There is a popular vintage Harley Davidson t-shirt that says “Tough Guys Finish First.” That may be true. But, sometimes, to finish first, one does not need more tough guys; one needs more lawyers, as a crime-related matter involving the Mongols Motor Cycle Club has recently shown. So today we thought that we would use Michael Corleone’s observation as the title of our discussion of how creative intellectual property lawyering has impacted that recent Mongols’ matter in a California federal court. [Not only is the Corleone quote apt here, but it is often useful in any context to start with a quote from The Godfather, which has been described as the “sum of all wisdoms” and “the source of all knowledge.” So it is probably fitting that we lead this piece (or any piece) with a Godfather quote or reference, especially since it has worked for us before.]
The notion that trademark law is relevant to criminal law is not a new one, and the concept that controlling the marks or identifying symbols associated with an alleged criminal enterprise are also not new. Indeed, it has been celebrated in cinema and conceded in real life. See, US v. Saunders, 826 F. 3d 363, 375 (7th Cir. 2016 ) (“But the court ultimately accepted that … he used red tape to wrap his heroin in order to distinguish it, and that he was known on the street for having excellent quality heroin because of this ratio”) (emphasis added). But law enforcement efforts to seize control of, and limit the use of, group identifying marks raise sensitive free speech and related issues that are worth considering. And in the end, no matter how many tough guys were within the Mongols’ ranks, it was about having the right lawyers involved. Indeed, those lawyers made their mark by making the right arguments to let the Mongols, who were on the verge of losing the rights to their name, keep their mark.
The Case of the Mongols
The Mongols’ case is an interesting one. It began in 2013 with the indictment for various crimes, including two counts under the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO of defendant Mongol Nation. That defendant was described in part as follows:
At all relevant times, defendant MONGOL NATION was an unincorporated association comprised of full patched members of the Mongols Gang who, among other things, maintained authority to control the use and display of the Word Image and Rider Image. Defendant MONGOL NATION controlled the use and display of the Word Image and the Rider Image.
On or about January 11, 2005, as the result of an application caused to be submitted by Ruben Cavazos, Sr., at the time the President of the Mongols Gang, defendant MONGOL NATION was granted registration of the Word Image with the United States Patent and Trademark Office (“USPTO”) as a collective membership mark (the “Word Mark”) (registration number 2916965).
On or about April 4, 2006, as the result of an application caused to be submitted by Ruben Cavazos, Sr., at the time the President of the Mongols Gang, defendant MONGOL NATION was granted registration of the Rider Image with the USPTO as a trademark/service mark (the “Rider Mark”) (registration number 3076731).
[Indictment [Pacer Subscription Needed]]
Creative prosecution lawyers sought both to convict that defendant and deprive it of its identifying trademark. On December 13, 2018, five and one half years after the original indictment [Pacer Subscription Needed], a jury in California found defendant Mongol Nation guilty.
In January 2019, the jury returned to hear a forfeiture aspect of the case during which the government was seeking requiring the defendant to forfeit to government control not only physical items containing the motor cycle club’s logo or “colors” but also requiring the forfeiture of the intellectual property rights themselves:
[the government sought forfeiture of] the rights and privileges associated with the federally-registered collective membership marks that have been referred to generally as the Word Mark1, the Center Patch Image2, and the Combined Mark3 (collectively, the “Marks”), and items of personal property bearing all or part of any of the Marks.
1 The “Word Mark” is defined as any and all legal and equitable rights of any kind or nature associated with or appurtenant to the Collective Membership Mark consisting of the word “Mongols” that, at various times, was or is registered with the United States Patent and Trademark Office (“USPTO”) under registration numbers 2916965, 4406187 and 4730806, whether for the purposes of commerce, associative purpose, or any other purpose, whether in connection with promoting the interests of persons interested in the recreation of riding motorcycles or otherwise, and which has been used by Defendant Mongol Nation, among other uses, as the top rocker of the three-piece patch awarded to full-patch and probationary members of the Defendant Mongol Nation.
