MEMORANDUM AND ORDER Motion for Summary Judgment

MARILYN PATEL, Chief Judge, District

In March 2003, plaintiff Halo Management, LLC ("HM") brought this civil action against defendant Interland, Inc., seeking monetary and injunctive relief for alleged violations of federal trademark law, see 15 U.S.C. § 1114, 1125, and of California's Business and Professional Code. See Cal. Bus. Prof. Code § 17203. On October 17, 2004, the court denied HM's motion for a preliminary injunction. Now before the court is Interland's motion for summary adjudication. The court has considered fully the parties' arguments, and for the reasons set forth below, the court rules as follows.

BACKGROUND

I. Background Facts and the Parties' Relationship

Founded as a sole proprietorship, HM is a small, privately-held limited liability corporation based in Los Altos, California. Focusing on internet-related services, HM offers email, web-search functions, and web-hosting to its list of subscribers and customers. In late 1999, HM filed a United States trademark application for the word mark "HALO." By June 25, 2002, HM had registered the "HALO" mark, see Ashby Dec., Exh. 3, identifying two classes of relevant goods and services:

CLASS 038 — Electronic communication and commerce services, namely, electronic transmission of voice, video, and data via computer terminals, electronic mail services, providing on-line chat rooms for transmission of messages among computer users in the field of business, legal, and intellectual asset management, and providing multi-user access to a global computer network.

CLASS 042 — Providing a search engine for online searching and retrieving of information on a global computer network; hosting the web sites of others on a computer server for a global computer network; on-line, non-downloadable electronic newsletters in the field of business, legal, and intellectual asset management; and intellectual property consultation.

Interland, Inc. is a publicly-traded corporation, attracting customers through, inter alia, its listing on the NASDAQ stock exchange. Like HM, Interland offers an array of internet-based services to its subscribers and customers. As a part of its business practices, Interland employs the web address "bluehalo.com," often redirecting visitors to the "bluehalo.com" site to Interland's corporate homepage ("interlandcom"). Interland also displays the symbol "blueHALO" prominently throughout its corporate, sales, and marketing materials, often — if not uniformly — casting the mark in the color blue.

After HM filed its 1999 trademark application for "HALO," Interland filed an intent-to-use trademark application for the mark "blueHALO Architecture." See Ashby Dec., Exh. 5 (dated June 13, 2002). Interland's trademark application identified web-hosting as the service targeted by the mark. The Patent Trademark Office ("PTO") rejected Interland's "blueHALO Architecture" application on March 7, 2003. See Ashby Dec., Exh. 6 (citing 15 U.S.C. § 1052 (d) of the Lanham Act in finding Interland's proposed mark too likely to cause confusion, too likely to cause mistake, or too likely to deceive). Interland filed a second trademark application a short time later. In this second application, Interland substituted the phrase "and Design" for "Architecture," seeking to register the mark "blueHALO and Design." See Ashby Dec., Exh. 7 (noting that the mark was "lined" for the color blue). The PTO refused Interland's second application, once again noting the likelihood of confusion and the close affinity between the goods and services offered by the parties. See Ashby Dec., Exh. 8.

Interland continued to employ the "blueHALO" moniker in its business ventures. HM learned of Interland's ongoing use in January 2003, and it promptly asked Interland to alter the mark used in Interland's web-hosting services. Interland confirmed receipt of HM's initial query, but Interland did not otherwise respond. Not until HM reiterated its request, in fact, did Interland formally refuse HM's demand See Ashby Dec., Exh. 11. During this time, Interland continued to use the "blueHALO" moniker in its press releases, denoting the term with a superscript "SM." See, e.g., Ashby Dec., Exh. 12. Interland also used the mark in combination with "shared" or "Architecture," rerouting all visitors to the "bluehalo.com" website directly to Interland's corporate homepage. See Ashby Dec. ¶ 9.

