FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SELLER AGENCY COUNCIL, INC.,
Plaintiff-counter-defendant-
Appellee,
No. 08-56791
v.
D.C. No.
KENNEDY CENTER FOR REAL ESTATE 8:06-cv-00679-
EDUCATION, INC., a Georgia AHS-MLG
corporation; JOE KENNEDY, an
OPINION
individual,
Defendants-counter-claimants-
Appellants.
Appeal from the United States District Court
for the Central District of California
Alicemarie H. Stotler, District Judge, Presiding
Argued and Submitted
February 9, 2010—Pasadena, California
Filed September 3, 2010
Before: Sidney R. Thomas and Barry G. Silverman,
Circuit Judges, and Jeremy Fogel, District Judge*
Opinion by Judge Fogel
*The Honorable Jeremy Fogel, United States District Judge for the
Northern District of California, sitting by designation.
13415
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13419
COUNSEL
Arthur A. Gardner and Joseph W. Staley, Gardner, Groff,
Greenwald & Villanueva, P.C., Atlanta, Georgia, for the
defendants-appellants.
Grant J. Hallstrom and Timothy D. Otte, Hallstrom Klein &
Ward, LLP, Irvine, California, for the plaintiff-appellee.
OPINION
FOGEL, District Judge:
Appellants Joe Kennedy (“Kennedy”) and the Kennedy
Center for Real Estate Education, Inc. (“KCREE”) appeal the
district court’s order denying them damages, attorneys’ fees,
and costs in an action for trademark infringement against
Appellees Seller Agency Council, Inc. (“SAC”), RealtyU, Inc.
(“RealtyU”), and Stefan Swanepoel (“Swanepoel”). The dis-
trict court found that Appellants are the owners of the trade-
marks in question, but it also determined that Appellants
consented and acquiesced to the use of the marks by Appel-
lees. Appellants argue that the district court erred in finding
consent and acquiescence. We affirm in part, vacate in part,
and remand for further proceedings consistent with this opin-
ion.
I. BACKGROUND
A. Factual Background
Kennedy, the owner of KCREE, created an educational cur-
riculum called the Accredited Seller Representative (“ASR”)
program. In connection with the ASR program, Appellants
developed and registered several trademarks (“the ASR
marks”).1 In 2003, Appellants began to market and earn
1
The marks at issue have the following federal registration numbers:
3,071,769; 3,088,326; 3,093,851; 3,139,782; 3,325,443; and 3,240,837.
13420 SELLER AGENCY COUNCIL v. KENNEDY CENTER
income from the ASR program. A third-party real estate
school would pay KCREE an annual fee (referred to as the
license fee) in order to use the ASR materials to teach an ASR
class. In addition to the license fee, KCREE charged the third-
party schools a fee for each student in an ASR class, and suc-
cessful students also would pay yearly fees to KCREE to
maintain their ASR registration.
In 2005, Swanepoel, the owner and president of RealtyU,
approached Kennedy with a business proposition. RealtyU
represented that it could provide KCREE with access to the
RealtyU affiliates across the country and thus to a larger num-
ber of students. Kennedy and Swanepoel signed a “Letter of
Intent” on June 28, 2005, agreeing to form a new company,
SAC. KCREE was to transfer the ASR marks to SAC in
return for 49% ownership of the company. RealtyU would
contribute working capital to SAC and own the remaining
51%. Other than teaching fees earned by Kennedy, all student
course fees, provider licensing fees, and renewal fees related
to the ASR marks would belong to SAC, and profits would be
distributed according to the parties’ respective ownership
shares. Neither KCREE nor SAC was required to pay the
annual licensing fee. Kennedy testified that SAC had discre-
tion to waive the licensing fee for RealtyU affiliated schools.
On or about September 8, 2005, the parties executed a
series of formal agreements, including a stock purchase agree-
ment. Among other things, the agreements required SAC to
take the “best overall actions” for the company. SAC was to
acquire the ASR marks upon closing; however, SAC had to
meet certain conditions precedent before the closing could
occur, including the transfer of SAC shares to Appellants.
