In Escamilla v. M2 Technology, the individual owner of a business sued to enforce the “M2” trademark owned by his business. No. 12-41183 (July 16, 2013, unpublished). The Fifth Circuit affirmed the dismissal of the claim for failure to join a necessary party, as the individual did not join his company as a party plaintiff, thus exposing the defendant to potential repetitive future litigation. (This decision appears to have been rooted in avoiding the cost of having counsel appear for the company.) The Court rejected the individual’s argument that a future suit would be barred by claim preclusion, noting the clear separation in Delaware corporate law between a business entity and its shareholders.
The Fifth Circuit affirmed a preliminary injunction about pharmaceutical development in Daniels Health Sciences v. Vascular Health Sciences. No. 12-20599 (March 5, 2013). The opinion offers a practical road map for basic issues in trade secret litigation. As to likelihood of success on the merits, the Court found adequate findings about damage, specific confidential information, a trade secret arising from a “compilation,” and a confidential relationship between the parties. As to irreparable injury, the Court found sufficient findings about reputational injury that was not speculative. While it found no abuse of discretion in the district court’s weighing of public and private interest factors, it did see a “close question” about the overall scope of the injunction in light of the conduct at issue and the defendant’s business plans and suggested that the district court “try to narrow the scope of its injunction on remand.”
Paddle Tramps Manufacturing made wooden paddles with the emblems of several fraternities, a group of 32 fraternities sued to enjoin it for trademark infringement and unfair competition, and the company defended with unclean hands and laches. Abraham v. Alpha Chi Omega, No. 12-10525 (revised Feb. 7, 2013). The district court entered partial injunctive relief after a jury trial found for the company on the defenses. The Fifth Circuit affirmed the instructions given, finding that the appellant’s arguments about unclean hands conflated elements of trademark liability with elements of the defense and that the laches instruction fairly handled the concept of “progressive encroachment.” The Court also found sufficient evidence to support the “undue prejudice” element of laches, although calling it a “close question,” and found that the district court properly balanced the equities — especially injury to the alleged infringer — in crafting the injunction. The opinion discusses and distinguishes other cases denying relief in related situations. Professor Rebecca Tushnet further analyzes the case on her intellectual property blog.
In Gibson v. Texas Department of Insurance, a state regulator sought to prohibit an attorney from using the domain: “texasworkerscomplaw.com.” No. 11-11136 (Oct. 30, 2012). Even assuming the domain name was only commercial speech, the Fifth Circuit reasoned that Texas failed to show that the name was inherently deceptive, and also “made no serious attempt to justify” its regulation as an effort to “prevent misuse of the DWC’s names and symbols.” Id. at 9-10. The Court thus reversed and remanded for consideration of the “misuse” issue and to allow Gibson to show that the domain was “ordinary, communicative speech, and not merely . . . commercial speech.” Its analysis reviewed several cases about trademark issues in the domain name context. Id. at 8 & n.1.