Opinion issued February = 15,=20 2007
For=20
The
YAHYA =
HASSAN,=20
INDIVIDUALLY AND D/B/A SAFE CAB CO. A/K/A SAFE CAB COMPANY, AND =
KEMAL=20
MOHAMMED, INDIVIDUALLY AND D/B/A SAFE CAB CO. A/K/A SAFE CAB =
COMPANY,=20
Appellants GREATER =
HOUSTON=20
TRANSPORTATION COMPANY D/B/A YELLOW =
CAB,=20
Appellee
On =
Appeal from the=20
281st District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2004-19728
O P I N =
I O=20
N Appellees, =
Greater=20
Houston Transportation Company d/b/a Yellow Cab ("Yellow Cab"), =
brought a=20
trade dress
Since the 1940s, Yellow Cab has =
been=20
operating yellow-colored taxicabs in the Houston metropolitan =
area. Today,=20
on an average day, there are between 700 and 800 Yellow Cab taxis=20
servicing greater Houston each day. While Yellow Cab is the =
dominant taxi=20
company in Houston, there are about 120 other taxi companies. =
Thirty-six=20
of these other taxicab companies use predominately yellow-colored =
taxis,=20
but each has a different color scheme. As far back as 1993, there =
were=20
more than 20 taxicab companies in Houston using a predominately =
yellow=20
color scheme. As the name implies, Yellow Cab's taxis are painted =
yellow.=20
They have black lettering and crossed-sword logos on the side. =
In 2003, Safe Cab received a =
license to=20
operate in the City of Houston. Its choice of a yellow paint =
scheme for=20
its taxi Yellow Cab sent "cease and =
desist" demand=20
letters to taxi companies with yellow color schemes, demanding =
that they=20
stop using yellow-colored taxis and offering to paint their taxis =
another=20
color at Yellow Cab's expense. Two taxi companies, with a total of =
approximately 40 taxis, accepted Yellow Cab's offer. After Safe =
Cab=20
refused to comply with Yellow Cab's demand, Yellow Cab filed suit =
under=20
(1) the Lanham Act, the federal statutory scheme for trademark and =
trade=20
dress infringement, and (2) a Texas common-law claim of unfair=20
competition, contending that its yellow-colored taxis were =
protectable=20
trade dress. Yellow Cab sought a permanent injunction enjoining =
Safe Cab=20
from using yellow-colored taxis. The jury returned a verdict in =
favor of=20
Yellow Cab, and the trial court rendered judgment permanently =
enjoining=20
Safe Cab from using yellow-colored taxis. After the trial court =
denied=20
Safe Cab's motion for new trial, Safe Cab filed this appeal. =
In its first point of error, =
Safe Cab=20
contends that the trial court lacked subject-matter jurisdiction =
over=20
Yellow Cab's Lanham Act claim because Yellow Cab did not prove =
that Safe=20
Cab's services were used "in commerce." Yellow Cab responds that =
the "in=20
commerce" requirement of the Lanham Act is not jurisdictional, but =
instead=20
is simply an element of the cause of action, and therefore Safe =
Cab has=20
waived this argument by failing to preserve the complaint. =
The Lanham Act provides in =
pertinent=20
part: (1) Any person who, on or in =
connection=20
with any goods and services, or any container for goods, uses =
in=20
commerce any word, term, name, symbol, or device, or any =
combination=20
thereof, or any false designation of origin, false or misleading=20
description of fact, which-- (A) is likely to cause =
confusion, or to=20
cause mistake, or to deceive as to the affiliation, connection, or =
association of such person with another person, or as to the =
origin,=20
sponsorship, or approval of his or her goods, services, or =
commercial=20
activities by another person, . . . . . . . shall be liable in a civil =
action by any=20
person who believes that he or she is or is likely to be damaged =
by such=20
act. 15 U.S.C.S. =A7 1125(a)(1) =
(LexisNexis=20
2006) (emphasis added). Several federal circuit courts =
of appeals=20
have held that the "in commerce" language is a jurisdictional=20
prerequisite. See Starter Corp. v. Converse, Inc., 84 =
F.3d 592,=20
595 (2d Cir. 1996) (holding that use of marks was sufficiently "in =
commerce" to sustain federal-question jurisdiction under Lanham =
Act);=20
Ocean Garden, Inc. v. Marktrade Co., 953 F.2d 500, 505 =
(9th Cir.=20
1991) (stating that act in commerce triggers subject-matter =
jurisdiction);=20
Rickard v. Auto Publisher, Inc., 735 F.2d 450, 453 n.1 =
(11th Cir.=20
1984) ("In actions involving unregistered trademarks, the =
jurisdiction of=20
the federal courts extends only to cases in which a false =
designation of=20
origin has been 'transported or used in commerce.'"). However, at =
least=20
one circuit court has treated the requirement as a =
nonjurisdictional=20
element of the cause of action. See World Carpets, Inc. v. =
Dick=20
Littrell's New World Carpets, 438 F.2d 482, 488-89 (5th Cir. =
1971).=20
Decisions of the federal courts =
of=20
appeals do not bind Texas courts, although they are received with=20
respectful consideration. Hayes v. Pin Oak Petroleum, =
Inc., 798=20
S.W.2d 668, 672 n.5 (Tex. App.--Austin 1990, writ denied). Texas =
