[00:00:00] Speaker 04:
The first is Ascent versus Ascent Classical Academy.

[00:00:06] Speaker 04:
This is 25-11-32.

[00:00:07] Speaker 04:
I will be delighted to hear from Mr. Gessler.

[00:00:14] Speaker 06:
Thank you, Your Honor.

[00:00:15] Speaker 06:
My name is Scott Gessler.

[00:00:16] Speaker 06:
I represent the Appellant Ascent Classical Academy, to whom I shall refer to as Ascent in my argument.

[00:00:25] Speaker 06:
This case is primarily a case of contract interpretation.

[00:00:29] Speaker 06:
And the relief we're asking is that this court reverse the lower court's contractual interpretation, provide the correct interpretation, and then remand for factual findings to determine what, if any, in the extent of trademark infringement, intellectual property infringement exists.

[00:00:46] Speaker 06:
So that's what we're asking.

[00:00:48] Speaker 06:
In the contract here, basically the way it was structured is assent kept all of the current and future intellectual property except for one limited carve out.

[00:00:59] Speaker 06:
So there were four contracts, each of which was identical.

[00:01:03] Speaker 06:
And in each one of those contracts, the charter schools, ACACS, retained the right to use a trade name.

[00:01:11] Speaker 06:
Ascent Classical Academy of Douglas County in the first contract.

[00:01:16] Speaker 06:
And then, of course, different specific trade names in the three subsequent contracts.

[00:01:20] Speaker 06:
And a trade name is a specific name for a specific school.

[00:01:25] Speaker 06:
And that's what ACACS was able to retain and nothing else.

[00:01:30] Speaker 06:
The court, of course, rejected this approach and committed four errors in its analysis.

[00:01:36] Speaker 06:
And let me treat each one individually.

[00:01:38] Speaker 06:
First, when you look at the court's analysis, the court had an improper reading of the word, the legalistic pronoun, the same.

[00:01:48] Speaker 06:
So basically, the language itself says, however, the name Ascent Classical Academy of Douglas County shall be a trade name of the school, and the school shall have the right

[00:01:58] Speaker 06:
to use the same.

[00:02:01] Speaker 06:
So the question is, what does the same refer to?

[00:02:03] Speaker 06:
Well, the court said the same refers to name.

[00:02:06] Speaker 06:
And that's just frankly incorrect.

[00:02:08] Speaker 06:
In a common interpretation, last antecedent, the same refers as a pronoun, legalistic pronoun.

[00:02:17] Speaker 06:
It refers to the most recent item in a list.

[00:02:22] Speaker 06:
And that most recent item was the last one, trade name.

[00:02:25] Speaker 06:
So when it says ascent classic, when it says

[00:02:28] Speaker 06:
The right to use the same, the same refers to the trade name.

[00:02:33] Speaker 06:
And of course a trade name, the Lanham Act, is clearly defined as a specific name for a specific school.

[00:02:41] Speaker 06:
And we cite modern English usage and textual analysis, Garner and Scalia, which I believe the appellee has cited as well.

[00:02:49] Speaker 06:
We both like, apparently, that source.

[00:02:53] Speaker 06:
So that was the first error.

[00:02:56] Speaker 06:
The second error,

[00:02:57] Speaker 06:
is that the court said, well, when you look at the name of a school, that's much different than trade name.

[00:03:05] Speaker 06:
And in fact, structurally, that sentence, the name is equal to the Ascent Classical Academy of Douglas County, which is equal to the trade name.

[00:03:16] Speaker 06:
Logically, that is the analysis.

[00:03:19] Speaker 06:
So if you break down or outline the sentence, you would say, the name shall be a trade name.

[00:03:27] Speaker 06:
As a lawyer, sometimes I like to use the word, well, shall comprise or shall be constituted.

[00:03:34] Speaker 06:
It makes me sound a little more educated.

[00:03:36] Speaker 06:
But shall be is about as direct as it gets.

[00:03:39] Speaker 06:
The name shall be a trade name.

[00:03:42] Speaker 06:
So name and trade name are one and the same.

[00:03:44] Speaker 05:
What do you make of the fact that the parties chose to employ the word a trade name instead of the trade name?

[00:03:54] Speaker 06:
I think it's in this instance, whether it's the definitive or indefinitive use, it's irrelevant.

[00:04:01] Speaker 06:
Doesn't A suggest, as opposed to D, that there are several?

[00:04:07] Speaker 05:
There very well may be.

[00:04:08] Speaker 05:
And this is one.

[00:04:09] Speaker 06:
There very well may be.

[00:04:11] Speaker 06:
The ACACS may say, we want to also get a trade name called Rocky Mountain Academy, something different.

[00:04:20] Speaker 06:
And that doesn't involve a cent.

[00:04:21] Speaker 06:
It doesn't involve a cent's intellectual property.

[00:04:24] Speaker 06:
What does involve Assent's intellectual property is Assent Classical Academy of Douglas County.

[00:04:30] Speaker 06:
And that is what is being conveyed here, shall be a trade name.

[00:04:35] Speaker 06:
Whether it's the trade name, in other words, whether ACSS only has that as a trade name, or whether they have other trade names, is irrelevant for this contractual interpretation.

[00:04:47] Speaker 05:
I don't think you're asking us to say,

[00:04:50] Speaker 05:
With respect to the error that you claim on the phrase, the same, I think what you are saying today is that it's at least ambiguous.

[00:04:59] Speaker 05:
You're not asking us, or are you telling us that as a matter of contract interpretation, the same here means something different than Judge Gallagher said?

[00:05:09] Speaker 06:
I'm saying it means something different, absolutely.

[00:05:11] Speaker 06:
As a matter of law?

[00:05:12] Speaker 06:
As a matter of law, as a matter of contractual interpretation.

[00:05:16] Speaker 06:
The same refers to trade name.

[00:05:17] Speaker 06:
It is the last antecedent.

[00:05:19] Speaker 06:
If you look at Garner,

[00:05:20] Speaker 06:
And the same has a long pedigree.

[00:05:22] Speaker 06:
I know it's been treated poorly by many commentators, but it's been used since the 14th century.

[00:05:27] Speaker 06:
Shakespeare used it in comedy of errors.

[00:05:30] Speaker 06:
And as Garner noted, it's used in Article II of the Constitution for succession of vice presidents when a president is unable to exercise various powers of the office.

