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Stockdale Investment Group, Inc. v. Stockdale Capital Partners, LLC

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

October 15, 2019

STOCKDALE INVESTMENT GROUP INC. D/B/A STOCKDALE, Plaintiff,
v.
STOCKDALE CAPITAL PARTNERS, LLC, et al, Defendants.

          MEMORANDUM AND ORDER

          HON. KEITH P. ELLISON UNITED STATES DISTRICT JUDGE

         This is a trademark infringement and unfair competition dispute between Plaintiff Stockdale Investment Group d/b/a Stockdale (“Plaintiff”) and Defendants, Stockdale Capital Partners, LLC and its affiliated companies (collectively “Defendants”), over the use of “Stockdale.” Before the Court is Defendants' Motion for Summary Judgment. (Doc. No. 34). After considering the parties' filings, all responses and replies thereto, oral argument, and the applicable law, the Court finds that Defendants' Motion for Summary Judgment must be DENIED.

         I. BACKGROUND

         Plaintiff is a real estate services company operating in Texas, California, and North Carolina. (Doc. No. 53 at ¶15). It focuses on the “real estate design, construction, and property management space.” Id. It markets itself as “Stockdale, ” and has operated continuously under that name since its inception in 1989. See (Doc. No. 41-4 at 117), (Doc. No. 53 at ¶15). “Stockdale” was chosen as a reference to Stockdale, California, where the company was founded. (Doc. No. 53 at ¶18). Plaintiff relocated its headquarters to Texas in 2012. It registered the name “Stockdale, LLC” and “Stockdale Capital” with the Texas Secretary of State in 2014 and 2017, respectively. (Doc. No. 53 at ¶16). Plaintiff also attempted to register “Stockdale” as a trademark with the U.S. Patent and Trademark Office (the “USPTO”), but was denied the registration in 2018 on the basis that “Stockdale” is primarily a surname. (Doc. No. 34-8 at 2).

         Defendants “are a family of real estate investment, development, and management companies headquartered in Los Angeles.” (Doc. No. 34-2 ¶4). Defendants have used the name “Stockdale” continuously since their collective inception in 2013. Id. at ¶6. Defendants “are primarily focused on the acquisition and development of real estate for commercial uses” and seek investments from “ultra-high net worth individuals.” Id. at ¶¶7, 9. Defendants are also “involved in leasing and property management operations, but only as it relates to themselves for their own or their affiliates' properties.” Id. Defendants “typically target investments, acquisitions, and developments that are in the $50 [million] to $200 [million] range, but up to $400 [million].” Id. at ¶8. Defendants claim they were not aware of Plaintiff prior to this claim and they maintain that Plaintiff is not a competitor in the same marketplace. Id. at ¶10.

         Plaintiff learned of Defendants in 2017 after a broker from a real estate investment firm contacted Plaintiff to inquire whether they were involved in marketing a pending deal. (Doc. No. 41-1 at 112). The name “Stockdale” was on a list of potential buyers. Id. Plaintiff was not in fact involved with that deal.

         In August 2018, Plaintiff filed suit, alleging claims for relief including trademark infringement under 15 U.S.C. § 1225(a), unfair competition under 15 U.S.C. § 1225(a), and unfair competition under Texas common law.[1] Plaintiff also sought a permanent injunction, which the Court denied in January 2019. Defendants now move for summary judgment. Defendants contend that Plaintiff's mark, “Stockdale, ” is not protectable because it is merely descriptive as a surname or a geographical descriptor and has not acquired secondary meaning. It further contends that there is no likelihood of confusion between Plaintiff and Defendants' marks.

         II. LEGAL STANDARD

         Summary judgment is proper when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A genuine issue of material fact exists if a reasonable jury could enter a verdict for the non-moving party. Springboards to Educ., Inc. v. Hous. Indep. Sch. Dist., 912 F.3d 805, 811 (5th Cir. 2019). The court can consider any evidence in “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The evidence and inferences must be viewed in the light most favorable to the nonmoving party. Springboards to Educ., 912 F.3d at 811.

         The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 322-25. Once a movant meets this burden, the burden shifts to the nonmovant to show the existence of a genuine fact issue for trial. Id. at 321-25. In a trademark case, “[a]lthough the secondary meaning of a mark and the likelihood of confusion are ordinarily questions of fact, summary judgment may be upheld if the summary judgment record compels the conclusion that the movant is entitled to judgment as a matter of law.” Bd. of Supervisors for La State Univ. Agric. & Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 474 (5th Cir. 2008) (internal citations omitted).

         III. ANALYSIS

         To prevail on a trademark infringement claim under the Lanham Act, 15 U.S.C. § 1051 et seq., a plaintiff must show, first, ownership of a legally protectable mark and, second, a likelihood of confusion created by an infringing mark. All. for Good Gov't v. Coal. for Better Gov't, 901 F.3d 498, 505 (5th Cir. 2018); Paulsson Geophysical Servs, Inc. v. Sigmar, 529 F.3d 303, 309 (5th Cir. 2008).[2] The Court addresses each in turn.

         A. LEGALLY PROTECTABLE MARK

         A mark is protectable if it is distinctive, meaning it must be “capable of distinguishing the applicant's goods from those of others.” Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 237 (5th Cir. 2010) (quoting Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). An identifying mark can be distinctive in one of two ways: it can be inherently distinctive, or it can acquire distinctiveness through “secondary meaning.” Id. at 237; see also Wal-Mart Stores, Inc. v. Samara Bros, Inc., 529 U.S. 205, 210-11 (2000).

         To determine whether a mark is distinctive, marks are often classified into categories of generally increasing distinctiveness: they may be (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. Two Pesos, Inc., 505 U.S. at 768 (citing Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976)). The latter three categories of marks are deemed inherently distinctive and are entitled to protection because their intrinsic nature serves to identify a particular source of a product. Id. By contrast, generic marks “refer to the genus of which the particular product is a species, ” and thus are never registrable as trademarks. Id.

         Descriptive marks are not inherently distinctive because they merely “identif[y] a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients.” Pebble Beach Co. v. Tour 18 1 Ltd., 155 F.3d 526, 540 (5th Cir. 1998). A descriptive mark can only be protectible when it has acquired secondary meaning. Two Pesos, 505 U.S. at 769. As relevant here, terms that are “primarily merely surnames” or “primarily geographically descriptive” are deemed to be descriptive and thus unprotectable absent a showing of ...


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