Tesoro Corporation v. Tesoro Corporation, D/B/A Tesoro Petroleum Corp. ( 2015 )

ACCEPTED
13-14-00511-cv
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
2/3/2015 11:05:49 AM
DORIAN RAMIREZ
CLERK
No. 13-14-00511-CV
In the Court of Appeals FILED IN
13th COURT OF APPEALS
For the Thirteenth Judicial District
CORPUS CHRISTI/EDINBURG, TEXAS
Corpus Christi-Edinburg, Texas
2/3/2015 11:05:49 AM
TESORO CORPORATION DORIAN E. RAMIREZ
Appellant Clerk
V.
TESORO CORPORATION D/B/A TESORO PETROLEUM CORP.
Appellee
On Appeal from the 206TH District Court, Hidalgo County,
Texas, Trial Court Cause No. C-2971-09-D
APPELLANT’S BRIEF
Mark A. Weitz Reynaldo Ortiz
Weitz Morgan PLLC Law Office of Rey Ortiz
100 Congress Avenue 1305 E. Nolana,
Suite 2000 Suite F
Austin, Texas 78701 McAllen, Texas 78504
512-394-8950 956-687-4567
512-657-1849 (mobile) 956-631-1384 (facsimile)
512-852-4446 (facsimile)
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellant certifies that the following is a
complete list of the parties, attorneys, and other
persons who have an interest, financial or otherwise,
in the outcome of this proceeding:
Appellant:
TESORO CORPORATION
Appellant’s: Counsel:
Mark A. Weitz Reynaldo Ortiz
Weitz Morgan PLLC Law Office of Rey Ortiz
100 Congress Avenue 1305 E. Nolana,
Suite 2000 Suite F
Austin, Texas 78701 McAllen, Texas 78504
512-394-8950 956-687-4567
512-657-1849 (mobile) 956-631-1384 (facsimile)
512-852-4446 (facsimile)
Appellee:
TESORO CORPORATION D/B/A TESORO PETROLEUM CORPORATION
Appellee’s Counsel:
Frank Weathered Sarah Pierce Cowen
Dunn, Weathered, Coffey, Cowen & Garza, L.L.P.
Rivera & Kasperitis, P.C. 820 Hackberry Avenue,
611 S. Upper Broadway Suite 101
Corpus Christi, Texas 78401 McAllen, Texas 78501
361-883-1594 956-994-9170
361-883-1599 (facsimile)
Gerald T. Drought, Esq. Gilbert Hinojosa
Martin & Drought, P.C. Gilbert Hinojosa &
Bank of America Plaza, Associates, PC
25th Floor 622 East St. Charles St.
300 Convent Street Brownsville, Texas 78520
San Antonio, Texas 78205 956-544-4218
210-227-7591 956-544-4218 (facsimile)
210-227-7924 (facsimile)
TABLE OF CONTENTS
Page
Table of Contents i
Table of Authorities v
Statement of the Case 1
Statement Regarding Oral Argument 3
Issues Presented: 4
Issue #1: Did the District Court err
in Granting the Appellee’s Motion to
Set Aside the Jury Verdict based upon
failure to Establish Irreparable harm
and Lack of Adequate Remedy at Law?
Issue #2: Did the District Court err
in Granting the Appellee’s Motion to
Set Aside the Jury Verdict based on
Improper Jury Instructions.
Issue #3: Even if the Court Rejected the
Appellee’s Motion to Set Aside Jury Verdict
Did the District Court err in Denying
Appellant’s Request for Permanent Injunction
after the Full Hearing.
Issue#4: Did the District Court err
in denying Appellant’s Injunctive Relief
based on Balancing the Equities and/or
Unclean Hands.
Issue #5: Did the District Court err in
vacating the Jury’s Attorney Fee award.
i
Page
Statement of Facts 5
Summary of Argument 10
Argument 10
Issue #1: Did the District Court err
in Granting the Appellee’s Motion to
Set Aside the Jury Verdict based upon
failure to Establish Irreparable harm
and Lack of Adequate Remedy at Law? 11
A. The Issue of Irreparable Harm is
for the Court: 11
B. There Was Irreparable Harm: 15
C. There is no Adequate Remedy at Law: 17
Issue #2: Did the District Court err
in Granting the Appellee’s Motion to
Set Aside the Jury Verdict based on
Improper Jury Instructions. 19
Issue #3: Even if the Court Rejected the
Appellee’s Motion to Set Aside Jury Verdict
Did the District Court err in Denying
Appellant’s Request for Permanent Injunction
after the Full Hearing. 28
A. Standard of Review: 29
B. Imminent Harm: 29
C. Irreparable Injury and Adequate
Remedy at Law: 32
ii
Page
1. Irreparable Injury: 33
2. Adequate Remedy at Law: 34
D. The Record Shows a Complete Absence
of any Guiding Principles or Rules
Upon Which the Court Relied in
Denying Injunctive Relief. 38
1. Requested Scope: 38
(i) State Wide Prohibition of
Use: 38
(ii) Presumption of State-Wide
Rights: 39
(iii)Actual Use and
Business Transactions: 41
(iv) All Speech Mediums: 43
(v) Publicly Traded Stock
Designation: 46
(vi)Use of Appellant’s Trade
Name on the Internet: 46
2. In Light of the Appellant’s
Evidence and the Virtual
Absence of Appellee’s Evidence
to the Contrary the Court
Denied Appellant’s Injunctive
Relief without Any Basis in
Guiding Principles or Rules: 49
iii
Page
Issue#4: Did the District Court err in
denying Appellant’s Injunctive Relief
based on Balancing the Equities and/or
Unclean Hands. 51
A. Balancing the Equities: 51
B. Overly Broad: 56
C. Unclean Hands: 59
Issue #5: Did the District Court err in
vacating the Jury’s Attorney Fee award. 62
Conclusion 63
Prayer 65
Certificate of Service 66
Certificate of Brief 67
Appendices
Appendix 1: Copy of the Trial Court’s Judgment
Appendix 2: Copy of Jury Charge
Appendix 3: Record Excerpts of Court’s Directed Verdict
iv
TABLE OF AUTHORITIES
Page
Cases:
2300, Inc. v. City of Arlington, 888 S.W.2d
123 (Tex. App.--Fort Worth 1994, no writ) 25,29
Abercrombie and Fitch Co. v. Hunting World,
Inc., 537 F.2d 4 (2nd Cir. 1976) 12
All Am. Builders, Inc. v. All Am. Siding of
Dallas, Inc., 991 S.W.2d 484, (Tex. App.-Fort
Worth 1999, no pet.) 24
Bd. of Trustees v. Fox, 492 U.S. 469,
109 S. Ct. 3028, 106 L. Ed. 2d 388 (1989) 44
Black Hills Jewelry Mfg. Co. v. Gold Rush,
Inc., 633 F.2d 746 (8th Cir.1980) 17,26,33
Brennan's, Inc. v. Brennan's Rest., L.L.C.,
360 F.3d 125 (2d Cir.2004) 17,26,33
Camarena v. Texas Employment Comm’n,
754 S.W.2d 149, 151 (Tex. 1988) 30
Cameron County v. Velasquez, 668 S.W.2d
776 (Tex.App.--Corpus Christi 1984, writ
ref'd n.r.e.) 23
Cano v. Macarena, 606 S.W.2d 718 (Tex. App.-
Corpus Christi, 1980) 40
Central Hudson Gas & Electric Corp. v. Public
Service Commission of New York, 447 U.S. 557,
100 S. Ct. 2343, 65 L. Ed. 2d 341 (1980) 44-45
v
Page
Chemlawn Servs. Corp. v. GNC Pumps, Inc.,
690 F. Supp. 1560 (S.D.Tex.1988) 30,34
Circuit City Stores, Inc. v. CarMax, Inc.,
165 F.3d 1047 (6th Cir.1999) 17,26,34
Craddock v. Sunshine Bus Lines, 134 Tex. 388,
133 S.W.2d 124, 126 (Tex.Comm.App.--1939,
opinion adopted) 49
Davis v. Huey, 571 S.W.2d 859 (Tex. 1978) 29,49
Douglas v. Walker, 707 S.W.2d 733, 734
(Tex. App.--Beaumont 1986, no writ) 14
Downer v. Aquamarine Operators, Inc., 701
S.W.2d 238 (Tex.1985), cert. denied, 476
U.S. 1159, 106 S. Ct. 2279, 90 L. Ed. 2d 721
(1986) 25,29
Dunnagan v. Watson, 204 S.W.3d 30
(Tex. App.—Fort Worth 2006, pet. denied) 59
Enter. Int'l, Inc. v. Corporacion Estatal
Petrolera Ecuatoriana, 762 F.2d 464
(5th Cir.1985) 32
Flores v. Flores, 116 S.W.3d 870 (Tex. App.—
Corpus Christi 2003, no pet.) 59
Florida Bar v. Went For It, 515 U.S. 618,
115 S. Ct. 2371, 132 L. Ed. 2d 541 (1995) 45
Fuji Photo Film Co. v. Shinohara Shoji
Kabushiki Kaisha, 754 F.2d 591 (5th Cir.1985) 16
Gonzalez v. Zamora, 791 S.W.2d 258 (Tex. App.
-Corpus Christi, 1990) 58
vi
Page
GoTo.com, Inc. v. Walt Disney Co., 202 F.3d
1199 (9th Cir. 2000) 17,26,34
Hellenic Inv. v. Kroger Co., 766 S.W.2d 861
(Tex. App.-Houston [1st Dist.] 1989, no writ) 57
Hitt v. Mabry, 687 S.W.2d 791, 795 (Tex. App.-
San Antonio 1985, no writ) 56
Hudgens v. Goen 673 S.W.2d 420 (Tex. App-
Waco, 1979) 22
Isunai v. Manske-Sheffield Radiology Group,
805 S.W.2d 602 (Tex. App—Beaumont, 1991) 58
Jeter v. Associated Rack Corp., 607 S.W.2d 272
(Tex. App.—Texarkana 1980, ref. n.r.e.) 18,35
Jim Rutherford Investments Inc. v. Terramar
Beach Community Ass'n., 25 S.W.3d 845(Tex. App.
—Houston [14 Dist.] 2000, pet. den’d) 28
Joy Mfg. Co. v. CGM Valve & Gauge Co., 730 F.
Supp. 1387 (S.D.Tex.1989)
Landry v. Travelers Insurance Co., 458 S.W.2d
649 (Tex. 1970) 49
Lazy M Ranch, Ltd. v. TXI Operations, LP,
978 S.W.2d 678 (Tex. App.-Austin 1998,
pet. denied) 59-60
Light v. Centel Cellular Co, 883 S.W.2d 642
(Tex. 1994) 58
Lower Nueces River Water Supply Dist. v.
