America's oldest farming association prevents seceding chapter from using its name

United States of America

When a local chapter secedes from a national association, it cannot continue to use the national association’s name and trademarks. So held the US District Court for the Eastern District of California, based in Sacramento, California, in The National Grange of the Order of Patrons of Husbandry v California State Grange, an important trademark decision handed down on July 14.

The court granted summary judgment, finding that there was no genuine dispute of material fact, and that judgment could be rendered in the National Grange’s favour as a matter of law, without trial. In so doing, the court adhered to a long line of decisions, stretching back over a century, holding that when a chapter of a national association disaffiliates, it cannot continue to use the national association’s name or trademarks, as that would falsely suggest to the public that it is still affiliated with the national association. The court thus granted the National Grange a permanent injunction against the disaffiliated former state chapter.

The national association, the National Grange, was founded in 1867 to champion the interests of farmers and farming, and is now the oldest fraternal agricultural association in the United States. In 1873 it chartered the California State Grange, one of many state and local Grange chapters in the National Grange’s hierarchy. The California State Grange was affiliated with the National Grange for 140 years, until the State Grange’s charter was revoked in 2013.

The trademark issue arose when the disaffiliated State Grange continued to call itself a 'Grange'. Even though it received a cease and desist letter from the National Grange instructing it to stop using the Grange name, its website insisted that “We are the Grange”, and it continued to solicit dues and membership applications from Grange members and prospective members under the Grange name.

The National Grange sued the former California State Grange for trademark infringement and unfair competition.  As it alleged, the Grange’s good name was the national organisation’s intellectual property, protected by over a dozen US trademark registrations and common law rights stemming from nearly 150 years of continuous use. The Grange name was so well known in the United States that the federal government issued a postage stamp to commemorate its centennial, and dictionaries in the United States define 'Grange' as "an association of farmers founded in the United States in 1867". The National Grange alleged that the disaffiliated state chapter was using its good name to divert dues and members from the Grange.

As the court found, the disaffiliated defendant’s statement “We are the Grange” on its website, among other similar uses, strongly suggested that it was still associated with the National Grange, which it was not. And because the disaffiliated defendant’s services were admittedly the same as those offered by the National Grange, the court found, a person seeking to join the official Grange would likely believe that the defendant was somehow still affiliated. Beyond that, the court found, the National Grange had chartered a new, reorganised State Grange for California, and the defendant conceded that two state organisations using the same Grange name caused consumer confusion.  

Judge Shubb’s decision is not only important to the National Grange, but also to other hierarchical organisations, such as other fraternal religious or benevolent associations. If, like the National Grange, an organisation is hierarchical, and its top level maintains control of the organisation’s name and trademarks, it can stop seceding chapters from continuing to use its good name. The decision may also apply to international organisations with a hierarchical structure. The rationale behind the ruling is clear: such use of the name by seceding members, over whom the organisation has no further control, amounts to a fraud upon the members of the organisation and the public.

James L Bikoff, David K Heasley and Valeriya Sherman, Smith Gambrell & Russell, Washington DC

Smith Gambrell & Russell represented the plaintiff in this case

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