Karma Automotive LLC sues Reimagined Automotive LLC

[DMC-81]

Sally's original lawsuit was not thrown out, she settled with Texas for an undisclosed amount of money for use of the name DeLorean. She later discovered that DMC Texas had re-directed royalty payments from Universal Studios, to DMC Texas, instead of the DeLorean estate. Sally had no idea the estate was due payments from Universal Studios because she obviously was not that close with John DeLorean. Everything was left to DeLorean's children Zachary and Kathyrn in the will. However, at the time the kids were unaware of this (long story). Sally acted in bad faith adminstering the estate. Because Sally settled the first lawsuit, the judge basically said, "too bad, you already settled." That's how DMC Texas gets to keep the ongoing supply of money from Universal Studios.

Yes, she settled with DMCH. Here was the essence of the agreement as written in the District Court decision in the dismissed second lawsuit:

"First, the Settlement Agreement is not merely retrospective. Instead, it both resolves all claims that were sought and could have been sought in the 2014 action and recognizes DMC Texas’s rights to use these marks in the future. Those rights, as explained above, include the enforcement of DMC Texas’s marks and licenses to those marks. Second, the Settlement Agreement expressly carves out specific areas in which the Estate retains its right to pursue legal action against DMC Texas—namely, any other use of the name DeLorean, any aspect of John Z. DeLorean’s life, and any depiction of his likeness. That the Universal Agreement is not mentioned in the Settlement Agreement suggests that the parties did not intend to permit the Estate to be able to sue DMC Texas for attempting to enforce its rights to the marks against other entities, including Universal. Accordingly, we find that the Settlement Agreement shields DMC Texas from suit brought by the Estate for the conduct at issue here."

Source

18-3333-2019-12-05.pdf

[DMC-81]

Neither is DMC Texas. Sally Baldwin (AKA DeLorean) took them to court in 2015 after they unlawfully used the DeLorean trademark between 1995-2015 when it was owned by John DeLorean. DMC Texas also re-directed royalty payments from Universal Studios to DMC Texas bank accounts when DeLorean died in 2005. Payments were due to the DeLorean estate, not DMC Texas.

See my reply above. I for one am glad that Delorean Motor Company is alive and well again AND that they are willing to defend their trademarks. Whatever anyone's opinion of DMCH is, any DeLorean owner should be glad that there is a group of Delorean enthusiasts willing to put their money at risk to run a dedicated Parts, Sales, Service, and Restoration business.

[gullwingD]

Dana, you're missing the much bigger picture. "I was informed recently that "DeLorean Motor Company -- Texas" had taken the proceeds of the contract by informing Universal that it was the rightful owner of Mr. DeLorean's rights under the contract, I was shocked." said Mayer Morganroth, John DeLorean's longterm attorney in 2018. "I fully support the Estate's lawsuit against "DeLorean Motor Company Texas." I believe that the company has effectively stolen money that belongs to the Estate, by misrepresenting that it somehow succeeded to Mr. DeLorean's rights under the Universal contract. I certify that the forgoing statements are true. I am aware that if any of the forgoing statements are intentionally false, I am subject to punishment."

That is testimony from Mayer Morganroth. SALLY NEVER WOULD HAVE SETTLED HAD SHE KNOWN THERE WAS A UNIVERSAL AGREEMENT -- SHE DID NOT KNOW! Just because a court says something is OK does not mean it is right. People get away with murder in the court of law all the time. It all comes down to technicalities. It's great there is a parts and service company, but know when you support Texas, you are supporting a company that as Morganroth said, "essentially stole" from John DeLorean himself -- and he did not approve of.

See my reply above. I for one am glad that Delorean Motor Company is alive and well again AND that they are willing to defend their trademarks. Whatever anyone's opinion of DMCH is, any DeLorean owner should be glad that there is a group of Delorean enthusiasts willing to put their money at risk to run a dedicated Parts, Sales, Service, and Restoration business.

