Cowboys Football Club v. America's Team Properties

• Decision Date: 30 March 2009
• Docket Number: Civil Action No. 3:06-CV-1906-K.
• Citation: 616 F.Supp.2d 622
• Parties: DALLAS COWBOYS FOOTBALL CLUB, LTD. and NFL Properties, LLC, Plaintiffs, v. AMERICA'S TEAM PROPERTIES, INC., Defendant.
• Court: U.S. District Court — Northern District of Texas

616 F.Supp.2d 622

DALLAS COWBOYS FOOTBALL CLUB, LTD. and NFL Properties, LLC, Plaintiffs, v. AMERICA'S TEAM PROPERTIES, INC., Defendant.

Civil Action No. 3:06-CV-1906-K.

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

March 30, 2009.

Levi G. McCathern, II, Margaret R. Mead, McCathern Mooty, Dallas, TX, Jessica A. Rose, Robert L. Raskopf, Quinn Emanuel Urquhart Oliver & Hedges, New York, NY, for Plaintiffs.

Austin H. England, Veon & England, Daniel W. Schreimann, Law Office of Daniel W. Schreimann, Irving, TX, Kyle J. Kaiser, Peter J. Gleekel, Winthrop & Weinstine, Minneapolis, MN, for Defendant.

MEMORANDUM OPINION AND ORDER

ED KINKEADE, District Judge.

Before the Court are a Motion for Summary Judgment and a Motion to Exclude from Evidence the Reports, Affidavit and Testimony of Defendant/Counter Claimant's Expert Witness James T. Berger by Plaintiffs Dallas Cowboys Football Club, Ltd. and NFL Properties, LLC (Doc. Nos. 61 and 62) and a Motion to Exclude the Expert Report and Testimony of Gabriel M. Gelb and a Motion for Partial Summary Judgment by Defendant America's Team Properties, Inc. (Doc. Nos. 64 and 66). Because Plaintiffs' rights in the term "America's Team" are superior to Defendant's claims, Plaintiffs' motion for summary judgment is GRANTED. Consequently, the Court DENIES Defendant's motion for partial summary judgment.

Because the Court finds Plaintiffs' expert survey to be sufficiently reliable under Federal Rule of Evidence 702 and "minor methodological flaws will affect weight rather than admissibility," Scott Fetzer Co. v. House of Vacuums, Inc., 381 F.3d 477, 488 (5th Cir.2004), Defendant's Motion to Exclude is DENIED. Because the Court would rule for Plaintiffs even if the expert report to which they object is considered, Plaintiffs' Motion to Exclude is DENIED as moot.

I. Factual and Procedural Background

Plaintiff Dallas Cowboys Football Club, Ltd. ("Dallas Cowboys" or "Cowboys") is the National Football League ("NFL") franchise in the Dallas, Texas, metropolitan area. Plaintiff NFL Properties, LLC, ("NFLP") is the marketing arm of the thirty-two NFL member clubs.

Defendant America's Team Properties, Inc. ("ATP"), is a Minnesota corporation with its principal place of business in Burnsville, Minnesota. Defendant was incorporated in 1998 to take assignment of U.S. Trademark Reg. No. 1,899,914 (for "clothing; namely, shirts") and exploit the mark commercially.

The '914 trademark registration was originally applied for by Terrence Nash ("Nash"), president and owner of MEOB, Inc. ("MEOB"), in June 1990, and was sold to ATP in 1998. In his intent-to-use application with the United States Patent and Trademark Office, Nash submitted a sworn declaration stating that he was unaware of any other person or firm that had the right to use the mark in commerce. Nash has stated he intended to sell one million t-shirts at $1 profit each to pay for his children's education. The '914 trademark was granted to MEOB in 1995.

Nash states that he sold or gave away t-shirts printed with "America's Team" at various sporting events and while traveling as a salesman. He received a license from the University of Washington and sold co-branded t-shirts outside Husky Stadium in 1990. He also licensed use of "America's Team" to a recreational league softball team in Texas. Nash claims he was completely unaware that the Dallas Cowboys, or any other entity, was referred to as "America's Team" at this time.

Nash claims a few sales between 1990 and 1994. In 1994, he sold t-shirts to four businesses. As a result of the registration and these sales, Defendant asserts it has a nationwide priority date of June 6, 1990, and the mark has been continually used in commerce since 1995. Thereafter, Nash spoke with many entities about potential licensing deals, including Nike, Reebok, and L.A. Gear, but none came to fruition.