2 The “Center Patch Image” is defined as any and all legal and equitable rights of any kind or nature associated with or appurtenant to the Collective Membership Mark consisting of the drawn image of a Genghis Khan-type character with sunglasses and a ponytail, riding a motorcycle, with the letters “M.C.” appearing below the motorcycle, that, at various times, was or is registered with the USPTO under registration numbers 3076731 and 4730806, whether for the purposes of commerce, associative purpose, or any other purpose, whether in connection with promoting the interests of persons interested in the recreation of riding motorcycles or otherwise, and which has been used by Defendant Mongol Nation, among other uses, as the center patch of the three-piece patch awarded to full-patch, probationary and prospective members of the Defendant Mongol Nation.
3 The “Combined Mark” is defined as any and all legal and equitable rights of any kind or nature associated with or appurtenant to the Collective Membership Mark consisting of the Word Mark and the Center Patch Image, that, at various times, was or is registered with the USPTO under registration numbers 3076731 and 4730806, whether for the purposes of commerce, associative purpose, or any other purpose, whether in connection with promoting the interests of persons interested in the recreation of riding motorcycles or otherwise, and all or part of which has been used by Defendant Mongol Nation, among other uses, as the top rocker and center patch of the three-piece patch awarded to full-patch, probationary and prospective members of the Defendant Mongol Nation.
[Government’s Brief filed December 21, 2018, Pacer [Pacer Subscription Needed] Docket Entry #322, at 1-2]
In essence, at issue was the word MONGOLS and this image:
On January 11, 2019, the jury in fact ordered that forfeiture. [Pacer Subscription Needed] “But the case is not over. U.S. District Judge David O. Carter declined to immediately order the trademarks forfeited and instead set a hearing for next month to address, among other things, thorny 1st Amendment issues raised by the verdict,” as the Los Angeles Times reported.
Between the jury’s verdict and the hearing before Judge Carter, several interesting filings occurred. First of all, the court invited amicus filings on four questions: “ Whether criminal forfeiture of any and all legal and equitable rights of any kind or nature associated with or appurtenant to a collective membership mark violates the First Amendment to the United States Constitution.  Whether criminal forfeiture of a collective membership mark is feasible under intellectual property law.  Whether criminal forfeiture of a collective membership mark violates the due process rights of the individual members of a collective.  Whether an unincorporated association is legally capable of committing the crimes of murder and/or attempted murder, and can be held liable under the RICO Act for such predicate acts.” Proceedings (In Chambers): Amicus Invitation [Pacer Subscription Needed]. Second, despite the government’s statement in the December 21st filing indicating, as quoted above, that it sought forfeiture of “items of personal property bearing all or part of any of the Marks,” the government’s February 11, 2019 filing stated (at page 2) [Pacer Subscription Needed] that “Nothing in the proposed POF suggests that the order imposes any restrictions on any individual’s possession of personal property bearing the Marks, or any use or display of the Marks. To the contrary, the proposed POF explicitly excludes seizure authority applicable to personal property.”
On February 28, 2019, and the court issued its decision.
The forfeiture of trademarks is not unprecedented as part of criminal sentencing in the United States. For instance, a registered trademark was forfeited pursuant to a plea agreement in 2016 in the Eastern District of Michigan in United States Of America v. D-11, John Renny Riede (“The trade mark/word mark/service mark, an example of which is attached hereto as Exhibit A (Registration Number 4574783), issued to Devils Disciples MC. The mark consists of an upper arc framing the words ‘DEVILS DISCIPLES’, a design with two crossed pitch forks over a spoked wheel, and the letters ‘MC’, purportedly for use in commerce to indicate membership in an organization of motorcycle riders” as well as “the word mark ‘DEVILS DISCIPLES MC’”). Such forfeiture also occurred in the same year in another plea bargain in the same federal district in US v. Lonsby. (“Defendant shall not contest, or assist anyone else in contesting, the forfeiture of all Devil’s Disciples’ websites, markings, service marks, trademarks, names and “Colors,” to the extent that the government seeks forfeiture of such items in any forfeiture action or proceeding”). [A similar issue was raised but not pursued in the 7th Circuit case of US v. Bowser, 834 F. 3d 780, 785 fn.2 (7th Cir. 2016).] But this is not merely an issue with motor cycle clubs, as seen in Rubashkin v. US (ND Iowa 2017), and United States v. Agriprocessors, Inc., (ND Iowa 2009), where the government noted its ability to obtain forfeiture of numerous trademarks in a glatt kosher meat industry business. Thus, while the press have been describing the Mongols case as unprecedented, it is not.