[00:05:42] Speaker 06:
And it is the same.

[00:05:43] Speaker 06:
The same refers to office.

[00:05:45] Speaker 06:
And that's the way it is commonly and consistently, and I would say almost uniformly, interpreted.

[00:05:51] Speaker 06:
But I would also add that even if it were to refer to name, name shall be a trade name.

[00:06:00] Speaker 06:
Name is ascent classical academy of Douglas County.

[00:06:04] Speaker 06:
They're all one and the same.

[00:06:06] Speaker 06:
The name is a very specific defined term using quotation marks, which is a trade name, or shall be is the phrase they use.

[00:06:15] Speaker 06:
So we don't have to rely entirely upon the last antecedent principle for determining what the legalistic pronoun the same refers to.

[00:06:24] Speaker 06:
But that in and of itself is sufficient.

[00:06:27] Speaker 06:
Yes, ma'am.

[00:06:27] Speaker 01:
Can I follow up on that question?

[00:06:29] Speaker 01:
This was a dismissal, right?

[00:06:30] Speaker 01:
Yes.

[00:06:30] Speaker 01:
And the basis of the motion to dismiss was the interpretation of this particular paragraph,

[00:06:46] Speaker 06:
I believe it's R, but yes, ma'am.

[00:06:47] Speaker 01:
Yeah.

[00:06:49] Speaker 01:
Whatever it is.

[00:06:50] Speaker 01:
Yeah, sorry.

[00:06:51] Speaker 01:
Yeah, R. But I mean, don't we just have to say, well, we disagree with the interpretation and the district court erred in dismissing it?

[00:07:05] Speaker 01:
Why would we need to actually interpret it at this point?

[00:07:13] Speaker 01:
Isn't that a summary judgment question?

[00:07:14] Speaker 01:
Wouldn't you file cross motions for summary judgment at some point?

[00:07:18] Speaker 06:
I don't think so.

[00:07:18] Speaker 01:
You haven't asked for judgment at this point.

[00:07:20] Speaker 01:
You're basically asking us for judgment, aren't you, if we interpret the contract in the fashion that you would like?

[00:07:27] Speaker 06:
This is an important factor, but I don't think it resolves everything.

[00:07:30] Speaker 01:
Because what we're really asking for is... I'm just asking, can we say the district court erred in interpreting a contract in this manner?

[00:07:39] Speaker 06:
Yes.

[00:07:40] Speaker 01:
And remand.

[00:07:41] Speaker 01:
I mean, either way, we're going to remand, I presume, is what you're asking.

[00:07:44] Speaker 06:
I hope.

[00:07:45] Speaker 01:
Well, I mean, I'm just saying.

[00:07:46] Speaker 06:
Yes.

[00:07:47] Speaker 01:
You seem to be asking us for more, which is an interpretation in your favor that obviously you haven't asked for yet.

[00:07:54] Speaker 06:
We are asking for that, and this court is, and contractual interpretation is a matter of law.

[00:07:59] Speaker 06:
Well, Your Honor, I guess our point is contractual interpretation is a matter of law.

[00:08:05] Speaker 06:
It's something for the courts to do.

[00:08:06] Speaker 01:
Sure, it normally doesn't come at a motion to dismiss stage.

[00:08:11] Speaker 01:
Usually you have cross motions for summary judgment on a contract interpretation.

[00:08:16] Speaker 06:
We'd like to get as much as we can out of you, Your Honor.

[00:08:19] Speaker 01:
I'm sure you would.

[00:08:20] Speaker 01:
I just think Judge Shelby's question was really rather well taken, and I was interested in the response.

[00:08:25] Speaker 06:
Yeah.

[00:08:26] Speaker 06:
I mean, we think that the meaning of that contractual term is clear and that this court is equipped to be able to make that decision based on the language of the contract itself at this point and to reverse the court's interpretation.

[00:08:41] Speaker 06:
Not merely say, well, it's not what the lower court said, but it could be something else.

[00:08:46] Speaker 05:
I think a necessary implication of that is you contend that this language that's in dispute in the contract is unambiguous.

[00:08:53] Speaker 06:
That is correct.

[00:08:55] Speaker 06:
And the court did not make an ambiguity finding.

[00:08:58] Speaker 06:
So that's one area where we would likely agree with the court that it is not ambiguous.

[00:09:04] Speaker 05:
We agree.

[00:09:05] Speaker 05:
I don't think there's a dispute.

[00:09:06] Speaker 05:
The parties don't dispute the state of Colorado law on the question.

[00:09:10] Speaker 05:
When we're construing the contract, we consider the subject matter of the contract, the object of making the contract,

[00:09:16] Speaker 05:
the sense in which the parties understood the language at the time the contract was made, the purposes and objects, all of that, right?

[00:09:24] Speaker 05:
Correct.

[00:09:25] Speaker 05:
So I know that you're in a structure of the four errors, and I'm going to pull you right out of that.

[00:09:29] Speaker 05:
But when we look at the rest of the contract, so the subject matter of the contract, the object, and the like, isn't your construction in tension with the rest of the contract?

[00:09:43] Speaker 05:
Not at all.

[00:09:44] Speaker 05:
But what about the property rights provision in the contract, for example?

[00:09:48] Speaker 05:
What sense does it make to say that the teaching materials, the physical property, the other items that the school has, all of which may bear any number of marks that may be different from the part in quotations in paragraph in R?

[00:10:05] Speaker 05:
Does the school get to keep it, and they just can't use the equipment if it's marked with, say, initials?

[00:10:13] Speaker 06:
it would likely require some form of rebranding.

[00:10:15] Speaker 06:
But it's very clear with respect to intellectual property.

[00:10:19] Speaker 06:
I mean, it states intellectual property and the relevant section of Section 3R, which is a pretty long section, it includes the phrase, no other use of assent trademarks is permitted without assent prior written permission.

[00:10:32] Speaker 06:
The school shall acquire no rights

[00:10:34] Speaker 06:
All goodwill of a cent trademark cylinders.

[00:10:37] Speaker 05:
I think your argument stronger on intellectual property for sure and which is why I want to focus you on the physical property The contract seems to grant something that you maintain your interpretation the contract would take away I think it would it would likely read out of the contract the provision that says keep all

[00:10:56] Speaker 05:
the t-shirts and the gym equipment and the chairs that are marked with the initials instead of the full written name, the whole name in contract, seven words.

