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
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of the original case Taco Cabana, Inc., v. Two Pesos, Ins., is provided and the decisions made by the different courts. Case History Taco Cabana, Inc. started business in 1978 as a fast-food Mexican restaurant in the city of San Antonio, Texas by brothers Mike and Felix Stehling. Taco Cabana became a chain of fast food Mexican restaurants opening 5 more restaurants on San Antonio in 1985, in the same year Taco Cabana called its trade dress “Mexican Fast-Food Trade Dress”. Based on Taco Cabana’s description its restaurants trade dress is A Cheerful eating environment with decorated colorful ornaments and wall paintings within the patio and inside area. On the outside the building continues with cheerful bright colors and neon stripes, vivid tents and umbrellas aligned with the themed. The patio area could be closed by garage doors that could be pulled from roof. 932 F. 2d 1113, 1117 (CA5 1991). In 1985 Two Pesos, Inc., started its restaurant business in Houston, Texas. The restaurant was opened by Jim Blacketer and Marno McDermott. Two pesos used a design for their restaurant that was alike and or comparable to the description of Taco Cabana’s trade dress. Two pesos was able to expand its business soon after stating operations, opening more locations within Houston, to Dallas and other cities. In December 1987, the Stehling brothers decided to go separated ways and agreed to divide the restaurants; from that division, Michael named the locations he kept TaCasita. Days later, Taco Cabana sued Two pesos for in the United States District Court for the southern District of Texas for trade dress infringement under § 43(a) of the Lanham Act, 15 U. S. C. § 1125(a) (1982 ed.), and for theft of trade secrets under Texas common law. Section 43(a) of the Lanham Act provides: Any person who shall affix, apply, or annex, or use to connection with any goods or services or any container or containers for goods, a false designation or origin or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, ad any person that shall with knowledge of the falsity of such designation of origin or description or representation cause or procured the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation. 15 U.S.C § 1125 (a) (1982). The interpretation of the Lanham Act by the court is that it has designated the first manufacturer of a product, to an unregistered trademark in the trade dress of a product. Based on the United States Patent and Trademark Office, (USPTP) a trademark or service mark includes any word, name, symbol, device, or combination, used or intended to be used to identify and distinguish the goods/services of one seller or providers from those of others, and to indicate the source of the goods/services. A trade dress is an overall image or appearance of a product or service. Courts generally evaluate a trade dress on the overall look rather than each component that makes the appearance of a product or service different. Most courts have stated an understanding that the Lanham Act establishes a cause of action for unregistered trade dress infringement, the different courts disagree on what specifications or elements are needed to to be considered sufficient facts for a case. What is clear is that most courts agree that the plaintiff must prove that the two products or services in question have enough similarity to possibly confuse the customers or consumers. One important factor, that different courts differ on, is the need to prove secondary meaning. Secondary Meaning is a buyer’s mental association between a trademark or trade dress and the source of the product. (Levi Strauss & Co. v. blue Bell, Inc., 778 F.2d 1352, 1354. 9th Cir. 1985) Taco Cabana V. Two Pesos District Court Decision The District court instructed the Jury that Taco Cabana’s trade dress would be protected if it either was inherently distinctive or if it had acquired secondary meaning. The Jury found that Taco Cabana trade dress was inherently distinctive, although it had not acquired secondary meaning, the jury also found, that the trade dress taken as a whole was nonfunctional, and that the alleged violation created a possibility of confusion within customers as to the source or association of the restaurants. The district court awarded damages to Taco Cabana, holding that Two Pesos had intentionally and deliberately infringed Taco Cabana’s trade dress. The damages for trade dress infringement totaled $1,868,600, the District court also awarded attorney fee of $937,559 and ordered Two Pesos to make changes on the appearance of the restaurants. Two Pesos v.
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,
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Inc. Two Pesos Inc., v. Taco Cabana Inc., U. S Supreme Court Two pesos entreated the United States Supreme Court for a Writ of Certiorari, the petition was accepted. The supreme court sustained the Court of Appeals’ decision holding that the trade dress is protectable under the Lanham Act because of its inherently distinctiveness, without need for proof of secondary meaning. Justice Byron R. White writing for a unanimous court affirmed the lower courts decision. The supreme court held that trade dress can be protected under the Lanham Act based on inherent distinctiveness even as if there is no proof of a secondary meaning, and there is no persuasive reason for treating trade dress differently from other types of trademark. Requiring secondary meaning would go against the purposes of the Lanham Act. (Oyez.Org; Two Pesos, Inc., v. Taco Cabana, Inc.) After the Supreme court’s decision on this case is clear that an unregistered trade dress is protected and will not required proof of secondary meaning; if the trade dress is essentially distinctive, if it is nonfunctional and there is a possibility of creating confusion among the consumers in relation to the original source.