In fact, it has other antecedents as well. At least one law professor was writing about just such use of seizure orders as far back as 2009. See Reilly, “Marks of Mayhem and Murder: When A Few Bad Mongols Spoil The Bunch, Should The Government Seize a Motorcycle Association’s Trademarks,” 7 Buffalo Intellectual Property Law Journal 1 (Winter 2009). Internationally, limitations on motorcycle groups themselves, or on their using or displaying their names or colors, have also burgeoned recently. Such limitations have arisen in Queensland, North-Rhine Westphalia, Berlin, and elsewhere. Some have applied to use on clothing as well as websites, such as the one in North-Rhine Westphalia. Of course, those jurisdictions have different historical contexts against which one should assess banning logos and paraphernalia.
The Concerns Raised
The concerns that arise from government seizures of intellectual property, especially pre-conviction, raise serious constitutional concerns for some in the US context. These have been highlighted by Timothy Lee after Congress expanded the use of such seizures to copyright cases in the 2008 PRO-IP Act. But the seizures contemplated here were post-conviction remedies. Practicing lawyers nonetheless emphasized such concerns about the Mongols case. These concerns have found echoes in newspaper accounts as well, as when the New York Times noted that “Other lawyers opined that the forfeiture verdict would not hold up on constitutional grounds,” after earlier reporting that “legal experts question the prosecutors’ grasp of intellectual property law.” Indeed, at least one amicus [Pacer Subscription Needed] was quite forceful in arguing these First Amendment issues.
Others, though concerned, thought the prosecution may have been on to something. One of the amicus filings, for instance, took the position (at page 5) that “[t]here is no barrier to the criminal forfeiture of trademarks as assets as long as the marks are not targeted on expressive grounds. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Board, 502 U.S. 105 (1991).” Indeed, that same filing notes (at page 5) that “forfeiture of a trademark is ‘feasible’ to the extent that its purpose is simply to divest defendants of accrued trademark rights, and, depending what the government plans to do with the seized mark, to prohibit others from using the mark commercially.” As another amicus pointed out [Pacer Subscription Needed], once seized the mark could then be sold to the highest bidder.
Even Cal Berkley’s law school dean, Erwin Chemerinsky, as reported by the Los Angeles Times, “said the government likely has the law on its side,” though he wished it did not:
He pointed to a 1993 case [i.e. Alexander v. United States, 509 US 544 (1993)] in which a divided U.S. Supreme Court ruled the government was within its rights when it seized and destroyed all the contents in adult bookstores owned by a man who had been convicted under the same federal racketeering laws used in the Mongols case.
“I think the government’s action seizing speech should violate the First Amendment, but [the earlier case] will make the First Amendment claim difficult,” he wrote in an email.
Of course, Dean Chemerinsky could have been right, and the legal door could have metaphorically locked behind the Mongols, as it were. Amicus Stefan Cassella certainly argued strenuously in his brief that Alexander controlled: “And there is no reason why the Supreme Court’s holding in Alexander that the First Amendment does not prohibit the forfeiture of expressive materials as punishment for past criminal conduct …does not apply equally to the forfeiture of intangible property,” according to his brief (at page 10).
But Dean Chemerinsky and Mr. Cassella seem to this author to over-read Alexander, which is why this is more about lawyers than tough guys (pausing as I must to observe that they are not mutually exclusive groups). Alexander involved the seizure and destruction of pornographic and obscene inventory, rather than the copyright in such materials, which would seem the apt analogy here. Chief Justice Rehnquist’s majority opinion in Alexander could be read to exclude from the tainted assets of the defendant’s business the underlying intellectual property in the materials sold at that business. But Alexander does not seem to distinguish between such assets, other than on a new versus old basis:
By contrast, the RICO forfeiture order in this case does not forbid petitioner to engage in any expressive activities in the future, nor does it require him to obtain prior approval for any expressive activities. It only deprives him of specific assets that were found to be related to his previous racketeering violations. Assuming, of course, that he has sufficient untainted assets to open new stores, restock his inventory, and hire staff, petitioner can go back into the adult entertainment business tomorrow, and sell as many sexually explicit magazines and videotapes as he likes, without any risk of being held in contempt for violating a court order. Unlike the injunctions in Near, Keefe, and Vance, the forfeiture order in this case imposes no legal impediment to—no prior restraint on—petitioner’s ability to engage in any expressive activity he chooses. He is perfectly free to open an adult bookstore or otherwise engage in the production and distribution of erotic materials; he just cannot finance these enterprises with assets derived from his prior racketeering offenses.
