United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
is Defendants' Motion to Dismiss Count III of
Plaintiff's Amended Complaint Pursuant to Fed.R.Civ.P.
12(b)(6) (Document No. 30) . After carefully considering the
motion, response, reply, and applicable law, the Court
concludes for the following reasons that the motion should be
Academy, Ltd. d/b/a Academy Sports Outdoors
("Academy") sells sporting and outdoor goods online
and in more than 250 retail stores in sixteen
states. After one of Academy's longtime
competitors, Gander Mountain, filed for bankruptcy in 2017,
Defendants CWGS Group, LLC and Gander Outdoors, LLC
(collectively "Gander") acquired Gander
Mountain's retail store leases and intellectual property
rights and launched a campaign to rebrand Gander Mountain as
Gander Outdoors, with a new logo and a new look and feel for
its stores. Gander has opened at least sixty retail
locations in nineteen states, representing a 75 percent
overlap with Academy's market.
alleges that its trade dress consists of storefronts with a
white facade and a primary logo in "Academy's
distinctive blue color ('Academy-blue')" with
Academy-blue accents; a utilitarian interior that forgoes
"experiential amenities typically present in other
sporting goods stores"; largely unadorned white walls
with an industrial ceiling and white lights; Academy-blue
signs with white letters and red accents; and Academy-blue
employee uniform shirts featuring the Academy logo in white
letters.Before Gander's rebranding, Gander
Mountain stores operated under the red and white Gander
Mountain logo, with a red, brown, and green color scheme;
dark tile and wood floors and finishes; a "reserved
cabin-type look and feel, including wall mounts of deer and
other game animals"; and employees wearing forest green
and khaki vests. Academy alleges that Gander copied
Academy's logo and trade dress, and that Gander Outdoors
stores now feature a white and Academy-blue color scheme,
storefronts with a white facade and Academy-blue accents,
white and Academy-blue in-store signage, a utilitarian
interior forgoing amenities and the previous mounted animals,
and employees dressed in Academy-blue shirts with white
alleges that the new Gander Outdoors logo infringes
Academy's trademarks and that Gander's store redesign
copies the look and feel of Academy's stores to take
advantage of Academy's goodwill and reputation for value.
Academy alleges claims for (1) federal trademark
infringement, (2) federal unfair competition, (3) federal
trade dress infringement, (4) trademark infringement and
unfair competition under Texas common law, and (5) injury to
business reputation under Texas Business and Commerce Code
§ 16.29. This motion is directed only at
Academy's claim for trade dress infringement under Rule
12(b)(6) provides for dismissal of an action for
"failure to state a claim upon which relief can be
granted." Fed.R.Civ.P. 12(b) (6). When a district court
reviews the sufficiency of a complaint before it receives any
evidence either by affidavit or admission, its task is
inevitably a limited one. See Scheuer v. Rhodes, 94
S.Ct. 1683, 1686 (1974), abrogated on other grounds by
Harlow v. Fitzgerald, 102 S.Ct. 2727 (1982) . The issue
is not whether the plaintiff ultimately will prevail, but
whether the plaintiff is entitled to offer evidence to
support the claims. Id.
considering a motion to dismiss under Rule 12(b)(6), the
district court must construe the allegations in the complaint
favorably to the pleader and must accept as true all
well-pleaded facts in the complaint. See Lowrey v. Tex.
A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997).
To survive dismissal, a complaint must plead "enough
facts to state a claim to relief that is plausible on its
face." Bell Atl. Corp. v. Twombly, 127 S.Ct.
1955, 1974 (2007) . "A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1949 (2009). While a complaint
"does not need detailed factual allegations . . . [the]
allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact)." Twombly, 127 S.Ct. at 1964-65.
dress refers to the total image and overall appearance of a
product and may include features such as the size, shape,
color, color combinations, textures, graphics, and even sales
techniques that characterize a particular product."
Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d
225, 251 (5th Cir. 2010) (citation omitted). Trade dress
protection may apply to the look and feel of a business, such
as the overall "motif" of a restaurant.
Id. (citing Two Pesos, Inc. v. Taco Cabana,
Inc., 112 S.Ct. 2753, 2555 (1992)) . "The purpose
of trade dress protection, like trademark protection, is to
'secure the owner of the [trade dress] the goodwill of
his business and to protect the ability of consumers to
distinguish among competing products.'"
Eppendorf-Netheler-Hinz GMBH v. Ritter GMBH, 289
F.3d 351, 355 (5th Cir. 2002) (quoting Two Pesos,
112 S.Ct. at 2760). To succeed on a claim for trade dress
infringement, the plaintiff must show that "(1) the
dress qualifies for protection, which requires considering
functionality, distinctiveness, and secondary meaning; and
(2) that the dress has been infringed, which requires
considering the likelihood of confusion." Taco
Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d
1113, 1117-18 (5th Cir. 1991) (citation omitted),
aff'd, 112 S.Ct. 2753 (1992).
sole argument is that Academy's trade dress infringement
claim in Count III must be dismissed because Academy's
pleading admits that Academy's trade dress is
functional. See 15 U.S.C. § 1125(a)(3)
("In a civil action for trade dress infringement under
this chapter for trade dress not registered on the principal
register, the person who asserts trade dress protection has
the burden of proving that the matter sought to be protected
is not functional."); TrafFix Devices, Inc. v. Mktg.
Displays, Inc., 121 S.Ct. 1255, 1259 (2001) ("This
burden of proof gives force to the well-established rule that
trade dress protection may not be claimed for product
features that are functional.") .
the "traditional" definition of functionality,
"a product feature is functional, and cannot serve as a
trademark, 'if it is essential to the use or purpose of
the article or if it affects the cost or quality of an
article, '" such that "if a product feature
isvthe reason the device works,' then the
feature is functional."
Eppendorf-Netheler-Hinz, 289 F.3d at 355 (quoting
TrafFix, 121 S.Ct. at 1261-62). Additionally, under
the "competitive necessity" test, "a
functional feature is one the 'exclusive use of which
would put competitors at a significant non-reputation-related
disadvantage.'" Id. at 356 (quoting
TrafFix, 121 S.Ct. at 1261). Although functional
features cannot be protected as trade dress, "a
particular arbitrary combination of functional features, the
combination of which is not itself functional, properly
enjoys protection." Taco Cabana, 932 F.2d at
1119 (citations omitted).
alleges that the trade dress of its stores consists of the
following features (which are illustrated by color
photographs in paragraph 37 of Academy's First Amended
(a) a storefront with a white facade, and primary logo that
is set off by Academy-blue with accents that ...