*1 preponderance to establish gold transporting Calhoun tried to
New Orleans obstruct gold. The
justice by hiding illegitimate
two-point enhancement obstruction
justice supported by the evidence.2
AFFIRMED.3 ARMS, INC., Plaintiff-Appellee, VAIS, Defendant-Appellant.
No. 03-50287. Appeals, States Court of
United
Fifth Circuit.
Aug. appellee’s supple- court's motion to file a letter 2. We need not address finding justice, argument argument other basis for obstruction of menting made at oral employment agreement the creation of a false is denied. computer, and destruction of a because the two are sufficient other bases justice obstruction of enhancement. *2 Wayne Joseph (argued), Colton San An- tonio, TX, for Plaintiff-Appellee. (ar- Cazier, Allen Francis David Snell Krause, gued), Bayne, Snell & San Anto- nio, TX, Defendant-Appellant. JOLLY, WIENER, Before PICKERING, Judges. Circuit WIENER, Judge: Circuit Defendant-Appellant George ap- peals from the court’s grant entry perma- injunction nent Plaintiff-Appel- favor of (1) lee Inc. on claims for unfair 43(a) competition under of the Lanham (2) Act, injury trademark dilution and reputation business under the Texas com- code, mercial infringement competition and unfair under Texas com- law, mon breach of a covenant not -(“non-compete agreement”) un- der the Texas commercial code. We af- firm.
I. FACTS AND PROCEEDINGS 15, 2000, From May 1996 until Defen- dant-Appellant George (“George”) manufactured and sold firearm muzzle through unincorporated pro- brakes1 his prietorship, During ‘Vais Arms.” time, George moved his business to various States, locations across the United includ- Houston, Texas; Boise, ing Idaho; Pres- cott, Arizona; Kerrville, finally, Texas. He primarily marketed muzzle brakes through telephone and mail order cata- logues, recognizing throughout sales States, foreign United as well as in some countries.
1. A perceived muzzle brake is a device attached to the recoil and barrel "bounce” that oc- (exit end) gun gun of a barrel to reduce curs when the is fired. tions for the first two weeks after early days operation During the business, the move. George developed a severe of his industrial chemi- to household and allergy C.If Ronald Bartlett dies before solvents, he used including those cals assets, of all all pay- transfer *3 in manufacture of his brakes. ments on the note will be refunded 1999, George’s condition wors- In summer to Ronald’s estate. and he decided to leave significantly, ened agrees 2. Ronald Bartlett to the follow- and return to his native
the United States ing: change in hope in the Greece If George pay- A. dies before all In improve would his health. environment note, ments are made on the Ronald departure, George asked preparing for payments on remaining will make (“Bartlett”), gunsmith at Ronald Bartlett the note to a trust fund for goods out- nearby sporting San Antonio children, This trust fund will be es- let, in he would be interested by George’s tablished estate. George’s muzzle brake busi- purchasing Finally, parties executed a non-com- continuing production ness states, agreement pete pertinent in ulti- muzzle brakes. Bartlett sale Vais part: mately agreed purchase George’s to busi- Non-Compete peri- Covenant. For a plaintiff corporation and formed the ness years od of 10 after the effective date Arms, that purpose. Inc.” for “Vais Agreement, George of this Vais Arms 30, 1999, George and On December directly indirectly engage will not Bill Bartlett executed a of Sale which any that competes business seller, Arms,” agreed to sell to ‘Vais Arms, Vais Inc. This covenant shall Arms, Inc.,” buyer, all of Vais “Vais apply geographical to the area that for a equipment, lump Arms’s assets and all includes U.S. states countries $40,000. payment of The Bill of Sale sum which are included the current cus- the transfer would take specified tomer bases. May 2000. It also referenced place immediately began op- Inc. Vais listing an attached exhibit the assets and May approxi- erations on 2000. For sold. The total cost of equipment thereafter, mately two weeks $39,848.97, roughly was the items listed alongside in Bartlett’s worked Bartlett purchase than the amount of the less $150 store, assisting production him in the price. Arms, Inc. the muzzle brakes. When Vais addition, In executed an At- fully operational, George went became Bill tachment to the of Sale which reads as home to Greece. follows: began marketing Vais Inc. soon agreed by George following The and, like its its muzzle brakes nationwide Vais and Ronald Bartlett Arms, quickly recog- predecessor, Vais following: agrees Vais throughout country. Ear- nized sales 2001, however, ly returned from patent A. name get To trade began manufacturing and mar- it in Greece and include keting muzzle brakes under sale of assets. help equipment
B. To move the receiving a series location and make sure ev- In March after the new prompted erything give inquiries works. To instruc- customer fact existed as whether of material advertising campaign, national mark in the VAIS George had abandoned registration of for federal applied Bartlett leaving Bartlett and selling his business in connection with the VAIS accessories, declined to country. court components “firearms George filed muzzle brakes.” namely of the non- claim for breach of this favor as As of the time opposition.
