San Diego - A state Supreme Court in Arkansas is refusing to toss out a Little Rock marketing firm's trademark infringement lawsuit in which it is seeking exclusive rights to certain Arkansas state-related lottery phrases it claims it used before Arkansas ever had a lottery.
In a 4-3 decision, the divided Supreme Court dismissed the Arkansas Lottery Commission's appeal of a circuit judge's ruling which denied its motion for summary judgment in the trademark infringement complaint filed by Alpha Marketing. Throughout the case, the Commission has argued that it is exempt from civil suits, however Circuit Judge Wendell Griffen never addressed that issue in his ruling.
Alpha Marketing reportedly filed its complaint against the Lottery Commission after its owner Ed Dozier was informed by the state attorney general's office that he would be sued if his company continued to use the lottery-related phrases, which have appeared on merchandise such as T-shirts. United States Patent and Trademark Office (USPTO) records indicate that Alpha Marketing registered the lottery-related trademarks as early as 1994, however the state of Arkansas did not have an official lottery until 2009.
In its lawsuit, Alpha Marketing is seeking a decision from the state Supreme Court that it has exclusive trademark rights to the phrases, "Arkansas lottery," "Arkansas Lotto," and "Lottery Arkansas."
During its arguments heard before the Arkansas Supreme Court last month, a trademark lawyer representing the attorney general's office argued that the Lottery Commission has sovereign immunity since it is run as a state agency and therefore exempt from lawsuits. This argument was countered by Alpha Marketing attorneys who insisted that the sovereign immunity defense does not apply because the state lottery is operated as a for-profit business.
The majority ruling from the Supreme Court wrote that it could not consider the sovereign immunity defense without a ruling from the lower-court that specifically addresses it. Although it dismissed the appeal, the Supreme Court did say that the Lottery Commission could return after obtaining a ruling from the circuit judge on the issue of sovereign immunity.
State Supreme Court Justice Robert Brown wrote in his opinion, "In my judgment, it is the obligation of this court to facilitate trials through our procedures, not impede them. By requiring additional magic words from the circuit judge, which would amount to surplusage in light of the judge's clear decision, and by discounting his actions, this court has endorsed a trap for the unwary in the practice of law."