Abraham v. Omega

• Citation: 781 F.Supp.2d 396,79 Fed.R.Serv.3d 385
• Decision Date: 26 April 2011
• Docket Number: Case No. 3:08–cv–570–F.
• Parties: Thomas Kenneth ABRAHAM, an individual d/b/a Paddle Tramps Mfg. Co., Plaintiff,v.ALPHA CHI OMEGA, an unincorporated association, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

781 F.Supp.2d 396

79 Fed.R.Serv.3d 385

Thomas Kenneth ABRAHAM, an individual d/b/a Paddle Tramps Mfg. Co., Plaintiff,

v.ALPHA CHI OMEGA, an unincorporated association, et al., Defendants.

Case No. 3:08–cv–570–F.

United States District Court, N.D. Texas, Dallas Division.

April 26, 2011.

Elizann Carroll, Molly B. Richard, Richard Law Group Inc., Jeffrey S. Levinger, Hankinson Levinger LLP, Dallas, TX, for Plaintiff.D. Ronald Reneker, Munsch Hardt Kopf & Harr PC, Dallas, TX, Amy S. Cahill, Jack A. Wheat, Jennifer L. Kovalcik, Stites & Harbison PLLC, Louisville, KY, Haley M. Dickerson, Stites & Harbison PLLC, Lexington, KY, for Defendants.

ORDER GRANTING IN PART AND DENYING WITHOUT PREJUDICE IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

ROYAL FURGESON, Senior District Judge.

BEFORE THE COURT is a Motion for Summary Judgment filed by the defendants and counter-plaintiffs in this action, an assortment of fraternity and sorority organizations (“the Greek Organizations”) (Docket No. 54). ¹ A Response was filed by Plaintiff Thomas Kenneth Abraham (“Kenneth Abraham”) d/b/a Paddle Tramps Manufacturing Company (“Paddle Tramps”) (Docket No. 65), and the Greek Organizations filed a subsequent Reply (Docket No. 72). The instant Motion concerns whether there is a genuine issue of material fact regarding whether Paddle Tramps committed trademark infringement, unfair competition, and trademark dilution under federal and Texas state law. Paddle Tramps has also filed a Motion for Summary Judgment regarding its affirmative defenses of laches and acquiescence (Docket No. 48), which has been fully briefed by the parties. The Court shall address Paddle Tramps's Motion in a separate order to be issued at a later date.

After considering the briefing of both parties, the Court is of the opinion that the Greek Organizations' Motion for Summary Judgment should be GRANTED IN PART AND DENIED WITHOUT PREJUDICE IN PART.²

I. Factual Background

For the purposes of this Motion for Summary Judgment, the Court shall view the facts in the light most favorable to the non-moving party. General Univ. Sys., Inc. v. Lee, 379 F.3d 131, 137 (5th Cir.2004); Texas Tech Univ. v. Spiegelberg, 461 F.Supp.2d 510, 528 (N.D.Tex.2006) (Cummings, J.). The Court shall discuss the facts relevant to the Greek Organizations' claims of trademark infringement, unfair competition, and trademark dilution, Facts only relevant to Paddle Tramps's Motion for Summary Judgment addressing its defenses shall be addressed in a separate order.

A. The Greek Organizations

The 32 defendants and counter-plaintiffs in this case are all fraternity and sorority organizations with chapters on college campuses throughout the nation. Due to these organizations' penchant for using Greek letters in their names, they are known as “Greek organizations.” All of the Greek Organizations were founded no later than 1959, and most of them are over 100 years old. The Greek Organizations act as holding-type companies which hold ownership of their properties, including their trademarks. Each Greek Organization is identified with a combination of Greek letters; examples of this include “Alpha Gamma Delta,” “Sigma Alpha Epsilon,” “Delta Delta Delta,” and so forth. The Greek Organizations also use Greek letter insignia to identify themselves; in keeping with the examples just mentioned, those three Greek Organizations are also identified as “?G?,” “S??,” and “???.” Most of the Greek Organizations are the owners of valid registrations of trademarks of these Greek letter combinations and insignia issued by the United States Patent and Trademark Office (“PTO”).

Some registrations also consist of combinations of Greek letters other than the name of the Greek Organization that serve as a shorthand reference to that organization, such as “Pi Phi” for Pi Beta Phi. Some other Organizations possess trademark registrations of nicknames reflecting a Greek letter or multiple Greek letters contained in their names. Examples of this type of trademark include “Teke” for Tau Kappa Epsilon, “SigEp” for Sigma Phi Epsilon, or “Pikes” for Pi Kappa Alpha. Additionally, many of the Greek Organizations have obtained valid registrations of a number of graphic designs, which vary in their complexity.³ The images range from ornate and complex crests to simpler shapes such as a sheaf of wheat or a version of a cross. Many of these designs, particularly the crests, contain the Greek letter combinations or insignia of the Greek Organization possessing the trademark. The registrations of all of these marks range from as early as 1928 to as late as 2007. A small number of the marks at issue in this case are not registered with the PTO.

