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Allied Lomar, Inc. v. Lone Star Distillery, LLC

United States District Court, W.D. Texas, Austin Division

March 28, 2017

ALLIED LOMAR, INC., Plaintiff,
v.
LONE STAR DISTILLERY, LLC d/b/a Garrison Brothers Distillery; and DOES 1 THROUGH 10, Defendants.

          ORDER

          SAM SPARKS, UNITED STATES DISTRICT JUDGE

         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Plaintiff Allied Lomar, Inc. (Allied)'s Opposed Renewed Motion for Order as a Matter of Law and Opposed Motion for a New Trial [#140], Defendant Lone Star Distillery d/b/a Garrison Brothers Distillery (Garrison Brothers)'s Response [#182] in opposition, and Allied's Reply [#183] in support. Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and order.

         Background

          This is a trademark infringement action brought by Allied, a California liquor distributor, against Garrison Brothers, a Texas liquor distributor. Filing suit in July 2014, Allied alleged it owned the trademark "COWBOY LITTLE BARREL" for bourbon and whiskey products and Garrison Brothers' "COWBOY BOURBON" mark infringed on its trademark. Allied consequently brought trademark infringement and unfair competition claims. Garrison Brothers counterclaimed for declaratory judgment findings of non-infringement and cancellation of Allied's registration due to abandonment or fraud on the United States Patent and Trademark Office (USPTO).

         On December 5, 2016, this case was called for trial and a jury of six legally and duly qualified jurors was empaneled. Order of Dec. 5, 2016 [#143] at 1. Prior to the empaneling of the jury, the Court granted Garrison Brothers' second motion in limine and ordered Allied to "approach the bench, [and] advise of its intention regarding any product released subsequent to the filing of this lawsuit to obtain a ruling on admissibility prior to any exposure of the same to the jury." Order of Dec. 1, 2016 [#141]. The case proceeded through opening statements and to the presentation of evidence with Allied calling its President, Marci Palatella, as the first witness. Id. When questioned by Allied's counsel, Ms. Palatella advised the jury Allied's largest sale was the recent sale of 5, 000 cases, which occurred after the filing of this suit. Order of Dec. 5, 2016 [#143] at 1. In light of Allied's violation of this Court's order in limine, the Court granted Garrison Brothers' motion for a mistrial. Id. at 1-2.

         On January 9, 2017, this case was again called for trial and a jury of seven legally and qualified jurors was empaneled. The case proceeded to trial and, when Allied rested its case, Garrison Brothers filed a motion for judgment as a matter of law. The Court took this motion under advisement and the trial continued. When Garrison Brothers rested, Allied filed and Garrison Brothers renewed motions for judgment as a matter of law. The Court denied some grounds as there was sufficient evidence to raise fact issues and took other grounds under advisement. Thereafter, the case was presented to the jury via instructions and a verdict form. On January 11, 2017, the jury returned a verdict finding (1) no likelihood of confusion between the parties' trademarks, (2) the mark COWBOY LITTLE BARREL was in use in commerce at registration, (3) Allied did not commit fraud on the USPTO, and (3) Allied abandoned the mark COWBOY LITTLE BARREL. See Verdict Form [#167].

         Allied timely filed its renewed motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b), arguing it is entitled to a favorable judgment because the jury's finding Allied abandoned the mark COWBOY LITTLE BARREL is unsupported by any evidence. Allied also moves for a new trial, arguing prejudicial error occurred in the jury instructions, verdict form, and exclusion of evidence. For the reasons set forth below, the Court DENIES both Allied's renewed motion for judgment as a matter of law and motion for a new trial.

         Analysis

          I. Motion for Judgment as a Matter of Law

          A. Legal Standard

         When a case is tried to a jury, a motion for judgment as a matter of law "is a challenge to the legal sufficiency of the evidence supporting the jury's verdict." Cowart v. Erwin, 837 F.3d 444, 450 (5th Cir. 2016) (citations omitted). In reviewing a challenge to a jury verdict, the Court "draw[s] all reasonable inferences and resolve[s] all credibility determinations in the light most favorable to the nonmoving party." Heck v. Triche, 775 F.3d 265, 272 (5th Cir. 2014) (citations omitted); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151 (2000) ("Thus, although the court should review the record as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe."). This Court upholds a jury's verdict "unless there is no legally sufficient evidentiary basis for a reasonable jury to find as the jury did." Id. at 273.

         B. Application

         Allied argues it is entitled to judgment as a matter of law because the verdict and judgment are contrary to the evidence regarding Allied's intent to abandon. Mot. [#178] at 3-5. In particular, Allied claims Garrison Brothers did not meet its burden of persuasion as it presented no evidence of an intent to abandon. Id. at 4. The Court disagrees with Allied's articulation of the intent required for abandonment and finds sufficient evidence to support the jury's finding of abandonment.

         The Lanham Act expressly provides a mark shall be deemed to be abandoned when

its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. "Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.

15U.S.C. § 1127.

         From this statutory language, the Fifth Circuit has extracted a two-part test, requiring the party asserting abandonment to establish "the owner of the mark both (1) discontinued use of the mark[, ] and (2) intended not to resume its use." VaisArms, Inc. v. Vais,383 F.3d 287, 293 (5th Cir. 2004). When the party claiming abandonment provides evidence the mark has not been used for three consecutive years, however, the burden shifts to the mark owner to establish that "circumstances do not justify the inference of intent not to resume use." Action Ink, Inc. v. N.Y. Jets, L.L.C., 576 F.App'x 321, 323 (5th Cir. 2014) (quoting Exxon Corp. v. Humble Explor. Co., Inc.,695 F.2d 96, 99 (5th Cir. 1993)); see also Emergency One v. Am. ...


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