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Tricon Precast, Ltd. v. Easi Set Industries, Inc.

United States District Court, S.D. Texas, Houston Division

July 8, 2019

TRICON PRECAST, LTD., Plaintiff,
v.
EASI SET INDUSTRIES, INC., Defendant.

          MEMORANDUM AND OPINION

          Lee H. Rosenthal Chief United States District Judge

         Tricon Precast, Ltd. has sued Easi-Set Industries, Inc., alleging that Easi-Set's registered trademark-a tapered top to concrete traffic barriers-is invalid, must be cancelled, and that Tricon has not infringed it. Tricon asserts that Easi-Set has violated the Texas Antitrust Act and the Sherman Act by “inducing and encouraging” the Texas Department of Transportation to require the taper in design specifications for concrete traffic barriers purchased by Texas government entities. Easi-Set has moved to transfer to the Eastern District of Virginia under a forum-selection clause and to dismiss the antitrust claims under the Noerr-Pennington doctrine. Tricon responded, and Easi-Set replied. (Docket Entry Nos. 8, 11-13).

         After a careful review of the pleadings, motion, response, and reply, the properly considered submissions, and the applicable law, the court denies the motion to transfer but grants the motion to partially dismiss the amended complaint. The antitrust claims against Easi-Set are dismissed, with prejudice and without leave to amend, because amendment would be futile. The reasons are explained in detail below.

         I. Background

         Tricon is a Texas company based in Houston that manufactures and sells “precast concrete and related products, ” including traffic barriers, for the road-construction industry. (Docket Entry No. 10 at 1, 3). Tricon sells traffic barriers “throughout the State of Texas for installation on roadways to divide traffic lanes.” (Id. at 3). Easi-Set is a Virginia company headquartered in Midland, Virginia; it licenses precast concrete products. (Id. at 1).

         In March 2011, Easi-Set obtained Trademark Registration No. 3, 927, 357 from the United States Patent and Trademark Office for “Concrete Highway Crash Barriers and Concrete Construction Work Zone Barriers.” (Docket Entry No. 10-1 at 2 (emphasis omitted)). The ‘357 Trademark covered:

the design of two facing angular end tapers of interconnected concrete barriers, which are not part of the mark, such that when the two concrete barriers are connected, the angular end tapers comprising the mark form a “V” shape at the point of connection. The broken lines on the drawing show position of the mark on the goods.

(Id. (emphasis omitted)). The ‘357 Trademark included the following picture:

         (Image Omitted)

         The Texas Department of Transportation, or “TxDOT, ” requires traffic barriers to meet certain design specifications. (Id. at 3-4). A “significant percentage of TxDOT, county, and other municipality barriers must include a ‘V-shape.'” (Id. at 4). Because of this, Tricon has put “‘V- shape' tapered ends” on traffic barriers manufactured for “TxDOT and other Texas county and municipality projects, ” leading Easi-Set to accuse Tricon of infringing the ‘357 Trademark. (Id.). Tricon agrees that the “‘V-shape' as described in the ‘357 [Trademark] . . . is the same design element required in a significant percentage of TxDOT, county, and municipal-compliant precast concrete barriers.” (Id. at 5).

         According to Tricon, Easi-Set has improperly influenced Texas officials to convince them to adopt the V-shape design requirement. (Id.). Easi-Set employees allegedly provided Texas officials with “design specifications, ” without disclosing that Easi-Set had trademarked the V-shape. (Id.). Tricon alleges that the V-shape has no legitimate purpose, but admits that the V-shape requires “less concrete” and costs less to manufacture. (Id. at 5-7). Tricon alleges that:

[i]f Easi-Set and/or its licensees are the exclusive suppliers of traffic barriers required by TxDOT, as well as other Texas counties and municipalities, that include Easi-Set's purported “V-shape” trade dress, then such exclusivity would put Tricon and other competitors at a disadvantage, as they would be foreclosed from supplying such TxDOT, county, and municipal-mandated traffic barriers, thereby resulting in an unreasonable restraint of trade and unfair competition within the State of Texas.

(Id. at 6). Tricon alleges that “Easi-Set seeks to willfully maintain its monopoly position through improper means rather than through a superior product, business acumen, or historical accident, ” requiring Tricon to “pay unreasonably high royalties” to use the ‘357 Trademark. (Id. at 7).

         Tricon sued Easi-Set in the Southern District of Texas, seeking a declaratory judgment that the ‘357 Trademark is invalid and must be cancelled, and that Tricon has not infringed it. (Id. at 8-9). Tricon asserts that Easi-Set has violated the Texas Antitrust Act and the Sherman Act by “induc[ing] and encourag[ing]” TxDOT “to require the ‘V-[s]hape' embodied in the ‘357 [Trademark] in precast concrete barriers.” (Id. at 11). Tricon alleges that Easi-Set has succeeded in these lobbying efforts, making “Easi-Set the sole supplier of precast concrete barrier[s], ” and having “a staunch effect on competition.” (Id. at 10).

         Easi-Set moved to transfer to the Eastern District of Virginia and to dismiss the antitrust claims. (Docket Entry No. 8). Easi-Set argues that this case arises from a licensing agreement between Easi-Set and Tricon with a valid and enforceable forum-selection clause; the parties have related litigation pending in the Eastern District of Virginia; and the public and private factors favor transfer. (Id. at 3-8). As to the antitrust claims, Easi-Set argued that the “so-called Noerr-Pennington doctrine” bars Tricon's claims as a matter of law. (Id. at 9-13).

         Tricon amended its complaint, making the pending motion to dismiss moot, and responded to the motion to transfer. (Docket Entry Nos. 10-11). Tricon argues that this litigation has nothing to do with the Licensing Agreement; the Virginia litigation concerns different patents and trademarks; the witnesses and evidence are in Texas; and Texas has a strong interest in antitrust claims that involve TxDOT and local governments. (Docket Entry No. 11 at 15-22). Easi-Set replies that the “V-shape” mark is “an integral part of the product line specifically governed by the Licensing Agreement” and that the forum-selection clause applies. (Docket Entry No. 12 at 2-4).

         Easi-Set has moved to dismiss the antitrust claims in the amended complaint. (Docket Entry No. 13). Easi-Set “stridently denies that it has done anything improper, ” but “recogniz[es] that a Rule 12(b)(6) motion is not the appropriate occasion to attack the factual basis of a complaint.” (Docket Entry No. 13-1 at 5). Easi-Set argues that “its alleged efforts to influence the State of Texas . . . [are] protected from antitrust scrutiny under the Noerr-Pennington doctrine.” (Id.). Tricon responds that the Easi-Set cannot be shielded “from antitrust liability by having a regulatory body sign off on a requirement that results in anticompetitive activity, ” and that the sham exception to the Noerr-Pennington doctrine ...


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