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
closed. Conclusion Despite the challenges faced by the courts and new entrants to market, in relation to the trade dress, the Lanham Act does provide a great level of protection that rewards the originality of the trade dress of the first brand that established the trade dress. Two Pesos, Inc., v. Taco Cabana helped settle the differences between the different circuits regarding when was proof of secondary meaning required, with The Supreme Court establishing that there is no need for proof of secondary meaning when the trademark or trade dress was inherently distinctive. Bibliography 505 U.S. 763; 112 S. Ct. 2753; 120 L. Ed. 2d 615; 1992 U.S. LEXIS 4533; 60 U.S.L.W. 4762; 92 Cal. Daily Op. Service 5571; 92 Daily Journal DAR 8910; 23 U.S.P.Q.2D (BNA) 1081; 6 Fla. L. Weekly Fed. S 643 Lawecommons.luc.edu https://www.uspto.gov/trademarks-getting-started/trademark-basics https://www.oyez.org/cases/1991/91-971
Mexico’s Attorney General’s Office (Procuraduria General de la Republica, PGR) had issued information related to the conformation of the seven principal drug cartels present at Mexico:
(7) Right to appellate review: The Supreme Court did not rule regarding appeal since their ruling was this case was to be remanded back to the lower courts.
In “Wal-Mart vs. Pyramids”, Laura Carlsen questions the super franchises business tactics and opposes their attempt to build on the sacred, holy land that was once Teotihuacan. In her argument, Carlsen suggest that building in this area would infringe on the country’s cultural heritage, one that goes back thousands of years. Laura Carlsen gives a compelling argument against Wal-Marts’ practices in Mexico by displaying effective uses of ethos, pathos, and logos, as well as her successful use of other rhetoric appeals.
v. VIP Prods., LLC 666 F. Supp. 2d 974 (Mo., 2008) Anheuser-Busch makes a distinction between confusing and non-confusing parodies, the latter being protected as a parody. The important factors in the case were that the price point of the products was the same, they were directly competing goods and the survey showed that there was a level of confusion (30.3% were confused), in addition, consideration was placed on irreparable harm caused by the defendants use of the mark, the priority lay with the first to register the trademark, lastly the District Court considered public interest, i.e. whether the public was deceived. Similarly in Starbucks Corp v. Wolfe’s Borough Coffee Inc., 588 F3d 97 (2d Cir. 2007) the court distinguished Louis Vuitton S.A. v Haute Diggty Dog, LLC, 507 F.3d 252 (4th Cir. 2007) by holding that if (as in the Louis Vuitton case), the mark is used in non-competing goods, the defendant conveyed that it was not the source of the plaintiffs product and if the actual use of the mark does not impair the distinctiveness of the plaintiff’s mark there may be an argument in favor of the defendant, however, if the defendant’s humor is not conveyed to the public, and does not increase the public identification of the plaintiff’s mark with its mark it will fail to establish
Diaz offered foreign investors to start business in Mexico and encouraged utilization of the country’s natural resources through the investment of foreign capital (284).
The Great Divide University of California-Berkley geographer and author Michael Johns argues in his novel, The City of Mexico in the Age of Diaz, that the central Zocalo of Mexico City does more than geographically segregate the East from the West, but Mexico’s national mentality as well. During the years of Diaz’s democratic façade, the upper classes thrived upon plantation exports, feudalist economics and the iron fist of Diaz’s rurales while struggling to maintain European social likeness. East of the Zocalo, shantytowns housed thousands of poor pelados that served as societal blemishes of a suburbanite’s experience. In Johns’s work, the penniless and indigenous serve as the scapegoats for the priviledged and their obsession with grooming Mexico City to be a little Europe. A growing affluent class called upon the Diaz regime and imported architects to construct buildings in the Zocalo to reflect a “proper” image that drew on influences from Europe and the United States.
Hernandez v. New York, 500 U.S. 352; 111 S. Ct. 1859, 114 L.Ed.2d 395 (1991).
1. The court stated that they did have power to hear this case: "Since the court has consistently exercised the power to construe and delineate claims arising under express powers, it must follow that the Court has authority to interpret claims with respect to powers alleged to derive from enumerated powers."
Many businesses used this new process to raise the price of their competitors. They did this by putting constraints on entry restrictions (Woods 1986). At the state level, other laws were put in place to support the Food and Drug Act mainly to help local and area producers who were and would be facing new nat...
If one were to visit different countries and societies throughout the world, they may notice the many differences and similarities each region shares. This makes the world a very unique place because there is constant change and diversity everywhere we look, no matter the distance traveled. A prime example of this would be the similarities and differences between the United States of America and Mexico. Although the two are neighboring countries, there is a great deal of diversity amongst them that deserve a thorough examination.
must be excluded. But it was held admissible and the idea was excluded from the case
The process of the judging on this criteria goes like this: First, a business or organization that loses an appeal in the Us court system, they are allowed to file a petition, called a “cert petition” (Savage 981). These petitions explain in thirty pages or less the process, views, and decision of the case. These are then given to the Law Clerks, who create a “cert memo”. This is created when the Clerk rea...
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4. Raven, M. E. (2000, October). Seventh Circuit affirms FTC's ruling that Toys "R" Us led illegal boycott. Corporate Counsel (7), p. A6.
The aim of this essay is to critically discuss how the law of passing off and trade mark law have common roots and therefore are, in many respects, similar. I will begin with a short brief history of trade mark law and the law of passing off. I move on to discuss the similarity between trade mark law and the law of passing off with reference to relevant case law and statutes. Although, passing off and trade mark law deal with overlapping factual situations, s 2(2) of the Trade Mark Act 1994 maintains passing off as a separate cause of action. When a trade mark is threatened by the actions of third parties the proprietor will bring an action for both passing off and trade mark infringement which both share many similarities. However, they are