notice of however, choosing agreement, still application Bartlett’s appeal, abeyance pend- hold the motion in stead to pending. briefing further on the reasonableness ing Arms, Inc. filed September tempo- geographic and agreement’s alleging that in the district suit *4 Accordingly, the district ral limitations. infringed mark of the VAIS George’s use injunction pro- preliminary entered a court Arms, user of rights as senior Inc.’s Vais mark George’s use of the VAIS hibiting sales and mar- the mark and Arms, Inc.’s ruling on Vais but reserved the terms of efforts violated keting injunction enforcing the for an request Arms, Inc. non-compete agreement. Vais non-compete agreement. terms of the (1) competition unfair brought claims for (2) 43(a) Act,2 briefing further on the rea- Following § the Lanham under temporal geograph- of the injury sonableness to business trademark dilution non-compete agree- of the § Texas ic limitations 16.29 of the reputation under Code,3 ment, granted court Vais breach Business and Commerce Arms, summary judg- Inc.’s motion agreement under non-compete of the of the non- on its claim for breach Business and Com- ment § 15.50 of the Texas per- court also Code,4 infringe- compete agreement. The trademark merce competing manently enjoined George from under Texas competition and unfair ment Arms, Arms, manufacturing Inc. in the later, year A Vais with Vais common law. of firearm muzzle brakes summary judgment marketing Inc. filed a motion for May until in the United anywhere It filed a motion for States on all its claims. also judgment 2010. After was entered injunction prohibiting preliminary favor, Arms, Inc. filed motion using from mark con- its Vais George VAIS per- to make judgment alter or amend the the sale of muzzle brakes and nection with injunction pro- market- manent the court’s earlier manufacturing, selling, and from of the hibiting George’s in contravention use “VAIS” ing firearm muzzle brakes non-compete agreement. the district court could rule Before amend, however, that motion to alter or January the district court a motion to reconsider the in favor of filed granted Arms, Arms, summary judgment on grant claims for unfair Inc. on its claims. advanced injury dilution and Inc.’s trademark competition, trademark Inc. waived its abandon- reputation, and trademark that Vais to business it in its argument failing to assert fringement competition and unfair under (“the not had ade- complaint, he had Texas common law claims”). Inc.’s quate court its deci- time to The district based argument before the district genuine that no abandonment sion on a determination § (Ver- 15.50 1125(a)(Supp.2004). § 4. See Tex. Bus. 2. See 15 U.S.C.A. & Comm.Code Ann. Supp.2004). 2002 & non (Ver- Tex. Bus. & 16.29 3. See Ann. Comm.Code Supp.2004). 2002 & non summary judgment. contravention of the non-compete agree- ment. noted that the of abandon- raised for the first time Vais ment was II. ANALYSIS reply brief. The district court ground for recon-
rejected George’s first
A. Standard
Review
but allowed the
addition-
sideration
de novo a
review
supplemental
al
to submit
briefs and
time
summary judgment.5
on abandonment.
considering
supplemental
After
B. Trademark Abandonment
abandonment,
and evidence on
briefing
genuine
asserts that
is
determined that no
district court
sues of material fact exist as to whether he
as to whether
issue of material
existed
abandoned the
when he sold
mark. Accord-
George had abandoned the
his business to Bartlett and moved
back
ingly,
the court denied
motion
that,
argues
result,
Greece. He
aas
summary
prior grant
reconsider
district court
in holding
erred
that Vais
judgment on Vais
Inc.’s trademark Arms, Inc. was the senior holder of the
*5
The court
then
claims.