II. The Relevant Licence

On July 1, 2002, HM entered a "License, Consent to Use and Registration Agreement" with Planet Halo, Inc., a California corporation. See Wargo Decl., Exh. B. Through this agreement, HM granted Planet Halo a license to use HM's mark — and "any eventual registrations based thereon" — and invested Planet Halo with the right to "worldwide use and registration."Id. When it entered this license agreement, Planet Halo agreed only "to employ reasonable commercial efforts to maintain the positive business value of the HALO mark." Id. No explication of this provision is provided in the agreement, and no express right to inspect or to supervise Planet Halo's "efforts" is provided. Id. (permitting either party to "assign th[e license] Agreement so long as any such assignee agrees to the terms and conditions [t]herein"). In fact, the licensing agreement invests HM with no express contractual right to inspect or to monitor Planet Halo's use of the "HALO" mark. See, e.g., Wargo Decl., Exh. A B.

III. The Instant Litigation

HM filed this action on March 14, 2003. See Compl. at 1. On October 17, 2004, the court denied HM's motion for a preliminary injunctive relief, finding that HM had failed to satisfy either portion of the relevant "sliding scale." See Southwest Voter Registration Education Project v. Shelley, 344 F.3d 914, 917 (9th Cir. 2003) (en banc; per curiam) (discussing the court's responsibility to consider the moving party's "likelihood of success on the merits," "the possibility of irreparable injury," and the seriousness of "the questions" raised, and "the balance of hardships"). Interland has now moved for summary judgment, arguing that HM abandoned its rights in the relevant mark and, in so doing, forfeited all of the claims — federal and state — it attempts to bring here.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56, summary judgment shall be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial . . . since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Fed.R.Civ.P. 56(c). When making a summary judgment motion, the moving party bears the initial burden of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. To discharge this burden, the moving party must show that the nonmoving party has failed to disclose the existence of any "significant probative evidence tending to support the complaint." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 290 (1968). If the moving party satisfies this initial hurdle, the burden then shifts to the nonmoving party to "go beyond the pleadings, and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp., 477 U.S. at 324 (citations omitted).

Not all disputes that arise in the course of litigation constitute genuine issues of material fact. A dispute about a material fact is genuine — and thus adequate to survive a motion for summary judgment — "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Mere allegations or unsubstantiated denials do not, without more, generate a genuine issue of material fact. See Gasaway v. Northwestern Mut. Life Ins. Co., 26 F.3d 957, 960 (9th Cir. 1994). When considering motions for summary judgment, the court views the facts — and the inferences drawn therefrom — in the light most favorable to the party opposing the motion. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractor's Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In this process, the court does not make credibility determinations. See Anderson, 477 U.S. at 249.

DISCUSSION

The core issue before the court is whether HM abandoned its "HALO" trademark by entering into a "naked license." The Ninth Circuit has defined "naked licenses" as those licenses that "fail to exercise adequate quality control over the licensee."Barcamerica Int'l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589, 595-96 (9th Cir. 2002) (citing Moore Bus. Forms, Inc. v. Ryu, 960 F.2d 486, 489 (5th Cir. 1992)); see also McCarthy on Trademarks and Unfair Competition § 17:6, at 17-9 (4th ed. 2003) ("Licensing a mark without adequate control over the quality of the goods or services sold under the mark by the licensee may cause the mark to lose its significance as a symbol of equal quality — hence, abandonment."). Where a "trademark holder engages in naked licensing, without any quality control over the quality of goods produced by the licensee, such a practice is inherently deceptive." See First Interstate Bancorp v. Stenquist, 1990 WL 300321, at *3 (N.D. Ca. 1990) (Patel, J.). Failure to exercise "adequate quality control" constitutes "abandonment" of a mark — i.e., a "purely involuntary forfeiture of trademark rights" that does not demand evidence of "any subjective intent to abandon the mark." Id. (quoting McCarthy § 18:48 at 18-76-18-78). Once a trademark holder enters a "naked license" — that is, once a holder "abandons the trademark" — the holder is "estopped from asserting rights [related] to [that] mark." Id. (quoting Moore, 960 F.2d at 489).

