778 F. Supp. 2d 726
N.D. Tex.2011Background
- Cottonwood and CSFS are party to a cross-border trademark dispute in the payday-lending sector over the Cash Store marks.
- Cottonwood uses the CASH STORE marks for consumer lending; CSFS uses The Cash Store marks in Canada, Australia, and the UK.
- CSFS expanded capital markets activity in the U.S. (NYSE listing, investor conferences) and engages in U.S. investment solicitation.
- Cottonwood asserts trademark infringement, unfair competition under the Lanham Act, and dilution under Texas law.
- The court grants Cottonwood limited relief on Texas dilution, dismisses Lanham Act claims, and finds subject matter jurisdiction while retaining jurisdiction over state-law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has subject matter jurisdiction over Cottonwood’s claims | Cottonwood seeks relief under Lanham Act and Texas law; extraterritorial reach possible via U.S. commerce | Sterling Drug/American-Rice line of cases limits extraterrality; CSFS argues no U.S. goods/services here | Court retains jurisdiction; extraterritorial application permissible under applicable doctrine |
| Whether Cottonwood states a dilution claim under Texas law | CSFS’s investment solicitation and use of Cash Store marks dilute Cottonwood | Texas dilution requires a protected mark and likelihood of dilution; CSFS argues no actionable use in Texas | Cottonwood states a dilution claim under Texas law |
| Whether Cottonwood states a Lanham Act claim | CSFS uses Cash Store marks in commerce related to investments; likely to cause confusion | Investment solicitation and listings do not constitute use of marks in commerce for goods/services; foreign operations outside U.S. | Lanham Act claims not stated; Court dismisses federal claims |
| Whether Cottonwood is entitled to preliminary injunctive relief on its dilution claim | Likely dilution and irreparable harm justify injunction | Relief should be narrow; risk of harm to CSFS; extraterritorial issues | Grant in part: limited injunctive relief requiring CSFS to avoid using Cash Store/The Cash Store in U.S. filings and solicitations, with disclaimers and narrowly tailored caveats |
| What is the scope of the Court’s remedy and its effect on public interest | Broad protection needed to prevent dilution | Discretion to tailor remedy via disclaimers and scope | Remedy tailored to balance harms; limited disclaimer and use provisions, preserving public interest |
Key Cases Cited
- Sterling Drug, Inc. v. Bayer AG, 14 F.3d 733 (2d Cir.1994) (extraterritorial Lanham Act considerations in cross-border disputes)
- American Rice, Inc. v. Producers Rice Mill, Inc., 701 F.2d 408 (5th Cir.1983) (the reach of Lanham Act to foreign commerce factors; foreign-commerce power arguments)
- American Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321 (5th Cir.2008) (FTDA/TDRA dilution considerations and extraterritorial reach)
- Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir.1999) (dilution analysis factors under NY law; influence on TDRA interpretation)
- Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373 (2d Cir.2005) (confusion factors informing dilution analysis post-TDRA)