The plaintiff National Board (NBCOT) sued defendant American Occupational (AOTA) when AOTA sought to have NBCOT’s trademarks revoked. Historically speaking, AOTA had been the sole organization in charge of the occupational therapy field, but in 1986, had split off a part of itself to continue the certification program. AOTA at the time had been concerned with violations of the Sherman Act since they were the only organization of its type in the field. After the spin-off, NBCOT re-incorporated itself into a separate entity.

Trademarks

The beginning of the dispute centered around NBCOT’s use of two trademarks. AOTA had been the first to use them, and had patented them in 1963. The patent expired in 1993. A number of states required certification for their occupational therapists, and pins or other ornaments with AOTA’s emblems were sent to the therapists once certified. Others were allowed to simply purchase the pins complete with the emblems. In 1995, NBCOT and AOTA entered into an agreement where NBCOT had the sole claim on the design of the emblem, and the NBCOT allowed AOTA to sell the pins in a non-exclusive licensing agreement.

As the NBCOT continued to assert its policies regarding certification, AOTA continued on its own business. NBCOT promulgated a certification renewal program that mandated re-certification of occupational therapists every five years. In addition, NBCOT began to require disclosure of felonies by an applicants for board certification. The plan included a step-up provision from felony disclosure to disclosure of any illegalities, but that provision had not yet been enacted, and was to begin when NBCOT finalized the plan. AOTA vehemently opposed it, and filed with the Patent and Trademark Office to have NBCOT’s trademarks declared void.

The Court determined that AOTA did have standing to challenge NBCOT’s use of the trademarks. AOTA rose above the "mere competitor" and "meddlesome party" standards. However, AOTA had freely contracted their use of the trademarks away to an entity which had always been intended by both parties to be separate and distinct from each other. AOTA, through their dismissal of their own trademarks by transfer to the initial offshoot that later became NBCOT, no longer had any claim on the marks. Indeed, NBCOT had specifically licensed AOTA to use the marks, but AOTA could no longer claim any ownership of them.

A number of reasons contributed to this. Firstly, AOTA had not required membership of an occupational therapist in AOTA to receive the pins or emblems. Secondly, AOTA asserted that NBCOT had not exercised sufficient control over the marks, but through NBCOT’s licensing procedures, quality control, and contractual relationship with AOTA, the Court determined that NBCOT had not let quality of the trademarks lapse. The Court took note of the fact that AOTA had specifically divested itself of control over both NBCOT and the trademarks because of concern over possible antitrust liability. The conclusion was that NBCOT had full use of the trademarks and their actions did not warrant de-certification of the marks.

NBCOT’s Antitrust Claims

The next major issue in the opinion was antitrust. The Court held that although "John and Jane Doe" were mentioned as defendants (and AOTA had moved to dismiss on the grounds that the antitrust suit could not proceed when there were unknown defendants), the fact that AOTA was a trade organization was sufficient for antitrust scrutiny. The essential part of NBCOT’s antitrust claim against AOTA was that of group boycott.

AOTA had made three resolutions that called for withdrawal of support from NBCOT, but all three had failed when placed before its members for a vote. The Court viewed this as an indication that there was no intent by AOTA to boycott NBCOT. The letter provided to the Court by NBCOT was evidence things had been taken out of context and did not rise to the level required to show that AOTA was actively engaged in seeking a boycott against NBCOT.

The other antitrust violation alleged by NBCOT against AOTA was that of attempted monopolization. The Court stated that AOTA’s behavior did not rise to the level of attempted monopolization, but instead was a "losing battle to control an independent organization [NBCOT] of [AOTA]’s own creation." Id. The three-step analysis is that: 1) the defendant had engaged in predatory or anti-competitive conduct; 2) the defendant had a specific intent to monopolize; and 3) that there was a dangerously close chance at achieving monopoly. The Court first held that AOTA’s resolution letter could not meet the first prong of the test, and that was the only evidence offered by NBCOT against AOTA, nor was there sufficient evidence to show that AOTA even had a chance, much less a dangerously close chance at achieving a monopoly in the field of occupational therapist certification.

AOTA’s Antitrust Claims

According to the Court, AOTA failed to establish any "issue of material fact" to demonstrate that NBCOT had attempted a monopoly. NBCOT had urged state legislatures to require occupational therapists within the state to mandate NBCOT certification, but caselaw has demonstrated and held that this is not a willful attempt at monopoly, nor does enforcement of their trademark rights constitute an attempt to monopolize. Even if the Court had been persuaded that NBCOT was a true monopoly in violation of the Sherman Act, AOTA still would have had to show an antitrust injury, which AOTA failed to do.

Trademark Dilution Claims

Trademark dilution occurs when a famous trademark’s ability to distinguish its product is lessened, either through "tarnishing" (a famous mark becomes associated with an inferior product) or "blurring" (a junior mark becomes associated with the famous mark’s product). The Court tersely stated that NBCOT had no evidence to support their conclusory assertions. AOTA had asserted that since the Trademark Dilution Statutes had been passed comparatively recently and their own trademarks predated the statute, there could be no retroactive application of the statute. The Court denied this as well; noting that AOTA had never complained about trademark dilution until NBCOT had begun to implement their new certification policies.

Certification Mark Disparagement/Injurious Falsehood

NBCOT also brought forth an injurious falsehood claim against AOTA. For an injurious falsehood claim to succeed, the plaintiff must prove that the defendant maliciously published an item with a known falsity derogatory to the plaintiff’s business, which resulted in special damages. According to the Court, NBCOT did not assert any special damages, and NBCOT’s claim failed.

Trademark Infringement/Unfair Competition Claims

NBCOT relied on the "unfair use which results in confusion, mistake, or deception" test to establish an infringement case. Although there were seven factors to consider (including distinctiveness, similarities in many respects, and actual confusion), the Court again treated this issue quickly; AOTA had admitted that it continued to use the emblems now under trademark ownership by NBCOT. The Court granted summary judgment on this issue for NBCOT.

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