Vais
granting summary
mark and
judgment on
Arms,
motion to
or
Inc.’s
alter
amend
Arms, Inc.’s trademark
Spe
claims.
enjoined
judgment
permanently
cifically, George contends that
as a
using
mark in
George from
connection
law,
matter of
a person cannot abandon his
manufacturing, marketing,
with the
or sell-
surname,
assuming arguendo
even
ing of firearm muzzle brakes. The court
surname,
person
that a
can abandon his
stay
injunc-
motion to
denied
genuine issues of material fact exist as to
pending appeal.
tion
whether he intended to abandon the VAIS
George timely
appeal
filed
argue
notices
Because he did not
before
rulings
from
granting
person
the district court’s
the district court
that a
cannot
surname,
summary judgment, enjoining his use of
abandon
his
has waived
mark,
enjoining
his
argument
appeal.6
VAIS
activities
on
therefore
567,
Atlanta,
Stores,
City
(quoting
5. See Markos v.
364 F.3d
Food Fair
Inc. v. Lakeland
156,
(5th Cir.2004).
(4th
Grocery Corp.,
570
301 F.2d
160-61
Cir.
1962)). Once it is established that a surname
however,
acquired
meaning,
Inc.,
secondary
has
a
Spectrum,
6. See Ellison v.
85
Software
(5th
observe,
it "becomes a trade name or service mark
Cir.1996). We
191
subject
priority
however,
to the rule of
in order to
George preserved
that had
this issue
prevent
public,”
deception of the
and accord
appeal,
against
for
we would rule
him. A
ingly
susceptible
is
of abandonment. John R.
descriptive
surname is classified as a
word
Thompson
Holloway,
Constr., Inc.,
Co. v.
366 F.2d
113
Corp.
mark. See Perini
v. Perini
(5th Cir.1966)("a
right
such,
man has no absolute
(4th
1990).
915 F.2d
Cir.
As
name,
honestly,
to use his own
even
as the
rights
claims federal
in
"one who
business”).
name of his merchandise or his
prove
a
must
that the name has
[surname]
125;
Further,
secondary
acquired
meaning."
George's
a
Id. at
reliance on the Ninth Cir-
Voluntary
see also Chevron Chem. Co. v.
Pur
cuit’s decision in Abdul-Jabbar v. Gen. Motors
Inc.,
(5th
chasing Groups,
Corp.
proposition
659 F.2d
as
for his
that a
secondary meaning
person
Cir.
exists if
abandon his
“[A
cannot
surname is mis-
(9th Cir.1996),
present
placed.
a
in fact
substantial number of
See
abandonment matter, George that the The record establishes a threshold suasive. As permitted sup him to file a argument that district court appeal on reasserts on the issue of plemental Inc. waived memorandum court Vais any additional along it for by raising abandonment the issue of abandonment have Although in his favor. we mem reply first time identified all the cir comprehensively Inc.’s not opposition to Vais orandum a district court cumstances under which summary judgment. for motion may rely arguments pre on and evidence decision in Atlas cites the Sixth Circuit’s brief, reply sented for the first time Company Shops, v. Atlas Brake Supply 56(c) Inc., merely “Rule proposition that we have stated that F.2d 16 for the give the court to the non-movant requires “an affirmative defense abandonment respond prior adequate opportunity it is pleaded; must otherwise Further, ruling.”9 those circuits As the district court deemed waived.”7 however, addressed this issue noted, expressly Inc. does that have aptly may rely that a district court issue of abandonment as have held not raise the arguments presented and evidence a means to show a break defense but as i.e., reply long it the first time in a brief as priority, chain of has be gives the nonmovant an ade holder of the mark and is come the senior opportunity respond.10 for in As the bring quate therefore entitled to claims *6 posture, op In that district court allowed such an fringement and dilution.8 required plead portunity, complain to he cannot now Inc. was not by complaint, prejudiced in and Atlas is he was abandonment its reply.11 until inapposite. failure to raise the issue pur- summary judgment, require a had name for commercial not used the years prior filing nonmoving party oppor poses than ten to court to allow the an for more tunity respond”); Booking v. Star suit. See id. at 411 Gen. Co., 414, (2d Mgmt. 254 418 Cir. F.3d 16, (6th 7. Cir. 360 F.2d 18 2001)("Rule Appel 28 of the Federal Rules analogue late Procedure ... has no in 8. See J. Thomas McCarthy McCarthy, on Trade- Procedure, Federal Rules of Civil and in most (4th 17:4 Competition marks and Unfair judges provide parties cases trial can with an ed.2004)("abandonment may signifi- become adequate opportunity respond particular possible legal cant in a number of situations” ordering briefing.”); arguments by additional [including the situation "abandon- where] Tech., Inc., Seagate 145 F.3d Beaird v. chain of result[s] break (10th Cir.1998)("when moving party priority parties prior where the each claim reply advances in a new reasons and evidence use”). support summary judg of its motion for ment, nonmoving party should be Paso, City Co. El Southwestern Bell Tel. opportunity respond”)(citing Cia. Petrol (5th Cir.2003). 