Although the share transfer never occurred, SAC and RealtyU
utilized the ASR marks between September 8, 2005 and July
12, 2006 without objection by Appellants.
After executing the agreements, Appellants learned that a
significant stream of ASR program revenue was being
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13421
diverted from SAC directly to RealtyU. On July 12, 2006,
Appellants sent a cease-and-desist letter to Swanepoel stating
that “your companies do not have a contract with [Appel-
lants], [and] your continued use of [their] trademarks consti-
tutes trademark infringement.” SAC filed a complaint for
declaratory relief on July 25, 2006, requesting a determination
that SAC was the rightful owner of the ASR marks. On Feb-
ruary 2, 2007, Appellants filed counterclaims for trademark
infringement against SAC, RealtyU, and Swanepoel.
On July 28, 2006, three days after commencement of the
action for declaratory relief, Kennedy sent an email to Tom
Mitchell (“Mitchell”), the Senior Vice President of RealtyU
Group, Inc.2 Kennedy forwarded a complaint of a potential
ASR student who was having difficulty registering for an on-
line ASR course. Kennedy told the potential student that he
was “forwarding this to our IT folks.” Mitchell responded to
Kennedy that it was “[t]aken care of.” More than a year later,
on November 19, 2007, Kennedy sent Mitchell a facsimile
regarding “Candidate Apps.” The cover page read “[f]rom
Kennedy Center to be placed in database.” The facsimile con-
tained several ASR candidate applications and the candidates’
completed ASR course exams. The district court found that
Kennedy had “ask[ed] SAC to make use of the intellectual
property by requesting that it process certificates and certify
members in the ASR program for classes.”
B. The District Court’s Determinations
The district court determined that Appellants are the right-
ful owners of theASR marks. It concluded that SAC could not
enforce the agreement requiring Appellants to transfer the
intellectual property because SAC had not satisfied the condi-
tions precedent contained in the stock purchase agreement,
including its obligation to issue stock to Appellants. The dis-
2
Based on Appellees’ corporate disclosure statement, RealtyU Group,
Inc. owns RealtyU, Inc.
13422 SELLER AGENCY COUNCIL v. KENNEDY CENTER
trict court also found that SAC could not enforce the agree-
ment because it had unclean hands: while the stock purchase
agreement required SAC to take the “best overall actions” for
the company, SAC in fact diverted many of the ASR student
course fees to RealtyU rather than keeping the fees itself.
The district court noted that “[f]rom September 8, 2005,
until July 12, 2006, [i]t is undisputed that . . . SAC had per-
mission or an implied license to use the ASR Trademarks.” It
also concluded that Appellants’ conduct after the July 12,
2006 cease-and-desist letter led SAC, RealtyU, and Swane-
poel to believe they had permission to continue using the ASR
marks, and it denied damages and royalties for that period “in
light of [Appellants’] acquiescence to [Appellees’] use of the
trademarks” after the cease-and-desist letter and the initiation
of litigation. For the same reason, the district court declined
to award attorneys’ fees. The district court did, however, per-
manently enjoin SAC, RealtyU, and Swanepoel from infring-
ing or otherwise making use of Appellants’ intellectual
property.
II. ANALYSIS
Appellants challenge the district court’s decision on several
grounds. They argue that because SAC had unclean hands, the
court erred in sustaining SAC’s affirmative defense of acqui-
escence. They also contend that the record is insufficient to
support the conclusion that they gave any form of consent for
RealtyU to use the ASR marks, either before or after the July
12, 2006 cease-and-desist letter. Finally, they also challenge
the finding of acquiescence itself, arguing that the evidence in
the record is insufficient to support the conclusion that they
acquiesced to use of the ASR marks by SAC or RealtyU.
A. Standards of Review
To the extent that Appellants challenge the district court’s
factual findings, such findings are reviewed for clear error.