Live Oak County, 312 S.W.2d 696, 701 (Tex.
Civ. App.-San Antonio 1958, writ ref'd n.r.e.) 56
vii
Page
McAfee MX v. Foster, No. 02-07-080-CV, 2008 WL
344575, at *2, 2008 Tex.App. LEXIS 968, at *8
(Tex.App.-Fort Worth Feb. 7, 2008, pet. denied),
petition for cert. filed, No. 08-639
(U.S. Nov. 12, 2008) 52
McAx Sign Co., Inc. v. Royal Coach, Inc.,
547 S.W.2d 368, 369 (Tex.Civ.App.--Dallas
1977, no writ) 1
McDonald's Corp. v. Robertson, 147 F.3d 1301,
(11th Cir.1998) 17,26,34
Miller v. Lone Star Tavern, Inc. 593 S.W.2d 341
(Tex. Civ. App.--Waco 1979, no writ) 22
Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447,
98 S. Ct. 1912, 56 L. Ed. 2d 444 (1978) 44
Pappan Enters., Inc. v. Hardee's Food Sys.,
Inc., 143 F.3d 800, 805 (3d Cir.1998) 17,26,34
Parkem Indus. Servs., Inc. v. Garton 619 S.W.
2d 428 (Tex. Civ. App.—Amarillo 1981, no writ) 29
Pebble Beach Co v.Tour 18 I Ltd.,
942 F. Supp. 1513 (S.D. Tex., 1996) 12
Pebble Beach Co. v. Tour 18 I, Ltd.,
155 F.3d 526 (5th Cir. 1998) 13
Physicians and Surgeons Gen. Hosp. v.
Koblizek 752 S.W.2d 657 (Tex. App.—Corpus
Christ, 1988) 23-24
viii
Page
Pittsburgh Press Co. v. Pittsburgh Comm'n
on Human Relations, 413 U.S. 376, 385,
93 S. Ct. 2553, 37 L. Ed. 2d 669 (1973) 44
Pro Hardware, Inc. v. Home Ctrs. of America,
Inc., 607 F. Supp. 146, 154 (S.D.Tex.1984) 30,34
Quantum Fitness Corp. v. Quantum Lifestyle
Ctrs., L.L.C., 83 F. Supp. 2d 810, 831
(S.D.Tex.1999) 27,33
Recon Exploration, Inc. v. Hodges, 798 S.W.2d
848 (Tex. App.--Dallas 1990, no writ) 29,49
Rescuecom Corp. v. Google, Inc. 562 F.3d 123
(2d Cir. 2009) 48
S. Monorail Co. v. Robbins & Myers, Inc., 666
F.2d 185, 188 (5th Cir. Unit B 1982) 27,33
Smithson v. Cessna Aircraft Co., 665 S.W.2d 439
(Tex.1984) 49
Societe Des Produits Nestle, S.A. v. Casa
Helvetia, Inc., 982 F.2d 633, 640 (1st Cir.1992) 17
Soweco v. Shell Oil Co., 617 F.2d 1178,
(5th Cir.1980), cert. denied, 450 U.S. 981,
101 S. Ct. 1516, 67 L. Ed. 2d 816 19
Storey v. Cent. Hide & Rendering Co.,
148 Tex. 509 226 S.W.2d 615, 618-19 (1950) 51-52
Texas Soc. v. Ft. Bend Chapter, 590 S.W.2d 156
(Civ. App.—Texarkana 1980, ref. n.r.e.) 18,35
Thompson v. W. States Med. Ctr., 535 U.S. 357,
122 S. Ct. 1497, 152 L. Ed. 2d 563 (2002) 45
ix
Page
Thompson v. Thompson Air Conditioning & Heating,
Inc., 884 S.W.2d 555, (Tex. App.-Texarkana 1994,
no pet.) 24
Ty, Inc. v. Jones Group, Inc., 237 F.3d 891
(7th Cir.2001) 17,26,33
Union Gas Corp. V. Gisler, 129 S.W.3d 245
(Tex. App.-Corpus Christi, 2003) 60-61
Union Nat’l Bank v. Union Nat’l Bank, 909 F.2d
839 (5th Cir. 1990) 12
Webb v. Glenbrook Owners Association, Inc.,
98 S.W.3d 374, 384 (Tex. App.—Dallas, 2009) 57
Zapata v. Zapata 841 S.W.2d 45 (Tex. App.—
Houston [14th Dist], 1992) 1-12,16,
19,31
Statutes:
Tex. Bus. & Comm. Code § 16.15(c) (1968) 40
Tex. Bus. & Comm. Code s 16.27(a) (1968) 40
x
STATEMENT OF THE CASE
This is an appeal of an adverse ruling by the
District Judge following a favorable jury verdict on
the issue of common law trade name infringement.
[Appendix 1]. Because the Order/Judgment is vague as
to the basis of the Court’s ruling, Appellant must
address all conceivable basis for the District Court’s
decision McAx Sign Co., Inc. v. Royal Coach, Inc., 547
S.W.2d 368, 369 (Tex.Civ.App.--Dallas 1977, no writ).
It is the Appellant’s contention that to the extent
the Court’s decision was based upon the Appellee’s
Motion to Set Aside the Jury Verdict [Clerk’s Record,
pp.143-156] 1 the Court erred in so doing. The Court had
directed a verdict that Appellant was the senior user
2
[Reporter’s Record: Volume V: 150-151] and the jury
found that Tesoro Corporation was both the Appellant’s
trade name and that the Appellee had created likelihood
of confusion [RR:XI:75]. To the Extent the Court’s
decision was based upon the Appellee’s Motion to set
1
There is only one volume of the Clerk’s record. Hereinafter CR: page.
2
Hereinafter, RR:Vol: Page.
1
aside based on improper jury issues [CR:143-156] the
Court again erred because the only two issues
presented, violation of the common law trade
infringement and declaratory relief were in fact one in
the same, in other words they necessarily related, and
the Appellee was on full notice as to what was being
pled and requested. To the extent the Court left the
jury verdict intact, but based its ruling on a lack of
irreparable injury or the presence of discernable
damages at law the Court again erred. Appellant put on
more than sufficient evidence both at trial and in the
Permanent Injunction hearing to show non-speculative,
unquantifiable injury that cannot be adequately
compensated at law. To the extent the Court denied
Appellant’s injunctive relief based upon the
application of unclean hands or a balancing of the
equities Appellant contends the Appellee was the only
party which appeared in court with unclean hands and
that over the course of the trial it gave the Trial
Court no equities on its behalf in which to balance
against Appellant’s needs. Finally, to the degree that
2
the Court did base its ruling on Appellant’s failure to
demonstrate its right to injunctive relief, the denial
of attorney’s fees stipulated to by both parties was
based upon the successful jury finding and should not
have been disturbed
STATEMENT REGARDING ORAL ARGUMENT
While the law on the issue of trade name and
trademark infringement is well developed, the facts of
this case present many issues the Court found novel, or
difficult to resolve. One of the specific aspects of
the case factually was the admission by the Appellee
that it knew the Appellant owned the name and after
being refused the use or the purchase of the name, it
proceeded to use the name anyway under the “assumed
name” provisions of Texas law. Furthermore, evidence at
trial revealed the Appellee knew there was the risk of
a trade name infringement claim [RR:V:41-44, 61-71;
IX:87]. At one point in the proceeding the court even
confronted the Appellee with the fact that Appellee’s
usurpation of the name may have been fraudulent
3
[RR:XI:61]. Appellant therefore contends that oral
argument is not only appropriate but necessary.
ISSUES PRESENTED
Issue #1
Did the District Court err in Granting the
Appellee’s Motion to Set Aside the Jury Verdict based
upon failure to Establish Irreparable Harm and Lack of
Adequate Remedy at Law?
Issue #2
Did the District Court err in Granting the
Appellee’s Motion to Set Aside the Jury Verdict based
on Improper Jury Instructions.
Issue #3
Even if the Court Rejected the Appellee’s Motion to
Set Aside Jury Verdict Did the District Court err in
Denying Appellant’s Request for Permanent Injunction
after the Full Hearing.
Issue#4
Did the District Court err in denying Appellant’s
Injunctive Relief based on Balancing the Equities and
Unclean Hands.
Issue #5
Did the District Court err in vacating the Jury’s
Attorney Fee award.
4
STATEMENT OF FACTS
Appellant Tesoro Corporation is a Donna, Texas
sign leasing and sales business that has been in
existence since 1975. The owner of Tesoro Corporation,
Mr. Paul Sullivan secured the name Tesoro Corporation
in 1975 and has held it continuously every since that
time [RR:IV:43-45]. According to Appellee’s general
counsel, Charles Parrish, Appellee was formed as a
Delaware corporation in 1968 under the name Tesoro
Petroleum Corporation and in 1969 applied to do
business in Texas as Tesoro Petroleum Corporation
[RR:V:38]. Appellee has no business operations in Texas
aside from its corporate headquarters in San Antonio
where it has been since the inception of Appellee’s
existence [RR:IX:93]. Although Appellant does do
business as Triple A signs, its clients remit payment
and know his business as Tesoro Corporation, his
business operations and banking relationships are
conducted as Tesoro Corporation, and his tax returns
all reflect Tesoro Corporation [RR:IV:58-126].
Evidence at trial indicated Appellant did business
5
across Texas including Amarillo, Dallas, Houston, and
San Antonio, where Appellee is headquartered [RR:IV:48-
49,78; RR: VIII: 103-123, 214].
The evidence presented at trial shows that in 2004
Appellee approached Mr. Sullivan and one of his
employees and asked to either pay to use the name or to
purchase the name. Appellant’s agents clearly refused
both requests [RR:IV:192-200; RR:V:6-16] and the
evidence showed that Appellee nevertheless made a
corporate decision to proceed to use the Appellant’s
trade name [RR:V:61-71], enlisted the assistance of
Fulbright & Jaworski, and filed an assumed name
certificate with the Texas Secretary of State [RR:V:41-
44].
The attorney for Fulbright & Jaworski that
effectuated the name change and use of the name was
Carrie Platt/Ryan[RR:V:41-44]. Appellee actually
checked the availability of the name and found that
Appellant was the registered owner and the name was
therefore not available. The Texas statute in effect
in 2004 was the same as the statute today and
6
prohibited the use of identical or deceptively similar
names. That statute applied to the use of “Tesoro
Corporation” as an assumed name in Texas if it was
already taken, which in this case, it was, thus
prohibiting Appellee from using the name even as an
“assumed name” in Texas. [RR:V:61-71].
Appellee approached Appellant, through Carrie
Platt’s secretary, Darcy Angel and was unable to secure
the use or ownership of the name. Appellee was advised
by legal counsel of the legal ramifications of using
Tesoro Corporation as an assumed name and nevertheless
took the assumed name Tesoro Corporation knowing it
could be sued for trade name infringement and that
Appellant was the owner of that name [RR:V:61-71;
RR:IV:192-200; RR:V:6-16].
