–Sharon Armstrong, Attorney

The Associated Press reported last week that adult entertainment pioneer Larry Flynt, the creator of the famous, and infamous, Hustler Magazine, scored a victory in his trademark infringement suit against his estranged nephews, who are also in the family business.  The nephews, Jimmy Flynt, Jr. and Justin Flynt, launched their business after their uncle fired them from Larry Flynt Publications.  The mark at issue?  FLYNT.  Simply put, the court found that the nephews’ use of FLYNT – regardless of the fact that it is their own last name – creates a suggestion of sponsorship or endorsement by the elder Flynt.  “No one wins in this thing,” said one of the nephews, “It’s sad that the family is in this dispute, but we felt strongly that we should be allowed to use our name in our business.”

This case underscores a point that is all too familiar to many trademark attorneys – trademark-related conflicts that may arise among family members when the family business becomes successful.  In many conflicts, a grandparent or parent starts a business – using the family name as a trademark – and toils to make it successful, only to pass the business on to multiple children who proceed to have differences of opinion, split the business, and commence to fight about who has the right to use the family name as a trademark and take advantage of years and years of goodwill in their own last name.

In most cases, the selection of an inherently distinctive mark – or exploitation of a personal name that is not related to the family – will often prevent this problem.  The Flynt case, however, adds a wrinkle to this approach; Larry Flynt did use an inherently distinctive mark, HUSTLER, in connection with his goods and services and, of course, Larry Flynt didn’t pass his business on to his nephews – he simply fired them because he “felt they were doing a horrible job.”  Under these circumstances, it’s possible that the suit could have been prevented by following different employee termination procedures.  In terms of preventing his nephews from using their own last name in connection with their business, however, and as with many successful family businesses, it appears that court was the only place for these parties to go.