As the court noted in its preliminary injunction order, a party must satisfy a "stringent standard" of proof when asserting that a trademark holder entered into a "naked license." Id. (quotingMoore, 960 F.2d at 489); see also Creative Gifts, Inc. v. UFO, 235 F.3d 540, 548-548 (10th Cir. 2000) ("Because naked licensing if established is treated as an abandonment of the trademark, which triggers the loss of trademark rights against the world, anyone attempting to show such abandonment via naked licensing faces a stringent burden of proof.") (citing Moore, 960 F.2d at 489, and Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1121 (5th Cir. 1991), aff'd, 505 U.S. 763 (1992)). The court found that Interland met that "stringent" standard for the purposes of HM's request for a preliminary injunction. And while the motion for summary adjudication asks a different question than did the request for preliminary injunctive relief — viz., whether there is a genuine issue of material fact, not whether HM demonstrated a probability of success on the merits — Interland nevertheless meets its "stringent" standard of proof here.

On July 31, 2002, HM granted Planet Halo a license for "worldwide use and registration" of HM's mark and "any eventual registrations based thereon." See Wargo Decl., Exh. B. No explicit or definite quality control terms appear anywhere in the two-page licensing agreement; no objective, enforceable terms guide (or limit) Planet Halo's use of the mark. Id. Instead, the agreement requires Planet Halo only to do (at most) three things: one, "to employ reasonable commercial efforts to maintain the positive business value of the HALO mark"; two, to limit mark use to that "substantially as shown in the pending applications and with services substantially as recited"; and, three, to cooperate with HM to "mitigate the confusion or likelihood of confusion between the parties' respective marks." See Ashby Decl., Exh. B. None of these requirements — nor the three taken together — place any distinct or cognizable restriction on the quality of goods Planet Halo may produce or distribute under the mark. In fact, all of these putative "quality control" terms prove inherently amorphous, both in obligation and in effect — and all remain wholly undefined in the agreement. Id. Under the terms of the licensing agreement, in fact, HM retains no express contractual right to inspect or to supervise Planet Halo's conduct. HM lacks even the ability to terminate the license should Planet Halo derogate its supposed "quality" or "value" obligations. See Barcamerica, 289 F.3d at 595-96. By its own terms, then, the licensing agreement between HM and Planet Halo was a "naked" one.

As the Ninth Circuit has noted, of course, "[t]he lack of an express contract right to inspect and [to] supervise a licensee's operation is not conclusive evidence of lack of control." Id. at 596 (noting that where circumstances informing or surrounding the "licensing arrangement [indicate] that the public will not be deceived," the lack of a formal quality control provision does not automatically divest a trademark holder of protection) (citation omitted). But HM's conduct also confirms that HM relinquished — and otherwise failed to maintain — adequate quality control. Id. From the beginning, HM's interaction with Planet Halo was acrimonious, marked by HM's intent to divest itself of control of the germane mark, not to maintain it. HM's initial contact (via email) with Planet Halo was adversarial in nature, as HM immediately accused Planet Halo of infringing HM's mark. See Wargo Decl., Exh. B. Planet Halo disagreed with HM's charge, but HM persisted, sending Planet Halo a number of additional emails discussing a supposedly "self-evident" conflict. See id. Planet Halo continued to dispute HM's claims, but it entered the licensing agreement nonetheless, hoping to end the supposed relationship with HM, not to solidify it. See Wargo Decl., Exh. A (Angell Depo.) (noting that, through this "deal with the devil," Planet Halo hoped to "move on" at less cost than "hiring a lawyer"). No ongoing "working relationship" existed or developed between HM and Planet Halo, and little additional interaction occurred. Id. (noting, inter alia, that Planet Halo "didn't have a relationship" with HM, that the two entities were not "in any way related or affiliated," and that the two "never had a working relationship"). In fact, all Planet Halo ever sent to HM was a single set of marketing materials; no updates on these materials followed, and no "product" was ever reviewed. See Angell Depo., at 42:21-43:8 (noting that the transmission of one "marketing package" was "all" that the agreement — and, specifically, the "reasonable commercial efforts" term — contemplated).

At oral argument plaintiff made much of the fact that, of course, there had been no visits to Planet Halo's plant or other facility, because the model, a picture of which was displayed at the hearing and contained in an exhibit, was a only a prototype. However, despite demonstrations to potential manufacturers and purchasers, plaintiff had never been consulted about demonstrations or about particular manufacturers nor even inquired about them. Also, Planet Halo never sought plaintiff's permission or guidance on such activities.