In 2004, shortly after Tesoro Petroleum changed its
name, Appellant began to get complaints that its
railroad cars were damaging property, that its trucks
were causing damage, and/or its employees were cutting
fence locks. Appellant had no railroad cars, tanker
trucks or the need to cut fences. The conduct,
7
railroad cars, trucks, and employees belonged to
Appellee, Tesoro Petroleum, which had now changed its
name to take Appellant’s name [RR:IV:127-129]. Then in
2009 Union Pacific Railroad, a potential customer of
both Appellant and Appellee, albeit for different
services, began making demands for money on Appellant.
What followed and continued through to the present were
demands for damages from other railroads, threats of
sanctions from Texas governmental agencies like the
insurance department and attorney general’s office, law
firms from as far away as Washington and Alaska sending
demand letters to Appellant for conduct and actions of
the Appellee and a continuous barrage of contact that
made it clear that Tesoro Petroleum’s name changed was
causing actual confusion within Texas and nationwide.
In addition, it became clear that potential lenders
were confusing Appellant’s credit with that of Appellee
and the good standing of Appellant with that of
Appellee. [RR:IV:129-192,204-207]. In 2010 a
consumer/client of Appellant counter sued Appellant in
Hidalgo County for conduct attributable to Appellee.
8
Richard Schell, the attorney who filed the complaint
for the Defendant, had done research on Tesoro
Corporation and due to the confusion created by
Appellee’s usurpation of Appellant’s name, had come to
believe that the Appellant was misrepresenting itself
and its identity [RR:IV:259-271].
During trial Appellant’s representatives testified
as to the irreparable harm caused by Appellee’s conduct
[RR:IV:127-128,129-192] although from the outset the
trial was bifurcated and the Court agreed to hear the
issues relevant to the permanent injunction only after
a jury verdict established liability and that any
judgment would be based upon the jury verdict and the
evidence adduced in the permanent injunction hearing
[RR: VIII: 59-62]. At the Permanent Injunction hearing
the Appellant’s President, Paul Sullivan, testified to
the on-going imminent harm caused by the confusion that
the jury in fact found existed [RR:VIII:70-103, 204-
207] and the fact that he could not calculate or
predict the extent and degree of the potential harm
[RR:VIII:91-93, 204-207]. Ironically, the Appellee’s
9
sole witness on the issue, Gene Trevino, admitted the
same thing both at trial and during the injunction
hearing [RR:VIII:235-236.RR:XI:26-30].
SUMMARY OF ARGUMENT
The District Court erred in granting the Appellee’s
Motion to Set Aside Jury Verdict. Having already
granted Plaintiff’s directed verdict on the issue of
senior user, the Jury properly found that Tesoro
Corporation was in fact Appellant’s trade name and that
the Appellee’s use of Appellant’s name created a
likelihood of confusion among consumers. The jury was
not required to find irreparable harm or adequate
remedy at law, as that was an issue for the court to
determine in the injunction phase of the case. The jury
issues as to trademark infringement and declaratory
relief were proper and more than adequately put
Appellee on notice as to the Appellant’s claims. With
only equitable relief requested the Appellant clearly
demonstrated both irreparable harm and the lack of any
relief at law. Thus there was no basis for the Court
10
to have nullified the award of attorney’s fees to the
Appellant.
ARGUMENT
Issue #1
Did the District Court err in Granting the
Appellee’s Motion to Set Aside the Jury Verdict based
upon failure to Establish Irreparable harm and Adequate
Remedy at Law?
A. The Issue of Irreparable Harm is for the Court:
The first basis of Appellee’s Motion for Judgment
and to Disregard is the assertion that the jury failed
to find irreparable harm and therefore its verdict
should be disregarded [CR; 143-157]. In light of the
law and how the case was tried, that assertion is
invalid. The Appellee cited to Zapata v. Zapata 841
S.W.2d 45 (Tex. App.—Houston [14th Dist], 1992) for the
proposition that a jury must find irreparable harm.
First of all, Zapata was decided on a directed verdict,
the case never reached the jury nor was there a jury
charge in that case. In other words the Court decided
the issue, not the jury. In this case, the only issues
required to be submitted to a jury were submitted based
11
on the elements of common law trade infringement in
Texas. To prevail in its common-law action for trade
name infringement, Plaintiff has the burden to
establish the following elements: (1) that the name it
seeks to protect is eligible for protection, (2) that
it is a senior user of the name, and (3) that there is
a likelihood of confusion between its name and that of
the other user, Zapata Trading Corp v. Zapata Trading,
Int’l, Inc. 841 S.W. 2d 45, 47 (Tex. App.--Houston
[14th Dist.] 1992, no writ) (citing Union Nat'l Bank v.
Union Nat'l Bank, 909 F.2d 839 (5th Cir.1990)).
There was never an issue that the name was capable
of protection. To determine the distinguishing
capability of a mark or a trade name, and thus its
eligibility for protection, courts employ the classic
trademark continuum articulated in Abercrombie & Fitch
Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2nd Cir.
1976); Pebble Beach Co v. Tour 18 I Ltd., 942 F. Supp.
1513, 1537 (S.D. Tex., 1996). A mark or name may be (1)
fanciful, (2) arbitrary, (3) suggestive, (4)
descriptive, or (5) generic. Id. Fanciful, arbitrary,
12
and suggestive marks are inherently distinctive and
therefore protectable without an additional showing of
consumer identification. Id. At the other end of the
continuum are generic marks, which are never
protectable because they represent the name of the good
or service itself and therefore cannot identify or
distinguish a particular source. Id. Descriptive marks
fall somewhere in between. These marks describe a
characteristic of the good or service itself and may
not be protected absent a showing that the mark has
become associated in the minds of consumers with the
particular, albeit unknown, source. Pebble Beach Co..
v. Tour 18 I, Ltd., 155 F.3d 526 (5th Cir. 1998). This
association is called secondary meaning. Id.
Appellant’s trade name “Tesoro Corporation,”
derives from the Spanish name for “treasure” and in
addition to being at the far end of the spectrum where
names are protectable without any showing of consumer
identification, the evidence adduced at trial shows
that after 37 years of business Tesoro Corporation has
also acquired consumer identification. Evidence
13
showing long and extensive use has been held sufficient
to prove a trade name has acquired secondary meaning.
Douglas v. Walker, 707 S.W.2d 733, 734 (Tex. App.--
Beaumont 1986, no writ).
In this case, Appellant was willing to allow
Defendant to call itself Tesoro Petroleum, it simply
would not allow Appellee to use Tesoro Corporation. If
the Appellant’s trade name had no importance the
Appellee would have not begun to use it without
permission, nor would it be so resistant in
relinquishing the name. The Texas Secretary of State’s
office clearly recognized the combination of Tesoro and
Corporation into one name as being worthy of
registration and the evidence at trial demonstrated
that the Defendant thought it was protectable enough to
seek to use or buy it before simply trying to usurp the
name [RR:V:9-15, RR:V:41-4; RR: V:60-72; RR:V:84-87].
Appellee tried to argue that it, not the Appellant,
was the senior user. The Court granted a directed
verdict in Appellant’s favor on the issue of senior
user before the jury phase of the trial began [RR:V:
14
150-151; RR:XI:35] The Appellee is simply wrong about
the issue. It has never been about who was the senior
user of “Tesoro” or “Tesoro Petroleum” but rather who
was the senior user of “Tesoro Corporation.” The jury
found that “Tesoro Corporation” was Plaintiff’s trade
name and by using that exact name, Defendant caused
actual confusion [RR:XI:75]. In this case the evidence
showed that the senior user of “Tesoro Corporation” was
not disputed, every Defendant witness, whether offered
by the Defendant or the Plaintiff had testified that
Plaintiff was the senior user of the name at issue
“Tesoro Corporation” [RR:V:84-85; RR:V:61-72]. Having
rejected the Defendant’s argument that the fight was
over the name “Tesoro” and not “Tesoro Corporation,” it
was entirely appropriate to grant directed verdict for
the Plaintiff as to the senior user of “Tesoro
Corporation” when even the Defendant admitted that to
be the case.
B. There Was Irreparable Harm:
Thus Appellee was left with the argument that there
was no irreparable harm. However, a finding of
15
likelihood of confusion brings with it a presumption of
irreparable harm. So the analysis, much like that in
Zapata v. Zapata also cited herein above, is whether
there was “evidence” to support a particular finding.
In this case, just as in Zapata v. Zapata 841 S.W.2d
45, 48-49, the Plaintiff demonstrated actual confusion
[RR:IV: 129-192; RR:IV: 259-270] and proof of actual
confusion is probative evidence that likelihood of
confusion exists, Zapata Trading Corp v. Zapata
Trading, Int’l, Inc. 841 S.W.2d 45, 48 (Tex. App.—
Houston [14th Dist] 1992 no writ). In fact, once actual
confusion is proved, an almost overwhelming amount of
proof is necessary to refute the existence of a
likelihood of confusion. Id.; see also Fuji Photo Film
Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591,
597 (5th Cir.1985). In this case not only was there
proof of actual confusion as cited herein above, but
the record reflects no real effort by the Defendant to
refute the actual confusion. Once the jury found
likelihood of confusion the irreparable nature of the
harm was established and the Court was free to presume
16
irreparable injury, See Brennan's, Inc. v. Brennan's
Rest., L.L.C., 360 F.3d 125, 129 (2d Cir.2004); Ty,
Inc. v. Jones Group, Inc., 237 F.3d 891, 902 (7th
Cir.2001); GoTo.com, Inc. v. Walt Disney Co., 202 F.3d
1199, 1209 (9th Cir. 2000); Circuit City Stores, Inc.
v. CarMax, Inc., 165 F.3d 1047, 1056 (6th Cir.1999);
McDonald's Corp. v. Robertson, 147 F.3d 1301, 1310
(11th Cir.1998); Pappan Enters., Inc. v. Hardee's Food
Sys., Inc., 143 F.3d 800, 805 (3d Cir.1998); Societe
Des Produits Nestle, S.A. v. Casa Helvetia, Inc., 982
F.2d 633, 640 (1st Cir.1992); Black Hills Jewelry Mfg.
Co. v. Gold Rush, Inc., 633 F.2d 746, 753 n. 7 (8th
Cir.1980).3
C. There is no Adequate Remedy at Law:
The corollary to lack of irreparable harm is the
argument that there is an adequate remedy at law. The
determination of whether an adequate remedy at law
exists is not a mechanical task. The mere existence of
a remedy at law is not a ground for a denial of
3
At trial and during hearings the Appellee tried to argue that because these cases were
temporary and not permanent injunction cases, the presumption should not apply. There is no
valid reason to limit the presumption to temporary status quo relief versus permanent injunctive
relief.
