Teke CAN sue for use of the TKE letters if they are used in the copyrighted FORMAT or method that represents the organization. The national office holds copyrights and trademark rights on the NAME and SYMBOLS of the fraternity, which include the LOGO of "TKE", the NAME "Tau Kappa Epsilon", the crest and other such things that represent or signify the organization.
And from what this article says, the movie prominently showed the logo-style letters, fraternity name and crest...which are intellectual property of the national office, and therefore must be cleared for by that office for use.
It's basically like Coca-Cola...they can't copyright the WORD "cola", but in the font and text of their company name and logo, they do have ownership and could sue for misuse or misrepresentation...it's the same for a fraternity or any other corporation.
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