Indeed, nothing in the record suggests that HM was remotely interested in any of these activities and there is nothing in the record to show that Planet Halo was familiar with HM's internal quality control efforts. Id. Nor does anything in the record indicate that HM had (or sought) any information about Planet Halo's own quality control methods, either. Id. A studied myopia or blindness appears to have guided these parties in their dealings. The deposition testimony of Marc Angell, Planet Halo's CEO, puts it succinctly: Planet Halo entered a "bogus deal . . . with the devil" so that it could "move on"; Planet Halo permitted HM no access to any of its facilities; Planet Halo had no discussion of — nor understood the thrust of — any of the supposed "quality control" terms in the licensing agreement; Planet Halo angrily rebuffed HM's few attempts to inspect Planet Halo's "facilities and books and records"; Planet Halo had "no plans, then, now or in the future, to give" HM the right to inspect or to confirm Planet Halo's operations; and Planet Halo emphatically denied any suggestion of HM "control," however minute, calling such claims "absurd." See id. At most, the record suggests that Planet Halo entered the licensing agreement so that it might forfend additional contact with HM. Id. (assuring that Planet Halo "absolutely [would] not" have entered into the license agreement had it believed HM had any supervisory or monitoring rights); see Stanfield v. Osborne Industries, Inc., 52 F.3d 867, 872 (10th Cir. 1995) ("[T]he parties have had no contact with each other except as adversaries."). No legitimate efforts to control quality occurred.

To be sure, as a part of its opposition to Interland's motion for summary adjudication, HM adduces three new declarations — one from a supposed "expert," one from Planet Halo's CEO, and one from Ashby himself. See Pl.'s Opp., Decls. of Franklyn, Angell, and Ashby. Each of these declarations conclude — in nearly identical language — that Planet Halo and HM were somehow "working together," that the licensing agreement was "sufficiently definite" to be enforceable, and that HM was involved in "periodic" review of Planet Halo's efforts. See id. But each of these declarations confuse untenable, self-serving, and impressionistic conclusions of law for legitimate assertions of material fact. See United States v. Shumway, 199 F.3d 1093, 1104 (9th Cir. 1999). In fact, none of the three declarations contains relevant, material facts; instead, the declarations recite legal conclusions and attempt to recast facts already found by this court. See Decls. of Ashby, Angell, and Franklyn. This does not satisfy Rule 56's standard — especially where a declarant's conclusions contradict his own deposition testimony, and especially where an "expert" merely signs a declaration rife with unvarnished legal conclusions that echo (identically) what the benefitting party himself has said.See Scamihorn v. General Truck Drivers, 282 F.3d 1078, 1086 (9th Cir. 2002) ("As a general rule, an affidavit submitted in response to a motion for summary judgment which contradicts earlier sworn testimony without explanation of the difference does not automatically create a genuine issue of material fact.") (citing Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266 (9th Cir. 1991)); Aguilar v. Int'l Longshoremen's Union, 966 F.2d 443, 447 (9th Cir. 1992) (discussing improper "expert" testimony); see also Fed.R.Evid. 702 704.

The court is mindful of the fact "that a statement is self-serving [may] bear on its credibility, not on its cognizability for purposes of establishing a genuine issue of material fact." Lucas Auto. Eng'g, Inc. v. Bridgestone/Firestone, Inc., 275 F.3d 762, 768 (9th Cir. 2001); Fed.R.Civ.P. 56(e). But the court is likewise mindful that interested parties cannot concoct genuine issues of material fact simply by submitting strategically-worded — and unsupported — conclusions of law in the form of declarations. See Shumway, 199 F.3d at 1104 ("If the affidavit stated only conclusions, . . . then it would be too conclusory to be cognizable. . . ."). All three declarations — Franklyn's "expert" opinions, Angell's contradictory (i.e., "sham") declaration, and Ashby's legal assertions — provide little more than a list of self-serving legal conclusions, not facts. And all three hope to cure a naked license by reciting terms no less indefinite than those in the license itself. See, e.g., Decls. of Franklyn Ashby (suggesting that "reasonable commercial efforts" is sufficiently clear because it demands Planet Halo to "uphold the stature of the mark" and to "maintain a respectable integrity"). Such declarations do not, without more, overcome a motion for summary judgment. See, e.g., AM Records, Inc. v. Napster, Inc., 2000 WL 1170106, at *8 (N.D. Ca. 2000) (finding that a law professor's report was inadmissible vis-a-vis legal questions before the court) (Patel, C.J.).