In the Mongols case, the ACLU essentially argued in its February 8, 2019 amicus brief (at page 14) that reading Alexander as did Dean Chemerinsky did was to over-read it. The Mongols case, according to the ACLU, presented the very question that Alexander did not address—namely, is the forfeiture of the underlying intellectual property in the Mongols case too restrictive of the free speech and association rights of unconvicted, uncharged and, indeed, legally and factually innocent Mongols? Ultimately, the district court in the Mongols’ case agreed (at page 31) that “this [case] is a far cry from Alexander…”
Though some might argue the forfeiture in the Mongols’ case would go too far, others say it does not go far enough. As reflected in Tore Bjørgo’s piece in the 2017 edition of Trends in Organized Crime, these marks play a central role in unifying many of these organizations. Efforts to limit trademarks used in or associated with crimes, thus, also have their champions, even in the United States and notwithstanding freedom of speech concerns. As noted in The Effects of “Blue Magic”: A Call to Punish Criminal Organizations that Benefit from the Use of Trademarks, 9 J. Marshall Rev. Intell. Prop. L. 912, 934 (2010), Thomas Kelley believes that criminal law and sentencing guidelines should provide for enhanced punishments when one uses a trademark or tradename in the commission of a crime. But it would remain unclear that such a statute would stand against a constitutional claim such as the one being made by the Mongols. Further, where the prosecution has long sought to rid that unifying symbol from being displayed, it makes little sense to sell it to the highest bidder, as more than one amicus has noted [Pacer Subscription Needed]. The prosecution would naturally hesitate to allow for such sale because, as that same amicus pointed out [Pacer Subscription Needed], a purchaser could turn around and sell it to Mongol Nation or simply abandon the marks, which would also allow the Mongols to resume use and ownership potentially. On the other hand, the government’s desire to take the mark out of circulation, that could in and of itself amount to a cancelling abandonment of the mark that could make it again available to the Mongols or allies. See Tracy Amicus Brief [Pacer Subscription Needed] at 3 (citing Constitution Party v. Constitution Ass’n USA, TTAB 1966)).
A certain common sense could have been seen as supporting the notion of government control, especially when one remembers that grounding ones rights in a trademark is resting one assertions in essentially commercial speech, a form of expression long recognized as less sacrosanct and more open to regulation than other forms of First Amendment expression. Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 563 (1980) (“the “Constitution . . . accords a lesser protection to commercial speech than to other constitutionally guaranteed expression”); see also National Grange of the Order of Patrons of Husbandry v. California Guild, 334 F. Supp. 3d 1057, 1067 (E.D. Cal. 2018). But the Tracy amicus [Pacer Subscription Needed] and, especially the Tushnet amicus, filings illustrate the difficulties in using existing trademark law to further the criminal law interest in ending use of the mark for any reason: “It is not ‘feasible,’ however, if its purpose is to allow the government to stop the club and its members from calling themselves Mongols and wearing Mongols gear” because “’[t]rademark ownership is always appurtenant to commercial activity. Thus, actual and continuous use is required to acquire and retain a protectable interest in a mark.’ Tally-Ho, Inc. v. Coast Comm. College Dist., 889 F.2d 1018, 1022-23 (11th Cir. 1989).”
But the government’s interest here was in ending all use, and not letting it re-emerge; it is not about freeing terms for use in the market, but eliminating the market, any market altogether:
“Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.
15 U.S.C. § 1127. …If the government lacks a good faith intent to use or transfer the marks to an entity that will use them for a motorcycle association, abandonment could occur at the time of forfeiture.
When a mark has been abandoned, anyone can use the symbol and can even create a new trademark right using the symbol. Cumulus Media, Inc. v. Clear Channel Comm., Inc., 304 F.3d 1167, 1173 (11th Cir. 2002) (“[A] defendant who successfully shows that a trademark plaintiff has abandoned a mark is free to use the mark ….”); McCarthy on Trademarks and Unfair Competition § 17:1 (5th ed. 2017) (an abandoned mark “falls into the public domain and is free for all to use …”). Thus, if there was seizure and abandonment of the instant marks, the defendants could re-adopt the Mongols marks as trademarks, though their rights would accrue only as of the new first use date. Members (and anyone else) would be free to use the abandoned words and designs.