[00:11:05] Speaker 05:
Anything that you have that isn't marked in seven words, you need to rebrand or destroy.

[00:11:11] Speaker 05:
And if you can't rebrand it, you destroy it.

[00:11:13] Speaker 05:
Otherwise, it's a trademark violation.

[00:11:16] Speaker 05:
So what's the purpose of that provision in the contract if the parties mutually understood and intended that you couldn't use any of it?

[00:11:25] Speaker 06:
Well, we would disagree that the two are inextricably bound, that one can separate physical property with intellectual property.

[00:11:34] Speaker 06:
But I would also point out, if I may, just real quick, that's not a proper form of analysis at this point for a motion to dismiss.

[00:11:44] Speaker 06:
We're looking at the specific contractual term, not the consequences of what would happen

[00:11:49] Speaker 06:
if in fact trademark infringements are filed?

[00:11:51] Speaker 05:
No, it's a reading in the context of the subject matter of the contract, the contract in its totality.

[00:11:59] Speaker 05:
And I think contract law would tell us to consider other provisions in the contract and not to adopt a construction that would write part of the contract out.

[00:12:08] Speaker 05:
Is that true?

[00:12:10] Speaker 06:
As a general proposition, I'll accept that.

[00:12:13] Speaker 06:
But the totality in this instance is particularly weak.

[00:12:17] Speaker 06:
submit that those arguments that you're positing are particularly weak in light of very clear and explicit language that talks about all of the IP is kept by assent except for a very specific limited carve out.

[00:12:34] Speaker 05:
I don't mean to monopolize the argument, but I'm going to jump to your fourth point.

[00:12:37] Speaker 05:
I think the fourth point of error you're going to tell us is

[00:12:40] Speaker 05:
when Judge Gallagher considered common usage among high schools and other schools throughout the country or other institutions and organizations.

[00:12:48] Speaker 05:
And you say it's error.

[00:12:49] Speaker 05:
He considered facts outside the record.

[00:12:51] Speaker 05:
But how do you consider a judge's common sense under Rule 12, but also the subject matter, the object of the contract, and the like, if you just say a judge can't take notice of things in the world when evaluating what it makes sense in the context of the party's language?

[00:13:08] Speaker 06:
Technically, that's my third point, but I appreciate it.

[00:13:11] Speaker 06:
Fair.

[00:13:12] Speaker 06:
If I may answer, I know my time is short, very quickly.

[00:13:16] Speaker 06:
As my children tell me all the time, my hair is gray and I'm old, and we live in a different world.

[00:13:23] Speaker 06:
The judge, I think, has looked at an outmoded analysis.

[00:13:27] Speaker 06:
He says, look, central schools are we, this is how schools always work.

[00:13:30] Speaker 06:
And he said the law of candy bars is different than the law of schools, which has no support in the record.

[00:13:37] Speaker 06:
But he says, and he uses the word customarily.

[00:13:40] Speaker 06:
He says, schools customarily identify themselves.

[00:13:43] Speaker 06:
And the black letter law in Colorado, that type of customary usage is a factual matter, not subject to the judge's whims.

[00:13:51] Speaker 06:
But I would also say this.

[00:13:52] Speaker 06:
The judge's mode, probably as mine is, is somewhat outdated.

[00:13:57] Speaker 06:
We may have grown up, I think the judge is around my age, in a world, for example, in Denver, where you had North High School, South High School, East High School, West High School.

[00:14:05] Speaker 06:
But that's not the world we live in today.

[00:14:07] Speaker 06:
The world we live in today has the charter schools.

[00:14:11] Speaker 06:
They have four schools that they seek to brand all over the metropolitan area so that when families say, hmm, what should I do?

[00:14:18] Speaker 06:
Where should I send my children?

[00:14:19] Speaker 06:
They know that that charter school has a particular approach and brand that they can trust.

[00:14:24] Speaker 06:
Likewise, Ascent,

[00:14:25] Speaker 06:
as a management company says, when we manage a school, we do this, that, and the other.

[00:14:30] Speaker 06:
We vet our teachers.

[00:14:31] Speaker 06:
We provide this type of curriculum, these types of materials.

[00:14:34] Speaker 06:
We have this type of discipline.

[00:14:35] Speaker 06:
We provide that product and service.

[00:14:37] Speaker 06:
And they're a management company.

[00:14:38] Speaker 06:
This world of school choice is far different than what this judge assumed.

[00:14:43] Speaker 06:
And the judge made factual assumptions that go far beyond common sense.

[00:14:46] Speaker 06:
When we talk about common sense and experience, we're talking about a judge's common sense to understand inferences,

[00:14:53] Speaker 06:
within the bounds of a complaint as to whether those certain allegations logically will support a complaint.

[00:15:01] Speaker 06:
That's what we mean by a judge uses its common sense at this stage of the pleadings.

[00:15:06] Speaker 06:
Not that the judge makes statements like, unvaried reproduction of a full legal name is not, and never has been, how school names have been used.

[00:15:15] Speaker 05:
And never has been is a broad standard.

[00:15:17] Speaker 05:
Do we not all understand the University of Southern California is known as USC and the University of Virginia goes by UVA?

[00:15:23] Speaker 05:
And is that not just what the judge was observing?

[00:15:25] Speaker 06:
No, that's not at all.

[00:15:27] Speaker 05:
When he's referred to central as an abbreviation for some high schools, that's not the same concept.

[00:15:33] Speaker 06:
That's fact finding.

[00:15:34] Speaker 06:
That is completely fact finding and not at all.

[00:15:36] Speaker 06:
Look, the word central is a geographical location.

[00:15:39] Speaker 06:
I mean, the world, certainly I grew up in, I'd submit maybe the judge grew up in.

[00:15:43] Speaker 06:
I mean, we didn't have all this school choice.

[00:15:46] Speaker 06:
We went to a neighborhood based school that normally had a geographical designation.

[00:15:52] Speaker 06:
And that's how it was referred to.

[00:15:54] Speaker 06:
And you didn't have these issues of intellectual property rights because you didn't have this level of school choice, which I would submit.

[00:16:00] Speaker 06:
And I know we're painting outside the lines a little bit.

