Teresa Earnhardt won a small victory Thursday as the U.S. Court of Appeals ruled that the U.S. Trademark Trial and Appeal Board must clarify its decision that allowed Kerry Earnhardt to use the term "Earnhardt Collection" for a collection of custom homes.
The trademark appeal board must reconsider its ruling because "it is unclear whether the Board's analysis properly applied" a past U.S. Court of Appeals decision that is being used as precedence in the Earnhardt case, the three-judge panel ruled.
The trademark board isn't required to change its decision; it needs to clarify its reasoning in ruling on the trademark battle between Dale Earnhardt Sr.'s widow and her stepson, Kerry.
Kerry Earnhardt Inc. licensed "Earnhardt Collection" in 2011 to Schumacher Homes, which Kerry and his wife, Rene, helped with the designs.
The battle over the trademark began in May 2012, the trademark board ruled in February 2016, and appeals court judges Raymond Chen, Todd Hughes and Evan Wallach heard arguments in the case March 10.
"This [trademark board] opinion is certainly not a model of clarity. ... This opinion could have been written much better," Chen said during the appeals court hearing.
Chen worked as an attorney in the U.S. Patent and Trademark Office from 1998 to 2013 before his appointment to the Court of Appeals for the Federal Circuit, a court with nationwide jurisdiction in areas such as international trade, government contracts, patents, trademarks and veteran benefits.
"Kerry Earnhardt Inc. believed the [trademark board's] judgment could have been affirmed as it was, but we understand the Federal Circuit's desire to have more clarity," Kerry Earnhardt attorney Blaine Sanders said in a statement.
"We are confident that, on remand, the [board] will again determine that 'Earnhardt Collection' is registrable."
Teresa Earnhardt has owned the trademark to "Dale Earnhardt" since the death of the seven-time NASCAR Cup champion in the 2001 Daytona 500. She had initially argued to the trademark board that people would believe that the homes were endorsed by her and also that for all intents and purposes, it was primarily an attempt to trademark a surname, which is not legal.
The trademark board rejected those arguments, and Teresa dropped the confusion claim and on appeal focused solely on the technicality of trademark law that Kerry could not pair his surname with a merely descriptive term, such as "collection."
For Kerry Earnhardt to use the term "Earnhardt Collection," the law requires that a customer must use imagination, thought and perception to reach a conclusion as to the nature of the homes and not just have an immediate idea of the qualities or characteristics of the homes.
"Because ... the [trademark board] did not adequately explain whether 'collection' was merely descriptive of KEI's goods and services, its analysis of the mark as a whole was likewise deficient," Chen wrote in the decision.
Teresa has a long history of attempting to protect Earnhardt's name and legacy. When Kelley Earnhardt Miller and Dale Earnhardt Jr., who is Kerry's half-brother, first formed their race team, they used the term "JR Motorsports." The JR was capitalized and pronounced "Jay Are" because Earnhardt Jr. didn't own the rights to his name. He eventually procured those rights in 2006.
Both Earnhardt Jr. and Earnhardt Miller have come out publicly in support of Kerry.
"I hate this for my brother," Earnhardt Jr. tweeted. "He's a good soul and my father would be proud of him and what he's accomplished."