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Dispute Over 'Rebels Honky Tonk' Lives Because of Pending Equitable Defenses

Thursday, October 17, 2013
By Anandashankar Mazumdar

Oct. 15 --A dispute between two bar owners using the name “Rebels Honky Tonk” and an associated logo could not be resolved at the summary judgment stage, given pending equitable defenses asserted by the defendant, the U.S. District Court for the Southern District of Texas ruled Oct. 9 ( Reservoir, Inc. v. Truesdell, S.D. Tex., No. 4:12-cv-02756, 10/9/13).

Denying a motion for summary judgment on a claim of trademark infringement, the court did, however, grant the plaintiff judgment on the pleadings regarding the defendant's assertion of a defense of laches.

Ex-Employee Claims to Be Creator of Idea
Mohammad Ayman Jarrah of Houston is a principal of Reservoir Inc., which in August 2009 has operated the Rebels Honky Tonk bar on Washington Avenue in Houston.

Prior to the opening of the bar, Justin Zack Truesdell of Houston had been an employee of Jarrah and had knowledge of Reservoir's plans. Truesdell's employment was terminated some time prior to August 2009. In November 2009, Truesdell formed Rebels Honky Tonk LLC and opened a bar in Austin, Texas, also called Rebels Honky Tonk, using an identical logo incorporating the phrase “Rebels Honky Tonk.”

In 2010, Truesdell filed an application with the Patent and Trademark Office to register the logo as his trademark. In 2012, Truesdell formed 26710 North I45 LP and opened another Rebels Honky Tonk bar--known as Rebels Honky Tonk Woodlands--in Oak Ridge North, Texas, 30 miles north of Houston. The Woodlands location has since closed.

In February 2012, Truesdell, claiming that he had been the actual developer of the Rebels Honky Tonk name, concept and trade dress, demanded that Jarrah stop using the name and logo. In August 2012, Jarrah sued Truesdell in the Texas District Court for the Ninth District, Conroe, Texas, alleging trademark infringement and unfair competition under Texas state common law, injury to business reputation and trademark dilution under Tex. Bus. & Com. Code §16.29, trademark infringement, unfair competition and trade dress infringement under federal law, and sought cancellation of Truesdell's federal trademark registration.

Truesdell petitioned for removal to federal court and asserted several equitable defenses. In a prior ruling, the court had found that Jarrah had established enforceable rights in a protectable trademark as well as likelihood of confusion resulting from Truesdell's uses.

Jarrah then moved for summary judgment with respect to several equitable defenses raised by Truesdell, namely, laches, waiver and estoppel.

Laches Only Issue Resolved
Judge Nancy F. Atlas first granted Jarrah's motion on the issue of laches. The court found no evidence for the claim that Jarrah had unreasonably delayed bringing his claims.

Specifically, there was no evidence of Jarrah having known of the opening of the Austin bar in November 2009, as asserted by Truesdell. In contrast, there was evidence in the record that Jarrah learned about Truesdell's use only when he received Truesdell's cease-and-desist letter.

Furthermore, the court said, even if Jarrah had learned of the use in November 2009, the time between that and the filing of his complaint in state court would have been within the four-year statute of limitations applicable under Texas state law.

Truesdell then argued that by waiting until August 2012 to file his claims, Jarrah had waived his rights and had, in effect, given Truesdell permission to use the name and logo. The court found that further briefing was required on the question of whether this concept of waiver applied to trademark infringement claims under federal law.

Turning to Truesdell's assertion of the equitable defense of estoppel, based again on his claim that Jarrah had given him permission to use the trademarks, the court denied summary judgment on this claim, using the same reasoning as that applied to the waiver issue.

Finally, the court turned to Jarrah's request for summary judgment on his trademark infringement claim, based on the prior findings that he had an enforceable trademark and that there was a likelihood of confusion. However, according to the court, this issue could not be resolved while Truesdell's waiver and estoppel defenses were still pending.

Jarrah was represented by Lee Van Richardson Jr. of Hempstead, Texas. Truesdell was represented by Albert Thomas Van Huff of Monshaugen & Van Huff, Houston.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com


Text is available at http://www.bloomberglaw.com/public/document/Reservoir_Inc_et_al_v_Truesdell_et_al_Docket_No_412cv02756_SD_Tex.

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