In the end, all that HM properly adduces to prove "quality control" is a pair of email messages from HM to Planet Halo. Both messages seek "reassurance" from Planet Halo regarding its license obligations, and both ask to review "samples" of Planet Halo's relevant products. See Ashby Supp. Decl., Exh. 8 (dated January 21, 2003, and February 19, 2003) (thanking Planet Halo for "promoting a positive image" — though this "positive image" term is left unexplored — and noting that, for fear of "a loss of rights," it is "kind of important to check up" on Planet Halo's use of the mark). Viewed generously, these emails may imply a "minimal effort to monitor quality." Barcamerica, 289 F.3d at 597 (citation omitted). But the timing and the effect of the messages actually weaken — rather than buttress — HM's claims of legitimate quality control. All of HM's attempts to monitor Planet Halo's use of the mark occurred more than six months after the license agreement was entered. In fact, all of HM's putative monitoring coincided with (and helped prepare for) HM's filing of this litigation — as if HM wished to cure the abandonment of its mark through a series of tardy, dilatory, and facile quality control gestures. See Ashby Supp. Decl., Exh. 8. Such "minimal effort[s]" do not qualify as sufficient quality control efforts.See Barcamerica, 289 F.3d at 597 (citation omitted).

They were inconsistent and unsuccessful as well. Cf. Emergency One, Inc. v. American FireEagle, Ltd., 228 F.3d 531, 537 (4th Cir. 2000) ("[T]he owner of a trademark cannot defeat an abandonment claim, as well as the purposes of the Lanham Act, by simply asserting a vague, subjective intent to resume use of a mark at some unspecified future date."). HM's quality control efforts consist of little more than a short series of curt, pro forma requests to review unspecified Planet Halo products and materials. Id. Such transparent post hoc gestures are not sufficient to revive an abandoned mark, nor do they function as adequate "quality controls." See Barcamerica, 289 F.3d at 597-98. Since HM and Planet Halo entered the license agreement, HM has "failed to demonstrate any knowledge of or reliance on actual quality controls used . . ., nor has it demonstrated any ongoing effort to monitor quality." Id. No formal agreement guides Planet Halo's use of the mark; nothing in the record establishes "when, how often, and under what circumstances" HM can — or did — exercise any kind of quality control. Planet Halo and HM never maintained "the type of close working relationship required to establish adequate quality control in the absence of a formal agreement." Id. (citations omitted). If anything, the record confirms that HM "played [no] meaningful role in holding [any product] to a standard of quality — good, bad, or otherwise." Id. at 598;see also McCarthy, § 18:48, at 18-82 ("A mark can become abandoned by any act or omission of the registrant which causes the mark to lose its significance as an indication of origin.");see McCarthy § 18:55, at 18-94; TMT North America, Inc. v. Magic Touch GmbH, 124 F.3d 876, 885 (7th Cir. 1997). All that HM has done is attempt to revive an abandoned mark through uniformly tardy, unsystematic, and unavailing means. Cf. Stanfield, 52 F.3d at 872 ("In cases in which courts have found that a licensor justifiably relied on a licensee for quality control, some special relationship existed between the parties."); Wargo Decl., Exh. A ("This is absurd. There has been no control."). Such efforts do not change the character of the "naked" license between HM and Planet Halo — and they do not restore HM's forfeited state or federal rights. See, e.g., Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994) (affirming the dismissal of related Lanham Act and state law claims). For this reason, all of HM's claims against Interland are untenable as a matter of law. Interland's motion for summary judgment must be granted accordingly.

CONCLUSION

Interland's motion for summary judgment is GRANTED. HM's claims are DISMISSED WITH PREJUDICE.

IT IS SO ORDERED.