state=20
courts "are free to interpret federal law independently, though in =
the=20
first instance we typically seek guidance from among the decisions =
of the=20
lower federal courts." Kiefer v. Continental Airlines, =
Inc., 882=20
S.W.2d 496, 502 (Tex. App.--Houston [1st Dist.] 1994), =
aff'd, 920=20
S.W.2d 274 (Tex. 1996). Unless a federal statute provides for =
exclusive=20
federal jurisdiction, state courts have the authority to render =
binding=20
decisions based on their interpretation of federal law. ASARCO =
v.=20
Kadish, 490 U.S. 605, 617, 109 S. Ct. 2037, 2045 (1989). =
Unlike federal courts, in which =
the=20
authority to adjudicate must be established for each case, Texas =
district=20
courts are courts of general jurisdiction, and subject-matter =
jurisdiction=20
over a cause of action is presumed unless a contrary showing is =
made.=20
Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 75 (Tex. =
2000). In=20
Kazi, our supreme court held that the statutory =
requirement in=20
that case was not jurisdictional. Appellant has made no showing =
that the=20
"in commerce" requirement is jurisdictional, and we do not so =
interpret=20
the language of the Lanham Act. Rather, here, as in Kazi, =
the=20
right to maintain a suit for trade dress infringement goes to the =
right of=20
the plaintiff to obtain relief, not to the right of the court to =
entertain=20
the suit. See Kazi, 12 S.W.3d at 75, 76-77. Safe Cab did =
not=20
object in the trial court that the alleged infringement of the =
Lanham Act=20
did not occur "in commerce." Therefore, Safe Cab waived its right =
to=20
require Yellow Cab to prove that the alleged infringement affected =
interstate commerce. Accordingly, we overrule Safe =
Cab's first=20
point of error.
In its=20
third point of error, Safe Cab asserts that the trial court erred =
in=20
submitting an erroneous definition of "secondary meaning" in the =
jury=20
charge. Yellow Cab first contends that Safe Cab waived this point =
of error=20
because it did not properly object. The Texas=20
Supreme Court has adopted the following test for preservation of =
charge=20
error: Did the trial court know of and overrule the substance of =
the=20
complaint at a time when the court could have, but did not, =
correct the=20
problem in the charge? See State Dep't of Highways & Pub. =
Transp.=20
v. Payne, 838 S.W.2d 235, 241 (Tex. 1992) (holding that there =
"should=20
be but one test for determining if a party has preserved error in =
the jury=20
charge, and that is whether the party made the trial court aware =
of the=20
complaint, timely and plainly, and obtained a ruling."). =
Therefore, an=20
objection to a defective instruction is sufficient to preserve =
error, and=20
a request using substantially correct language is not required.=20
Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, =
157 (Tex.=20
1994). In this=20
case, the proposed jury charge stated that "'secondary meaning' =
means that=20
the color at issue has acquired a meaning beyond the primary =
meaning, by=20
having become associated by use, promotion or advertising, in the =
public=20
mind with the business of YELLOW CAB." At the charge conference, =
Safe Cab=20
objected to the definition of secondary meaning, stating, =
In addition=20
to Question No. 1, the defense has previously submitted for =
inclusion a=20
definition of secondary meaning, additional information regarding =
color;=20
and we would ask that our definition of color--or the portion of =
secondary=20
meaning relating to color--specifically that color may acquire =
secondary=20
meaning--may have--I'm sorry--that--the portion we have submitted=20
previously to the Court that talks in terms of for color [sic] to =
acquire=20
secondary meaning requires in the minds of the consuming public =
the color=20
has become uniquely linked with only one provider of the service =
to the=20
exclusion of all other providers of the service as causes =
confusion to its=20
origin. We think that should be included in the "secondary =
meaning"=20
definition in Question No. 1, Your Honor. We ask that it be=20
included. The trial=20
court then stated, "Court notes your objection to the lack of =
inclusion of=20
the terminology regarding color. Court overrules said objection." =
The=20
trial court clearly understood Safe Cab's complaint and ruled on =
it.=20
Therefore, we conclude that Safe Cab preserved its complaint. =
Yellow Cab=20
argues, in support of the jury charge in this case, that the =
definition=20
provided by the trial court is more faithful to the Supreme Court =
opinion=20
in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, =
766 n.4,=20
112 S. Ct. 2753, 2756 n.4 (1992), and "accepted jury submission =
practice"=20
than Safe Cab's proposed language. In Two=20
Pesos, the Supreme Court noted that secondary meaning "is =
used=20
generally to indicate that a mark or dress 'has come through use =
