CAN Legal Saga Continues


The "old" Cult Awareness Network, once the largest anti-cult organization in the U.S., has lost still another legal battle, but the fight is not over. Having lost a key deprogramming case, CAN had filed for bankruptcy. The trustee had auctioned some of its assets, including its trademark, trade name and service marks, and the higher bid had been cast by Steven L. Hayes, on behalf of a coalition of religious liberty activists including some dedicated Scientologists now operating a "new" CAN. The "old" CAN objected to the sale, claiming that its name has been sold to a "cult" (i.e. Scientology) and was being used for "unscrupulous purposes". However, it lost first before the bankruptcy court and then before the district court. On July 30, 1998 the "old" CAN has experienced a third defeat, as the U.S. Court of Appeal for the Seventh Circuit has affirmed the district court's decision, thus leaving CAN's name and trademarks in possession of the "new" CAN.

The decision is based on two legal principles. First, the "old" CAN has no pecuniary interest in the disposal of its estate, and non-pecuniary interests are not recognized by bankruptcy law (if they were, bankruptcy litigations were never-ending and the entire bankruptcy system will soon collapse). Second, the only exception allowed by the law refers to a possible surplus in the estate. However that a surplus in the estate of the "old" CAN will be generated is regarded by the decision as extremely unlikely, due to the recent Ninth Circuit appeal decision affirming CAN's responsibility in the deprogramming case, and notwithstanding the possibility that CAN may collect money in a different Illinois case pending against the Church of Scientology where, however, "the battle is far from over" and collecting damages as high as to be capable to save the "old" CAN does not seem "a reasonable possibility".

CAN loses once again a key case, but possibility for further litigation remains open -- as noted by the decision itself -- at two different levels. A footnote states that the sale of the CAN name from the trustee may be open to intellectual property challenges on the basis that no goodwill was transferred at the same time. Additionally, "when and if" the "new" CAN may be found guilty of a deceptive use of the trademark, "aggrieved consumers, the ["old"] Cult Awareness Network's Board of Directors, or perhaps state or federal authorities" may "address the problem".

Although these latter remarks in the decision are being quoted by anti-cultists as a mitigating factor in the defeat, it remains to be seen whether the struggling and declining American anti-cult movement will be able to find the appropriate resources to continue in this sort of litigation.

The full text of the decision, mirrored and reformatted from the excellent legal Web site of the Chicago-Kent College of Law, Illinois Institute of Technology, is available on CESNUR's home page.

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Sat, Dec 11, 1999