Two Pesos V. Taco Cabana Summary

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Legal Environment of Business
Prof. Sue Ganske, J.D., M.A.

Introduction

Two Pesos, Inc., v. Taco Cabana, Inc. tells the story of two competing Mexican themed restaurants and the legal fight of the understanding of the protections awarded under § 43(a) of the Lanham Act,15 U.S.C.S §1125 (a). The legal fight is for the protection or not of unregistered trade dresses under the Lanham Act, specifically the need or not for secondary meaning, in order to determine if in fact, there was infringement of trade dress. The United States Supreme Court resolution on this case addresses the differences between the Fifth and the Second Circuit and provides clarity in the application of the Lanham Act and requirements of secondary meaning. A brief history …show more content…

Taco Cabana U. S Court of Appeals

Two pesos appealed to the Fifth circuit stating that Courts instructions to the Jury was contradicting, Two Pesos objected that the trade dress could not be inherently distinctive and not have secondary meaning. Two Pesos argued that the district court failed to inform the Jury that the trade dress could only be protected if it was found to have secondary meaning.

The court of appeals ruled that the instructions were within the law, held that the evidence provided supported jury’s findings and rejected Two Pesos argument that the trade dress not being inherently distinctive contradicted with having no secondary meaning. The court of appeals reaffirmed its decision on the Chevron Chemical Co. v. Voluntary Purchasing Groups, Inc., 659nF.2d 695, 702 (CA5 1981), where the court indicated that trade mark law only when a trademark is not essentially distinctive would require demonstration of secondary meaning, the court of appeals held that the same principle should be applied to the protection of trade dresses. The court of appeals also noted that their decision contradicts with the decision of the Second Circuit because they required the proof of secondary meaning to grant the protection of unregistered trademarks as they ruled in the Vibrant Sales, Inc. v. New Body Boutique, …show more content…

Other things remained unclear as the level of similarity accepted by the court before an infringement consideration. For second market entrants, having business concepts similar to the first brand in the market could result challenging because there are no specific outlines as of what level of similarity is accepted without facing any legal issues or violation the protection under the Lanham Act. As of today July 2017, there is still no specific regulation on the acceptance of brand similarities.

The After Case

A year after the resolution of the case Two Pesos sold its stores to Taco Cabana for shares onf their company for a total of 22 million. Taco Cabana changed some of the Stores to Taco Cabana and other locations were

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