Members of the Greek Organizations, particularly new members (sometimes known as “pledges”), often decorate ceremonial paddles as part of their initiation into the fraternity or sorority. While paddles are often associated with the hazing practices of Greek Organizations, pledges often purchase a crafted wooden paddle, which they decorate to commemorate their membership in the individual Greek Organization or to convey to their “big brother” or “big sister” within the fraternity or sorority. Pledges frequently will purchase a blank paddle to decorate, and will also purchase several individual Greek letters, combinations of Greek letters, carvings of their fraternity or sorority's crest or symbol, and other wooden figures with which to decorate their paddle. This tradition of decorating paddles dates back decades, and is practiced by all of the Greek Organizations who are parties to this case. The Greek Organizations' marks are also used on other types of merchandise, including pins, clothing, glasses, and mugs, among other items.

B. Paddle Tramps's Foundation and Business

Kenneth Abraham pledged the Phi Gamma Delta fraternity while attending Texas Tech University in the fall of 1960.⁴ Building upon his pledging experience, Abraham founded Paddle Tramps in 1961. Paddle Tramps's purpose was to provide materials to pledges for them to construct traditional decorative paddles. Generally, Paddle Tramps would provide fraternity and sorority members with blank paddles and various wooden figures with which to decorate them, and the members themselves would glue the figures to paddle itself. The wooden figures sold by Paddle Tramps included individual Greek letters, which, while not indicating any Greek Organization individually, could be combined to form the Greek letter insignia of a fraternity or sorority. More controversially for the purpose of this litigation, Paddle Tramps sold carved wooden figurines that were replicas of the crests or symbols within the crests of individual Greek Organizations.⁵

Abraham initially visited various Texas Tech fraternity and sorority houses showcasing his products, and took orders from Paddle Tramps's store location in Lubbock. By 1964, Paddle Tramps had opened a shop in Lubbock, Texas, and arranged for manufacturing of products in Lubbock and shipping the products to customers. As the 1960s progressed, Paddle Tramps's business expanded outside of the state of Texas. Paddle Tramps utilized its own catalogs and traveling salesmen to contact fraternity and sorority chapters at various schools to advertise their products. Paddle Tramps also published a catalog of its products in 1966, which advertised various products that specifically identified the Greek Organizations to which they were tailored.

Eventually, Paddle Tramps began wholesaling its products to stores and retail outlets. Kenneth Abraham's testimony indicates that he was selling products for all of the Greek Organizations who are parties to this lawsuit by 1966, and corresponded with members of a number of these organizations. In the 1960s and 1970s, Paddle Tramps began wholesaling its products to third party stores throughout the country, and participating in various trade shows. At no point during this early period of its existence did Paddle Tramps attempt to enter into a licensing agreement with any of the Greek Organizations. Conversely, the Greek Organizations did not reach out to Paddle Tramps about obtaining a license to sell products bearing the Greek Organizations' names, insignia, or crests until the 1990s.⁶

C. The Greek Organizations' Licensing Efforts

In the first few decades of Paddle Tramps's existence, certain individual Greek Organizations contacted Paddle Tramps about entering into licensing programs for the use of their marks or about controversies related to Paddle Tramps's use of the marks of certain Greek Organizations in its advertising efforts. These communications frequently led to compromise or resolution without litigation.

In the 1990s, the Greek Organizations began to increase their vigilance in policing their marks. At present, each of the Greek Organizations has a licensing program, and hundreds of vendors are licensed to produce memorabilia containing their Greek letter combinations, insignia, crests, and symbols. The Greek Organizations hired Affinity Marketing Consultants (“AMC”) to manage their licensing programs, which include over 10,000 licensing agreements with numerous authorized vendors to sell merchandise containing their Greek letter combinations, insignia, crests, and symbols. Most vendors of such merchandise are now licensed, as Kyle Abraham, the son of Paddle Tramps's founder and an officer of Paddle Tramps, admitted in his deposition. Products licensed by the Greek Organizations are identified by a stylized symbol, which consists of a circle bordered by the characters of the Greek Alphabet and containing the words “Greek Licensed Product” in the center. See Defs.' App., Docket No. 55–20, at 309–10.

As part of their efforts to educate their members about licensing, the Greek Organizations have sent notices to members urging them to only purchase products bearing their Greek letter combinations, insignia, crests, and symbols from licensed vendors. This...