5. We return to the assignment in gross doctrine. No rights to Star Control IP of any kind besides the bare mark --> Star Control trademark severed from goodwill --> purported assignment of the Star Control trademark was a nullity.
Careful; you're losing the caveats I had attached when I brought that rule up. We do not know how much weight that precedent has in this case; that's where a real lawyer who knows the case law in detail is needed.
Well, assignment in gross is not a precedent, it is a doctrine that is codified in statute. It flows from the fact that trademark doesn't exist independently from the associated line of business it represents. The leading Ninth Circuit case:
“[T]he law is well settled that there are no rights in a trademark alone and that no rights can be transferred apart from the business with which the mark has been associated.” Mister Donut of America, Inc. v. Mr. Donut, Inc., 418 F.2d 838, 842 (9th Cir.1969). An exhaustive and authoritative treatment of assignment in gross can be found at § 34 of the Third Restatement of Unfair Competition. The purpose of derogating from trademark rights in this way is consumer protection: it's a fraud on the market for an assignee to do a bait and switch with a bare mark. As you assert, the rule of thumb is that if the assignee's business/products are not substantially similar to the assignor's, then the trademark assignment is void.
McCarthy's opinion is that you can't get goodwill/substantial similarity in a literary work without the associated copyright. When you phrase it this way, it's trivial: how does it lie in Stardock's mouth to say that it is not engaging in "substantially similar" reproduction of the copyrights held by PRFF (or the inchoate individual creators per Stardock's latest reply) while still arguing that it can create a "substantially similar" product to the one last marketed under the Star Control mark?
Nintendo and Universal Studios fought about this in the 80s -
Universal City Studios, Inc. v. Nintendo Co., Ltd., 797 F.2d 70. Universal said that Donkey Kong sounded too much like their King Kong trademark and was confusing people. Nintendo clapped back that Universal been assigned the King Kong trademark in gross (and thus never had it) because various third parties kept the copyrights to the only other extant visual images of King Kong (RKO Radio Pictures held copyrights to the 1933 film, Dino De Laurentis Productions had copyrights to the 1975 remake). Quoting from the appeal:
"The existence of the legally protected RKO and DDL King Kong images meant that the public could not possibly associate some undefined third King Kong image and distinguish it from these other sources. In this regard it is noteworthy that Universal never created another image of King Kong."
Now Stardock could argue that
Universal is distinguishable insofar as Stardock does have copyright to an ersatz Frankenstein version of Star Control 3, though who knows what is left after you strip out everything licensed from PRFF (or as Stardock now claims, the inchoate individual creators.) Given how parasitic 3 is on 2's IP, that seems like more bad bootstrapping to me.
One might also argue that substantial similarity in a game is really just about a kind of mechanical/thematic congruence, or that the consumer protection policy of the assignment in gross doctrine is not engaged by computer games given how mutable and iterative they are. In my opinion those are just-so arguments that treat the normative connection to the underlying goodwill too frivolously.