346 F.3d Caribbean, Inc., Caribe, era Inc. v. Arco (1st 1985)). Cir. Auth., F.2d See, e.g., Seay Valley v. Tenn. (6th Cir.2003)("the pur- 481-482 poses opportunity of notice and 11.The Seventh Circuit cases cited 56(c) distinguishable. The district courts in extend Rule to the situation where the are moving permit party reply brief new those cases did not the nonmovant an submits in adequate respond. opportunity of its motion See Aviles reasons and evidence in expressed the substance of which the declarants or affiants As for belief, he contends that is their and the facts on which arguments, these he grounded, sues of material exist whether beliefs were that when George business, mark when intended to abandon sold he had no intention of to Bartlett and moved he sold his business reentering the muzzle brake business in Act, addition, home to Greece. Under the Lanham country.
a mark is deemed “abandoned” introduced into evidence an October 2000 shooting magazine article about George’s has its use been discontinued
[w]hen retirement not to resume such In- from the muzzle brake business with intent use. may tent not to resume be inferred from and the transfer of his business to Bart- circumstances. Nonuse for three con- lett. The article describes long- years prima secutive shall be facie evi- time struggle allergy with his to household dence of abandonment. “Use” of a including and industrial those chemicals— mark means the bona fide use of that used manufacture . ordinary
mark made course of brakes —and that by moving his belief trade, merely and not made to reserve improve back his native Greece he could in a mark.12 right his condition. The article makes no men- tion intended ever to re- party asserting The abandonment must es- turn to the United States or ever to re- tablish that the owner of the mark both trade, sume his either in the United States use of the mark discontinued or abroad. tended not to resume its use. The burden proof party claiming is on the abandon- For his part, George produced nothing
ment.13 affidavit, in self-serving but his own not he dispute developed do states that he had condition “multiple sensitivity” use of the discontinued his mark when he known as chemical departed hope sold his business to Bartlett and and had left for in the Greece Rather, point for Greece. the sole of con- the “clean environment” there would im- whether, doing, George prove tention is in so his health. He further con- states possessed requisite clusionally intent to that he did not “intend to abandon aban- *7 proprietary right to the mark.14 don business name of Vais Arms” and [his] VAIS George “hoped stay To its contention that that he had to return after a mark, pursue tended to abandon the to craft manu- [ ]his [of Greece objective facturing Inc. filed numerous and affi- As brakes].” declarations George’s davits from former customers in evidence of his intent not to abandon the Co., (7th Forge only v. Cornell when there is an issue of F.3d comes relevant i.e., mark, Cir.1999)(employee opportunity not "hoarding” of a when there is a arguments reply); to to raised in Ed claim that the owner wanted to retain the Inc., Honeywell, wards v. 960 F.2d only prevent by mark to its use others. See (7th Cir.1992)(district improperly grant Co., Corp. Exploration Exxon v. Humble ed in favor of defendant (5th there is Cir. As no ground by party; plaintiff not raised either allegation "hoarding” appeal, of in this given opportunity respond). was no to accept George’s parties appear to as both framing of the issue as whether he "intended (Supp.2004). 12. See 15 U.S.C.A. 1127 mark, adopt we to abandon” the VAIS George's 13. See id. at 99. characterization of the element of ,intent. 14. The distinction between an “intent to abandon” and an "intent not to resume” be- Arms, Inc.’s over- light of Vais Bart- viewed in mark, that he asked George stated 1(A) of whelming evidence abandonment. of the provision out strike lett to defeat of a trademark cannot owner prior “[T]he Bill of Sale to the Attachment by simply ... as- claim “George an abandonment provision This reads: signing. to re- vague, subjective intent serting following: get To to the A. agrees unspecified a mark at some sume use of for patent [sic] trade name most, affida- George’s At A future date.”15 of assets.” it in the sale and include subjective, uncom- only his that vit establishes Attachment confirms of the review mark, to abandon the was, fact, desire not and municated struck-out provision the he any indication of when or how is not without This strike-out by Bartlett. initialed use; it its commercial intended to resume dated. as to his genuine not does establish he struck- does not contest that Bartlett intent to abandon. 