Non-Exclusive Trademark License Standing in Florida Courts: D.H. Pace Co. v. OGD Equipment Co.

If your business operates under someone else's trademark—as a franchisee, dealer, distributor, or non-exclusive licensee—and a competitor starts confusing your customers by misusing that same mark, can you sue on your own? For years, the honest answer in many courts was "probably not, unless your license says so in writing." In 2023, the Eleventh Circuit revisited that assumption in D.H. Pace Co. v. OGD Equipment Co., LLC, and the result has real consequences for how non-exclusive trademark licenses should be drafted going forward—in Florida and throughout the circuit.

The Legal Framework: Two Different Kinds of Claims

The Lanham Act gives rise to two distinct kinds of federal trademark claims, and standing works differently for each. Section 32, 15 U.S.C. § 1114, protects the owner of a federally registered mark against infringing uses—standing under Section 32 generally belongs to the "registrant" and its legal representatives, a narrower category. Section 43(a), 15 U.S.C. § 1125(a), is broader: it creates a cause of action for unfair competition or false designation of origin, available to "any person who believes that he or she is or is likely to be damaged" by the conduct at issue—language that doesn't require the plaintiff to own the mark at all.

Historically, courts applied a common-law doctrine holding that a non-exclusive licensee's trademark rights "merge" into the licensor's property once the license is accepted, leaving the licensee without independent rights to enforce the mark unless the license agreement expressly granted a right to sue. The modern standing test for Section 43(a) claims comes from the Supreme Court's decision in Lexmark International, Inc. v. Static Control Components, Inc., which asks two things: whether the plaintiff's alleged injury falls within the Lanham Act's zone of interests (commercial interests in reputation or sales), and whether the plaintiff's injury was proximately caused by the defendant's conduct.

The Eleventh Circuit had already shown how a restrictive license can defeat standing. In Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc. (2019), a licensee's agreement expressly reserved all trademark ownership and enforcement authority to the licensor, limiting the licensee's own rights to import, sell, and distribute the licensed products. The Eleventh Circuit held that plain contract language foreclosed the licensee's own infringement suit. The open question after Kroma was what happens when a license agreement doesn't address enforcement rights at all—when it's simply silent.

The Story Behind the Case

D.H. Pace Company, Inc. operated garage door sales and service businesses in Atlanta and Kansas City under a non-exclusive license from Overhead Door Corporation (ODC), the owner of the Overhead Door trademarks, permitting Pace to use ODC's trade names in connection with reselling ODC's products. Like many non-exclusive dealer or franchise arrangements, the license said nothing one way or the other about Pace's ability to sue third parties for infringing or misusing the licensed marks.

A Texas competitor, OGD Equipment Company, LLC, was doing business as "Overhead Garage Door"—a name Pace and ODC believed caused confusion with the licensed Overhead Door trade names. In 2017, ODC had already settled its own trademark dispute with OGD, requiring OGD to precede its business name with "OGD." That settlement agreement expressly stated it was not binding on ODC's current and future licensees, with one specific exception unrelated to Pace.

When Pace itself began experiencing customer confusion—including complaints from customers who believed Pace, not OGD, had provided them poor service—Pace sued OGD directly for unfair competition under the Lanham Act and Georgia common law, seeking an injunction, corrective advertising, and lost profits.

The District Court Threw Out Pace's Case

The U.S. District Court for the Northern District of Georgia granted summary judgment for OGD, ruling that Pace lacked standing to sue on three independent grounds: the license agreement contained no express right-to-sue provision, Pace's status as a non-exclusive licensee meant it held insufficient rights in the marks to sue in its own name, and, because ODC had voluntarily resolved its own claims against OGD in the 2017 settlement, Pace's rights—as derivative of ODC's—were discharged along with them. Having found no standing, the court didn't reach the merits of Pace's underlying unfair competition claims.

The Eleventh Circuit Reversed

A panel of Circuit Judges Branch and Brasher, joined by District Judge Winsor sitting by designation, reversed on August 22, 2023, with Judge Branch writing for the court.

Silence is not a bar. The court distinguished Kroma directly: a licensing agreement forecloses a licensee's ability to sue only when it expressly limits that right, as the agreement in Kroma did by reserving all enforcement authority to the licensor. Pace's license simply said nothing about enforcement—and silence, the court held, creates no contractual bar at all.

Section 43(a) gives non-exclusive licensees broad standing. The court emphasized that Section 43(a)'s text extends to "any person who believes that he or she is or is likely to be damaged," and that this language doesn't turn on trademark ownership or an explicit contractual right to sue. Applying Lexmark, the court found Pace's alleged injuries—damage to its own business reputation and goodwill from customers who blamed Pace for OGD's poor service—fell within the Lanham Act's zone of interests and were proximately caused by OGD's conduct. That was enough. The court rejected the notion that a non-exclusive licensee needs an affirmative grant of enforcement rights to bring a Section 43(a) claim, distinguishing that requirement from the narrower registrant-focused standing rules that can apply to Section 32 claims.