[00:16:02] Speaker 06:
I mean, about 20, 25% of all Colorado children attend either a charter school or a private school.

[00:16:09] Speaker 06:
And so these intellectual property issues do matter.

[00:16:12] Speaker 06:
And it is much different than what this judge painted as a picture.

[00:16:15] Speaker 06:
And they are factual findings.

[00:16:16] Speaker 06:
They look at customary usage.

[00:16:21] Speaker 04:
I do have actually a question.

[00:16:23] Speaker 04:
Yes, sir.

[00:16:23] Speaker 04:
For a license, does the licensor need to retain control over the quality?

[00:16:30] Speaker 06:
I'm sorry.

[00:16:30] Speaker 06:
Can you say that again, Your Honor?

[00:16:32] Speaker 04:
If I license Bob Baccarat dry cleaners, the user Bob Baccarat dry cleaners to you, to characterize that conveyance of your usage, your right to use the name Bob Baccarat dry cleaners,

[00:16:51] Speaker 04:
Do I need to retain control over the quality in order to maintain that characterization as a license?

[00:17:00] Speaker 06:
I don't think quality is one of the conditions.

[00:17:03] Speaker 06:
Usually it's confusion in the marketplace.

[00:17:06] Speaker 04:
So a license, are you familiar with the term naked license?

[00:17:11] Speaker 06:
I am not, Your Honor.

[00:17:13] Speaker 06:
What I would say is what we're looking at here is the licensing of a trade

[00:17:18] Speaker 06:
name, not a trademark.

[00:17:20] Speaker 04:
Well, that begs the question.

[00:17:22] Speaker 04:
So if a license, I don't want to belabor it because if you're not familiar with the term, you're not familiar with the term, but if a licensor has to retain quality control in order to maintain characterization as a license, and if a SANT had conveyed the right to use the trade names even after termination of the agreement,

[00:17:47] Speaker 04:
I don't know how ASSENT would be able to treat the conveyance of the right to use the trade name as a license, even though it uses the word license, a non-transferable license.

[00:18:04] Speaker 04:
I just questioned whether or not the use of the terminology was incorrect as a matter of law, and it was really an assignment, a transfer of ownership of the right to use

[00:18:15] Speaker 04:
the name, in my situation, Bob Becker at Dry Cleaners.

[00:18:19] Speaker 04:
And if it was an assignment, you would lose, right?

[00:18:22] Speaker 04:
If it was an assignment of the right to use the name of the schools, then they would have the right to use whatever variant of the name that they would like to use, right?

[00:18:32] Speaker 06:
No, Your Honor, that is not correct.

[00:18:33] Speaker 06:
And if I may answer.

[00:18:34] Speaker 04:
If it's an assignment?

[00:18:36] Speaker 06:
It's not an assignment of a trademark.

[00:18:39] Speaker 06:
There is a difference between trademark and trade name, Your Honor.

[00:18:44] Speaker 04:
But an assignment is an assignment is an assignment.

[00:18:47] Speaker 04:
If it is an assignment of a trademark, are you saying that the new assignee of the trademark has no right to use any variations of the name trademark, even though that entity owns

[00:19:04] Speaker 04:
as the assignee of the trade name?

[00:19:10] Speaker 06:
If I may, Your Honor.

[00:19:11] Speaker 06:
That is not our argument because we have never argued or contemplated that there was an assignment of a trademark.

[00:19:18] Speaker 06:
Only a trade name.

[00:19:19] Speaker 06:
And if I may just squeeze this in here.

[00:19:21] Speaker 06:
It's the opposite of what your argument is.

[00:19:23] Speaker 06:
Right.

[00:19:24] Speaker 06:
So what our argument is is trademark stuff, a trademark, is different than a trade name.

[00:19:29] Speaker 04:
I know that.

[00:19:30] Speaker 06:
And a trade name is a specific name

[00:19:33] Speaker 06:
that can be used for a specific school or a specific business, in this case a specific school.

[00:19:40] Speaker 06:
Now, a trademark or a logo or advertising material may incorporate a trade name or it may not.

[00:19:50] Speaker 06:
In this instance, the only thing that assent granted through mutual agreement of the parties was a trade name to be able to use

[00:20:00] Speaker 06:
be used with the school itself.

[00:20:09] Speaker 04:
If I assign the trade name Bob Baccarat Dry Cleaners to you, I say, have at it.

[00:20:15] Speaker 04:
You're the assignee, you use it.

[00:20:18] Speaker 04:
And you use the name Baccarat Dry Cleaners.

[00:20:21] Speaker 04:
Have you deviated somehow from the right to use the trade name, even though you are the full owner, the full assignee of the trade name Bob Baccarat Dry Cleaners?

[00:20:34] Speaker 06:
Yes, you have.

[00:20:35] Speaker 06:
And the reason why is, if you say,

[00:20:37] Speaker 06:
Bob Baccarat Dry Cleaners show up here today.

[00:20:40] Speaker 06:
We got a nice logo.

[00:20:42] Speaker 06:
Come join us.

[00:20:43] Speaker 06:
That is a trademark.

[00:20:44] Speaker 06:
That is not a trade name.

[00:20:46] Speaker 06:
Now the name is being used as a trademark.

[00:20:49] Speaker 06:
The trademark incorporates that name.

[00:20:51] Speaker 06:
If you register with the Colorado Secretary of State or the U.S.

[00:20:56] Speaker 06:
Patent Office or your chartering authority as a school and you say, I am the Bob Baccarat Dry Cleaners,

[00:21:05] Speaker 06:
That is my legal name, and that is the name of the entity under which I pay taxes and I register.

[00:21:11] Speaker 06:
That is a trade name.

[00:21:13] Speaker 06:
All right.

[00:21:13] Speaker 04:
So what you're saying is that if it was an assignment of a trade name, you lose.

[00:21:23] Speaker 04:
But you shouldn't lose because it would be an assignment of a trademark.

[00:21:29] Speaker 04:
Is that what you just meant?

[00:21:31] Speaker 06:
When you say the you lose.

[00:21:33] Speaker 04:
I'm just trying to figure out how your answer fits into my question.

[00:21:39] Speaker 06:
I'm struggling my best to help you out, your honor.

[00:21:43] Speaker 04:
I asked you a question about an assignment of a trade name.