1(A). He in- provision initialed out and out of striking does Bartlett’s sists, however, did strike out Neither that he not 1(A) in the Attachment raise George’s signing provision prior to provision fact to the genuine issue of material as of as Bill of December Sale mark. avers, intent to abandon the early so in March element of but did George duty referred to longer provision no held That that he 2000 to reflect and to patent” a “trade name registering procure for responsible assets”; asserts, says it Thus, act “include it in the sale he VAIS mark. nothing the actual transfer that about construed cannot be Neither does it make to aban- trade name itself. requisite lacked the intent only at some don, signing, assume re- due at only that Bartlett would transfer Thus, time in the future. the mark. unidentified sponsibility registering assuming provision even objec- intent is determined That George’s signing the prior stricken at require cita- tive is too well settled test Sale, striking Bill Bartlett’s act of it out summary Viewing judgment evi- tion. convey an on the understanding does not light in the most favorable dence party that the VAIS part of either including an as- non-movant— being along transferred was not occurred, as sumption that the strike-out Quite other sale the business’s assets. contends, December, signing he at the contrary, reading a reasonable to the agree 1999—we with the district 1(A) in context of whole provision failed estab- determination the five months between transaction over lish issue material signing of the Bill of Sale and the exists as to his intent abandon of the sale confirms that the effective date vague, self-serving state- *8 by solely Bartlett provision was struck out that in his affidavit to the effect he ments hassle George procedural to relieve “hoped” regain his health in Greece and he registering of the VAIS mark before day one to his “craft of manufactur- return country left the for health reasons. is not to raise ing muzzle brakes” sufficient evi- George produce of material as to the As failed a issue has intent, of dence would establish the particularly of when existence element mark, One, Ltd., any Emergency FireEagle, to abandon the or had Inc. v. Am. intent never use, (4th Cir.2000); then no would 228 537 see also intent not to resume 17:13("If par abandoned.”)(citing Golenpaul all a ever be held McCarthy on Trademarks Rosett, ty holding to do to avoid a of abandon Misc. N.Y.S.2d had (N.Y.Sup.Ct.1940)). testify any was to that he never had material fact he genuine issue of not define the term “current customer bas- es,” mark, or, alternatively, phrase abandoned the we affirm the that the “cur- rent customer bases” ambiguous is judg- of summary jury therefore should determine its ment in favor of Vais meaning. disagree. trademark claims. Albeit the limiter geographic was Agreement Non-Compete
C. drafted, inartfully plain reading confirms beyond quibble that the phrase “current enforceability “The of a covenant only customer bases” the foreign modifies not to compete question is of law for the ” aspect of geographic “countries the cov court.”16 The Texas Not to Covenants ” erage—not the portion. “U.S. states Compete provides Act two criteria the Thus, (1) the covenant as drafted covered enforceability such a It of covenant.17 (2) any “all United States” foreign “ancillary must of part to or an countries which George had “current agreement” otherwise enforceable base,” customer i.e. sales muzzle of brakes. time, contain “limitations as to geographi By reforming the geographic limiter to area, cal scope activity re to be only conformity cover “U.S. states” in with strained that not are reasonable and do Inc.’s voluntary abandonment impose a greater restraint than is neces of foreign coverage, the district court elim sary protect goodwill busi other potential inated any interpretive promisee.”18 ness interest of the “current modifier customer bases.” appeal, George On does not contest Indeed, reading this geo non-compete agreement ancillary graphic limitation is the one that only sen to the Bill of or that Sale the time limita- sibly comports with the national