IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
Loeb & Loeb, Andrew S. Clare, Lawrence B. Gutcho; Akin Gump Strauss Hauer & Feld, William A. Norris, Edward P. Lazarus, L. Rachel Helyar, Michael C. Small and Rex Heinke for Plaintiffs and Appellants.
Horvitz & Levy, David M. Axelrad, John A. Taylor, Jr., Frederic D. Cohen; Munger, Tolles & Olson, Michael R. Doyen and Brad D. Brian for Defendant and Respondent Manatt, Phelps & Phillips, LLP.
The Franklin Mint Company and its principals, Stewart and Lynda Resnick,
(collectively, Franklin Mint) appeal from a judgment dismissing their malicious
prosecution action against the law firm Manatt Phelps & Phillips LLP and attorney
Mark S. Lee (collectively, Manatt). Manatt represented the executors of the estate
of Diana, Princess of Wales and the trustees of The Diana, Princess of Wales
Memorial Fund (collectively, the Fund) in a lawsuit filed against Franklin Mint
We conclude that, based on the record before us, no reasonable attorney
could find tenable the false advertising claim as it was alleged and litigated in the
underlying action. Therefore, we hold there was no probable cause to prosecute
We also hold there was no probable cause to prosecute the trademark
dilution claim because no reasonable attorney could conclude that the claim could
satisfy two fundamental, long-standing principles of trademark law. First, to be
protectable as a trademark,2 a word, phrase, name, or symbol must be used in
commerce to identify goods or services and their source. Although Manatt
Franklin Mint also sued the Fund for malicious prosecution of those claims; it
settled with the Fund before trial. (See Franklin Mint Co. v. Superior Court (2005) 130
contends that Princess Diana used her name in connection with her appearances at
charitable events, that use does not demonstrate trademark use. Second, a
trademark that is descriptive -- such as a personal name -- must acquire secondary
meaning to be protectable in a trademark dilution action. In other words, the
primary meaning of the mark (i.e., the descriptive meaning) must in the minds of
the public be subordinate to its meaning as the source of goods or services.
Manatt argues, however, that we should not find that the claim lacked
probable cause, because the issues are complex and there is no directly controlling
authority. But the fundamental principles of trademark law -- a trademark must
identify a source of a product or service, and a descriptive mark such as a personal
name must acquire secondary meaning in the minds of the public -- were clear and
well-established, and their application to this case is straightforward and
uncomplicated. The complexity of the issues arises only from Manatt\u201fs attempts to
avoid those fundamental principles. Accordingly, we reverse the judgment and
remand for trial on malice and damages issues.
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