[Malevy]

Wow! That brief is pretty crushing.

The government money may be in jeopardy too. If nothing else, this lawsuit may end the DMR project simply because funding will dry up. Investors don't want their money used to defend lawsuits.

https://www.expressnews.com/business...s-17369971.php

I read that Sally Baldwins's lawsuit was dismissed:
https://www.eastbaytimes.com/2018/10...is-thrown-out/

I have a full history of the trademark issue here: https://malevy-dmc.blogspot.com/2022...r-company.html

[DMC-81]

Dana, you're missing the much bigger picture. "I was informed recently that "DeLorean Motor Company -- Texas" had taken the proceeds of the contract by informing Universal that it was the rightful owner of Mr. DeLorean's rights under the contract, I was shocked." said Mayer Morganroth, John DeLorean's longterm attorney in 2018. "I fully support the Estate's lawsuit against "DeLorean Motor Company Texas." I believe that the company has effectively stolen money that belongs to the Estate, by misrepresenting that it somehow succeeded to Mr. DeLorean's rights under the Universal contract. I certify that the forgoing statements are true. I am aware that if any of the forgoing statements are intentionally false, I am subject to punishment."

That is testimony from Mayer Morganroth. SALLY NEVER WOULD HAVE SETTLED HAD SHE KNOWN THERE WAS A UNIVERSAL AGREEMENT -- SHE DID NOT KNOW! Just because a court says something is OK does not mean it is right. People get away with murder in the court of law all the time. It all comes down to technicalities. It's great there is a parts and service company, but know when you support Texas, you are supporting a company that as Morganroth said, "essentially stole" from John DeLorean himself -- and he did not approve of.

I don't think I am missing anything. The way I read it is, after the settlement, DMC got legal affirmation on what they owned the rights to, i.e. the car, brand, etc.versus Sally ( essentally John's likeness & legacy). Since the car was used in the movie, it seems like DMC asked Universal for the royalties. I see nothing underhanded here. Wouldn't John's rights in the Universal agreement be related to them using the car? Ergo, DMC now had the rights.

As for Sally, it seems like she probably needed better legal counsel. It was stated that the Universal agreement came up during the discovery for the first lawsuit. Her counsel probably should have made that an item to clarify during the settlement process if it was important.

Who knows. I was not there, so I'm deducing the whole picture based on the settlement, and the dismissal of the second suit.

One thing I know for sure is that there is no shortage of drama in and around the Delorean world.

[gullwingD]

Dana, what about what occured before the lawsuit? From 2005-2015/16ish DMC Texas was taking Universal royalties unlawfully. They were using the trademark without permission. It's all immoral stuff done by bad actors. You can't say just because Sally's legal counsel sucked, everthing is morally OK, it's not. Also, DMCTX didn't get legal affirmation on anything they were doing was correct, prior to the lawsuit. They got a settlement, and an agreement by Sally not to sue them. There's more to the story, but it's not my place to tell today.

I don't think I am missing anything. The way I read it is, after the settlement, DMC got legal affirmation on what they owned the rights to, i.e. the car, brand, etc.versus Sally ( essentally John's likeness & legacy). Since the car was used in the movie, it seems like DMC asked Universal for the royalties. I see nothing underhanded here. Wouldn't John's rights in the Universal agreement be related to them using the car? Ergo, DMC now had the rights.

As for Sally, it seems like she probably needed better legal counsel. It was stated that the Universal agreement came up during the discovery for the first lawsuit. Her counsel probably should have made that an item to clarify during the settlement process if it was important.

Who knows. I was not there, so I'm deducing the whole picture based on the settlement, and the dismissal of the second suit.

One thing I know for sure is that there is no shortage of drama in and around the Delorean world.

[JBaker4981]

[MrChocky]

Pretty much. I don't really think the outcome of such a suit, or of this new car is really do the benefit of anyone in the community, no matter
which way things go.

