Premier Pools Management Corp. and Shan Pools, Inc. D/B/A Premier Pools and Spas v. Premier Pools, Inc.
05-14-01388-CV
| Tex. App. | Aug 12, 2016Background
- Premier Pools, Inc. (Dodds) is a Texas pool-construction business using the trade name "Premier Pools" in North Texas since 1989; it built ~1,400 pools over 22 years before the dispute.
- In 2010 Paul Porter formed Premier Pools Management Corp. (PPMC) to license the name "Premier Pools and Spas." In 2011 Shan Pools, Inc. (doing business as Premier Pools and Spas) operated under a PPMC license in parts of North Texas.
- Confusion arose when customers, vendors, and officials contacted Shan Pools believing it was the Dodds' Premier Pools; Premier Pools alleged lost sales, reputational harm, and instances of actual confusion.
- Premier Pools sued PPMC and Shan Pools for common-law trademark infringement, dilution, and unfair competition; a jury found for Premier Pools on liability, secondary meaning, irreparable harm, lost profits ($287,976), and disgorgement ($167,030).
- The trial court entered injunctive and declaratory relief, and awarded attorney’s fees under the Uniform Declaratory Judgments Act; defendants appealed.
- The court of appeals affirmed liability, damages, disgorgement, and injunctive relief but reversed the declaratory-judgment and attorney’s-fees award (holding the declaratory claim added nothing and could not support fees) and rendered that Premier Pools take nothing on its attorney’s-fee claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "Premier Pools" (not inherently distinctive) acquired secondary meaning in the trade area | The Dodds relied on long use, yard signs, referrals, sales volume, testimony of confusion, and intent-to-copy evidence to show consumer association with a single source | Defendants argued plaintiff failed to show the size/portion of the consuming public that associated the mark with plaintiff and attacked survey evidence | Court: Evidence (length/use, sales, yard signs, testimony of confusion, intent) was legally and factually sufficient to support secondary meaning in the relevant market; overruled challenge |
| Whether defendants’ conduct constituted trademark infringement, dilution, and unfair competition | Use of "Premier Pools and Spas" in same market caused confusion, dilution, and unfair competition; plaintiff is senior user entitled to protection in its market and natural expansion | Defendants argued lack of county-specific findings and that PPMC did not itself use the mark; Shan used a different name variant | Court: County lines irrelevant in this metro trade area; senior-user rule supports injunction; evidence sufficient for infringement, dilution (blurring/tarnishment), and unfair competition |
| Whether damages (lost profits and disgorgement) were supported | Lost profits based on identified lost sales and projection (expert relying on owner testimony); disgorgement of PPMC royalties to prevent unjust enrichment | Defendants argued lost-profits evidence speculative and disgorgement duplicative of lost profits | Court: Lost-profits proof was admissible and not speculative; disgorgement of royalties supported by records and not objected to at trial; both awards upheld |
| Whether attorney’s fees could be recovered under the Uniform Declaratory Judgments Act | Declaratory relief was requested and trial court awarded fees under the Act | Defendants argued the declaratory claim merely duplicated other claims and was used to obtain fees; fees not recoverable absent statute or contract | Court: Declaratory-judgment claim added nothing and could not support attorney’s fees; reversed and rendered that plaintiff take nothing on attorney’s fees |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency standard and review framework)
- Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828 (Tex. 2009) (more-than-a-scintilla standard for sufficiency)
- Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527 (5th Cir. 2015) (secondary-meaning requirement for non-distinctive marks)
- Zapata Corp. v. Zapata Trading Int’l, Inc., 841 S.W.2d 45 (Tex. App.—Houston [14th Dist.] 1992) (factors for establishing secondary meaning)
- Union Nat’l Bank of Tex. v. Union Nat’l Bank of Tex., 909 F.2d 839 (5th Cir. 1990) (senior-user rights and natural area of expansion)
- Scott Fetzer Co. v. House of Vacuums, Inc., 381 F.3d 477 (5th Cir. 2004) (dilution—blurring and tarnishment concepts)
- Tony Gullo Motors, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (attorney’s-fee recovery requires statutory or contractual authorization)