17
injunctive relieve unless the legal remedy is as
practical and efficient to the ends of justice as the
equitable remedy, Jeter v. Associated Rack Corp., 607
S.W.2d 272, 278 (Civ. App.—Texarkana 1980, ref.
n.r.e.). Thus, while a plaintiff may have a right to
bring an action for damages, that remedy is inadequate
if damages cannot be calculated. Texas Soc. v. Ft. Bend
Chapter, 590 S.W.2d 156, 159 (Civ. App.—Texarkana 1980,
ref. n.r.e.).
As set out in the testimony of Paul Sullivan it is
impossible to calculate monetary damages [RR:IV:129-
192: RR: VIII: 70-103]. The instances of confusion are
continuous and haphazard. The effects on credit and
goodwill are impossible to gauge and may be immediate,
or may create long-term problems that do not
immediately manifest themselves. Since it is impossible
to know when the confusion will again re-surface, it is
equally impossible to prepare for the problems or to
take prospective action to mitigate harm. The
impossibility of calculating damage in part contributed
to the Plaintiff’s decision to drop his monetary claims
18
prior to the commencement of the jury trial. Appellant
simply could not calculate the harm in a monetary
sense.
Issue #2
Did the District Court err in Granting the
Appellee’s Motion to Set Aside the Jury Verdict based
on Improper Jury Charge and Instructions.
The Appellee would have the Court believe that the
failure to present “irreparable injury” to the jury is
defective and precludes granting a summary judgment.
It cites a long list of cases including Zapata v.
Zapata 841 S.W.2d 45 (Tex. App.—Ho [14th Dist], 1992)
for the proposition that a jury must find irreparable
harm. That statement is blatantly incorrect. In a
trademark infringement case the question of “likelihood
of confusion” is a question for the trier of fact.
Zapata v. Zapata 841 S.W.2d 45, 49. See also Soweco v.
Shell Oil Co., 617 F.2d 1178, 1186 (5th Cir.1980),
cert. denied, 450 U.S. 981, 101 S. Ct. 1516, 67 L. Ed. 2d
816 The only matters submitted to a jury in Texas are
the elements of a cause of action that a jury is
19
required to answer. There is no jury charge in Texas
for a permanent injunction because a permanent
injunction and the elements require of it are to be
determined by the Court in its sound discretion.
The Jury charge in this case was as follows:
Question one. Do you find from a preponderance
of the evidence that Tesoro Corporation is the
trade name of the Plaintiff? A trade name is
any designation which is adopted and used by a
person to denominate goods which the markets or
services which he renders or a business which
he conducts or has come to be so used by
others.
Answer yes or no.
If you answered yes to question number one,
then answer question number two. Otherwise, do
not answer question number two.
Question number two. Do you find from a
preponderance of the evidence that there exists
a likelihood of confusion between the
Plaintiff's corporation and the Defendant's
corporation by any consumer?
Answer yes or no. [RR:VI:6-7].
The Appellee’s only objections to the Court’ charge and
instructions[RR: V: 164-170; RR: XII: Exhibit 1] wholly
failed to raise any issue as to the submission of
irreparable harm and/or adequate remedy at law, an
20
objection it raised for the first time in its Motion to
Disregard two months later.
In the hearing on May 21, 2013 the Appellee
attempted to argue that because there was a claim for
common law trademark infringement and a claim for a
declaratory action, that some how these claims were
“separate’ and their elements were not “necessarily
referable” to one another, and that by failing to
present the issue of irreparable harm to the jury the
Appellee had not know what it need to respond to
[RR:VII:31-38]. The key to the Appellee’s argument
lies in the declaratory judgment action not being
necessarily referable to the common law trademark
infringement case. The facts of each were identical.
There were no “two unrelated claims” such that the
Appellee would have been confused as to which claim was
being asserted. In this case there was only one claim,
common law trademark infringement, the declaratory
action was simply a mode of relief, it did not have one
single different fact or element and the Appellee’s
failure to object was fatal to its claim [CR:34-35]. To
21
give any credence to the Appellee’s contention would be
to say “we were confused by the claim for relief under
the common law trademark infringement cause of action
and by the request that the Court declare Defendants
actions a violation of Texas Common law trade
infringement law.” It is simply not a tenable argument.
The Defendants cite to Hudgens v. Goen 673 S.W.2d
420 (Tex. App-Waco, 1979) for the same proposition and
that case is equally flawed. In Hudgens the cause of
action was not common law trade infringement, but
unfair competition. Based on Miller v. Lone Star
Tavern, Inc. 593 S.W.2d 341 (Tex. Civ. App.--Waco 1979,
no writ) irreparable harm was a necessary third element
of the main cause of action, not the injunctive relief.
More important, the Court then went on to say that the
third element found in Miller, of irreparable harm, was
not required for a plaintiff to be entitled to
injunctive relief when the cause of action is based on
unfair competition Hudgens v. Goen 673 S.W.2d 420,
423. In this case, irreparable harm has never been an
element of a trade infringement case. Rather it is an
22
element of a permanent inunction and that issue is left
to the Court which must look to the underlying
evidence, not the jury charge.
In an amendment to its Motion to Set Aside [CR:
143-156] appellee cited to Physicians and Surgeons Gen.
Hosp. v. Koblizek 752 S.W.2d 657, 660 (Tex. App.—
Corpus Christ, 1988) that seems to stand for the
proposition that having refused to submit a jury
question, this Court could not have previously made the
determination that there was no question of fact to
submit to the jury and therefore could not have granted
a directed verdict. That is not what Physicians and
Surgeons Gen. Hosp. v. Koblizek stands for. Rather,
that case stands for the following proposition:
The trial court was not authorized to find on its
own that the answers found by the jury created an
unreasonable risk of harm. That was a disputed and
essential factual issue which was never requested
by appellees or presented to the jury. The trial
court was prevented from making a finding on the
omitted issue and such circumstances require that
judgment be rendered for appellant. Cameron County
v. Velasquez, 668 S.W.2d 776, 781 (Tex.App.--Corpus
Christi 1984, writ ref'd n.r.e.).
23
In Physicians and Surgeons Gen. Hosp. v. Koblizek the
trial judge had refused an issue on whether the
hospital “knew” that the conditions of its floor had
created an unreasonable risk of harm. That was an
essential element of the cause of action (Emphasis
Added) and it remained disputed after the presentation
of evidence. Irreparable harm/adequate remedy at law is
simply not an essential element of a common law trade
infringement case, both become relevant only in the
event of a request for injunctive relief which falls
squarely into the realm of the trial judge’s authority.
More important, in a common law trade infringement
case the entire case can be tried to the Court and it
determines both facts and law. Thompson v. Thompson Air
Conditioning & Heating, Inc., 884 S.W.2d 555, (Tex.
App.-Texarkana 1994, no pet.); All Am. Builders, Inc.
v. All Am. Siding of Dallas, Inc., 991 S.W.2d 484,
(Tex. App.-Fort Worth 1999, no pet.). In this case
only the injunction phase has been bifurcated and just
as in Thompson, the Court’s findings of factual issues
24
relating to the injunctive relief are every bit as
proper and binding as a jury’s.
In granting a permanent injunction the standard of
review is clear abuse of discretion by a trial court,
not a jury. See 2300, Inc. v. City of Arlington, 888
S.W.2d 123, 126 (Tex. App.--Fort Worth 1994, no writ).
A trial court’s ruling is however reversible on appeal
if it acts without reference to any guiding rules and
principles. See Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238, 241-42 (Tex.1985), cert. denied, 476
U.S. 1159, 106 S. Ct. 2279, 90 L. Ed. 2d 721 (1986).
Thus, the jury does not find “irreparable harm,” it
finds likelihood of confusion in an infringement case
and the Court must look to the record to see if the
Plaintiff has “evidence to support irreparable harm.”
In this case evidence clearly exists and there was no
requirement to submit the issue to the jury. If a jury
finding was necessary there would be no case law
allowing the Court to grant or deny an injunction based
on “conflicting evidence.” A jury finding would take
25
that discretion from the Court and that is not the law
in Texas.
Finally, the Appellee’s argument completely
overlooks the legal effect of the likelihood of
confusion element that is submitted to a jury in a
common law trade infringement case. In virtually every
circuit in the United States the appeals courts have
expressly adopted the holding that a court may presume
irreparable injury upon finding a likelihood of
confusion in a trademark case. See Brennan's, Inc. v.
Brennan's Rest., L.L.C., 360 F.3d 125, 129 (2d
Cir.2004); Ty, Inc. v. Jones Group, Inc., 237 F.3d 891,
902 (7th Cir.2001); GoTo.com, Inc. v. Walt Disney Co.,
202 F.3d 1199, 1209 (9th Cir. 2000); Circuit City
Stores, Inc. v. CarMax, Inc., 165 F.3d 1047, 1056 (6th
Cir.1999); McDonald's Corp. v. Robertson, 147 F.3d
1301, 1310 (11th Cir.1998); Pappan Enters., Inc. v.
Hardee's Food Sys., Inc., 143 F.3d 800, 805 (3d
Cir.1998); Societe Des Produits Nestle, S.A. v. Casa
Helvetia, Inc., 982 F.2d 633, 640 (1st Cir.1992); Black
Hills Jewelry Mfg. Co. v. Gold Rush, Inc., 633 F.2d
26
746, 753 n. 7 (8th Cir.1980). Although the 5th Circuit
has not expressly adopted the holding it has done so
implicitly in S. Monorail Co. v. Robbins & Myers, Inc.,
666 F.2d 185, 188 (5th Cir. Unit B 1982) and districts
throughout the Fifth Circuit recognize that a finding
of likelihood of confusion is a finding of irreparable
harm/injury. Quantum Fitness Corp. v. Quantum Lifestyle
Ctrs., L.L.C., 83 F. Supp. 2d 810, 831 (S.D.Tex.1999).
In short, Appellee’s argument as to the charge fails at
every level and because of the unique nature of an
infringement case, the likelihood of confusion finding
establishes irreparable harm.
In addition, the argument is disingenuous given the
fact that the Appellee knew that the case would be
tried in a bifurcated manner, with the entire
injunction issue left to the Court. The Appellee even
filed and had granted, a motion for continuance seeking
time to develop more evidence for the injunction phase
and in fact have took the Appellant’s deposition for a
third time in this case. The argument of a defective
jury charge has no merit.
27
Issue #3
Even if the Court Rejected the Appellee’s Motion ot
Set Aside Jury Verdict Did the District Court err in
Denying Appellant’s Request for Permanent Injunction
after the Full Hearing.