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13423
Fed. R. Civ. P. 52(a)(6). A district court’s finding of fact is
clearly erroneous if it is “(1) ‘illogical,’ (2) ‘implausible,’ or
(3) without ‘support in inferences that may be drawn from the
facts in the record.’ ” United States v. Hinkson, 585 F.3d
1247, 1262 (9th Cir. 2009) (citing Anderson v. City of Besse-
mer City, N.C., 470 U.S. 564, 577 (1985)).
The application of the equitable doctrine of unclean hands
is within the discretion of the trial court and is reviewed for
abuse of that discretion. See TransWorld Airlines, Inc. v. Am.
Coupon Exch., Inc., 913 F.2d 676, 694 (9th Cir. 1990) (citing
Wash. Capitols Basketball Club, Inc. v. Barry, 419 F.2d 472,
478 (9th Cir. 1969) (finding that the application of the
unclean hands doctrine was committed to the district court’s
discretion). Similarly, while the question appears to be one of
first impression in our circuit, we join our sister circuits in
concluding that the application of the equitable doctrine of
acquiescence is within the discretion of the trial court and also
is reviewed for abuse of discretion. See Coach House Rest.,
Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551, 1558 (11th
Cir. 1991) (finding that “[b]ecause acquiescence is an equita-
ble defense, it will be reviewed for an abuse of discretion);
Piper Aircraft Corp. v. Wag-Aero, Inc., 741 F.2d 925, 932-33
(7th Cir. 1984) (finding that because acquiescence imports a
fact-based analysis, its determination rests in the “sound dis-
cretion” of the trial court and only will be disturbed on review
for “clear abuse” of that discretion).
Finally, “ ‘[w]e may affirm on any basis supported by the
record, whether or not relied upon by the district court.’ ”
Bank of N.Y. v. Fremont Gen. Corp., 514 F.3d 1008, 1020 n.8
(9th Cir. 2008) (quoting Hall v. N. Am. Van Lines, Inc., 476
F.3d 683, 686 (9th Cir. 2007)) (alteration in the original).
B. SAC’s Equitable Defenses and the District Court’s
Finding of Unclean Hands
[1] Appellants argue that SAC’s unclean hands should pre-
clude it as a matter of law from benefitting from the equitable
13424 SELLER AGENCY COUNCIL v. KENNEDY CENTER
defense of acquiescence. “The doctrine [of unclean hands]
bars relief to a plaintiff who has violated conscience, good
faith or other equitable principles in his prior conduct, as well
as to a plaintiff who has dirtied his hands in acquiring the
right presently asserted.” Dollar Sys., Inc. v. Avcar Leasing
Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989) (citations omit-
ted). The doctrine of unclean hands also can bar a defendant
from asserting an equitable defense. See Jarrow Formulas,
Inc. v. Nutrition Now, Inc., 304 F.3d 829, 841-42 (9th Cir.
2002) (noting that a defendant with unclean hands is barred
from asserting the equitable defense of laches). “ ‘It is funda-
mental to [the] operation of the doctrine that the alleged mis-
conduct by the [party] relate directly to the transaction
concerning which the complaint is made.’ ” Dollar Sys., 890
F.2d at 173 (quoting Arthur v. Davis, 126 Cal. App. 3d 684,
693-94 (Cal. Ct. App. 1981)). “[U]nclean hands does not con-
stitute ‘misconduct in the abstract, unrelated to the claim to
which it is asserted as a defense.’ ” Jarrow, 304 F.3d at 841
(citing Republic Molding Corp. v. B.W. Photo Utils., 319 F.2d
347, 349 (9th Cir. 1963)).
The district court found that SAC had unclean hands
because it diverted substantially all of its ASR program reve-
nue to RealtyU, despite the provisions of the stock purchase
agreement, which specified that ASR program revenue was
for the benefit of SAC and that SAC was obligated to take the
“best overall actions” for the benefit of the company. It was
this diversion of revenue that ultimately precipitated the July
12, 2006 cease-and-desist letter and Appellants’ claim for
trademark infringement.