The prior settlement didn't wipe out Pace's claims. The court also rejected the argument that ODC's 2017 settlement with OGD discharged Pace's rights as merely "derivative." The settlement agreement itself expressly stated it did not bind ODC's current and future licensees, and even contemplated future lawsuits by ODC's distributors and licensees against OGD. Reading the settlement's plain language, the court found no basis to treat Pace's independent Section 43(a) claim as extinguished by an agreement its own licensor had entered into with someone else.

Why This Decision Matters in Florida and Across the Eleventh Circuit

D.H. Pace is binding precedent throughout the Eleventh Circuit, which includes Florida, and it's good news for the many franchisees, dealers, distributors, and other non-exclusive licensees whose license agreements never anticipated this exact question. A non-exclusive licensee, whose reputation and business are damaged by a competitor's confusing use of a licensed mark, doesn't necessarily need an express right-to-sue clause to bring its own Section 43(a) claim—as long as the license doesn't affirmatively take that right away.

But D.H. Pace is also a cautionary tale. Pace spent years in litigation, lost at the district court, and only secured the right to actually litigate its claims—not a win on the merits—after a full trip to the Eleventh Circuit. A single well-drafted sentence in the original license agreement could have avoided that entire detour. For any business licensing out a trademark, or operating under someone else's mark, the lesson is the same: don't leave standing to chance, and don't assume a court will read silence the way you want it to.

Ten Recommendations for Non-Exclusive Trademark License Agreements:

1. Include an express right-to-sue clause for Section 43(a) claims. Even though D.H. Pace shows that silence isn't necessarily fatal, an explicit provision authorizing the licensee to bring its own unfair competition and false designation of origin claims removes any doubt and avoids years of litigation over the question.
2. Never include language that restricts or reserves all enforcement rights to the licensor. Kroma shows exactly how an express reservation of enforcement authority can foreclose a licensee's own claims—avoid clauses stating that only the licensor "may" or "shall" enforce the mark, or that the licensee waives any right to do so.
3. Document the licensee's own protectable commercial interest in the mark. Recitals or provisions describing the licensee's investment in reputation, goodwill, and customer relationships tied to the licensed mark make it easier to show the licensee's injury falls within the Lanham Act's zone of interests under Lexmark.
4. Address what happens if the licensor settles or releases claims against a third party. State expressly that any settlement, release, or covenant not to sue entered into by the licensor does not bind or discharge the independent claims of current or future licensees, as ODC's settlement did for Pace.
5. Spell out the licensee's right to recover its own damages separately from the licensor's. Identify categories of recoverable harm — lost profits, corrective advertising costs, diminished goodwill—that belong to the licensee in its own right, rather than leaving damages framed as purely derivative of the licensor's rights.
6. Build in a cooperation clause with the licensor. Require the licensor to provide registration certificates, prior enforcement history, and reasonable assistance (and consider whether the licensor should be joined as a party) since certain remedies tied to a registered mark may still benefit from the registrant's participation.
7. Define the scope of exclusivity, territory, and product category with precision. Ambiguity about whether a license is exclusive, non-exclusive, or exclusive within a limited territory or category invites exactly the kind of standing dispute litigated in both Kroma and D.H. Pace.
8. Include mutual notice-of-infringement obligations. A clause requiring each party to promptly notify the other of suspected infringement or confusion creates a contemporaneous record useful for establishing both standing and damages later.
9. Preserve the licensee's independent right to seek injunctive relief. Injunctive relief often matters more than damages in trademark disputes. Make clear the licensee can pursue it in its own name based on harm to its own goodwill, not only as a remedy available to the licensor.
10. Have experienced trademark counsel review both new and existing license agreements. Older agreements that are silent or ambiguous on enforcement rights, like Pace's, can still create years of costly, case-dispositive litigation. A proactive review and amendment is far cheaper than fighting the question out on appeal.

Don't Leave Your Standing to Chance

D.H. Pace Co. v. OGD Equipment Co. shows that a non-exclusive trademark license's silence on enforcement rights can still lead to years of expensive litigation before a licensee even gets to argue the merits of its case. Whether you're licensing out a trademark or operating under one, a carefully drafted agreement can prevent that fight from happening at all.

Contact our team of Florida Licensing Attorneys at RThornburg@AllenDyer.com or call us at 305-374-8303 to review or draft a trademark license agreement, or to discuss a non-exclusive licensee's rights to sue for unfair competition.