[00:21:49] Speaker 06:
Correct.

[00:21:50] Speaker 06:
But you used, I would submit, your examples as part of that question were actually trademark examples, not trade name examples.

[00:21:57] Speaker 04:
I know that.

[00:21:58] Speaker 06:
Respectfully.

[00:21:59] Speaker 04:
I mean, I heard you say that.

[00:22:00] Speaker 04:
So if it was an assignment of a trade name, I know you're resisting the premise, but if it was an assignment of a trade name, Bob Baccarat Dry Cleaners, then they would have the right to use any variation of the, you would have the right to use any variation of the name Bob Baccarat, you wouldn't be able to use Baccarat Dry Cleaners, Bob Dry Cleaners, whatever, but that's not,

[00:22:26] Speaker 04:
But you're saying that that conveyance could not have been the conveyance of the trade name.

[00:22:32] Speaker 04:
It would be the conveyance of a trade mark, right?

[00:22:36] Speaker 06:
Correct.

[00:22:37] Speaker 04:
If it were used in that capacity.

[00:22:39] Speaker 04:
So I'm starting to figure out what your answer to my other question relates to my question.

[00:22:44] Speaker 04:
So the answer to your question is that, well, if I assign Bob Baccarat dry cleaners to you,

[00:22:53] Speaker 04:
then that is the assignment of a trade name, and you would be circumscribed in your ability that you couldn't use Beckerack dry cleaners, you couldn't use Bob dry cleaners, because it was the assignment of a trade name as opposed to a trademark.

[00:23:08] Speaker 04:
It was the assignment of the ability to use the exact same formulation by Beckerack dry cleaners.

[00:23:15] Speaker 06:
That is correct, Your Honor.

[00:23:16] Speaker 06:
And I believe the trial court found that conclusion repellent, and therefore

[00:23:22] Speaker 06:
included extrinsic evidence as a way to interpret the word use.

[00:23:26] Speaker 06:
I understand.

[00:23:28] Speaker 06:
We're ready for the ability.

[00:23:30] Speaker 04:
Thank you, Your Honor.

[00:23:37] Speaker 03:
Good morning.

[00:23:38] Speaker 03:
May it please the Court.

[00:23:39] Speaker 03:
My name is Eric Hall, and I'm here on behalf of Ascent Classical Academy Charter Schools and Land's End.

[00:23:47] Speaker 03:
And Your Honors, I'd like to pick up with the interpretation of the contract,

[00:23:51] Speaker 03:
These are Lanham Act claims, three Lanham Act claims, but they do turn on the interpretation of the contract.

[00:23:56] Speaker 03:
With all due respect to my opposing counsel, I want to direct the court to the places in the contract where it actually talks about what was conveyed to the schools, my clients, upon separation.

[00:24:09] Speaker 03:
So again, my friend on the other side says that nothing was conveyed except this specific name in its entirety without alteration.

[00:24:18] Speaker 03:
Respectfully, that's incorrect.

[00:24:19] Speaker 03:
If you look at Article 3, Section Q, that on Joint Appendix 94, that states that the financial, educational, and student records are all school property.

[00:24:33] Speaker 03:
So upon the separation, those items, the financial, educational, student records, went with the school.

[00:24:38] Speaker 03:
Similarly, Article 3R, the initial property provisions,

[00:24:44] Speaker 03:
at Joint Appendix 94, so this is at the beginning of them, it recites there that all the intellectual property of the educational materials that the schools paid for belong to the schools.

[00:24:57] Speaker 03:
So if the schools paid for the curriculum guides, if the schools paid for how to teach U.S.

[00:25:01] Speaker 03:
history, that intellectual property belonged to the schools, they could keep it.

[00:25:05] Speaker 03:
Similarly, on Joint Appendix 95, also under Article 3, Section R,

[00:25:11] Speaker 03:
It talks about the school actually has a right to continue to use the ACA, the ASCENT educational materials, so long as the schools continue to use them in the regular course, i.e.

[00:25:24] Speaker 03:
as they had been using them prior to the separation.

[00:25:27] Speaker 03:
So again, even if some of the educational materials were intellectual property of ACA, ASCENT, the schools could continue to use those as long as they were using them in the regular course that they had been using them before.

[00:25:41] Speaker 03:
Similarly, when you look at the termination provisions, Article 8, Section B2, and Judge Shelby, this is to your point, that B2 section says that the materials that were paid for by the schools and owned by the schools, that the parties agree are owned by the schools, like the desks, the computers, the basketballs, the gym mats, the uniforms, all those things, the schools get to keep them.

[00:26:10] Speaker 03:
So there's a separation.

[00:26:12] Speaker 03:
The schools get to keep all that stuff upon the separation.

[00:26:16] Speaker 03:
All of that needs to be understood when you then look at that key provision at the end of Article 3, Section R, that talks about the school names.

[00:26:25] Speaker 03:
Because that last sentence of 3R that's so crucial here says, essentially, the schools are assigned, Judge Becker, back to your point, the schools are assigned this trade name, their trade name,

[00:26:40] Speaker 03:
and they can use it in perpetuity without any further payments to asset.

[00:26:46] Speaker 01:
Why aren't those provisions of the contract that you just referred to about materials and that sort of thing, why aren't those just pretty clear exceptions to this rule, which is you can't use anything post-termination except the trade name that you already have.

[00:27:03] Speaker 01:
Period end of story Everything else is off limits unless you pay us more money for instance if you're going to get new desks or new jerseys or new whatever You're not going to be able to use anything other than this name this trade name Unless you want to pay for it so everything else we've told you under the contract you can keep all this other stuff with our with our names with our trademarks and

[00:27:30] Speaker 01:
grade names, but that's only for everything you have as of today or as of the end of the contract.

[00:27:37] Speaker 01:
Why isn't that the very simple way to read that?

[00:27:40] Speaker 03:
Judge Morris, I think the simple way to read the contract is this is a contract that divided the both intellectual property and other property that made it account for what the parties were going to have upon separation.

[00:27:54] Speaker 03:
And then upon separation, the schools were going to keep a substantial amount of things and ACA was going to keep

[00:27:59] Speaker 03:
other things, and it could go sell its management services to other charter schools and other places.

[00:28:04] Speaker 03:
But the schools could continue to operate as they had been operating, including continue to use their trade names, their names, as they had been using those names, including with all the permutations and abbreviations that they'd been using them before.