[Tushnet Amicus Filing at 7-9]
Consequently, without more structural reforms that likely have to go beyond those suggested by Kelley, there will always be a litter bit of an odd fit here, trying to put a trademark lid on a criminal pot boiling over with First Amendment/freedom of expression considerations. Tushnet amicus Filing at 14-16.
In the end, the district court refused to require forfeiture of the Mongols’ mark. The district court’s thorough, fifty-one page opinion addressed all of the concerns noted above, ranging from the First Amendment ones through the various trademark considerations noted above. In fact, the court even added an extensive Eight Amendment analysis grounded on a US Supreme Court decision issued only days earlier. Of course, the opinion has been greeted with elation in some quarters.
And though this author accurately described the opinion as thorough, there also is a bit left unexplained and unsatisfied in the opinion. One has to wonder what the limiting principle will be on freedom of expression rights displacing trademark law or, as we saw some time ago, the law of defamation (as decried by Justice Thomas last month, as he referred (at page 5 of the concurrence) to the “’seemingly irreversible process of constitutionalizing the entire law of libel and slander’” in the decision to deny certiorari in McKee v. Cosby, and opinion that interestingly drew comment from Dean Chemerinsky as well), or, as we have seen more recently (when Eddie Money fired an aging drummer with bladder cancer), even aspects of employment and anti-discrimination law. If the right to expressive association found by the Mongols’ court prevents the seizure of a mark, one would have to imagine that such a right would also limit the enjoining or infringing or diluting activity. This is especially so where the First Amendment already “slants” trademark registration rights toward required acceptance of previously rejected marks, as Daniel Barsky has described, and a case already accepted by the US Supreme Court will consider whether a profane term’s “phonetic twin” is nonetheless registrable. While the First Amendment may not permit a government to prevent the use of such terms in commerce, it should not necessarily mean that the First Amendment requires that the government lend its imprimatur to such use through a federal registration—that seems to jump from allowing free speech to requiring the government to approve the speech in some sense. That just seems to go too far perhaps.
The First Amendment can swallow up a lot of intellectual property law if one is not careful. For instance, the Mongols’ court recognized (at page 3) that a motorcycle club could use a pre-existing mark to contest the subsequent infringing commercial activity of a toy retailer. But, that would not necessarily work if reverse—if the toy retailer were the senior user, would common law and statutory commercial rights stand up against constitutional claims? If the Mongols’ court is correct, any group committed to a unifying symbol or colors, exercising their freedom to expressive association, or any individual similarly wishing to express support for such group or its ideals should have little concern that the selected symbol infringes or dilutes another’s mark. If, as seen at page 29 of the opinion, seemingly legitimate “fear” and the need to deter the symbols from “function[ing] as a mouthpiece for unlawful or violent behavior” are insufficient support for injunction relief, it makes little sense to think that a likelihood of mere confusion would in the next case overcome what has been described as a constitutional right. That just seems wrong, and counter to common sense on so many levels.
Yet, even more remains unexplained. Is there, or should there be, a constitutional right to wear gang colors or marks/indicators of a criminal enterprise with impunity, and beyond the government’s ability to stop or control? This decision gets close to setting the groundwork for that, though the decision does all at page 12 for “a compelling reason” to exist “to prevent the display of the Mongols trademark.” But what exactly it meant remains somewhat of a mystery, since there is a footnote superscript “10” reference in the text that connects to no actual footnote on that page, the two before that page or the two after that page:
It would be nice to know more, like what else the court meant to cite and what compelling reasons might at least have been arguable in the court’s view. Oh well, tomorrow the Mongols, or maybe the federal government (which is “definitely considering an appeal”), will likely need even more lawyers than tough guys to figure next steps here, and maybe solve that little puzzle. Either way, the Mongols can relax a bit for now. As the credo on another classic biker t-shirt goes, “Yesterday is history, tomorrow is a mystery; Ride and live today.”
Connect with Jim on LinkedIn.