. Bart has alleged that Mercado continues to use the trademark to develop new materials and products with third-party agents, including a book, a CD, a website, and horoscopes distributed in several countries in media including periodicals, television, text messages, and pre-recorded audio and video messages. The District Court reasonably concluded that if Mercado and Bart are concurrently producing psychic and astrological products using the Mercado name, Mercado’s infringing use of the trademark is likely to create consumer confusion. The products rely on the same trademark; they are within the same class of astrological and psychic products; and they target the same class of Spanish-speaking astrological and psychic customers.”
“Bart also alleges that Mercado has interfered with Bart’s use of the trademark by continuing to represent to third parties that he owns the trademark,” Lynch added. “Mercado has, for example, attempted to bill Bart’s contractual partners directly for their use of the trademark.”
Bart can get its sought-after preliminary injunction as the case proceeds to trial in Puerto Rico, according to the court.