[2] However, the district court’s finding of unclean hands
related explicitly to events that occurred before July 12, 2006.
SAC’s claim of acquiescence was based on events occurring
after July 12, 2006, specifically Kennedy’s requests that SAC
continue to use the ASR marks even after Appellants sent
their cease-and-desist letter. The record does not reflect a
determination by the district court with respect to whether
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13425
SAC acted with unclean hands after July 12, 2006. However,
we must presume that in sustaining SAC’s acquiescence
defense, the district court found implicitly that SAC did not
have unclean hands with respect to Appellants’ claim for
trademark infringement, which could have arisen only after
July 12, 2006. The district court did not abuse its discretion
in concluding that SAC’s earlier breach of the stock purchase
agreement did not preclude SAC from claiming that Appel-
lants acquiesced to its use of the ASR marks thereafter.
C. RealtyU’s Right to Use the ASR Marks before July
12, 2006
Appellants contend that RealtyU never had any right to use
the ASR marks, notwithstanding any acquiescence that may
have occurred after July 12, 2006. The district court’s finding
of consent is a factual determination that we review for clear
error. See Fremont Gen. Corp., 523 F.3d at 1020 (noting that
a district court’s factual findings established consent and
could not be overturned without a showing that the finding
was clearly erroneous); Gonzalez-Caballero v. Mena, 251
F.3d 789, 795 (9th Cir. 2001) (noting that a district court’s
factual finding of consent was not clearly erroneous); PIC
Realty Corp. v. Evans, 605 F.2d 476, 483 (9th Cir. 1979)
(agreeing with the district court that the bankruptcy court’s
finding of no consent was not clearly erroneous). A district
court’s finding of fact is clearly erroneous if it is “(1) ‘illogi-
cal,’ (2) ‘implausible,’ or (3) without ‘support in inferences
that may be drawn from the facts in the record.’ ” Hinkson,
585 F.3d at 1262.
[3] The district court found explicitly that SAC had per-
mission or an implied license to use the ASR marks from Sep-
tember 8, 2005 until July 12, 2006. Although it did not make
such an explicit finding with respect to RealtyU, because it
declined to award damages based on RealtyU’s use of the
ASR marks, it must have decided implicitly that RealtyU also
had consent of some type to use the ASR marks before July
13426 SELLER AGENCY COUNCIL v. KENNEDY CENTER
12, 2006. In addition, “ ‘[w]e may affirm on any basis sup-
ported by the record, whether or not relied upon by the district
court.’ ” Fremont Gen., 514 F.3d at 1020 n.8 (citation omit-
ted). The district court determined that “Kennedy signed
agreements with SAC in September 2005 and he and his com-
pany promptly began to cooperate with RealtyU and/or SAC
to market his ASR program.” It also found expressly that the
purpose of Swanepoel’s proposed business venture was to
provide Appellants with “access to the RealtyU affiliates
across the country and the large number of students they pro-
vide.” Thus, the purpose of the agreement between KCREE
and SAC was to allow RealtyU and its affiliates to use the
ASR marks.
[4] This determination is neither illogical nor implausible:
in order for RealtyU to provide SAC with ASR student fees,
it had to use the ASR marks. However, Appellants contend
that RealtyU had consent to use the marks only if it paid a
licensing fee for that use — a fee that should have been paid
to SAC. While the district court did not make an explicit fac-
tual determination as to this point, its implicit conclusion that
RealtyU or its affiliates did not have to pay a licensing fee is
supported by inferences that may be drawn from the record.
Kennedy testified at trial as follows:
Q: [Counsel] If I understand what you’re saying,
you’re testifying that you made an agreement
and memorialized it in the stock purchase
agreement that Kennedy Center itself would not
have to pay the thousand dollar a year licensing
fee, right?
A: [Kennedy] Likewise
Q: And neither would RealtyU?