In light of the facts that the Appellant won a jury
verdict as to Tesoro Corporation being its trade name
and the Appellee’s use of that name creating the
likelihood of consumer confusion, was given a directed
verdict as to being the senior user, and presented in
evidence at trial and the permanent injunction hearing
of irreparable harm and no adequate remedy at law, the
Trial Court erred in denying injunctive relief.
To obtain a permanent injunction, a plaintiff must
prove (1) the existence of a wrongful act, (2) the
existence of imminent harm, (3) the existence of
irreparable injury, and (4) the absence of an adequate
remedy at law. Jim Rutherford Investments Inc. v.
Terramar Beach Community Ass'n., 25 S.W.3d 845, 849
(Tex. App.—Hous. [14 Dist.] 2000, pet. den’d). In the
present case the Plaintiff has established its common
law trade infringement claim and has therefore
28
established the existence of a wrongful act which in
addition to be wrongful, is on-going. Therefore, what
the Court must determine is the existence of the
remaining three elements.
A. Standard of Review:
In granting a permanent injunction the standard of
review is clear abuse of discretion. See 2300, Inc. v.
City of Arlington, 888 S.W.2d 123, 126 (Tex. App.--Fort
Worth 1994, no writ). A trial court’s ruling must be
based upon some reference guiding rules and principles.
See Downer v. Aquamarine Operators, Inc., 701 S.W.2d
238, 241-42 (Tex.1985), cert. denied, 476 U.S. 1159,
106 S. Ct. 2279, 90 L. Ed. 2d 721 (1986). An abuse of
discretion exists where the trial court lacks evidence
in the record which reasonably supports that trial
court's decision. Davis v. Huey, 571 S.W.2d 859, 862
(Tex.1978); Recon Exploration, Inc. v. Hodges, 798
S.W.2d 848, 852 (Tex.App.--Dallas 1990, no writ).
B. Imminent Harm:
In order to justify a permanent injunction the
underlying injury must be real and substantial Parkem
29
Indus. Servs., Inc. v. Garton 619 S.W. 2d 428, 430
(Tex. Civ. App.—Amarillo 1981, no writ). An injunction
will not issue to prevent merely speculative harm,
Camarena v. Texas Employment Comm’n, 754 S.W.2d 149,
151 (Tex. 1988). In this case the harm was and is both
real and on-going. The evidence adduced at trial shows
a clear confusion created by the Defendant’s use of
Texas Tesoro’s name. Appellant demonstrated actual
confusion [RR:IV:129-192; RR:IV:259-270] and based in
part on that evidence, the jury found likelihood of
confusion. Where likelihood of confusion exists in a
trademark or trade name case, the case law in Texas is
clear that the plaintiff's lack of control over the
nature and quality of the defendant's goods or services
constitutes an immediate (and in fact irreparable
injury), regardless of the actual quality of those
goods or services. See Joy Mfg. Co. v. CGM Valve &
Gauge Co., 730 F. Supp. 1387, 1394 (S.D.Tex.1989);
Chemlawn Servs. Corp. v. GNC Pumps, Inc., 690 F. Supp.
1560, 1569 (S.D.Tex.1988); Pro Hardware, Inc. v. Home
30
Ctrs of America, Inc., 607 F. Supp. 146,154
(S.D.Tex.1984).
As set out above, evidence of the imminence of the
harm to the Plaintiff was adduced in the testimony from
Richard Shell and from Paul Sullivan that showed based
on the actual confusion there was a real and on-going
damage to the Appellant’s business in Texas. In
addition, since the trial, additional events testified
to by Mr. Sullivan show that the Defendant’s actions
now had Appellant identified in the public forum as a
“Donna based” oil and gas company [RR:VIII:70-103,
RR:XIV: Exhibit 2, pp.11]. Appellant clearly had and
has no control over the actions and business practices
of Appellee and the Appellee’s perceived presence in
Texas completely overshadows the business enterprise of
Appellant even though the two companies are in
different businesses. Again, it bears repeating that
Plaintiff’s evidence of actual confusion was never
refuted by any Defense witness and proof of actual
confusion is probative evidence that likelihood of
confusion exists, Zapata Trading Corp v. Zapata
31
Trading, Int’l, Inc. 841 S.W.2d 45, 48 (Tex. App.—
Houston [14th Dist] 1992 no writ), a fact that did not
escape the jury.
C. Irreparable Injury and Adequate Remedy at Law:
Irreparable injury and adequate remedy at law
although distinct elements of a permanent injunction
often become intertwined because proof of an
irreparable injury in many cases is done by showing
that there is no adequate remedy at law. Appellee has
red to focus on the magnitude of harm and somehow
downplay the actual damage to Appellant. However,
federal courts have long recognized that it is not so
much the magnitude but the irreparability that counts
for purposes of an injunction and ....[A]n injury is
irreparable only if it cannot be undone through
monetary remedies .... The absence of an available
remedy by which the movant can later recover monetary
damages ... may ... be sufficient to show irreparable
injury. Enter. Int'l, Inc. v. Corporacion Estatal
Petrolera Ecuatoriana, 762 F.2d 464, 472–73 (5th
Cir.1985).
32
1. Irreparable Injury:
At least one district court in the Fifth Circuit
has held that in a trademark case, “[w]hen a likelihood
of confusion exists, the plaintiff's lack of control
over the quality of the defendant's goods or services
not only shows imminent harm, but constitutes an
irreparable injury, regardless of the actual quality of
those goods or services.” Quantum Fitness Corp. v.
Quantum Lifestyle Ctrs., L.L.C., 83 F. Supp. 2d 810, 831
(S.D.Tex.1999). The Fifth Circuit has neither expressly
adopted or a rejected the notion of a presumption of
irreparable injury where likelihood of confusion has
been shown to exist, S. Monorail Co. v. Robbins &
Myers, Inc., 666 F.2d 185, 188 (5th Cir. Unit B 1982).
But, as set out previously herein, several other
federal circuits have addressed this issue and
expressly held that a court may presume irreparable
injury upon finding a likelihood of confusion in a
trademark case. See Brennan's, Inc. v. Brennan's Rest.,
L.L.C., 360 F.3d 125, 129 (2d Cir.2004); Ty, Inc. v.
Jones Group, Inc., 237 F.3d 891, 902 (7th Cir.2001);
33
GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1209
(9th Cir. 2000); Circuit City Stores, Inc. v. CarMax,
Inc., 165 F.3d 1047, 1056 (6th Cir.1999); McDonald's
Corp. v. Robertson, 147 F.3d 1301, 1310 (11th
Cir.1998); Pappan Enters., Inc. v. Hardee's Food Sys.,
Inc., 143 F.3d 800, 805 (3d Cir.1998); Societe Des
Produits Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d
633, 640 (1st Cir.1992); Black Hills Jewelry Mfg. Co.
v. Gold Rush, Inc., 633 F.2d 746, 753 n. 7 (8th
Cir.1980).
Even absent a presumption based on likelihood of
confusion the courts have held that factually an injury
is also irreparable when compensatory damages are
extremely difficult to calculate. See Chemlawn Servs.,
690 F. Supp. at 1569; Pro Hardware, 607 F. Supp. at
154. Mr. Sullivan has provided more than adequate
evidence of irreparable harm/inadequate remedy at law
at this hearing and in the trial [RR:IV: 127-192; RR:
VIII: 70-103].
2. Adequate Remedy at Law:
34
The determination of whether an adequate remedy at
law exists is not a mechanical task. The mere existence
of a remedy at law is not a ground for a denial of
injunctive relief unless the legal remedy is as
practical and efficient to the ends of justice as the
equitable remedy, Jeter v. Associated Rack Corp., 607
S.W.2d 272, 278 (Civ. App.—Texarkana 1980, ref.
n.r.e.)]. Thus, while a plaintiff may have a right to
bring an action for damages, that remedy is inadequate
if damages cannot be calculated. Texas Soc. v. Ft. Bend
Chapter, 590 S.W.2d 156, 159 (Civ. App.—Texarkana 1980,
ref. n.r.e.).
As set out in the testimony of Paul Sullivan during
the permanent injunction portion of this proceeding, it
is impossible to calculate damages. The instances of
confusion are continuous and haphazard. The effects on
credit and goodwill are impossible to gauge may be
immediate, or may create long-term problems that do not
immediately manifest themselves. Since it is impossible
to know when the confusion will again surface, it is
equally impossible to prepare for the problems or to
35
take prospective action to mitigate harm. He simply
could not calculate the harm in a monetary sense
[RR:VIII:208-210.
Appellee’s sole effort to establish an adequate
remedy at law was the testimony of its expert, Gene
Trevino. Trevino’s entire testimony as to damages was
restricted to the cost of hiring someone to handle
telephone calls relating to the on-going confusion
generated by the Appellee’s wrongful usurpation of
Appellant’s name [RR:VIII:225-227]. However, Trevino
and the Appellee completely ignored all of the other
harm and the inability to calculate that harm, in great
part because Mr. Trevino’s client simply told him not
to look into that area of damage.
It as clear from Trevino’s trial testimony and his
deposition testimony that he only addressed “some of
the elements” of economic damages [RR:VIII:228]. When
pressed, Trevino admitted he was not even asked to try
and calculate economic damage. He claims there is no
economic loss, yet never did a calculation to make that
determination nor did he ever look at documents that
36
would have enabled him to even address the issue
[RR:VIII:229-232]. In his own words, “I didn’t do
anything.” [RR:VIII:232]. However, the lack of a
clearly discernable economic loss is the very essence
of irreparable harm that lacks a clear remedy at law.
Therefore, with no other evidence, other than Paul
Sullivan, Richard Schell, and the voluminous documents
provided as exhibits showing the inability to calculate
past economic harm, how can the Appellee even argue as
to either the extent of the harm or its irreparable
nature? It cannot.
When asked directly to confront the issue of future
harm, Trevino fell back on his telephone answering cost
analysis and then admitted, he was not asked to do a
calculation of future economic harm [RR:VIII:232-233].
Then after admitting he had no basis for any of his
numbers, he admitted he had no way of know the degree,
the frequency, or the intensity of any future confusion
and harm and that no one could ascertain that
[RR:VIII:234-236]. More important he was not asked,
and therefore did not perform, any calculation on loss
37
of good will, loss of reputation, loss of credit,
future attorney’s fees or any other factor. The only
quantifiable damage he calculated was phone calls,
because in the end he was not asked to do anything else
and so he did not [RR:VIII:236-239, 243-246]. The
problem is the Appellee should have done so because Mr.
Trevino was the only witness offered to refute the
Appellant’s case on irreparable harm and lack of
adequate remedy at law and by his own admission he
looked at only one narrow area.
D. The Record Shows a Complete Absence of any Guiding
Principles or Rules Upon Which the Court Relied in
Denying Injunctive Relief.
