National Fraternity Prevails Against Chapter in Trademark Infringement Case 

Timothy Burke, Fraternal Law Partners, tburke@manleyburke.com

National fraternal groups hold their names and Greek letter insignias in high regard as an important part of their identities. To protect such intellectual property, national groups should ensure it is trademarked. Properly created and protected trademarks are essential for preventing unauthorized use by those who do not own or have rights to them. This can be particularly important to a national fraternity with a rogue chapter not complying with the constitution, bylaws, and policies of the national organization, the holder of the trademark.

The Sigma Phi Society (“Sigma Phi” or the “Society”) recently demonstrated that importance when it won a trademark case in the U.S. District Court of the Eastern District of Michigan against Michigan Sigma Phi, Inc., doing business as Alpha of Michigan Sigma Phi (the “Chapter” or “Michigan Sigma”), and the Michigan Sigma Phi Housing Corporation.^[1] Included in Sigma Phi’s protected trademarks were its name and Greek letters.

Almost ten years ago, the Chapter began secretly allowing non-male members to join its chapter. That violated the Sigma Phi Society’s national constitution and bylaws. Despite the national organization’s efforts to convince the local chapter to halt that practice, it continued.

 Before resorting to litigation, Sigma Phi took a series of steps, including repeatedly advising the Chapter that it could no longer use the trademarks owned by the national organization, which protected the national’s name, symbols, designs, and properties against use by those having no right to use them. Despite those efforts and clear warnings from the Society, the Chapter, according to the court, “(a) used the Trademarks on its Facebook page…; (b) continued to use the Trademarks to solicit donations… and (c) continued to fundraise and sell merchandise using the Trademarks.”^[2]

Accordingly, Sigma Phi ultimately filed suit in federal court to protect its marks against further misuse by the Chapter. Additionally, as noted on the Sigma Phi Society’s website, the Society decided during its October 2022 General Convention to revoke the Chapter’s (active) undergraduate charter “for persistent failure to comply with the Society’s Restated Constitution and Bylaws.”^[3]

The district court issued a 24-page decision granting summary judgment in favor of Sigma Phi Society. In its decision, the court acknowledged there is precedent for such a result in at least three (3) analogous cases, including one that resulted in a decision in favor of a national fraternity against a local chapter.^[4]

The court carefully analyzed the standards a plaintiff must meet to establish a violation of the Lanham Act for trademark infringement. Those elements require that the (1) plaintiff has a valid and legally protectable mark; (2) plaintiff owns the mark; and (3) defendant’s use of the mark to identify its goods or services causes the likelihood of confusion.^[5]The court quickly concluded that the Sigma Phi Society had registered its Trademarks in 1955 and had been continually using them for more than sixty-five (65) years.

The court took longer to discuss the eight factors to be considered in determining whether Defendants’ use of the marks could cause the necessary likelihood of confusion. It noted that eight factors were to be assessed under this prong, including the (1) strength of the mark; (2) relatedness of the goods or services; (3) similarity of the marks; (4) likely degree of purchaser care; (5) the defendant’s intent in selecting its mark; (6) marketing channels used; (7) likelihood of expansion of the product lines; and (8) evidence of actual confusion.

The court noted that the Chapter did not challenge the strength of the Trademarks or that it was using the same marks owned—and thought to be protected—by the national organization. It continued, finding that the Chapter’s use of the identical marks made it clear it was still attempting to identify the Chapter with the national Sigma Phi Society and its “associated brand and good will.”^[6] The court therefore found, “as a matter of law, that Defendants’ use of the Trademarks will cause a likelihood of confusion.”^[7]

The court rejected the Chapter’s claim that it had “an implied license to use the Trademarks pursuant to their charter.”^[8] Here, the district court specifically noted that the Sigma Phi Society knew of, and did not object to, Defendants’ use of the Trademarks between 2010 and 2019. Yet, the existence of an implied license for the marks “did not entitle Defendants to the unfettered use of the Trademarks because implied licenses are terminable at will.”^[9] The court then traced the repeated efforts by Sigma Phi to notify the Chapter that its right to use the marks had been terminated.

The Chapter—arguing that because the Society sought to prohibit Defendants from having women members, which the Chapter alleged constituted unlawful discrimination—also tried to convince the court that it should decline to issue the requested injunction, “as doing so would be inequitable, unconstitutional, and unjust.”^[10] But the court made short work of that argument, noting that “Defendants do not cite a single applicable case showing that Plaintiff has violated the law, nor have they identified the law Plaintiff allegedly violated, filed a counterclaim, or filed a lawsuit against Plaintiff.”^[11]

The Sigma Phi Society had requested that the court award its attorney’s fees and require the Chapter to pay them. In declining this request, the court found there was “no evidence that Defendants are competing with [the Society], or that Plaintiff has suffered any loss of membership due to Defendants’ use of the Trademarks, as there is no evidence that Plaintiff has attempted to establish a new chapter at the University of Michigan.”^[12]

For national organizations, it is a clear win, reinforcing the ability of national fraternity to prohibit its chapters (or former chapters) from using its marks without national’s authority.

[1] Sigma Phi Soc’y Inc. v. Mich. Sigma Phi, Inc., No. 20-12817, 2024 U.S. Dist. LEXIS 59694 (E.D. Mich. Mar. 31, 2024).

[2] Sigma Phi Soc’y, Inc., 2024 U.S. Dist. LEXIS 59694, at *9.

[3] Sigma Phi Society, Inc. Prevails in Trademark Suit Against Michigan Chapter, Sigma Phi Soc’y (Apr. 18, 2024), https://www.sigmaphi.org/post/sigma-phi-society-inc-prevails-in-trademark-suite-against-michigan-chapter. Curiously, the court, in describing the dispute, includes a footnote indicating “it is undisputed, however, that no vote of the General Convention has been taken, and no party has argued that the charter of Michigan Sigma has been revoked.” Sigma Phi Soc’y, Inc., 2024 U.S. Dist. LEXIS 59694, at *3 n.1.

[4] Kappa Sigma Fraternity v. Kappa Sigma Gamma Fraternity, 654 F. Supp. 1095 (D.N.H. 1987); U.S. Jaycees v. Phila. Jaycees, 639 F. 2d 134 (3d Cir. 1981); and Grand Lodge of Improved, Benevolent & P.O.E. v. Grand Lodge, Improved, Benevolent & P.O.E., 50 F.2d 860 (4th Cir. 1931).

[5] Sigma Phi Soc’y, Inc., 2024 U.S. Dist. LEXIS 59694, at *13–14.

[6] Id. at *16.

[7] Id. at *18.

[8] Id. at *19.

[9] Id.

[10] Id. at *22–23.

[11] Id. at *23.

[12] Id. at *25–26.

By: TMB