Appropriation. The United States Golf Association (USGA) was founded in 1894. In 1911, the USGA developed the Handicap System, which was designed to enable individual golfers of different abilities to compete fairly with one another. Between 1987 and
1993, the USGA revised the system and implemented new handicap formulas. The USGA permits any entity to use the system free of charge as long as it complies with the USGA's procedure for peer review through authorized golf associations of the handicaps issued to individual golfers. In 1991, Arroyo Software Corp began marketing software, known as EagleTrak, that incorporated the USGA's system but did not incorporate any means for obtaining peer review of handicap computations. Arroyo's ads also used the USSA's without it's permission. The USGA filed a suit in a California state court against Arroyo, alleging, among other things, misappropriation. The USGA asked the court to stop Arroyo's use of its system. Should the court grant the injunction? Why or why not?
Appropriation
The court granted the injunction that USGA sought. Arroyo was prohibited from any unauthorized commercial use of USGA's Handicap System. Arroyo appealed to a California state intermediate appellate court, which affirmed the lower court's decision. The state intermediate appellate court pointed out that "Arroyo's use of the USGA name and service marks caused members of the public who purchased EagleTrak to assume, incorrectly, that (a) USGA had authorized Arroyo's use of the Handicap System * * * ; (b) the EagleTrak software issued USGA Handicap Indexes to individual golfers who entered their golf scores in the software program; and (c) the handicap indexes generated by the EagleTrak software were official USGA Handicap Indexes." The court noted that the trial court found Arroyo's unauthorized use of USGA's Handicap System in EagleTrak "undermined" the integrity of the System, "thereby creating the substantial risk of damage to the reputation, standing and viability of the USGA."
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