1. Requested Scope:
(i) State Wide Prohibition of Use:
The Appellant requested an injunction preventing
the Appellee from using the Plaintiff’s trade name
anywhere in the state of Texas [RR:IV:175-176;RR:XI:36-
36;CR:297-303]. The harm that has befallen the
Appellant has flowed directly from the Appellee’s
assumed name filing. In effect consumers and business
entities are searching the Texas Secretary of State
38
data basis and finding Tesoro Corporation listed as a
San Antonio based oil & gas company. To allow the
Appellee to continue to use the Appellant’s name
anywhere in Texas will only continue the confusion.
Having prevailed on its trade name infringement claim,
Appellant was entitled to deny the Appellee the use of
its trade name throughout the state. Even Appellee’s
alleged expert, Mr. Trevino admitted that a business
is entitled to do operate and solicit business state-
wide and that he in fact has his own business name and
can do business state-wide [RR:XI:26-30]. Both
Appellant’s request and Appellee’s admissions of state-
wide rights find support in Texas law.
(ii) Presumption of State-Wide Rights:
A certificate of registration issued by the
Secretary of State under the provisions of the Texas
Trademark Act is admissible in evidence as prima facie
proof of: 1) the validity of the registration; 2) the
registrant's ownership of the mark; and 3) the
registrant's exclusive right to use the mark through-
out the state of Texas in connection with the goods or
39
services specified in the certificate, subject to any
conditions or limitations stated therein. Tex. Bus. &
Comm. Code § 16.15(c) (1968). The Act specifically
provides that no registration of a trademark shall
adversely affect common law rights acquired in a
trademark prior to its registration. While a mark
remains effectively registered, no common law right may
be acquired against the owner unless he abandons such
mark. Tex. Bus. & Comm. Code s 16.27(a) (1968). Cano v.
Macarena, 606 S.W.2d 718, 722 (Tex. Civ. App. 1980). It
is undisputed that Mr. Sullivan had properly registered
the mark and that it was in place continuously since
1975 [RR:IV:43; RR: XII: Exhibits 24-25].
The registration of Tesoro Corporation created
certain protections as to its exclusive right to use
that name. The jury verdict in this case has confirmed
the principle established in Cano v. Macarena, 606
S.W.2d 718, 722 that Appellee acquired no rights in the
name Tesoro Corporation and in fact has violated the
Appellant’s rights. To give the Appellant less than
exclusive state-wide use is to reward Appellee’s
40
efforts by providing Appellant less than what the plain
reading of the law provides. In addition, the problem
is more complex because even if Appellee was restricted
to some small corner of one county in Texas, the fact
that it continues to be allowed to list “Tesoro
Corporation” as its assumed name lies at the center of
the confusion. Appellant receives calls from out-of-
state state regulator’s, taxing authorities, creditors,
consumers, and other persons [RR:IV:127-192;
RR:VIII:70-103], based on what is on file with the
Texas Secretary of State. Therefore, not only should
Appellee not be allowed to use the name in Texas, but
its assumed name registration should be withdrawn or
the harm to the Appellant continues unabated.
(iii) Actual Use and Business Transactions:
In addition to the nature of the harm occasioned by
the Appellee’s continued use of Tesoro Corporation,
evidence presented in this case demonstrates the state-
wide presence of the Appellant, including a significant
and long-established presence in Bexar County that
continues today that even Appellee’s expert had to
41
acknowledge [RR:XI:17-24]. Appellant is in every region
of the state including Bexar, Dallas, Harris, Tarrant
and El Paso counties. In addition to Texas’ major
cities, the counties virtually encircle every large
metropolitan area in the state. In West Texas where
Plaintiff presence is not as pronounced, he
nevertheless does business in every county with any
significant population center that would seek out and
utilize sign-based advertising. In addition, in those
areas of the state, the metropolitan areas are also the
places where business in the outlying counties would be
acquired. For example, the county seat of Tom Green
County is San Angelo and San Angelo is the closest city
where business is conducted for at least a 10-12 county
surrounding area.4
It is also important to note that the counties
where the Appellant actively does business are also the
areas where the Appellee and its business is very
likely to operate and create the same type of confusion
4
By way of illustration Plaintiff in west Texas where Plaintiff is not in every county it does business in Potter
County (Amarillo), Lubbock County (Lubbock), Taylor County (Abilene), Midland County (Midland), Ector
County (Odessa), El Paso County, (El Paso), and Val Verde County (Del Rio).
42
that has been testified to in this case. Tom Green,
Ector, Midland and the contiguous and near-by counties
are now at the very center of a re-vitalized Texas oil
and gas industry. Allowing the Appellee to use the
Appellant’s trade name anywhere in these areas invites
the same confusion and harm that gave rise to the
lawsuit.
(iv) All Speech Mediums:
The evidence adduced at trial and at the permanent
injunction hearing shows that beginning in 2009 when
Appellee began using Tesoro Corporation as its assumed
name, the confusion became disseminated through a
variety of mediums, all of which contribute to the
underlying problem and must be stopped. At issue here
is the ability of a Court to regulate speech and its
natural corollary, the printed word. However it is not
any speech, but commercial speech that the Plaintiff
seeks to enjoin.
Commercial speech in any form occupies one of the
lowest rungs on the First Amendment hierarchy, enjoying
only a "limited measure of protection, commensurate
43
with its subordinate position in the scale of First
Amendment values, and is subject to modes of regulation
that might be impermissible in the realm of
noncommercial expression." Bd. of Trustees v. Fox, 492
U.S. 469, 477, 109 S. Ct. 3028, 106 L. Ed. 2d 388 (1989)
(quoting Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447,
456, 98 S. Ct. 1912, 56 L. Ed. 2d 444 (1978)). Commercial
speech does "no more than propose a commercial
transaction" and may be freely regulated. Pittsburgh
Press Co. v. Pittsburgh Comm'n on Human Relations, 413
U.S. 376, 385, 93 S. Ct. 2553, 37 L. Ed. 2d 669 (1973).
In Central Hudson Gas & Electric Corp. v. Public
Service Commission of New York, 447 U.S. 557, 566, 100
S. Ct. 2343, 65 L. Ed. 2d 341 (1980), the Supreme Court
outlined its method of analyzing the lawfulness of
restrictions on commercial speech:
In commercial speech cases, then, a four-part
analysis has developed. At the outset, we must
determine whether the expression is protected
by the First Amendment. For commercial speech
to come within that provision, it at least must
concern lawful activity and not be misleading.
Next, we ask whether the asserted governmental
interest is substantial. If both inquiries yield
positive answers, we must determine whether the
44
regulation directly advances the governmental
interest asserted, and whether it is not more
extensive than is necessary to serve that interest.
Misleading commercial speech, is not protected by
the First Amendment. Thompson v. W. States Med.
Ctr., 535 U.S. 357, 367, 122 S. Ct. 1497, 152
L. Ed. 2d 563 (2002).
As the Central Hudson Court noted, "there can be no
constitutional objection to the suppression of
commercial messages that do not accurately inform the
public about lawful activity. The government may ban
forms of [235 S.W.3d 670] communication more likely to
deceive the public than to inform it...." Central
Hudson, 447 U.S. at 563, 100 S. Ct. 2343 (emphasis
added). Thus, "the government may freely regulate
commercial speech that ... is misleading," Florida Bar
v. Went For It, 515 U.S. 618, 623-24, 115 S. Ct. 2371,
132 L. Ed. 2d 541 (1995) (citations omitted), and the
remaining Central Hudson factors apply only if the
speech is not misleading.
In this case it has already been established that
the speech Appellant seeks to enjoin is the improper
and impermissible use of Appellant’s own trade name.
45
The use by Appellee of that trade name has been found
by a jury to mislead and confuse the public and has
caused harm to the Appellant. The assertion that a
Texas court cannot enjoin the Appellee from using the
Appellant’s trade name is without legal or factual
foundation.
(v) Publicly Traded Stock Designation:
Appellee trades its publicly issued and held stock
on the New York Stock Exchange and its symbol, “TSO,”
is identified as “Tesoro Corporation and was founded in
1939 and is headquartered in San Antonio, Texas. While
the Appellee has the right to use the name as a
“Delaware Corporation” it use as being headquartered in
“San Antonio, Texas coupled with its assumed name
filing contributes to the confusion. Appellant
requested that as part of the permanent injunction that
Appellee be prohibited from referencing “Tesoro
Corporation” as a San Antonio, Texas Company.
(vi) Use of Appellant’s Trade Name on the Internet:
The Appellant is well aware of the maxim that
“equity will not do a vain thing.” The idea that this
46
Court or any regulatory body can take back or remove
four years of material that the Appellee has improperly
placed on the internet is absurd. However, A court can
prospectively prevent the Appellee, its agents,
employees, and personnel from using Appellant’s trade
name in the future. The starting point for this relief
is the Appellee’s web-site. The web-site is easily
accessed by simply typing in the Appellant’s trade
name, “Tesoro Corporation.” In addition the web-site
can be accessed by typing in “Tesoro Corp.” Appellee
has so completely co-opted the Appellant’s trade name
that when Tesoro Corporation is entered on the web,
Plaintiff’s business never appears. In order to reach
Tesoro Corporation one must enter “Tesoro Corporation,
Donna, Texas” [RR: VIII: 80-92]. Appellee’s
misapplication and misappropriation of Appellant’s
trade name has not only served as an improper use of
the name, but has allowed Defendant to virtually co-opt
the Appellant’s name.
An examination of the Appellee’s web-site not only
reveals that it purports to be Tesoro Corporation of
47
Texas, but Appellee also uses the site to disseminate
other material such as press releases, news
conferences, copies of its annual reports and social
responsibility reports to name just some of what is
published on the site, all of which use Appellant’s
trade name and perpetuate the confusion and harm that
already exists [RR: XII: Defendant’s Exhibit 7; RR:
XIV, Exhibit 3]. In Rescuecom Corp. v. Google, Inc.
562 F.3d 123 (2d Cir. 2009), the Court found that even
persons and entities several steps removed from the
actual infringer could be compelled to stop using a
trade name. In Rescuecom Corp. v. Google, Inc. the
federal court found that Google was infringing on a
mark through “keyword use” and that such a practice
qualified as “use” in commerce under the Lanham Act.
The keyword in this instance is “Tesoro Corporation,”
and as set out herein above and testified to in this
hearing, Defendant has completely co-opted that term on
the internet. Plaintiff does not even appear when it
inputs its own trade name.
48
2. In Light of the Appellant’s Evidence and the
Virtual Absence of Appellee’s Evidence to the Contrary
the Court Denied Appellant’s Injunctive Relief without
Any Basis in Guiding Principles or Rules:
An abuse of discretion exists where a Court lacks
evidence in the record which reasonably supports that
trial court's decision. Davis v. Huey, 571 S.W.2d 859,
862 (Tex.1978); Recon Exploration, Inc. v. Hodges, 798
S.W.2d 848, 852 (Tex. App.--Dallas 1990, no writ). The
test for abuse of discretion is whether the court acted
without reference to any guiding rules and it is a
question of whether the court acted without reference
to any guiding rules and principles. Craddock v.