A: That’s correct. [ ]
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13427
(ER 31:7-13.) Kennedy continued to explain:
Q: So if I understand things, neither Kennedy Cen-
ter nor Seller Agency Council are [sic] required
to pay the annual licensing fee?
A: That is correct.
Q: What about RealtyU affiliate schools?
A: I believe that it’s basically that it’s up to Real-
tyU. I mean, they don’t have to charge the
licensing fee if they don’t want to. The actual
annual license fee.
Q: So Seller Agency Counsel could waive the
license fee for the RealtyU school?
A: That is correct. That is correct.
(ER 32:6-16.)
[5] The district court’s factual determination that Appel-
lants consented to RealtyU’s use of ASR marks prior to July
12, 2006 is not clearly erroneous. Accordingly, RealtyU may
be liable only for infringement occurring after it received the
cease-and-desist letter on July 12, 2006, and then only if
Appellants did not consent or acquiesce to that use.
D. Acquiescence
[6] Although we have dealt in passing with the concept of
acquiescence to infringement — see, e.g., Westinghouse Elec.
Corp. v. Gen. Circuit Breaker & Elec. Supply, 106 F.3d 894,
899 (9th Cir. 1997); E. & J. Gallo Winery v. Gallo Cattle Co.,
967 F.2d 1280, 1294 (9th Cir. 1992); Nat’l Lead Co. v. Wolfe,
223 F.2d 195 (9th Cir. 1955); Golden W. Brewing Co. v.
Milonas & Sons, Inc., 104 F.2d 880 (9th Cir. 1939) — we
13428 SELLER AGENCY COUNCIL v. KENNEDY CENTER
have not articulated a definition or established a practical test
for district courts to apply. We begin by observing that the
equitable defenses of acquiescence and laches are very simi-
lar. “Laches is an equitable time limitation on a party’s right
to bring suit resting on the maxim that one who seeks the help
of a court of equity must not sleep on his rights.” Jarrow, 304
F.3d at 835 (citations and internal quotations marks omitted).
Acquiescence, on the other hand, limits a party’s right to
bring suit following an affirmative act by word or deed by the
party that conveys implied consent to another. 6 J. THOMAS
MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR
COMPETITION, 31:42 (4th ed. 2008) (citing What-A-Burger of
Va., Inc. v. Whataburger, Inc. of Corpus Christi, Tex., 357
F.3d 441, 452 (4th Cir. 2004) (finding that “[a]cquiescence is
the active counterpart to laches, a doctrine based on passive
consent”); Creative Gifts, Inc. v. UFO, 235 F.3d 540, 547-48
(10th Cir. 2000) (finding that acquiescence requires “conduct
on the plaintiff’s part that amounted to an assurance to the
defendant, express or implied, that plaintiff would not assert
his trademark rights against the defendant”); Sara Lee Corp.
v. Kayser-Roth Corp., 81 F.3d 455, 462 (4th Cir. 1996) (find-
ing that acquiescence implies active consent, while laches
implies passive consent); Coach House, 934 F.2d at 1558
(finding that “[t]he difference between acquiescence and
laches is that laches denotes passive consent and acquiescence
denotes active consent”)).
The district court applied the test articulated in ProFitness
Physical Therapy Ctr. v. Pro-Fit Orthopedic & Sports Physi-
cal Therapy P.C., 314 F.3d 62, 67 (2d Cir. 2002). Acquies-
cence under ProFitness requires that “(1) the senior user
actively represented that it would not assert a right or a claim;
(2) the delay between the active representation and assertion
of the right or claim was not excusable; and (3) the delay
caused the defendant undue prejudice.” Id. at 67 (internal cita-
tion omitted). That test appears to have originated in an Elev-
enth Circuit opinion modifying that court’s test for laches to
accommodate an acquiescence inquiry. See Coach House, 934
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13429
F.2d at 1558 (modifying the prima facie case for laches from
Conagra, Inc. v. Singleton, 743 F.2d 1508, 1517 (11th Cir.