Defendant ATP purchased the trademark from MEOB, Inc., in 1998 for $100. Defendant asserts that this figure included the assumption that would be forced to spend an additional $100,000 in litigation costs defending the mark. As part of the deal, MEOB's president and owner Brian Reichel ("Reichel") agreed to give Nash 49 percent of the proceeds from any subsequent sale of the registration. On May 14 and May 17, 1999, Defendant ran advertisements in the USA Today newspaper to auction the "America's Team" registration to the highest bidder with a minimum bid of $500,000. America's Team Properties also called the Dallas Cowboys to notify the team that the registration was up for sale. Defendant also contacted the team in October, November, and December 2003 to offer to sell the registration for $400,000. The Cowboys refused to pay.

Since purchasing the registration, ATP has sold clothing and assorted goods through its website, www.americas teamusa.com. Its "primary focus" has been to create a website and social networking site to promote the "America's Team Award" to "provide a four-year, full-ride scholarship to one high school team every year."

The Dallas Cowboys and NFLP filed this suit alleging Defendant ATP's actions infringe their common law rights in the trademark and their state trademark registration. The Cowboys assert that "America's Team" is a protectable mark and that the team has priority over America's Team Properties, Inc. Plaintiffs assert that "Defendant is a bad-faith infringer whose increasingly aggressive and harassing activities pose a significant threat to the business concerns of the Dallas Cowboys."

Defendant ATP filed a counterclaim against the Dallas Cowboys and NFLP, seeking a declaratory judgment that its registration is valid and that the Cowboys have no use priority, and further seeks cancellation of the Cowboys' state trademark registration in Texas.

The Cowboys assert the team has used "America's Team" as a service mark and trademark since 1979. The term was first used in commerce that year as the title of the Dallas Cowboys' 1978 season highlight film. The term was coined by Bob Ryan, an executive at NFL Films, working with Doug Todd, the Cowboys' public relations director. The name stuck, and the Cowboys actively encouraged its use to promote the team. The Cowboys allow sponsors, promoters, and charities to use the term in promotions.

Other examples abound of use in connection with the Dallas Cowboys. A 1979-1980 calendar sold by the Cowboys to the public used the term. In the 1980s, NFL Films sold a videocasette titled "America's Team: The Dallas Cowboys 1975-1979." Between 1986 and 1990, a NFLP licensee sold silver coins with the term engraved on them. The team used the term in various publications throughout the 1980s and 1990s. And since at least 1989, the Cowboys have used the term in presentations and sales pitches to potential sponsors and business partners.

By at least 1991, the Cowboys sold t-shirts emblazoned with the term. The team notes that the first use in commerce by MEOB and Nash was January 1995. The team argues that by this time, the term had been long associated with the Dallas Cowboys and had been used in commerce on sweatshirts, trading cards, belt buckles, and other items for years.

On October 30, 1992, the Dallas Cowboys obtained Texas trademark registration No. 5223517 for "Dallas Cowboys America's Team" for use on clothing. Since 1995, the Cowboys have made millions of dollars selling "America's Team" items including apparel, glassware, flags, blankets, towels, pins, footballs, toys, and holiday ornaments. The team has sold the items through various retail outlets, including thirty-three Official Dallas Cowboys Pro Shops in malls and airports, at Texas Stadium, a merchandise trailer, through catalogs, and on the Internet. The Cowboys also sell "America's Team" items through wholesalers and license its use to various manufacturers.

Since December 2003, Defendant has filed fifty-eight trademark applications with the USPTO for various uses of "America's Team" and related indicia. The Cowboys and NFLP have opposed many of the applications before the USPTO Trademark Trial and Appeal Board ("TTAB"), and the TTAB proceedings are suspended pending the outcome of this action.

Plaintiffs seek summary judgment on seven claims: declaration of noninfringement and nondilution, federal unfair competition, federal dilution, injury to business reputation or trademark under Texas law, common law trademark infringement, common law unfair competition, and further seek cancellation of Defendant's trademark registration. Defendant moves for summary judgment on all Plaintiffs' claims, with the exception of Plaintiffs' declaratory claims. Defendant's counterclaims are not the subject of the instant summary judgment motions.

II. Legal Standard

Summary judgment is appropriate when the pleadings, affidavits and other summary judgment evidence show that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 322-25, 106 S.Ct. 2548. Once a movant makes a properly supported motion, the burden shifts to the nonmovant to show that summary judgment should not be granted; the nonmovant may not rest upon the allegations in the pleadings, but must support the response to the motion with summary judgment evidence showing the existence of a genuine fact issue for trial. Id. at 321-25, 106 S.Ct. 2548; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). All evidence and reasonable inferences must be viewed in the light most favorable to the nonmovant. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).

III. Analysis

A trademark is "any word, name, symbol,...