[00:28:16] Speaker 01:
Well, that's the part that it doesn't seem to say to me.

[00:28:18] Speaker 01:
And to me, what you just explained, which is, yeah, of course they're going to keep materials.

[00:28:24] Speaker 01:
They're not going to have to buy new desks, new everything.

[00:28:27] Speaker 01:
New everything.

[00:28:28] Speaker 01:
But that's the end of that.

[00:28:29] Speaker 01:
If they do buy new, post this, you've got to compensate us for it, period.

[00:28:36] Speaker 01:
It doesn't seem that complicated.

[00:28:38] Speaker 03:
Judge Moritz, my point is the assignment, the grant of permission at the end of 3R says that the schools get to continue to use their names, and they are names.

[00:28:49] Speaker 01:
It says a trade name, and in this case, the one we have here is the St.

[00:28:54] Speaker 01:
Classical Academy of Douglas County, but it's a trade name.

[00:28:58] Speaker 01:
A trade name, it's in quotations.

[00:29:00] Speaker 01:
I think that's a reasonable reading to think that that is what you get to use, that trade name that you already have.

[00:29:07] Speaker 01:
It's not really conveying anything.

[00:29:09] Speaker 03:
That's right, but we get to use

[00:29:11] Speaker 03:
the trade name as we had been using it, which includes abbreviations and permutations of it.

[00:29:16] Speaker 01:
It doesn't say as you have been using it.

[00:29:18] Speaker 01:
It has it in quotations.

[00:29:21] Speaker 01:
Correct.

[00:29:21] Speaker 01:
And it makes it clear if you're going to use it in the future, you're going to have to pay for it.

[00:29:28] Speaker 01:
If you're going to use permutations of that or other, or if you're going to use trademarks and trade names that don't belong to you, you're going to pay for it.

[00:29:36] Speaker 01:
Again, Your Honor, I believe the quotation... I'm saying isn't it a reasonable interpretation

[00:29:41] Speaker 01:
And we're at the motion to dismiss stage of the contract that it divides before and after, just exactly like it appears.

[00:29:50] Speaker 01:
You've got a trade name.

[00:29:51] Speaker 01:
You can continue to use that.

[00:29:53] Speaker 01:
It's in quotations here.

[00:29:54] Speaker 01:
Everything else belongs to us, except what we've accepted out, apparently, in the contract that's already existing on materials, on physical property, essentially.

[00:30:05] Speaker 03:
Yes, but Your Honor, if ACA's argument prevailed, then like Judge Shelby was pointing out, then essentially this grant of permission would actually be a prohibition because it would be completely unworkable for the schools to then say, we need to now modify all these items that we own.

[00:30:21] Speaker 01:
Why?

[00:30:21] Speaker 01:
No, no, because you said there's an exception for those.

[00:30:26] Speaker 01:
They can continue to use those materials.

[00:30:28] Speaker 03:
Well, Judge Moritz, what I'm saying is the way the agreement actually reads

[00:30:31] Speaker 03:
is it essentially incorporates what I think of as a non-disruption principle.

[00:30:35] Speaker 03:
In other words, the schools get to continue to operate as they had been operating, and there's a separation, but to be forced to change

[00:30:44] Speaker 03:
all the instances of the school's name with the full legal name.

[00:30:47] Speaker 01:
I think you're agreeing that it's ambiguous.

[00:30:49] Speaker 01:
I mean, you two both have completely opposite views of this.

[00:30:53] Speaker 01:
And you may be able to go both ways, but it sure does seem ambiguous.

[00:30:56] Speaker 01:
And it's certainly possible it doesn't mean what the district court said it meant.

[00:31:00] Speaker 01:
And the district court did use evidence of custom, which was arguably

[00:31:07] Speaker 01:
not appropriate at this stage.

[00:31:08] Speaker 03:
So I do agree with my friend on the other side in saying that one, interpretation of contracts are a question of law, that this court can do, that any court can do.

[00:31:16] Speaker 03:
Facts don't come into that.

[00:31:19] Speaker 03:
And two, that

[00:31:22] Speaker 03:
There is no ambiguity in the contract.

[00:31:24] Speaker 03:
I think the contract very clearly indicates that the schools can continue to use their names as they had been, which means they don't need to rebrand.

[00:31:32] Speaker 01:
Well, you may think that.

[00:31:33] Speaker 01:
I'm telling you, it may be ambiguous.

[00:31:35] Speaker 01:
And what is your answer if it's ambiguous?

[00:31:37] Speaker 01:
You presumably, the motion dismisses properly granted.

[00:31:43] Speaker 01:
Yes, Your Honor.

[00:31:44] Speaker 03:
If this Court believes it's ambiguous and believes that it needs to be sent down for more factual finding, it of course could do that.

[00:31:49] Speaker 03:
I don't disagree with that.

[00:31:52] Speaker 03:
Again, at the end of the day, it's still going to be a question of law as to what this contract means.

[00:31:57] Speaker 01:
Well, the problem that we have with the question of law, as you say, is the district court went outside of the four corners of the document here and definitely used what he viewed was customary practice, which to me goes way beyond common sense of the judge.

[00:32:16] Speaker 01:
What is customary practice?

[00:32:18] Speaker 01:
I don't know, but you certainly would need some evidence.

[00:32:20] Speaker 01:
In any event, that goes outside the four corners of the contract, possibly.

[00:32:26] Speaker 01:
And so we have a problem with the district court's interpretation.

[00:32:31] Speaker 03:
Respectfully, Your Honor, I disagree.

[00:32:33] Speaker 01:
I know you do.

[00:32:34] Speaker 01:
I'm just saying it is a problem to go outside and rely on evidence that's outside the four corners of the contract.

[00:32:40] Speaker 03:
I think the court was entirely appropriate to say this is a question about the school name, and school names are used

[00:32:48] Speaker 03:
as a matter of common sense in a whole variety of uses.

[00:32:51] Speaker 01:
He didn't say common sense.

[00:32:53] Speaker 01:
He said customary and custom.

[00:32:56] Speaker 01:
There's a big difference between custom and common sense.

[00:33:00] Speaker 03:
But any time any court is reading a contract, it is allowed to consider all the various factors that shall be discussed, including saying, well, in a school name, how are names used?

