Hot-Hed, Inc. v. Safehouse Habitats (Scotland), Ltd.
333 S.W.3d 719
| Tex. App. | 2011Background
- Hot-Hed, Inc. and Cinaruco International, S.A. sued Safehouse for trademark infringement based on use of Habitat; Safehouse counterclaimed under the UDJA for a declaratory judgment that Habitat is not eligible for trademark protection and sought cancellation of Hot-Hed's Texas registration.
- Hot-Hed's long-standing use of Habitat and its prior federal registration were challenged by Safehouse, which presented evidence Habitat was used generically for welding enclosures since the 1960s.
- Hot-Hed obtained Texas registration for Habitat in 2006; Safehouse sought cancellation under Texas Business and Commerce Code and UDJA relief.
- The trial court ruled Habitat not eligible for protection and awarded Safehouse $1,255,000 in attorney’s fees, plus post-judgment interest; it also retained the possibility of future fees and costs.
- Hot-Hed challenged the UDJA relief, jury findings, and specific declarations; Safehouse cross-appealed seeking cancellation of Hot-Hed’s Texas registration and related relief; the appellate court modified the judgment and affirmed as modified.
- The appellate court ultimately affirmed the declaratory judgment that Habitat is not eligible as a trademark for welding enclosures and ordered cancellation of Hot-Hed’s Texas registration with post-judgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the UDJA declaratory judgment was proper | Hot-Hed contamination: Safehouse misused UDJA; need jury findings | Safehouse properly sought affirmative relief on eligibility and rights | Declaratory judgment proper as affirmative relief |
| Sufficiency of jury findings to support the declaration | Presumption of validity shifts burden; jury found not eligible | Presumption extinguished; Safehouse showed generic use by others | Evidence supports the jury’s not-eligible finding; declaration upheld with scope modified |
| Whether Safehouse was entitled to cancel Hot-Hed’s Texas registration | Registration still valid; not yet cancelled | Habitat became incapable of serving as a mark | Texas registration cancelled for Habitat under §16.16(a)(4)(E) |
| Post-judgment attorney’s fees and related costs | Fees are proper under UDJA; Hot-Hed contested amount | Fees reasonable and necessary; trial court did not err | Attorney’s fees affirmed; post-judgment interest awarded; fees against Hot-Hed and Cinaruco jointly and severally |
| Whether the court should have submitted a special issue on statutory infringement | Such issue should guide jury on statutory element | Evidence or pleadings did not require it; threshold issue resolved | Trial court did not abuse discretion; judgment remains based on threshold finding of non-eligibility |
Key Cases Cited
- All Am. Builders, Inc. v. All Am. Siding of Dallas, Inc., 991 S.W.2d 484 (Tex.App.-Fort Worth 1999) (presumption from registration; burden shifts for rebuttal)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (evidence review standards for legal and factual sufficiency)
- Union Nat'l Bank, Laredo v. Union Nat'l Bank, Austin, 909 F.2d 839 (5th Cir. 1990) (category-based protection analysis; generic vs descriptive vs suggestive vs arbitrary)
- Prestige Ford Gar land Ltd. P'ship v. US Bank, N.A., 170 S.W.3d 272 (Tex.App.-Dallas 2005) ( UDJA context; declaratory relief considerations)