Sunshine Bus Lines, 134 Tex. 388, 133 S.W.2d 124, 126
(Tex.Comm.App.--1939, opinion adopted). Another way of
stating the test is whether the act was arbitrary or
unreasonable. Smithson v. Cessna Aircraft Co., 665
S.W.2d 439, 443 (Tex.1984); Landry v. Travelers
Insurance Co., 458 S.W.2d 649, 651 (Tex.1970). As set
out herein above, all of the evidenced adduced at trial
supports the following:
-The Appellee knowingly usurped Appellant’s trade name;
49
-The Appellee’s usurpation of the Appellant’s trade
name caused clear, actual confusion which creates an
almost irrebuttable presumption of likelihood of
consumer confusion;
-The Appellee made no effort to rebut the presumption;
-The Appellant presented abundant evidence of actual
harm for which no adequate remedy at law existed
-The only evidence of any quantification of damage, ie
of an adequate remedy at law, was the very limited
testimony of Gene Trevino that he admits covered only
his assertion of the cost of answering phones. He
admits to not looking at any other element of harm or
damage.
On what basis and upon what evidence did the Court
deny injunctive relief? The Court’s order is
completely silent on any basis for the judgment,
including whether the Court actually reached the issue
of injunctive relief at all. That factor alone should
be fatal to the Court’s denial of Appellant’s Request
for Permanent Injunction.
50
Issue#4
The District Court erred in denying Appellant’s
Injunctive Relief based on Failure to Balance the
Equities and/or Unclean Hands.
In addition to the factors required for trademark
and/or name infringement and the four elements of a
permanent injunction in Texas, the Texas courts have
articulated several sub-factors that must be
considered. Because the Trial Court’s judgment in this
case is virtually silent as to the underlying basis of
the decision, the Appellant must address these factors
as well because they were raised by Appellee during the
course of the trial.
A. Balancing the Equities:
There is a line of cases that suggests that a trial
court must balance the equities before issuing an
injunction and consider injury to (1) the defendant and
the public were the injunction granted and (2) the
complainant were the injunction denied. See Storey v.
Cent. Hide & Rendering Co., 148 Tex. 509 226 S.W.2d
615, 618-19 (1950). An injunction will ordinarily be
51
denied if the "injury to the complainant is slight in
comparison to the injury caused the defendant and the
public." Id. at 619. Conversely, an injunction may
issue if the injury to the defendant and the public is
slight when compared to injury suffered by the
complainant. See id. "Public convenience or necessity,
economic burden to the defendant, and the adequacy of a
legal remedy may affect this balance." McAfee MX v.
Foster, No. 02-07-080-CV, 2008 WL 344575, at *2, 2008
Tex.App. LEXIS 968, at *8 (Tex.App.-Fort Worth Feb. 7,
2008, pet. denied), petition for cert. filed, No. 08-
639 (U.S. Nov. 12, 2008).
However, the case cited most frequently in Texas is
Storey v. Central Hide & Rendering Co.,148 Tex. 509,
226 S.W.2d 615 and that case is a nuisance case.
Strictly speaking the doctrine of balancing the
equities does not even apply to a non-nuisance setting.
If this Trial Court applied the doctrine Appellant
would point out that the public suffers no injury
whatsoever by forcing Appellee to cease using the
Appellant’s trade name. Based on the nature of the
52
confusion demonstrated in this case, by clearly
delineating itself as Tesoro Petroleum, the confusion
caused to the public or the government seeking to reach
Appellee would virtually cease. The two “Tesoros”
would again be distinct as they were prior to 2004. The
evidence adduced at trial makes it clear that the
steady confusion Appellant suffers from did not begin
until after Tesoro Petroleum began using the
Appellant’s trade name.
The larger problem with this Trial Court having
applied an equity balancing test to deny the
Appellant’s injunctive relief is that the Appellee
presented no concrete evidence of harm that would have
been occasioned by a name change. In other words, it
gave the Court nothing to “balance.” Aside from some
conjecture from Appellee’s witness, Kelly Curll, at the
end of the Permanent Injunction hearing suggesting that
changing the name back to Tesoro Petroleum would result
in the demise of Tesoro Petroleum as a San Antonio
based company and with it the jobs, tax base and
possibly other unforeseen consequences [RR: IX: 62-75],
53
Appellee offered no equity to balance. It presented no
evidence of any real harm or cost to change the name.
Even Ms. Curll had no idea when asked what would really
happen if the Appellee had to change its name. When
asked if she could articulate the harm to Appellee, she
simply said “no.” [RR: IX: 68]. The one witness that
could have provided insight into the question,
Elizabeth Ising, offered nothing. Ms. Ising was a
Washington D.C. based attorney who handles matters of
corporate governance and Security Exchange Commission
issues for her clients. Since 2007 she has performed
those functions for Appellee [RR: IX: 6-8]. Over the
course of her direct testimony Ms. Ising testified as
to the requirements of a name change and what would
have to be done in order for Appellee to relinquish the
use of Appellant’s trade name in Texas. She indicated
three areas where Appellee would be affected, but
offered no testimony as to cost of such a name change
[RR: IX: 9-31]. On cross-examination Ms. Ising was
asked directly, what would she charge to change
Appellee’s name and she testified she “had no idea” and
54
could not quantify any financial harm to Appellee that
would be occasioned by a name change [RR: IX: 40, 42].
Any harm to the Appellee should have been totally
discounted because the uncontroverted evidence adduced
at trial indicates that Appellee knew the name it
wanted to use had been taken and that after being
refused the right to use the name, Appellee chose to
move ahead anyway with full knowledge that it might be
successfully sued for common law trademark/name
infringement. Both Mr. Parrish and Ms. Ryan testified
Appellee made the change because it suited it’s
business interest to do so. Ms. Ryan even testified
that the issue of Plaintiff’s ownership of “Tesoro
Corporation” was actually raised and that no one at
Appellee was concerned even though the very real
possibility existed that the Appellee could be sued for
trade name infringement. Therefore, any harm to the
Appellee is self-induced and the product of extreme
corporate arrogance.
55
B. Overly Broad:
Because this case will involved denying Appellee
access or use over a geographic area, Appellant
anticipated the Appellee raising the notion that the
injunction on a state-wide basis was “overly broad.”
Appellee put on testimony and cross-examined Paul
Sullivan on the issue as to where Appellant did
business. However, Appellee’s attack on where Appellant
did business was misplaced in the context of an
injunction because “overly broad” does not refer to the
geographical reach of an injunction, but rather to
something completely unrelated.
An injunction should be broad enough to prevent a
repetition of the evil sought to be corrected. Hitt v.
Mabry, 687 S.W.2d 791, 795 (Tex. App.-San Antonio 1985,
no writ) (citing Lower Nueces River Water Supply Dist.
v. Live Oak County, 312 S.W.2d 696, 701 (Tex.Civ.App.-
San Antonio 1958, writ ref'd n.r.e.)) An injunction
must not be so broad, however, as to enjoin a defendant
from activities that are a lawful and proper exercise
of his rights. Id. Where a party's acts are divisible,
56
and some acts are permissible and some are not, an
injunction should not issue to restrain actions that
are legal or about which there is no asserted
complaint. Hellenic Inv. v. Kroger Co., 766 S.W.2d
861, 866 (Tex. App.-Houston [1st Dist.] 1989, no writ).
Thus, the entry of an injunction that enjoins lawful as
well as unlawful acts may constitute an abuse of
discretion. Webb v. Glenbrook Owners Association, Inc.,
98 S.W.3d 374, 384 (Tex. App.—Dallas, 2009).
In this case “legality” did not pose an issue to
the entry of an injunction. Appellant’s right to the
name “Tesoro Corporation” has been sustained by a jury
verdict and that right extends to the state-wide use of
the name. There is no valid argument that Appellee
cannot legally use the name Tesoro Corporation in
Hidalgo County, but may do so in Bexar County. An
injunction that prohibits the use of the Plaintiff’s
trade name on a state-wide basis is completely
consistent with Plaintiff’s rights as conveyed by Texas
statute and as evidenced by his registration with the
Texas Secretary of State.
57
It is also important to note that this case does
not involve the enforcement of a non-compete clause.
There is significant case law in Texas that limits the
geographical reach of a non-compete to a “reasonable”
geographic area and time span. Light v. Centel Cellular
Co, 883 S.W.2d 642 (Tex. 1994). Isunai v. Manske-
Sheffield Radiology Group, 805 S.W.2d 602 (Tex. App—
Beaumont, 1991); Gonzalez v. Zamora, 791 S.W.2d 258
(Tex. App.--Corpus Christi, 1990). That is not what is
at issue in this case. Appellant is not seeking to
prevent the Appellee from competing in the market place
in any county in Texas. Confusion among consumers is
the issue here and it has been established. Therefore,
in arriving at appropriate injunctive relief the Court
was not bound by the non-compete parameters established
in the employment field, but was free to award relief
consistent with the Appellant’s statutory right that a
jury had already determined was being infringed upon by
the Defendant.
58
C. Unclean Hands:
To the extent the Trial Court’s ruling reflects a
finding that Appellant lacked “unclean hands” that
ruling is completely in error. The Appellee argued that
Appellant’s corporate representative, Paul Sullivan,
used inappropriate language in deposition and put on
evidence to that effect. It is a timeless doctrine
that one who seeks equity must do equity and must come
to court with clean hands. See Dunnagan v. Watson, 204
S.W.3d 30, 41 (Tex. App.—Fort Worth 2006, pet. denied);
Flores v. Flores, 116 S.W.3d 870, 876 (Tex. App.—Corpus
Christi 2003, no pet.). Whether equitable relief should
be denied based on unclean hands is left to the
discretion of the trial court. Dunnagan, 204 S.W.3d at
41; Flores, 116 S.W.3d at 876. The only real
prohibition against applying the doctrine is the
requirement that it be confined to misconduct in regard
to, or at all events connected with, the matter in
litigation, so that it has in some measure affected the
equitable relations subsisting between the two
parties, and arising out of the transaction. Lazy M
59
Ranch, Ltd. v. TXI Operations, LP, 978 S.W.2d 678, 683
(Tex. App.-Austin 1998, pet. denied).
Based on a two-page brief that could not even tie
Appellant’s alleged conduct to any case authority, or
show how Appellant’s conduct in this case prejudice it
CR: 294-296], Appellee requested the Court to deny
Appellant’s injunctive relief based upon testimony
elicited form Mr. Sullivan as to alleged perjury that
his company had always been in good standing when in
fact it had lapsed once and he had to pay a $50 fee to
reinstate. In addition they alleged Mr. Sullivan had
violated an agreement to produce some documents during
the course of the litigation [RR:VIII:180-198].