1984), to create the prima facie case for acquiescence as artic-
ulated in the opinion and recited in ProFitness).
[7] Because laches and acquiescence are closely related
concepts, we agree with the approach taken by the Eleventh
Circuit that modifying our current test for laches is an appro-
priate way to provide a practical test for acquiescence. In the
Eleventh Circuit, the prima facie case for laches required “(1)
a delay in asserting a right or claim; (2) that the delay was not
excusable; and (3) that the delay caused the defendant undue
prejudice.” Conagra, 743 F.2d at 1517 (citations omitted).
The prima facie case for laches in our own circuit is essen-
tially identical. “The test for laches is two-fold: first, was the
plaintiff’s delay in bringing suit unreasonable? Second, was
the defendant prejudiced by the delay?” Internet Specialties
W., Inc. v. Milon-DiGiorgio Enters., 559 F.3d 985, 990 (9th
Cir. 2009) (citing Tillamook Country Smoker, Inc. v. Tilla-
mook Cnty. Creamery Ass’n, 465 F.3d 1102, 1108 (9th Cir.
2006); Jarrow, 304 F.3d at 838). The first aspect of our test
in turn consists of two sub-parts: an assessment of the length
of the delay followed by an assessment of the reasonableness
of the delay. Jarrow, 304 F.3d at 838.
[8] Because we agree with the Eleventh Circuit that acqui-
escence differs from laches principally in that it requires some
form of active consent, we conclude that the Coach House
test largely comports with our own understanding of the
prima facie case for acquiescence. Accordingly, we adopt that
test. The elements of a prima facie case for acquiescence are
as follows: (1) the senior user actively represented that it
would not assert a right or a claim; (2) the delay between the
active representation and assertion of the right or claim was
not excusable; and (3) the delay caused the defendant undue
prejudice.
With respect to the third prong, we note that in the case of
laches, undue prejudice requires at least some reliance on the
13430 SELLER AGENCY COUNCIL v. KENNEDY CENTER
absence of a lawsuit. See Lathan v. Volpe, 455 F.2d 1111,
1122 (9th Cir. 1971), overruled on other grounds by Lathan
v. Brinegar, 506 F.2d 677, 691 (9th Cir. 1974) (finding “the
two essential elements of laches — lack of diligence by plain-
tiff and injurious reliance thereon by defendant”); accord Pro
Football, Inc. v. Harjo, 565 F.3d 880, 884 (D.C. Cir. 2009)
(“To be sure, a finding of prejudice requires at least some reli-
ance on the absence of a lawsuit”). Relatedly, prejudice in the
context of acquiescence inherently must involve reliance on
the senior user’s affirmative act or deed, and such reliance
must be reasonable. When inquiring into the reasonableness
of reliance, a district court must examine both the content of
the affirmative act and the context in which that act was per-
formed. In addition to their relevance with respect to undue
prejudice, findings with respect to reliance also may inform
whether the delay between the active representation and asser-
tion of the right or claim was excusable. See 3 ANNE GILSON
LALANDE, GILSON ON TRADEMARKS § 11.08[3][i][iii][A] (2010)
(“When the plaintiff has in some way assured the defendant
that it will not assert its rights in the mark and the defendant
has relied to its detriment, the plaintiff should be estopped
from bringing an action by its acquiescence regardless of the
period of delay.”).
[9] While it appropriately drew upon ProFitness for the
elements of acquiescence, the district court apparently did not
make factual findings either as to the scope of Appellants’
active representations or as to the extent and reasonableness
of Appellees’ reliance on those representations. In particular,
it did not determine whether Appellants’ requests that Appel-
lees use the ASR marks for specific purposes after July 12,
2006 amounted to a carte blanche to use the marks for any
other purposes, whether and to what extent the marks actually
were used for other purposes, or whether it was reasonable in
light of the cease-and-desist letter and subsequent litigation
for Appellees to use the marks either for purposes of the spe-
cific requests or for purposes outside of scope of those
requests. Because the application of the acquiescence doctrine
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13431
is within the discretion of the trial court, see Coach House,
934 F.2d at 1558; Piper Aircraft, 741 F.2d at 932-33, we will
vacate the judgment and remand so that the district court may
consider these questions consistent with the foregoing discus-
sion.