to be=20
uniquely associated with a specific source.'" Id. (citing =
Restatement (Third) of Unfair Competition =A7 13 cmt. e (1990)).=20
(6) The Court, relying its own precedent, then stated, =
"To=20
establish secondary meaning, a manufacturer must show that, in the =
minds=20
of the public, the primary significance of a product feature or =
term is=20
to identify the source of the product rather than the product=20
itself." Id. (citing Inwood Labs., Inc. v. Ives =
Labs.,=20
Inc., 456 U.S. 844, 851, n.11, 102 S. Ct. 2182, 2187 n.11 =
(1982))=20
(emphasis added). Yellow Cab suggests that the charge given in =
this case=20
is correct when compared with the model charge in a treatise on =
federal=20
pattern jury charges. That model charge states, A =
word or=20
phrase that is merely descriptive can still become a trademark if =
such a=20
secondary meaning has been developed for it by usage in the =
marketplace.=20
It is not necessary for plaintiff [] to prove that all or even a =
majority=20
of the consuming public understands this secondary meaning. What =
must be=20
shown by the evidence is that a significant number of the =
consuming public=20
have associated [term] with plaintiff [] before=20
[date]. 3A Kevin F.=20
O'Malley, Jay E. Grenig & William C. Lee, Federal Jury =
Practice &=20
Instructions =A7 159.63 (5th ed. 2001). The same treatise =
also states=20
that trade dress acquires secondary meaning "when it has been used =
in such=20
a way that its primary significance in the minds of the =
prospective=20
purchasers is not the [dress] itself, but the identification of =
the=20
[dress] with a single source." Id. Clearly, the latter =
definition=20
is relying on Supreme Court precedent. Two Pesos, 505 =
U.S. at 766=20
n.4, 112 S. Ct. at 2756 n.4; see also Wal-Mart Stores, Inc. v. =
Samara=20
Bros., Inc., 529 U.S. 205, 210, 120 S. Ct. 1339,1343=20
(2000) (defining secondary =
meaning as=20
occurring "when, in the minds of the public, the primary =
significance of a=20
[mark] is to identify the source of the product rather than the =
product=20
itself."). The instruction given to the =
jury in this=20
case did not track either the instruction in the federal model =
charge or=20
the language found in Two Pesos or Wal-Mart. The =
jury=20
charge asked only that the "color at issue has acquired a meaning =
beyond=20
the primary meaning, by having become associated by use, promotion =
or=20
advertising, in the public mind with the business of YELLOW CAB." =
The=20
definitions propounded by the Supreme Court ask for more than the=20
"association" of a color through advertising and other promotional =
activities; the correct definition requires that the trade dress =
be=20
"uniquely associated with a specific source" and "identify the =
source of=20
the product rather than the product itself." We conclude that the jury =
charge=20
definition strayed from the definition of secondary meaning as set =
out by=20
the Supreme Court. We further conclude that the erroneous =
definition was=20
harmful because it probably caused the rendition of an improper =
judgment.=20
See Tex. R. App. P. 41.1(a). Here, there was no evidence =
of a=20
unique association with a specific source--a specific =
taxicab=20
company. There was evidence that approximately 40 taxicab =
companies in=20
Houston used a predominately yellow color scheme and that some of =
those=20
companies had operated in the City of Houston for at least 10 =
years. This=20
evidence was uncontested. The evidence also established that =
Yellow Cab=20
was, by far, the largest of these companies, having in excess of =
700 cabs=20
on the streets of Houston daily. Therefore, it is possible that =
the public=20
may have come to associate the color yellow with Yellow Cab. =
However, it=20
is equally possible that the public is aware that not all yellow =
cabs are=20
Yellow Cabs. The definition in the court's =
charge=20
permitted the jury to find that the color yellow had acquired a =
secondary=20
meaning if it was merely "associated by use, promotion or =
advertising with=20
Yellow Cab," as opposed to being "uniquely associated" =
with only=20
Yellow Cab (the single source). It is quite a different thing to =
tell a=20
jury it must find an association through advertising and promotion =
as=20
opposed to finding a unique association with a specific source of =
the=20
product and identifying the source rather than the product. The =
charge=20
definition did not require a rigorous enough inquiry on the part =
of the=20
jury, in line with Supreme Court precedent, and therefore the jury =
would=20
probably have reached a different result had it been given the =
correct=20
definition. We hold that the trial court =
erred in=20
providing an erroneous definition of secondary meaning in the jury =
charge=20
and that Safe Cab was harmed by that error. Accordingly, we =
sustain Safe=20
Cab's third point of error.
