Lynchburg, Virginia — There is yet another installment in Jerry Falwell Jr.'s ongoing lawsuit against Liberty University and President Jerry Prevo who are accused of infringing on the trademark and intellectual property rights of the Dr. Jerry L. Falwell Family Trust.
Falwell Jr. has also sued his brother, Jonathan Falwell, who is a co-trustee of the Trust, for breaching his duties by not protecting the Falwell Intellectual Property (IP). The latest round of court documents reveal both Jerry and Jonathan are working to control the Family Trust.
According to a "Motion to Dismiss" filed on behalf of Liberty University and Jerry Prevo on September 27, "Falwell, Jr. was well aware that the other members of the Falwell family did not join him in this effort to wrest millions of dollars from one of their father’s proud legacies." According to court documents, not long after Jerry's Original Complaint, the other two beneficiaries of the Family Trust - Jonathan and Jeannie Falwell - elected to remove him as co-trustee on September 6, leaving Jonathan Falwell as the only Trustee.
On September 12, according to court documents, the Family Trust assigned away all remaining assets, including intellectual property such as the JERRY FALWELL trademark and Dr. Falwell’s name, image, and likeness (NIL). At the time the First Amended Complaint was filed by Jerry, the Family Trust did not own any marks or Dr. Falwell’s NIL, according to Liberty's Motion to Dismiss.
"The Family Trust does not own the intellectual property Falwell, Jr. seeks to assert, and therefore, he lacks standing to bring this lawsuit. Moreover, even if the Family Trust still owned it, Falwell, Jr. cannot sue unilaterally as a minority beneficiary. Similarly, Falwell, Jr. has failed to plead any personal ownership of the asserted intellectual property. Every claim asserted against Liberty and Prevo is predicated on ownership of such rights, and therefore Counts I-VII must be dismissed based on Falwell, Jr.’s lack of standing," the Motion to Dismiss states.
On October 6, Jerry filed a temporary injunction to prevent Jonathan from taking any actions related to the Family Trust. Jerry argues that Jonathan's conflicts of interest prevent him from protecting the Trust's IP and its beneficiaries. "Despite these conflicts, and apparently motivated by his allegiance to Liberty, Jonathan has recently purported to transfer significant and valuable Trust assets out of the Trust despite this current petition and Mr. Falwell's pending federal infringement case against Liberty," Jerry's injunction states.
The alleged assignments are seen as tainted by Jonathan's conflicts of interest, his breaches of fiduciary duty, and his failure to comply with Virginia law requirements for being a trustee, according to Jerry's injunction. That court document claims Jonathan's actions risk splitting the trademark, which allegedly contradicts the terms of Dr. Falwell's Will and could result in permanent damage to the Trust's core trademark assets. Because of this, Jerry requested that the court declare Jonathan's assignment of the Trust IP and any action taken to dissolve the Trust as void.
Jerry's Amended Complaint, filed on September 13, claims Jonathan owes the Trust "a duty to administer the trust solely in the interests of the beneficiaries, a duty to take reasonable steps to protect property of the trust, and a duty to refrain from acting in his personal interest at the expense of the interest of the Trust’s beneficiaries." The complaint claims that Jonathan’s actions constitute breaches of his fiduciary duties to the Trust. However, Jonathan requested the court dismiss that claim on October 6. Jonathan argues that the court lacks subject matter jurisdiction, and even if it does have jurisdiction, the court should decline because the claim is only loosely related to the trademark claims against Liberty University.
In response to Jonathan's motion to dismiss, Jerry argues that there is a strong connection between the breach of fiduciary duty claim against Jonathan and the federal infringement claims against Liberty and Prevo, and should be resolved in a single proceeding.
According to a memorandum filed on October 20, Jonathan initially agreed to recuse himself from making decisions on behalf of the Trust and didn't wish to be “dragged into” any disputes with Liberty. However, according to the memorandum, Jonathan later "sought to undermine" Jerry's efforts to protect the Falwell IP, stating that Jerry lacked his consent to prosecute the lawsuit. According to court documents, Jonathan claimed that he believed Liberty had always had the right to use the Falwell IP, something that Jerry says is "unsubstantiated and false" and "contradicted by a 2014 agreement Jonathan himself signed for the Trust whereby Liberty agreed the Trust had the exclusive right to use the federally-registered JERRY FALWELL trademark." This interference has caused damage to the Trust and its beneficiaries, according to Jerry.