Sugar Busters LLC v. Brennan (1999)
Citation: 177 F.3d 258 · Court: U.S. Court of Appeals for the Fifth Circuit · Decided: May 25, 1999 · Opinion: King, Chief Judge.
Source note (2026-10-18):
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Case page. Legal information, not legal advice. Last verified: 2026-10-16.
Facts
The plaintiff, publisher of the diet book SUGAR BUSTERS!, bought the registered service mark “SUGARBUSTERS” from Elliott, who had used it for a retail store in Indiana selling products for diabetics. The agreement recited a purchase of “all the interests [Elliott] owns” in the mark and “the goodwill of all business connected with the use of and symbolized by” the mark. The plaintiff obtained a preliminary injunction against a competing book. (Source: https://static.case.law/f3d/177/cases/0258-01.json , retrieved 2026-10-16.)
Holding
“We determine that the assignment of the registered ‘SUGARBUSTERS’ service mark to plaintiff-appellee was in gross and was therefore invalid, and we vacate the injunction.”
Reasoning
“A trademark is merely a symbol of goodwill and has no independent significance apart from the goodwill that it symbolizes,” so “a trademark cannot be sold or assigned apart from the goodwill it symbolizes” (citing 15 U.S.C. § 1060). Courts uphold assignments “if they find that the assignee is producing a product or performing a service substantially similar to that of the assignor and that the consumers would not be deceived or harmed.” A diet book was not substantially similar to a retail store providing diabetic supplies, and recitals of goodwill in the agreement did not change that.
Practical impact
A buyer of trademarks at a forced sale — especially a liquidation that separates marks from the operating business — risks an invalid assignment in gross if it does not acquire, and continue, the goods or services the mark symbolizes. Contract language reciting goodwill is not enough.
Good-law status
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intellectual-property-and-licenses
Legal information, not legal advice. Verify against the current primary source before relying on this summary.