Because we =
have=20
sustained Safe Cab's challenge to the jury charge definition of =
secondary=20
meaning, we need not reach its second point of error complaining =
that=20
there was no finding of irreparable harm--an element of an unfair=20
competition claim. We reverse the judgment of the =
trial=20
court and remand the case for further proceedings. Sam Nuchia Justice Panel consisting of Justices =
Nucia,=20
Keyes, and Hanks. Justice Keyes, =
dissenting. 1. Trade dress=20
under section 43(a) of the Lanham Act consists of the total image =
of a=20
product or service, including product features such as design, =
size,=20
shape, color, packaging labels, color combinations, graphics, or =
service=20
business features such as retail decor, architectural features, =
menus,=20
restaurant layouts, styles of service, costumes, and occasionally=20
marketing techniques as well. 2 Anne G. Lalonde, Karen Green & =
Jerome=20
Gilson, Trademark Protection & Practice =A7 2A.01[1] (59th ed. =
2006).=20
2. See 15=20
U.S.C.S. =A7 1125(a) (LexisNexis 2006).=20
3. Safe Cab had only one taxi.=20
4. In so holding, Kazi overruled =
Mingus=20
v. Wadley, 285 S.W. 1084, 1087 (Tex. 1926), which held that =
"where=20
the cause of action and remedy for its enforcement are derived not =
from=20
the common law but from the statute, the statutory provisions are=20
mandatory and exclusive, and must be complied with in all respects =
or the=20
action is not maintainable." 5. Generally, a reviewing court must =
consider=20
rendition points before considering remand points. Tex. R. App. P. =
43.3;=20
Pruitt v. Republic Bankers Life Ins. Co., 491 S.W.2d 109, =
112=20
(Tex. 1973). Therefore, we would usually consider Safe Cab's legal =
sufficiency point of error first. However, Safe Cab did not move =
for a=20
directed verdict, file a motion for judgment notwithstanding the =
verdict,=20
or otherwise preserve its no-evidence complaint except in its =
motion for=20
new trial. See Horrocks v. Tex. Dep't of Transp., 852 =
S.W.2d 498,=20
499 (Tex. 1993) (holding that appeals court can only remand for =
new trial=20
when that is only relief asked for by parties below). Therefore, =
because=20
Safe Cab asked only for a new trial, we can only remand for a new =
trial.=20
6. Although the federal courts of appeals' =
holdings=20
are not binding on Texas appellate courts, Hayes v. Pin Oak =
Petroleum,=20
Inc., 798 S.W.2d 668, 672 n.5 (Tex. App.--Austin 1990, writ =
denied),=20
the definition of secondary meaning involves a federal question =
under the=20
Lanham Act. Therefore, we are bound by the United States Supreme =
Court's=20
holding in this area. See Sharp v. Caterpillar, Inc., 932 =
S.W.2d=20
230, 235 (Tex. App.--Austin 1996, writ denied) (holding same).=20
7. Liability for unfair competition requires =
a=20
"finding of some independent substantive tort or other illegal =
conduct."=20
Schoellkopf v. Pledger, 778 S.W.2d 897, 904 (Tex. =
App.--Dallas=20
1989, no writ). Because there was error in the jury charge =
submission of=20
Yellow Cab's trade infringement cause of action (the independent =
tort=20
supporting the unfair competition claim), we need not reach this =
point of=20
error relating to unfair competition. Id.=20