character (10 years) tion chal- was reasonable. He the business that sold. The lenges only geographic extent of its record establishes that when con provision, restriction. That confected business, ducted the he advertised his accountant, lawyer, anot reads: nationally-distributed muzzle brakes via apply geo- This covenant shall to the publications, catalogues, trade mail order graphical area that U.S. includes all and, importantly, Internet. addi states and countries which are included tion, George does not contest he mar in the current customer bases. products enjoyed keted his sales court, The district on Vais throughout According United States. request, this clause include reformed ly, interpret provision as requiring only states”; “U.S. Inc. aban- to restrict the geographic limits any doned to coverage foreign claim just of the covenant to those states Nevertheless, countries.19 con- had actually consummated geographic sales, tends that the entire limitation disregarding one or more while scope marketing efforts, unenforceable as written because it does nationwide Inc., Glass, 15.51(c) 16. Butler v. requires Arrow Mirror & trial court Section (Tex.App.—Houston S.W.3d [1st reform a covenant not to “to the *9 pet.). Dist.] no necessary extent to cause the limitations ... impose to be and to reasonable restraint (Ver- 15.50(a) & Tex. Bus. Com. Cod. Ann. greater necessary....” that is not than Tex. Supp.2004). non 2002 & 15.51(c)(Vernon Bus. & Com.Code Ann. 2002 & Supp.2004). 18. Id. re against policy public of the because are con- We absurd. legally would result hardships trade and the straints interpretation court’s the that vinced a person’s with ing from interference and is correct limitation geographic the Mfg. Co. Zep of livelihood.” means cove- coverage of the extending the that Harthcock, S.W.2d is of the Union fifty states the nant to that it recognize I objec- (Tex.App.Dallas with the comports and reasonable non-compete a valid to have parties. possible is of the intent tively determined that clause; however, conclude I would enjoined properly court district The particular in this ambiguity marketing there is manufacturing and George from ambig A contract is non-compete clause. that geographic within brakes his muzzle reasonably sus is meaning uous when its area.20 interpretation. than one to more ceptible III. CONCLUSION NationsBank, 939 Inc. v. Heritage Res. case, (Tex.1996). In this 118, 121 S.W.2d material fact exists issue of No covenant that agreement “[t]his states the rights George abandoned as to area that geographical apply to the shall selling his business to the VAIS countries all states and includes U.S. We relocating Greece. Bartlett and customer in the current are included of sum- court’s affirm the included in “which are phrase base.” entry permanent mary judgment be read base” could current customer the Arms, Inc. on its of Vais injunction in favor “countries”, or it only to word apply Further, agree we also claims. states apply to “all U.S. be read to could imposed limitation geographic that is phrase Because the countries.” agreement reformed non-compete than one reasonable susceptible to more is reasonable by 'the district remand the issue should be interpretation, the district court’s affirm enforceable. appropriate court for an ed to summary judgment on Vais grant of Corp. v. Exxon West See determination. non-compete for breach claim Co., 299, 302 Gathering Texas S.W.2d entry of a as the as well agreement, (Tex.1993) ambi (explaining that contract enforcing agree- injunction permanent to be submitted are fact guities questions Defendant-Appellant against jury). to a Vais. respectfully foregoing I For reasons AFFIRMED. majority part dissent PICKERING, concurring Judge, the non opinion dealing Circuit with dissenting part: part clause. majority aspects of the in all concur I dealing part except
opinion “[cjourts Texas, In clause.
non-compete covenants noncompete disfavor
generally character”; national geo "[A] “national upheld have nationwide courts Texas reasonable, necessary agree non-compete' since it is injunction is limitations in graphic clearly it has been established sold protect business from ments when national in character. business national and inter- competition. an era national Co., See, Mfg. Elec. e.g., Williams v. Powell eq- court of corporations, a modern national (Tex.App. S.W.2d by past prece- — Houston uity constrained cannot feel five-year pet.)(enforcing no Dist.] [14th shops involving sale of barber dents of manufacturer restriction favor national stables.”). livery finding that manufacturer's business upon