[Drive Stainless]

Neither is DMC Texas. Sally Baldwin (AKA DeLorean) took them to court in 2015 after they unlawfully used the DeLorean trademark between 1995-2015 when it was owned by John DeLorean. DMC Texas also re-directed royalty payments from Universal Studios to DMC Texas bank accounts when DeLorean died in 2005. Payments were due to the DeLorean estate, not DMC Texas.

What makes you think John DeLorean owned the trademark between 1995-2015? Some reports have said John purchased the trademark rights when the company went into receivership. Sure the sale of those rights may have been unpublished, but the USPTO shows no record of any assignment or renewal of those rights, and the DMC mark was canceled in 1985. Any prudent individual or company that purchases an IP asset like a patent or trademark will almost always record the assignment at the USPTO. This allows prospective licensees find the rightful owner easily and do business accordingly (e.g., Universal).

In fact, the USPTO database shows no registration was made by John DeLorean until November 15, 2000 - serial 76165416.

I cannot find any reason why John DeLorean (or his heirs) would have any rights to the trademark from 1995-2015. Again, there are no federal registrations, renewals, or examples of products or services bearing the "DMC" mark during that period I could find. Trademark rights do not continue to inure to the registrant (or assignee(s)) after abandoning use of the mark - knowingly or not. This is consistent with property law generally (e.g., adverse possession), which can, in some states, reassign title to property from owners who "sleep on their rights."

Is there any evidence that John DeLorean continued to use the mark in commerce? If so, point to those goods and services. I have not seen any evidence. The watch that was created in ~2000 is the closest good that I know of, but it did not bear the original DMC logo.

DMCH registered trademark serial 75756108 in 1999.
Seems to me DMCH could have re-registered the original "DMC" mark at that time instead of this derived mark. Why? Because no one else appears to have been using the original mark in commerce. No other registrations for that mark or any similar mark were made. No one opposed the registration of DMCH's mark in 1999. If John DeLorean (or anyone else) had been using (or thought they were using) the original "DMC" mark in commerce during that time, he/she likely would have opposed DMCH's registration because it is very similar to the original mark and a case for showing confusion in the marketplace seems likely. Universal's lawyers probably did a search for the mark at some point, found DMCH to have the only "LIVE" trademark that resembled the "DMC" mark, and proceeded to procure a license - precisely the way it's supposed to work.

Therefore, to assume DMCH wasn't within their rights to use the "DMC" mark beginning even as early as 1985, one has to assume that the rightful owners of the mark were unaware not just for months, but for decades. I don't find that likely. What I do find likely is that the mark was abandoned from 1985-1999, consistent with the USPTO's public record.

As to why DMCH settled with Sally DeLorean? I can only speculate. Legitimate reasons may exist that do not implicate that they acting wrongfully or "stole" the trademark.

DISCLAIMER: I am an intellectual property attorney and former USPTO employee. The above is not to be construed as legal advice. There is no attorney-client relationship formed by the above. The above does not represent the views or opinions of anyone else but me based on performing a cursory search.

[gullwingD]

I would argue DeLorean’s proof of commerce would be the Universal/Amblin licensing deal which he struck in 1989, which I’ve attached to this message(PDF). Universal Pictures continued to sell products related to the DeLorean car and the “DMC” logo on the front grille, and items related to the name “DeLorean” per the contract. Checks were remitted to DeLorean until his death in 2005. While his body was still warm, DMC Texas asked Universal for royalty checks. Why John didn’t keep up with the registration with the USPTO is unknown.
It is not a requirement to register with the USPTO to own a trademark. Per the USPTO website:
-Common law rights
“If you haven’t filed for state or federal registration, your trademark protection is based solely on using your trademark in commerce within a particular geographic area. This limits your rights, as you can only enforce your trademark rights for the specific area where your trademark is used.”
Since Back to the Future items were sold worldwide, wouldn’t he have worldwide rights to his name? We know he owned the rights to his name per earlier court proceedings. He even says so in a 1987 audio recording here at 1 hour 13 minutes:
https://www.youtube.com/watch?v=6kJilxwFxOk&t=4382s
John DeLorean was working on a new car in the 1990s, and had a business plan laid out, and the trademark DeLorean Automobile Company which he owned inside of a holding company Ephesians 6:12, which still exists today. In the 2000s, his daughter Kathryn was working with him to raise capital for the new car to be called the “D2”. They were selling watches together at the 2000 car show. He called it the D2 because he felt like DMCTX was registering trademarks out from underneath him (in 1999 as you mentioned), and he wanted to get the new car company going without starting trouble. He also registered the stylized logo from the rear bumper on the original car to shut them down. It looks like Sally defended one of the trademarks in 2011 when someone else tried to use it.
There was never a trial, only a settlement. Had there been a trial, things may have been different. Sally obviously would rather have made a quick buck rather than defend the name. Zachary and Kathryn are the direct heirs of John DeLorean, as named in his will. If Sally entered into any legal proceeding or settlement regarding the estate she would be required to notify them, which she did not. The kids also did not see any of that settlement money. Bad actors all around.
Now, it’s Karma automotive’s turn. Do we see a pattern of behavior here? I am NOT a lawyer, but I can tell if something seems immoral, and that is my argument. Legal and immoral are two different things.

What makes you think John DeLorean owned the trademark between 1995-2015? Some reports have said John purchased the trademark rights when the company went into receivership. Sure the sale of those rights may have been unpublished, but the USPTO shows no record of any assignment or renewal of those rights, and the DMC mark was canceled in 1985. Any prudent individual or company that purchases an IP asset like a patent or trademark will almost always record the assignment at the USPTO. This allows prospective licensees find the rightful owner easily and do business accordingly (e.g., Universal).

In fact, the USPTO database shows no registration was made by John DeLorean until November 15, 2000 - serial 76165416.

I cannot find any reason why John DeLorean (or his heirs) would have any rights to the trademark from 1995-2015. Again, there are no federal registrations, renewals, or examples of products or services bearing the "DMC" mark during that period I could find. Trademark rights do not continue to inure to the registrant (or assignee(s)) after abandoning use of the mark - knowingly or not. This is consistent with property law generally (e.g., adverse possession), which can, in some states, reassign title to property from owners who "sleep on their rights."

Is there any evidence that John DeLorean continued to use the mark in commerce? If so, point to those goods and services. I have not seen any evidence. The watch that was created in ~2000 is the closest good that I know of, but it did not bear the original DMC logo.

DMCH registered trademark serial 75756108 in 1999.
Seems to me DMCH could have re-registered the original "DMC" mark at that time instead of this derived mark. Why? Because no one else appears to have been using the original mark in commerce. No other registrations for that mark or any similar mark were made. No one opposed the registration of DMCH's mark in 1999. If John DeLorean (or anyone else) had been using (or thought they were using) the original "DMC" mark in commerce during that time, he/she likely would have opposed DMCH's registration because it is very similar to the original mark and a case for showing confusion in the marketplace seems likely. Universal's lawyers probably did a search for the mark at some point, found DMCH to have the only "LIVE" trademark that resembled the "DMC" mark, and proceeded to procure a license - precisely the way it's supposed to work.

Therefore, to assume DMCH wasn't within their rights to use the "DMC" mark beginning even as early as 1985, one has to assume that the rightful owners of the mark were unaware not just for months, but for decades. I don't find that likely. What I do find likely is that the mark was abandoned from 1985-1999, consistent with the USPTO's public record.

As to why DMCH settled with Sally DeLorean? I can only speculate. Legitimate reasons may exist that do not implicate that they acting wrongfully or "stole" the trademark.

DISCLAIMER: I am an intellectual property attorney and former USPTO employee. The above is not to be construed as legal advice. There is no attorney-client relationship formed by the above. The above does not represent the views or opinions of anyone else but me based on performing a cursory search.