## Facts

- Phillip W. Stanfield developed agricultural products, including livestock heating devices, and contemplated marketing them under “Stanfield Products.”
- Community leaders formed Osborne Industries, Inc. (OII) to manufacture Stanfield’s products; Stanfield later became an OII employee and received royalties under a 1973 agreement.
- In 1975, the parties executed a license agreement granting OII the exclusive right to use “Stanfield” as a trade name and trademark for OII’s products, providing that OII would be the sole owner of trademarks containing “Stanfield,” and restricting Stanfield from using or authorizing use of “Stanfield” for competing products in the same field.
- OII adopted and federally registered marks that included “Stanfield,” including “Stanfield” and “Osborne Stanfield,” for livestock heating devices.
- The parties litigated related disputes in Kansas state courts, including ownership and validity of the “Stanfield” marks and the parties’ rights to use the “Stanfield” name.
- Stanfield later filed a federal action asserting Lanham Act claims (false designation of origin and infringement of registered marks) and related state-law claims.
- The district court granted summary judgment to defendants on the Lanham Act claims and dismissed the state-law claims without prejudice after declining supplemental jurisdiction.

## Issues

1. Whether Stanfield had a protectable interest and standing to assert Lanham Act claims challenging OII’s use of “Stanfield” marks in light of the 1975 license agreement.
2. Whether OII’s use of the “Stanfield” marks could constitute infringement or false designation of origin under the Lanham Act.
3. Whether prior Kansas state-court judgments barred the federal Lanham Act claims under preclusion principles.

## Decision

- The Tenth Circuit affirmed summary judgment for defendants on both Lanham Act claims.
- The court held the 1975 license agreement unambiguously granted OII exclusive rights and ownership in trademarks containing “Stanfield” for the relevant products, foreclosing Stanfield’s infringement and false-designation theories based on OII’s use.
- The court held that prior Kansas judgments resolving rights to use the “Stanfield” name and the validity/ownership of the “Stanfield” marks had preclusive effect in federal court, barring claims premised on contrary ownership or validity positions.
- The court rejected the contention that OII’s mark usage misled consumers as to source; OII was the source for the goods sold under marks it owned.
- The court affirmed the district court’s decision to decline supplemental jurisdiction over the remaining state-law claims after dismissal of the federal claims.

## Legal Principles

- A party who contractually grants another the exclusive right to use a name as a trademark and agrees that the grantee will be the sole owner of the resulting marks generally cannot sue the grantee under the Lanham Act for using those marks within the granted scope.
- Federal courts must give state-court judgments the same preclusive effect they would receive in the rendering state, including in later federal trademark litigation involving the same parties and resolved ownership/validity issues.
- Lanham Act liability requires actionable deception or confusion about source or affiliation; use of a mark by its adjudicated owner, consistent with the parties’ agreement, does not establish misrepresentation.
- When all federal claims are dismissed before trial, dismissal of supplemental state-law claims is ordinarily appropriate.

## Conclusion

The Tenth Circuit held that Stanfield’s Lanham Act claims failed because he had granted OII exclusive trademark rights in “Stanfield” for the relevant products and because prior Kansas judgments foreclosed relitigation of ownership and validity; with the federal claims resolved, the district court properly dismissed the state claims without prejudice.


Stanfield v. Osborne Indus., Inc., 52 F.3d 867 (10th Cir. 1995)