E. Whether Appellants granted consent to use the ASR
marks after July 12, 2006
[10] Appellees contend that the judgment may be affirmed
based upon the district court’s separate conclusion that their
use of the ASR marks was with Appellants’ “consent and per-
mission.” The district court concluded that “[Appellees’] use
of the intellectual property, including use past the commence-
ment of this litigation, was with [Appellants’] consent and
acquiescence.” However, a fair reading of the district court’s
discussion as a whole reflects a determination that Appellants
consented to the use of the ASR marks before July 12, 2006
and acquiesced to that use after July 12, 2006. The district
court observed that “[Appellants’] conduct after they sent the
July 12, 2006 demand letter led [Appellees’] to believe that
they continued to have ‘permission’ to use the trademarks.”
The district court’s phrasing — i.e., that Appellees only
believed that they had “permission” — demonstrates that the
district court was focused on acquiescence rather than actual
consent.
[11] To be sure, Kennedy made active representations that
Appellees could use the ASR marks, at least for the purposes
of specific tasks. The district court found that Kennedy “re-
quest[ed] that [SAC] process certificates and certify members
in the ASR program for classes,” and that he “continued to
forward student information to SAC to be included in SAC’s
‘website system’ [between July 12, 2006 and November
2007].” Nonetheless, as the district court determined, Appel-
lees did not have a contractual right to use the ASR marks.
Any consent that may have been granted after July 12, 2006
arguably amounted to nothing more than a revocable license
13432 SELLER AGENCY COUNCIL v. KENNEDY CENTER
to use the ASR marks for the particular tasks. Because the
parties were litigating actively with respect to the ASR marks
at the time Kennedy made his requests, it would be difficult,
if not impossible, to determine if and when Appellants
revoked any post-July 12, 2006 consent to Appellees’ use of
the marks. Because of these difficulties, the district court was
correct to apply the acquiescence doctrine to the instant case.
Rather than attempting to determine exactly when Appellants
granted or revoked consent, the proper inquiry is whether and
to what extent Appellees relied reasonably on Appellants’
active representations that Appellees had a right to use the
marks.
III. COSTS AND ATTORNEYS’ FEES ON APPEAL
[12] Pursuant to Federal Rule of Appellate Procedure 38,
Appellees seek double costs and attorneys’ fees on appeal.
“We can award such relief only ‘if the result is obvious or if
the claims of error are wholly without merit.’ ” In re Peoro,
793 F.2d 1048, 1052 (9th Cir. 1986) (quoting Orange Belt
Dist. Council of Painters No. 48 v. Kashak, 774 F.2d 985, 991
(9th Cir. 1985)). Appellees contend that Appellants’ argu-
ments are without merit. Because we conclude that the case
must be remanded to the district court,3 we cannot conclude
that Appellants’ arguments are wholly without merit.4
IV. CONCLUSION
We affirm the district court’s conclusion that the doctrine
of unclean hands does not bar the application of the equitable
3
Appellees also argue that Appellants’ briefing raises matters not pre-
sented to the district court and contains misleading and inappropriate char-
acterizations of the district court’s determinations. Although there is some
merit to these observations, we conclude that sanctions would be inappro-
priate.
4
In light of this disposition, Appellants’ motion to stay consideration of
this issue and to strike Appellees’ brief in opposition to the motion to stay
are terminated as moot.
SELLER AGENCY COUNCIL v. KENNEDY CENTER 13433
defense of acquiescence in this instance and its conclusion
that RealtyU had permission to use the ASR marks before
July 12, 2006. We vacate the judgment and remand so that the
district court may consider the applicability of Appellees’
defense of acquiescence in a manner consistent with this opin-
ion. Each party shall bear its own costs.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED.