Karma Automotive LLC sues Reimagined Automotive LLC

[DMC-81]

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.

First, I agree with what Matt said above and, even IF they were using the trademark "illegally", the parties settled the first lawsuit for an undisclosed amount. Sally's counsel had the responsibility to care for that. Period.

So, in alignment with Matt's explanation, there was nothing immoral about it IMO. I respect John DeLorean for all the positive things he did, but it would be irresponsible to dismiss the decisions he made that caused the DeLorean Motor Company to fail. DMCH was a major part of the brand's survival and resurgence ever since they took risks to buy the parts and build the business in Texas. They were also a big part of me deciding to buy a DeLorean because there was a multi-location parts and service company supporting the car.

In my time in this community, I have found the DMC people to be anything but immoral, from Stephen down to their technicians. They strive every day to provide services to us, the car owners, and many times despite the negativity.

People complain about lack of parts being reproduced, but they don't think about the drag on the business that things like this, or defending the brand against "Ty DeLorean" have.

Again there is no shortage of drama in the community, and for some it carries a hard cost.

[Malevy]

First, I agree with what Matt said above and, even IF they were using the trademark "illegally", the parties settled the first lawsuit for an undisclosed amount. Sally's counsel had the responsibility to care for that. Period.

Based on what I have found, DMCH did not disclose the full scope of what they were doing with the name/trademark to Sally. The biggest example being the Universal BTTF licensing deal with JZD from 1989 that DMCH somehow "took over". I agree, Sally's legal representation probably failed her, but that does not make it morally correct for either party.

but it would be irresponsible to dismiss the decisions he made that caused the DeLorean Motor Company to fail.

DeLorean Motor Company did not "fail", they were essentially shut down by the British government for political reasons.

FDMCH was a major part of the brand's survival and resurgence ever since they took risks to buy the parts and build the business in Texas. They were also a big part of me deciding to buy a DeLorean because there was a multi-location parts and service company supporting the car.

While all of that may be true, they could have accomplished the same thing without using the "DeLorean Motor Company" name. Something they did (IMO) for the purpose of causing confusion to the general public, so people thought they were the original company. How is that not immoral?

For the record, those of us who owned DMC-12 automobiles prior to 1995 had no problem getting parts and service for our cars. All that changed when DMCH bought the parts was a major jump in prices on the NOS parts. Many current owners are also able to keep their cars running without any help from DMCH.

*THE* major reason for the brand survival is Back to the Future. Anyone currently making money in the DMC-12 business owes it all to Back to the Future, all the while DMCH collecting JZD's money from Universal Studios. Ironic!

BTW, why are we so far OT? This thread was about the Karma lawsuit.

[gullwingD]

Dana, it is clearly laid out in the Universal agreement who should get the money, see my previous message with the attachment. DMC Texas only gets royalties from Universal because of a screw up within a lawsuit, not because a judge said that it was OK, only that Sally said she wouldn't sue about it (unknowingly). It doesn't mean it's MORALLY RIGHT that the DeLorean heirs now do not see those Universal royalties. DMC Texas is only successful because of Back to the Future, and the car that John DeLorean created. I'm sure much of their income comes from those licensing deals related to Back to the Future, a deal that JZD brokered for his family, not Stephen Wynne. Those left over parts that Wynne bought would always exist with or without him. The car can be serviced anywhere, it's just a car. Dana, you are entitled to your opinion, even though it may be wrong.

First, I agree with what Matt said above and, even IF they were using the trademark "illegally", the parties settled the first lawsuit for an undisclosed amount. Sally's counsel had the responsibility to care for that. Period.

So, in alignment with Matt's explanation, there was nothing immoral about it IMO. I respect John DeLorean for all the positive things he did, but it would be irresponsible to dismiss the decisions he made that caused the DeLorean Motor Company to fail. DMCH was a major part of the brand's survival and resurgence ever since they took risks to buy the parts and build the business in Texas. They were also a big part of me deciding to buy a DeLorean because there was a multi-location parts and service company supporting the car.

In my time in this community, I have found the DMC people to be anything but immoral, from Stephen down to their technicians. They strive every day to provide services to us, the car owners, and many times despite the negativity.

People complain about lack of parts being reproduced, but they don't think about the drag on the business that things like this, or defending the brand against "Ty DeLorean" have.

Again there is no shortage of drama in the community, and for some it carries a hard cost.

[Drive Stainless]

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.
Since Back to the Future items were sold worldwide, wouldnÂ’t he have worldwide rights to his name?

Thanks for posting the contract. Section 4 is where I believe there may be an issue. Again, the DMC trademark was canceled 3-1/2 years prior to this contract. Could John make the representation in 1989 that he was the "sole owner of the rights?" What "use in commerce" existed prior to then? Certainly not licensing because section 4 expressly represents that those rights have not been "granted, licensed, or otherwise transferred to any other person." Did John have a good excuse to not use the mark? Maybe. We may never know. I'll tell you what I would have done - if I had made this agreement in 1989, I would have been filing an "Intent To Use" for the DMC mark that very same day to ensure that those checks from Amblin & Universal keep rolling in.

As to worldwide rights to the mark based on worldwide sales of BTTF - no. Laws vary from country to country. A country can choose to have no trademark laws or weak enforcement of those laws such that any "rights" are merely illusory.

[gullwingD]

Mayer Morganroth set it up, I'm sure he knew what he was doing, you're grasping at straws.
https://www.morganrothlaw.com/mayer-morganroth.php

Thanks for posting the contract. Section 4 is where I believe there may be an issue. Again, the DMC trademark was canceled 3-1/2 years prior to this contract. Could John make the representation in 1989 that he was the "sole owner of the rights?" What "use in commerce" existed prior to then? Certainly not licensing because section 4 expressly represents that those rights have not been "granted, licensed, or otherwise transferred to any other person." Did John have a good excuse to not use the mark? Maybe. We may never know. I'll tell you what I would have done - if I had made this agreement in 1989, I would have been filing an "Intent To Use" for the DMC mark that very same day to ensure that those checks from Amblin & Universal keep rolling in.

As to worldwide rights to the mark based on worldwide sales of BTTF - no. Laws vary from country to country. A country can choose to have no trademark laws or weak enforcement of those laws such that any "rights" are merely illusory.

[Helirich]

Does anybody else find it odd that a car company would get royalties? I mean, they are getting free press. I believe Austin Martin pays dearly to keep its cars in Bond movies.

[SonnyV]

Does anybody else find it odd that a car company would get royalties? I mean, they are getting free press. I believe Austin Martin pays dearly to keep its cars in Bond movies.

It made sense at the time; when BTTF was being filmed and released, the logo was still active. As such, compensation for using the car would have been due. I would imagine that it is a precursor to the Universal agreement we know of now.

Let's set aside the discussion about the ethical issues of DMCH using the DeLorean name and logo or the debatably illegal practice of withholding the Universal contract from Sally; the latter Morganroth should have been aware of unless JZD brokered the deal without their involvement. It is a fact that in the Universal contract states that future proceeds are to go to the heirs of JZD; namely Zach and Kat. That was John's stated intent and, by that metric alone, DMCH is stealing what John intended to provide for his family.

[David T]

All of this debate is interesting but until someone spends the money on legal fees to argue this in a court of law, none of this is going to change anything.

This reminds me of the client who tells a lawyer about his case. The lawyer responds, "Your case has merit, how much justice can you afford"? This can be a very expensive legal battle and in the end how much is there to fight over? In the meantime as a practical matter, anything that keeps DMCH financially healthy is a good thing for the Delorean community. It assures us of a continuity of precious parts. Did JZD's kids get the short end of the stick? Maybe so but the bottom line is if JZD really cared about them he would have better prepared things. I can't blame Sally for cashing in for a quick buck and not worrying about her step-children but she could have been better represented by counsel in hindsight. In the end the lawyers always win no matter who wins or loses.

[SonnyV]

All of this debate is interesting but until someone spends the money on legal fees to argue this in a court of law, none of this is going to change anything.

This reminds me of the client who tells a lawyer about his case. The lawyer responds, "Your case has merit, how much justice can you afford"? This can be a very expensive legal battle and in the end how much is there to fight over? In the meantime as a practical matter, anything that keeps DMCH financially healthy is a good thing for the Delorean community. It assures us of a continuity of precious parts. Did JZD's kids get the short end of the stick? Maybe so but the bottom line is if JZD really cared about them he would have better prepared things. I can't blame Sally for cashing in for a quick buck and not worrying about her step-children but she could have been better represented by counsel in hindsight. In the end the lawyers always win no matter who wins or loses.

DMCH has been a blight on the DeLorean community. 20 years of lies about new cars capped with this scandal, a history of cease and desist letters, fighting DeLorean's heirs, and flipping cars is not a blessing. A group with integrity could have managed and sold the parts without all the added garbage of their lies and pretending to be DMC.

[gullwingD]

Yeah I can't understand any of the positives of DMCH really... those NOS parts would always be around. When DMCH came into existence the cost of NOS parts went up. Regarding "flipping" cars... Lately, the franchise locations have been bidding on cars against each other, and fight over cars from private sellers which has increased prices for everyone looking to buy. They even bid against every day buyers in the DeLorean community at major auctions so they can sell for more! They are making 25-30 percent or more on cars.

DMCH has been a blight on the DeLorean community. 20 years of lies about new cars capped with this scandal, a history of cease and desist letters, fighting DeLorean's heirs, and flipping cars is not a blessing. A group with integrity could have managed and sold the parts without all the added garbage of their lies and pretending to be DMC.