Appellee also played excerpts from Mr. Sullivan’s three
depositions where he used in appropriate language.
However, the Appellee could not show any harm to it,
serious or otherwise, and the Court correctly stated
that the doctrine applies to events leading up to the
litigation [RR:VIII:198]. In addition, the lone case
cited by Appellee, Union Gas Corp. V. Gisler, 129 S.W.
3d 245 (Tex. App.-Corpus Christi, 2003), does not even
60
apply. In that case the interpleader had actually
caused the dispute giving rise to the need to
interplead the funds and the Court denied any equitable
relief to the interpleader. More importantly the Court
stated:
For a complainant to be entitled to relief in
equity, it is necessary that he bring himself
within the full meaning of the maxims that he who
seeks equity must do equity, and that he who comes
into equity must come with cleans hands. These
maxims comprehend not only the previous conduct of
the complainant toward the defendant, but also the
attitude of the complainant toward the defendant
throughout the litigation. The complainant must in
good conscience offer to do equity and to have the
court accord to the defendant all of his rights.
Union Gas Corp. V. Gisler, 129 S.W.3d 245, 153.
The Court in this case never sanctioned the Appellant
for any conduct, nor did the Appellee ever file any
pleading requesting any such relief. As sited to
above, not only were all of the Appellee’s rights
afforded it, but Appellee offered no evidence of any
kind as to how any of its rights were harmed or
affected, seriously or otherwise.
What makes this argument patently absurd is that
the Appellee’s conduct leading up to the litigation,
61
the arena where “unclean hands” traditionally and most
often applies, was wrought with fraud and a blatant
disregard of he Appellant’s rights. The Appellee’s own
conduct brought about the dispute, and it sought to
limit its damage by having the court reward it for its
conduct, conduct even the Court questioned as being
fraudulent [RR:XI:61].
Issue #5
Did the District Court err in vacating the Jury’s
Attorney Fee award.
The Court’s denial of Appellant’s attorney’s fees
ignores two salient facts. First, the Appellant
prevailed in the jury trial. Second, the parties
stipulated to the amount of attorney’s fees in this
case to be afforded the prevailing party. That
stipulation is memorialized in a Rule 11 Agreement on
the record in this case [RR: V:128-129].
The Plaintiff was awarded a jury verdict [RR: VI:
75]. The jury had answered yes to both questions, that
“Tesoro Corporation” was the Appellant’s trade name and
that Appellee’s conduct had created a likelihood of
62
consumer confusion. Coupled with the Court’s directed
verdict on the issue of senior user [RR:V:151] the
result of the jury trial was a complete victory for he
Appellant. Under the terms of the Rule 11 Agreement
[RR:V: 128-129] Appellant’s attorney’s fees should have
been sustained.
CONCLUSION
The Appellant requests that this Court reverse the
Trial Court’s judgment and render a verdict. The Court
should grant the Appellant a permanent injunction
consistent with the Trial Court’s directed verdict on
the issue of senior user prior to the start of the
trial, the unanimous jury verdict finding the remaining
two elements required for common law trade
infringement, and the evidence presented showing both
irreparable harm and inadequate remedy at law. The
Defendant’s Motion to Set Aside Jury Verdict was
without merit. The jury instruction and charge did not
require a question as to irreparable harm because the
Appellant’s claim for common law trade name
infringement necessarily related to its request for
63
declaratory relief that was based on that sole claim.
There was no confusion created by the jury charge nor
did that charge omit any essential element of the
Appellant’s trade name infringement claim.
The requested scope of injunction was both
appropriate and within the scope of what the Trial
Court could provide. It placed the Appellant and
Appellee in the exact position they were in prior to
2004 when the Appellee knowingly and intentionally
usurped the Appellant’s trade name. To the extent that
the doctrine of balancing the equities has any
applicability to this case the Appellee put on no
evidence of any substance that demonstrated any
monetary harm to it as the result of having to change
its name back to Tesoro Petroleum. To the extent the
equities must be weighed, they all come down in favor
of the Appellant. The Appellee’s alleged hardship in
having to change its name is the direct result of its
own actions, taken with full knowledge that Appellant
owned the name Tesoro Corporation and that if it tried
to use that name in Texas it could be successfully sued
64
for common law trade name infringement. That same
arrogance brought Appellee, not Appellant, into Court
with unclean hands. Appellee’s two-page brief and
alleged evidence of discovery impropriety did not
deprive Appellee of one single vested right nor did it
occasion any harm. Throughout the four-year life of
the case Appellee never once moved for any relief in
the form of sanctions or otherwise against Appellant
for any reason. Finally, having prevailed upon both a
directed verdict and a jury verdict, the Appellant’s
entitlement to $100,000 in attorney’s fees should be
restored.
PRAYER
Appellant prays that this Court reverse the Trial
Court’s ruling and render a judgment in favor of
Appellant for the declaratory relief as set out herein
above and in the Trial Record and restore its
attorney’s fees award.
65
Respectfully Submitted,
/S/ Mark A. Weitz________
Reynaldo Ortiz
SB#15324275
Ortiz & Millin LP
1305 E. Nolana, Suite F
McAllen, Texas 78504
956-687-4567
965-631-1384 facsimile
Mark A. Weitz
SB# 21116500
Weitz Morgan PLLC
100 Congress Avenue
Suite 2000
Austin, Texas 78701
512-394-8950
512-852-4446 (facsimile)
ATTORNEYS FOR APPELLANT
TESORO CORPORATION
CERTIFICATE OF SERVICE
The undersigned does hereby certify that on the
30th day of January, 2015, I caused to be served a true
and correct copy of the foregoing Appellant’s Brief on
Defendant Tesoro Corporation d/b/a Tesoro Petroleum
Corporation by serving its attorney of Record, Frank
Weahtered by electronic service and/or facsimile
transmission and/or by United States First Class Mail,
Return Receipt Requested.
/S/ Mark A. Weitz________
Mark A. Weitz
66
APPELLANT’S CERTIFICATE OF BRIEF
I, Mark A. Weitz, certify that Appellant’s Brief
filed in this case is in 14 point font, and the
footnote text is in 12 point font.
I further certify that this brief was prepared with
Microsoft Word 2011 for Mac, and that, according to
that program’s word-count function, the sections
covered by TRAP 9.4(i)(1) that the number of words in
this brief including footnotes (excluding any caption,
identity of parties and counsel, statement regarding
oral argument, table of contents, index of authorities,
statement of the case, statement of issues presented,
statement of jurisdiction, statement of procedural
history, signature, proof of service, certification,
certificate of compliance, and appendix) is 11,285.
Respectfully Submitted,
/S/ Mark A. Weitz________
Mark A. Weitz
67
APPENDIX
1
Electronically Filed
7/2/2014 8:31:37 AM
Hidalgo County District Clerks
Reviewed By: Virginia Granados
Appendix 1
Electronically Filed
7/2/2014 8:31:37 AM
Hidalgo County District Clerks
Reviewed By: Virginia Granados
xxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
each party shall bear their own attorneys' fees.
Electronically Filed
7/2/2014 8:31:37 AM
Hidalgo County District Clerks
Reviewed By: Virginia Granados
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
7/2/2014
xxxxxxxxxxxxxxxxx
CC:
Hon. Reynaldo Ortiz, Esq -EMAIL rey@leydeortiz.com; gh@leydeortiz.com
Hon. Gerald Drought, ESq.-EMAIL gdrought@mdtlaw.com
Hon. Sarah Cowen, Esq. E-MAIL sarah@cowengarza.com
APPENDIX
2
Appendix 2
APPENDIX
3
150
15:43:01 1 MR. DROUGHT: No, Your Honor.
15:43:02 2 THE COURT: Okay. In reference to the
15:43:03 3 motion for directed verdict, the -- I got a bit
15:43:19 4 sidetracked between what the -- the Plaintiff's Motion
15:43:25 5 For Directed Verdict was insofar as the Court's Charge.
15:43:31 6 Tell me again which issues you're asking for a directed
15:43:34 7 verdict on?
15:43:35 8 MR. ORTIZ: We were asking for a directed
15:43:37 9 verdict on -- on the issue of -- to grant the senior --
15:43:41 10 that senior -- that Mr. -- that Tesoro Corporation is
15:43:45 11 the senior user of that name in Texas.
15:43:48 12 Tesoro Corporation. Plaintiff is the senior user of
15:43:52 13 Tesoro Corporation in Texas.
15:43:53 14 THE COURT: Okay.
15:44:04 15 MR. DROUGHT: Your Honor, I think the Zapata
15:44:05 16 case sinks the ship for the Plaintiff. I'm sorry, but I
15:44:08 17 don't know any other clearer way to say it. Zapata is
15:44:12 18 Zapata, Tesoro is Tesoro.
15:44:14 19 THE COURT: Tesoro's not a geographic name.
15:44:18 20 Zapata, that's what they relied on, the geographic
15:44:21 21 perspective. And that's distinguishable from the
15:44:22 22 Thompson case that use surnames. And when you start
15:44:25 23 looking at the detailed information about what the
15:44:29 24 protected name is in a trademark case, there's major
15:44:29 25 distinction between surnames, geographic, generic names.
Appendix 3
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15:44:34 1 I've read quite a few cases before this afternoon,
15:44:38 2 counsel, and I'm not getting any new information than
15:44:41 3 what I was led to believe and I wanted to give an
15:44:44 4 opportunity to be enlightened. I always welcome
15:44:48 5 enlightenment, but, with all due respect, I'll agree to
15:44:51 6 disagree with you, Mr. Drought, on the Zapata case
15:44:55 7 because of the -- the language used within it.
15:44:59 8 In reference to that Motion For Directed
15:45:01 9 Verdict, the court is going to grant Plaintiff's
15:45:04 10 directed verdict that the Plaintiff is the senior user
15:45:08 11 of the name Tesoro Corporation.
15:45:16 12 MR. DROUGHT: And our -- our objection is
15:45:17 13 noted obviously?
15:45:19 14 THE COURT: Absolutely.
15:45:21 15 Was there any other directed verdict?
15:45:23 16 MR. ORTIZ: No, Your Honor.
15:45:25 17 THE COURT: Okay. While we were off the
15:45:32 18 record and in reviewing the proposed charges again, it
15:45:38 19 came to my head that it would be wise to suggest to both
15:45:45 20 sides to modify your stipulation breaking it down even
15:45:52 21 further as to the different levels; trial, Court of
15:45:57 22 Appeals and Supreme Court. Did anyone want to heed that
15:46:01 23 advice? And if you don't, that's fine.
15:46:04 24 MR. ORTIZ: We did, Your Honor. We
15:46:05 25 conferred many times but we were unable to reach an