Act Before the Breakup: Use a Contract to Keep Your Brand Whole

Let’s start with a Richmond-connected trivia question: What was the greatest hit of the 1990s R&B three-girl group JADE? In 1992, the song sold 1.5 million copies and was certified “gold” by the Recording Industry Association of America. Answer at the end.

JADE consisted of Joi Marshall, Tonya Harris (who used the stage name Tonya Kelly), and Di Reed.

In 2015, Marshall gave a TED Talk at Richmond’s Carpenter Theater about her experience in the music business. She recounted that, despite JADE’s success, she saw little money because of recording-contract language that the band didn’t understand.

She went broke, which pushed her to get a secretarial job with a Los Angeles entertainment firm to pay her bills. There, her work included “typing out contracts.” She later began teaching about the music business in Atlanta.

In the talk, she said her younger self had a “knowledge gap” between what she thought she knew and reality, and she urged the audience to “make sure you know the business around your passion.”

Did Marshall practice what she preached? A recently decided federal appellate court case concerning the rights to the JADE band name – one resulting from a lawsuit filed six years after that TED talk – demonstrates the perils of doing business with others without an agreement on naming rights.

JADE broke up in the late 1990s. In 2018, they planned a reunion tour and federally registered the JADE band name as a service mark, listing the three performers as co-owners. But things didn’t work out. The reunion tour fell through.

In 2021, Marshall (our Richmond speaker) and Harris performed as JADE in a small concert series without Reed, cutting her out. Marshall and Harris replaced Reed with another singer. Marshall and Harris didn’t get Reed’s permission to use the JADE name for the reconstituted group.

Reed sued in federal court, asserting service mark infringement and related claims, including false advertising. At the least, Reed wanted a share of the earnings from the tour.

She lost on all counts in the district court, and the U.S. Court of Appeals for the Fifth Circuit affirmed that loss in July. Key takeaway: Don’t co-own a name without a contract among the co-owners!

The courts held that, because each band member co-owned the JADE mark, under federal trademark law, each had the right to use that name independently of one another, and none of them had to account to the others for any money earned from performing under that name. Thus, Reed got nothing from the 2021 performance revenues and can’t use federal trademark law to stop Marshall and Harris from doing it again.

This unfortunate situation can arise with any business name co-owned by a group of people without a written agreement that addresses name rights. This problem usually arises from a breakup resulting from disagreement or divorce, such as the dissolution of an informal partnership or joint venture, a falling out among members of a family business, or a death resulting in a business being owned by multiple heirs.

How do you prevent this problem?

Simple: Have a written agreement between the business owners that addresses the issue. State who controls the use of the business name (which is a mark). Must a decision be unanimous? Is a manager appointed to decide? Address whether any participant or subset can use the mark outside of the group. Provide for what happens if the group breaks up.

Typically, you prevent problems by forming a corporate entity that owns the group’s mark rights. When doing so, that corporation or LLC should be the sole owner of the mark. If you register the business name as a mark (on the federal or state level), the business entity, not one or more individuals, should be the applicant and registration owner.

On the flipside, though, if you are part of an informal group with a valuable name, don’t presume you can use the business name alone or in collaboration with new partners. Under trademark law, the person or entity that controls the quality of the goods or services associated with the mark is the owner of the mark.

This is a fact-intensive analysis that will produce varying outcomes in different circumstances. For example, depending on how a musical group is composed and managed, the general manager might own the band name rather than the performers.

Returning to the trivia question, JADE’s biggest hit was “Don’t Walk Away.” In it, the three singers implore some unnamed guy to be faithful rather than seeking only a one-night stand.

The ladies wanted commitment. Ironically, it was the lack of a contractual commitment to each other about use of their band name that led to expensive litigation over what probably were modest profits from a small reunion tour.

Written on July 28, 2025

by John B. Farmer

© 2025 Leading-Edge Law Group, PLC. All rights reserved.