[00:33:13] Speaker 03:
How are any names used?

[00:33:14] Speaker 03:
Names are used with abbreviations and permutations all the time.

[00:33:18] Speaker 03:
It's completely unworkable to think that anyone, including a school, is going to use the full legal name in its entirety without alterations every time it uses a name.

[00:33:27] Speaker 03:
And that was the only, just like Joshua was saying with UVA and USC, or with this court.

[00:33:33] Speaker 01:
You didn't even make this argument about custom below, right?

[00:33:38] Speaker 01:
I believe you didn't.

[00:33:40] Speaker 03:
Your honor, I said that the court could read the contract.

[00:33:45] Speaker 01:
Right.

[00:33:45] Speaker 01:
But you did not make this argument about custom, and I assume you stayed away from it for a reason.

[00:33:51] Speaker 03:
Your honor, I did make the arguments that said that when a court is interpreting a legal agreement, that it can use its common sense, just like Iqbal says.

[00:34:01] Speaker 03:
I'm saying custom here.

[00:34:03] Speaker 03:
Well, just like Iqbal says, the question is plausibility.

[00:34:06] Speaker 03:
The question is, are these Lanham Act claims plausible?

[00:34:09] Speaker 03:
And my argument has always been the idea that what the parties agreed to was that this particular trade name must be used in the full legal name in its entirety without alteration every time.

[00:34:21] Speaker 01:
I understand your argument, but that's different than what the district court did here.

[00:34:25] Speaker 01:
You did not argue below that.

[00:34:28] Speaker 01:
You district courts should consider the fact that schools use all kinds of variations of names.

[00:34:37] Speaker 01:
You didn't talk about custom and usage.

[00:34:39] Speaker 01:
You talked about your view of this contract, basically.

[00:34:44] Speaker 01:
You stayed within the confines of the contract, is what I'm saying.

[00:34:48] Speaker 03:
Correct, Your Honor.

[00:34:50] Speaker 01:
Your view is that what's in quotations, you can use any of those words within the quotation, right?

[00:34:58] Speaker 01:
That's different than saying schools all the time use shortened versions, nicknames, all kinds of stuff.

[00:35:05] Speaker 01:
That's a custom versus saying my position is those words within the quotations are what we can use, what permutations that we can use.

[00:35:15] Speaker 03:
quotation marks are one indicator of meaning your honor just like context and everything else about a written legal document are indicators of meaning and I think it was entirely appropriate for the court to say

[00:35:27] Speaker 03:
I'm going to consider the quotation marks and the contacts and the other provisions in the contract all to make a commonsensical determination that it would be unworkable for the schools to use the full legal name every time.

[00:35:41] Speaker 03:
Therefore, that is an implausible – these are implausible Lanham Act claims.

[00:35:46] Speaker 03:
And again, when you keep in mind that the underlying principle of the Lanham Act is unfair competition, this case has – this case does not

[00:35:57] Speaker 03:
go to unconfirmed competition at all.

[00:35:59] Speaker 03:
The only thing that happened here is the parties separated and the schools continued to operate as they had been operating using their names, which again, they own, pursuant to 3R, and they said, oh no, these are trademark violations because you have to use the full name every time without alteration.

[00:36:20] Speaker 05:
What work do the quotation marks do in the contract then?

[00:36:25] Speaker 05:
What's the purpose?

[00:36:26] Speaker 03:
They distinguish them from other schools that might open in other locations.

[00:36:30] Speaker 03:
So the complaint discusses how these parties work together to open a series of schools, a network of schools.

[00:36:38] Speaker 03:
Douglas County First, Northern Colorado Second.

[00:36:40] Speaker 03:
They tried to open one in Boulder.

[00:36:42] Speaker 03:
It failed.

[00:36:42] Speaker 03:
They tried to open one in Durango.

[00:36:44] Speaker 03:
It failed.

[00:36:45] Speaker 03:
They opened one in Grand Junction and in Northern Denver.

[00:36:47] Speaker 03:
The quotation marks indicate the names for the successful schools, those are the trade names.

[00:36:55] Speaker 03:
And those names the schools can keep and continue to use and continue to use on assignment as they would like, as they had been using.

[00:37:02] Speaker 03:
But you can't go and get another school in Colorado Springs or in Pueblo or in Greeley and call it a same classical academy of Pueblo.

[00:37:09] Speaker 03:
And if you do, then there would be a question between the parties as to whether that would be some sort of violation of either the contract or trademark law.

[00:37:18] Speaker 03:
But again, the quotation marks

[00:37:21] Speaker 03:
If what the parties intended was that the schools were going to have to use the full legal name without alteration, they would have to use more than quotation marks.

[00:37:32] Speaker 03:
They would need to say things in the termination provisions like, and all these items that you schools get to keep, they all need to be rebranded.

[00:37:40] Speaker 03:
And all the initial property that you have, that all needs to be rebranded too.

[00:37:44] Speaker 03:
Because you have to use that full name, and like the court observed,

[00:37:50] Speaker 03:
It is commonplace for not only names to be used in abbreviations, but also to schools to have lots of different permutations of their names on all their items.

[00:38:00] Speaker 03:
And that would be the opposite of what the parties agreed to here.

[00:38:03] Speaker 03:
And so the court correctly concluded that is an unreasonable reading of this contract, and that is an implausible, those are implausible claims, and therefore the motion to dismiss was granted.

[00:38:15] Speaker 03:
And Your Honor, I think that that was the correct reading.

[00:38:20] Speaker 03:
and this court should affirm.

[00:38:21] Speaker 03:
Unless the court has any other questions, I will sit down.

[00:38:27] Speaker 04:
I do have a question.

[00:38:29] Speaker 04:
So earlier, and I don't want to beat a dead horse, but I want to get to this concept of distinguishing or not between an assignment and a license.

[00:38:42] Speaker 04:
So there's two buckets, assignment versus license and trademark

[00:38:48] Speaker 04:
versus trade name.

[00:38:51] Speaker 04:
If the conveyance was an assignment, not a license, of a trademark, would that circumscribe the school's ability to use a variation of the name in the quote marks?

[00:39:06] Speaker 04:
Or would it be affected by assuming that it's an assignment, not a license,

[00:39:13] Speaker 04:
by the characterization as a trademark versus a trade name, or would it matter?

[00:39:20] Speaker 03:
So let me answer both, Your Honor.

[00:39:21] Speaker 03:
First, the assignment and the license.

[00:39:23] Speaker 03:
So as to the assignment, if it had been an assignment of a specific trademark in that hypothetical, then arguably that might have constrained the schools and their use of it, because the schools would have known this is the specific trademark.

[00:39:37] Speaker 03:
And we cannot vary from this trademark that's been assigned to us.

[00:39:40] Speaker 03:
That's not what happened, right, at all.

[00:39:43] Speaker 03:
What happened was, I think the end of 3R was an assignment of a trade name.

[00:39:50] Speaker 03:
And they said, schools, you can use, we're assigning you your name for you to use.

[00:39:56] Speaker 03:
without further compensation to us.

[00:39:59] Speaker 03:
And so you can go ahead and use it, which means the schools reasonably thought, oh, well, then we can continue to use our names as we had been using our names, which would include things like, I'm going to say on my basketball, Ascent-DC.

[00:40:12] Speaker 03:
because writing a St.

[00:40:13] Speaker 03:
Classical Academy of Douglas County on every basketball and gym mat and school uniform and athletic uniform is just unworkable.

[00:40:20] Speaker 03:
So the schools could continue to do exactly that.

[00:40:23] Speaker 03:
As to your license question, Your Honor, yes, you're right.

[00:40:25] Speaker 03:
When you look at that last paragraph of 3R, the beginning talks about licenses.

[00:40:30] Speaker 03:
And when the parties were still working together, then ACA had a license to us that we could use any and all of their trademarks or trade names, whatever they were.

[00:40:40] Speaker 03:
Once the agreement terminated and that license ended, that's fine.

[00:40:43] Speaker 03:
But that beginning about licenses is different than the end of 3R that says specifically that ACA granted to us our trade names that we could then use.

[00:40:57] Speaker 04:
So it originally was in fact a license because

[00:41:01] Speaker 04:
that the assent did exercise quality control, was the control, had control over the conveyance of both the trademark and the trade name.

[00:41:11] Speaker 04:
But once the relationship soured and terminated, the last sentence you're saying transformed the relationship into one of an assignment and no longer a trademark but a trade name.

[00:41:24] Speaker 03:
Not quite.

[00:41:25] Speaker 03:
I'd say just slightly differently than that.

[00:41:26] Speaker 03:
What I would say is when the parties entered into these management agreements together,

[00:41:31] Speaker 03:
They understood that, that last paragraph of 3R, as it's written, was that when the parties were working together, then there was a license.

[00:41:39] Speaker 03:
But once the parties separated, then the ACA said to the schools, you own the names.

[00:41:47] Speaker 03:
You own your names.

[00:41:49] Speaker 03:
Go ahead and use your names as you want, because we don't want to make you rebrand.

[00:41:54] Speaker 03:
If they wanted to make us rebrand, then these would have been written differently.

[00:41:58] Speaker 03:
But they said,

[00:42:00] Speaker 03:
Just continue to use your names as you have been using your names, just like you can continue to use your educational materials, your student records, your basketballs, all the things that belong to you.

[00:42:10] Speaker 03:
You can keep those and continue to use those.

[00:42:13] Speaker 03:
That's all consistent, and that is inconsistent with my friend's reading, which is, oh, you get to leave, but every time you use your name after we separate, you must use the full legal name in its entirety without alteration, which is completely unworkable.

[00:42:28] Speaker 03:
And therefore, I believe, an implausible reading.

[00:42:31] Speaker 04:
OK.

[00:42:32] Speaker 04:
Thank you.

[00:42:33] Speaker 03:
Thank you.

[00:42:34] Speaker 04:
What I'd like to do is, I mean, both sides have gone over time.

[00:42:37] Speaker 04:
Nobody fought.

[00:42:38] Speaker 04:
We just had a lot of questions.

[00:42:40] Speaker 04:
But I am going to go ahead and give you a minute and a half.

[00:42:44] Speaker 04:
You don't have to take it.

[00:42:45] Speaker 04:
But if you have a minute and a half of rebuttal to clarify anything, you're welcome to do that.

[00:42:53] Speaker 06:
Thank you, Your Honor.

[00:42:54] Speaker 06:
Being a lawyer, I will happily embrace any additional time I can have.

[00:42:59] Speaker 06:
I would just like to focus on the trademark versus trade name, and I think there's some confusion.

[00:43:06] Speaker 06:
What we tried to do in our brief is sort of demarcate the differences between the two.

[00:43:10] Speaker 06:
And a trademark is a sort of a source identifier.

[00:43:14] Speaker 06:
You use it to brand yourself with a product or a service, or if you use a service mark.

[00:43:20] Speaker 06:
Trade name is more of a specific name for a specific business.

[00:43:25] Speaker 06:
It's a business identifier.

[00:43:29] Speaker 06:
The import of it is if you put a trade name on a basketball, you're not using it as a trade name.

[00:43:39] Speaker 06:
That's a trademark.

[00:43:42] Speaker 06:
It's out in the public.

[00:43:43] Speaker 06:
It has been released into the wild where people can see it and use it and associate it with quality or lack of quality or certain characteristics.

[00:43:53] Speaker 06:
And the reason why is we would submit a trade name in this instance

[00:43:58] Speaker 06:
the charter school is chartered by a chartering authority under a specific business name.

[00:44:03] Speaker 06:
And that business name is Ascent Classical Academy of Douglas County or the other Ascent Classical Academies.

[00:44:09] Speaker 06:
And if that name changes, it requires certain cumbersome regulatory involvement as well.

[00:44:16] Speaker 06:
So there's a real reason for that.

[00:44:19] Speaker 06:
But when it comes to intellectual property as a whole, and my colleagues certainly correctly identified other carve-outs, the structure is

[00:44:28] Speaker 06:
Large amount of I the Ip goes to a cent except for very specific carve-outs.

[00:44:33] Speaker 04:
Thank you for the additional time yard All right, thank you both for both Both sides.

[00:44:39] Speaker 04:
I think you're as in the other cases.

[00:44:41] Speaker 04:
I think you're briefing and arguments were excellent No, we interrogate you pretty good at least for myself I'm trying to try to understand it and you both were very very helpful this matter will be submitted we'll go to the last