Litigation over 'Ultra Music' Licensing Raises International Trademark Issues

Adria's lawsuit further alleged that although Worldwide accused it of breaching contract, Ultra's parent company had never actually registered the trademark for use in Europe and Croatia.

Worldwide filed a counter-complaint alleging that Adria had engaged in trademark infringement, was unjustly enriched through its use of the Ultra brand and owed hundreds of thousands in licensing fees. With regards to the latter charge, the jury found that Adria had indeed breached its contract with Worldwide and owed $366,211 in damages.

According to Adria's attorney and Kozyak Tropin & Throckmorton partner Javier A. Lopez, the company conceded that it owed the sum named to Ultra Miami. “That number is actually the last year's licensing fee. That's something that we openly admitted we wouldn't pay,” Lopez told Entertainment Law & Finance's ALM sibling, Daily Business Review, citing the “undisputed” fact that Ultra had not registered a trademark for Ultra Europe when Worldwide initially licensed the brand to Adria.

“Ultra Miami sold us a bill of goods they didn't own. We paid millions of dollars for this mark [and] anybody could have used it,” Lopez added. “How can you possibly infringe on a trademark that Ultra doesn't own?”

The award to Worldwide is offset by the aforementioned $866,000 awarded to Adria for Worldwide's tortious interference and respective breach of contract. Additionally, besides the charge that Adria had failed to pay a licensing fee, the jury sided with the Croatian company in the eight other charges filed against it in Worldwide's counter-complaint.

Lopez said Adria is “basically bankrupt,” despite the victory, due to what he calls Ultra's “strong-arm tactics.” With their legal matters concluded in Miami, the two parties are now taking one another to court in Croatia to resolve who will ultimately receive the rights to throw events bearing the Ultra brand in Croatia and Europe at large.

Worldwide's attorney Peter Francis Valori, managing partner at Miami law firm Damian & Valori, told the Daily Business Review that there are plans to request a motion for judgment as a matter of law following the verdict. Worldwide wants the court to dismiss the tortious interference claim as a matter of law, arguing there was insufficient evidence to support the jury verdict.

Opposing counsel “didn't prove any damages — they did not present to the court or to the jury evidence that they were damaged by Worldwide's actions to retake the festival and protect the ticket holders,” Valori said.

The tortious interference claim “related to Worldwide Entertainment Groups' assertion of its retake rights after Adria MM breached the promotional agreement,” Valori continued, referring to the allegation against his client by Adria that Worldwide sabotaged the Croatian company's ability to conduct business. Valori said that opposing counsel argued that Worldwide took its actions — which were hastened by their assertion that Adria was in breach of contract —too soon in light of a pre-existing agreement for Adria to produce the 2017 edition of Ultra Europe.

While one lawyer for Adria MM says they expect the award to hold up, they agree with Worldwide's counsel on one thing — the litigation is not over.

“We are … submitting a motion for attorney fees and costs as the prevailing party because the initial contract calls for attorney fees to be awarded to the prevailing party in any dispute arising as a result of the contract,” said Yano Rubinstein, Adria MM lead counsel from San Francisco.

Rubenstein said Worldwide and Adria are still at odds over the ownership and use of the Ultra trademark and related iconography (such as the festival's logo, a mashup of the letter U and a power button) to promote Ultra branded events in Europe.

Both parties filed to register the use of the Ultra trademark in Europe after filing their respective suits in Miami; Adria filed in the Croatian State Intellectual Property Office and Worldwide filed in the European Union Intellectual Property Office.

“However, Adria MM has been granted exclusive rights to use the 'U' symbol in Croatia and so there is additional litigation against the new festival promoters for Ultra Europe in Croatia preventing them branding with the 'U',” Rubinstein said. He added that there may be further litigation in the United States outside of the Southern District of Florida concerning the use of the Ultra trademark in Europe.

Valori said his client Worldwide has “superior rights” to Ultra trademarks in Europe “pursuant to provisions of the 2012 contract.”

“We also have superior rights because we filed first in the European Union … and Croatia belongs to the European Union,” Valori said. “Ours was filed first and we expect it to be granted because … it's assigned to us under the [original] promotional agreement.”

But Rubinstein said that although Adria's allegation that Worldwide had committed fraud — because of an alleged lack of a registered Ultra trademark in Europe at the time of the 2012 agreement — was unadjudicated, Worldwide's position in his view was “ not … sustainable.”

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Zach Schlein is litigation reporter for Daily Business Review, a Florida-based ALM sibling publication of Entertainment Law & Finance. He can be reached at [email protected].