Flying Pigs LLC v. RRAJ Franchising LLC

Reliance on the Lanham Act is not always required to show ownership of a trademark when usage of the mark shows the same.

Opinion (King):In 1999, Flying Pigs, LLC ("Flying Pigs"), lease commercial space to Chelda, Inc. ("Chelda"), so they could operate a Ham's Restaurants, Inc. location in Kinston, North Carolina. In June, 2009 Chelda stopped making monthly payments to Flying Pigs. Flying Pigs obtained a judgment against Chelda in June, 2010 resulting in an equitable lien on Chelda's assets. But Chelda filed for bankruptcy that year and RCR Marketing, LLC ("RCR") bid on all of Ham's assets including all of its intellectual property. In September 2011, RCR assigned all of the intellectual property to RRAJ Franchising, LLC. In 2012, Flying pigs sought to foreclose its equitable lien against Chelda's intellectual property. The District court dismissed Flying Pigs's complaint. On appeal, RRAJ contends that Flying Pigs must establish that Chelda owned the Intellectual Property when the judgment was entered by the lower court.

Registration of a trademark under the Lanham act merely helps demonstrate that the registrant is the owner of the mark. This Court argued that "Flying Pigs could well argue that Chelda owned the intellectual property simply by virtue of its use" and reliance on the Lanham Act is unnecessary.

The Court stated that "a plaintiff's right to relief for a given claim necessarily depends on a question of federal law only when every legal theory supporting the claim requires the resolution of a federal issue." The Supreme Court's "necessarily raised" requirement of a "significant" federal issue, as explained in the cases of Grable and Gunn, has not been satisfied. As such, Flying Pigs is enforcing an equitable lien and this Court now VACATES the judgment of the district court and REMANDS for further proceedings.