Exxon Corp. v. Texas Motor Exchange of Houston, Inc.

• Decision Date: 22 October 1980
• Docket Number: No. 79-1009,79-1009
• Citation: 208 USPQ 384,628 F.2d 500
• Parties: EXXON CORPORATION, Plaintiff-Appellant, v. TEXAS MOTOR EXCHANGE OF HOUSTON, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 500

628 F.2d 500 208 U.S.P.Q. 384 EXXON CORPORATION, Plaintiff-Appellant,
v.
TEXAS MOTOR EXCHANGE OF HOUSTON, INC., et al., Defendants-Appellees. No. 79-1009. United States Court of Appeals,
Fifth Circuit. Oct. 22, 1980.

Page 501

Edward W. Goldstein, Houston, Tex., Theodore R. Scott, Chicago, Ill., F. X. Clair, J. Spencer Daly, New York City, for plaintiff-appellant.

Robert A. Heath, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before BROWN, HENDERSON and SAM D. JOHNSON, Circuit Judges.

SAM D. JOHNSON, Circuit Judge:

This is an appeal in the second trademark infringement action brought by Exxon Corporation against Texas Motor Exchange of Houston. The central issue in this appeal is whether there is a likelihood of confusion between the trademark EXXON and the words Texon or Tex-On. The district court found that there was no likelihood of confusion and refused to enjoin defendant from using either Texon or Tex-On. We affirm in part and reverse in part.

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I. Facts

In late 1972 and early 1973 the owner of Texas Motor Exchange of Houston began searching for a new name for his corporation. He felt that Texas Motor Exchange was too common a name in Texas. After some thought and consultation with his attorney, the owner settled on the name Texxon. In May 1973 he established a new corporation-Texxon Motor Centers, Inc. At this point the owner began using all forms of advertising to promote the new corporation. He substituted Texxon for Texas in two large neon signs located in front of the former place of business so that both of the signs, which previously read Texas Motor Exchange, read Texxon Motor Exchange. The owner also began using Texxon as the most prominent name in the large painted sign appearing on one side of his place of business. Finally, Texxon was prominently displayed in newspaper and yellow page advertisements, and Texxon Motor Exchange was used as the firm's trade name in radio advertising. Unfortunately for the owner, his effort to find an innovative name that would attract more business served as the basis for the instant cause of action.

In November 1972 Standard Oil Company changed its name to Exxon Corporation. Exxon Corporation owns several federal registrations of EXXON as a trademark for petroleum and other automotive products that it markets. ¹ Additionally, after adopting EXXON as its national trademark and changing its name in November 1972, Exxon Corporation went to great expense to advertise and promote its EXXON mark and name throughout the United States. It is safe to say that this effort has made EXXON virtually a household phrase.

In February 1975 Exxon Corporation filed an action for trademark infringement and unfair competition against Texxon Motor Center. Exxon Corporation sought damages and, most importantly, a judgment restraining defendant from using Texxon or Texon in connection with its business. The district court held a hearing in January 1977. The court found that defendant's use of Texxon infringed plaintiff's rights in its federally registered EXXON mark and name and that defendant had engaged in unfair competition. The trial judge then issued the following order:

1. Defendant Texxon Motor Centers Incorporated be, and hereby is, affirmatively directed to:

(a) Change its corporate name by eliminating "Texxon" therefrom;

(b) Remove TEXXON from any and all signs painted on or otherwise affixed to the building in which said defendant's place of business is located; and

(c) Deliver up for destruction all other signs, labels, prints, packages, wrappers, receptacles, and advertisements in its possession on which TEXXON appears.

2. Defendants Texas Motor Exchange of Houston, Inc. and Texxon Motor Centers Incorporated and their officers, agents, representatives, employees, attorneys and any and all persons in active

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concert or participation with them be and hereby are, permanently enjoined and restrained from:

(a) Using TEXXON as part of any corporate or trade name or mark or in the advertising, offering for sale or sale of any services or products; or

(b) Using any signs, advertising or promotional materials of any kind or nature whatsoever on which the trade name or mark is displayed in red letters on a white background above a blue bar or rectangle or in any other manner imitative of plaintiff's distinctive EXXON logotype.

In accordance with the district court's order, the defendant ceased using the name Texxon on any of its signs or in any of its advertisements. In its place, defendant began using the marks Texon and Tex-On. Defendant, however, did not formally change its corporate name by eliminating Texxon. Instead, defendant conducted business under the names Texon and Tex-On and decided to wait to formally change its name until Exxon Corporation filed a second lawsuit and the district court ruled on the propriety of the use of either Texon or Tex-On. As the defendant suspected, in September 1978 Exxon Corporation moved for a modification and enforcement of the permanent injunction. Specifically, plaintiff urged the court to modify the injunction and prohibit defendant from using Texon or Tex-On. In November 1978 the district court held a second hearing, this time on plaintiff's motion to modify the permanent injunction. The court ruled that the names Texon and Tex-On do not infringe upon plaintiff's EXXON mark and do not constitute unfair competition. The district court denied plaintiff's motion to modify the permanent injunction. Plaintiff then instituted this appeal.

II. Standard for Modification of the Injunction

Exxon Corporation seeks to modify the original injunction and impose additional limitations upon the defendant. ² The standard that Exxon Corporation must meet in order to justify the imposition of additional restrictions is, under present law, uncertain. The starting point for this Court's analysis must be the Supreme Court's decision in United States v. United Shoe Machinery Corp., 391 U.S. 244, 88 S.Ct. 1496, 20 L.Ed.2d 562 (1968).

United Shoe Machinery involved the Government's effort to take stronger steps to remedy the corporation's monopolization of the shoe machinery market. The district court, which...