Marshall v. Fulton

Filing 79

Memorandum Opinion and Order denying 61 Plaintiff's Motion for Partial Summary Judgment as to Tortious Interference and Laches/Estoppel; denying 63 Defendant's Motion for Partial Summary Judgment; granting 60 Plaintiff's Motion to Dismiss Defendant's Fraud on the Trademark Office Affirmative Defense and Counterclaim. (Ordered by Judge Sam A Lindsay on 4/29/2011) (axm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
WALLY MARSHALL
d/b/a MR. CRAPPIE,
Plaintiff,
v.
LAWRENCE A. FULTON,
Defendant.

§
§
§
§
§
§
§
§
§
§
§

Civil Action No. 3:08-CV-1921-L
Consolidated with C.A. 3:09-CV-0233-L

MEMORANDUM OPINION AND ORDER
Before the court are: (1) Plaintiff’s Motion for Partial Summary Judgment as to Tortious
Interference and Laches/Estoppel, filed October 15, 2010; (2) Defendant’s Motion for Partial
Summary Judgment Against Plaintiff Wally Marshall, filed October 15, 2010; and (3) Plaintiff’s
Motion to Dismiss Defendant’s Fraud on the Trademark Office Affirmative Defense and
Counterclaim, filed October 6, 2010.
After a careful review of the motions, briefs, appendices, responses, replies, record, and
applicable law, the court (1) denies Plaintiff’s Motion for Partial Summary Judgment as to Tortious
Interference and Laches/Estoppel; (2) denies Defendant’s Motion for Partial Summary Judgment
Against Plaintiff Wally Marshall.; and (3) grants Plaintiff’s Motion to Dismiss Defendant’s Fraud
on the Trademark Office Affirmative Defense and Counterclaim.
I.

Factual and Procedural Background
Wally Marshall d/b/a Mr. Crappie (“Plaintiff” or “Marshall”) filed his Original Complaint

and Application for Preliminary Injunction and Permanent Injunction against Lawrence A. Fulton

Memorandum Opinion and Order – Page 1

(“Defendant” or “Fulton”) in this court on October 28, 2008. His claims presented a federal
question under the Trademark Laws of the United States. He amended his complaint on October
31, 2008, January 19, 2009, and May 12, 2010. In the live complaint, Plaintiff’s Third Amended
Complaint (hereinafter, “Complaint”), Marshall asserts the following claims against Fulton: false
designation of origin, declaratory judgment, federal trademark infringement, common law trademark
infringement, common law unfair competition, violation of section 16.29 of the Texas Business and
Commerce Code, defamation (including libel, slander, and injurious falsehood), and interference
with business and contractual relations.
On November 12, 2008, Defendant Fulton filed a civil action against Plaintiff in the District
Court in and for Cherokee County, Oklahoma. Fulton asserted the following claims against
Marshall: trademark infringement, deceptive trade practices, common law trademark and trade
name infringement, and common law unfair competition. Marshall removed that action to the
United States District Court for the Eastern District of Oklahoma on December 23, 2008. The case
was transferred to this court on February 3, 2009, and the court consolidated the two actions on May
13, 2009. On August 14, 2009, Fulton brought a counterclaim against Marshall for fraud on the
trademark office.
Plaintiff is a professional fisherman who developed a line of products for “crappie anglers”
based upon the trademark “Mr. Crappie” (the “Trademark”). In 1998, Plaintiff filed an application
with the United States Patent and Trademark Office for the Trademark, which was accepted and
registered in 1999. Plaintiff sells the products with the Trademark through stores and distributors
including Bass Pro Shops, Academy Sports, Cabela’s, and Gander Mountain.

Memorandum Opinion and Order – Page 2

Plaintiff claims ownership of the Trademark under federal law. According to him, Defendant
has operated his business in Oklahoma under the name “Mr. Crappie,” has illegally used the federal
trademark registration symbol for his goods, and has attempted to interfere with Plaintiff’s business
in Texas and other states by writing letters to major stores and distributors that sell his products.
Plaintiff alleges that on or about February 25, 2008, Defendant wrote to him demanding royalties
and threatening to send a letter to Plaintiff’s stores and distributors if he failed to pay; Plaintiff
refused. Thereafter, he alleges that Defendant sent letters to numerous stores and distributors,
asserting that Plaintiff’s use of the Trademark is unauthorized, that Defendant holds rights to the
Trademark, that the law supports him, and that Plaintiff’s use of the Trademark is an infringement
upon Defendant’s own trademark rights.
Defendant moves for summary judgment on Plaintiff’s claims because he contends that no
evidence exists to support them and that he is the senior user of the Trademark. Plaintiff moves for
partial summary judgment on his interference with business and contractual relations claim and on
his laches and estoppel defense against all of Defendant’s claims and counterclaims. In addition,
Plaintiff moves to dismiss Defendant’s counterclaim for fraud on the trademark office for failure to
state a claim upon which relief can be granted.
II.

Legal Standards
A.

Motion for Summary Judgment

Summary judgment shall be rendered when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that 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, 323-25 (1986); Ragas v.

Memorandum Opinion and Order – Page 3

Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact
is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a
motion for summary judgment, the court is required to view all facts and inferences in the light most
favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party.
Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). Further, a court “may not
make credibility determinations or weigh the evidence” in ruling on motion for summary judgment.
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 25455.
Once the moving party has made an initial showing that there is no evidence to support the
nonmoving party’s case, the party opposing the motion must come forward with competent summary
judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 586 (1986). Mere conclusory allegations are not competent summary
judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v.
Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and
unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19
F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871 (1994). The party opposing summary
judgment is required to identify specific evidence in the record and to articulate the precise manner
in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty
on the court to “sift through the record in search of evidence” to support the nonmovant’s opposition
to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909,
915-16 & n.7 (5th Cir.), cert. denied, 506 U.S. 832 (1992). “Only disputes over facts that might

Memorandum Opinion and Order – Page 4

affect the outcome of the suit under the governing laws will properly preclude the entry of summary
judgment.” Anderson, 477 U.S. at 248. Disputed fact issues which are “irrelevant and unnecessary”
will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving
party fails to make a showing sufficient to establish the existence of an element essential to its case
and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex,
477 U.S. at 322-23.
B.

Motion to Dismiss for Failure to State a Claim

To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Reliable Consultants, Inc. v. Earle, 517
F.3d 738, 742 (5th Cir. 2008); Guidry v. American Pub. Life Ins. Co., 512 F.3d 177, 180 (5th Cir.
2007). A claim meets the plausibility test “when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The
plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)
(internal citations omitted). While a complaint need not contain detailed factual allegations, it must
set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555 (citation omitted). The “[f]actual allegations of [a
complaint] must be enough to raise a right to relief above the speculative level . . . on the assumption
that all the allegations in the complaint are true (even if doubtful in fact).” Id. (quotation marks,
citations, and footnote omitted).

Memorandum Opinion and Order – Page 5

In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the
complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm
Mutual Auto. Ins. Co., 509 F. 3d 673, 675 (5th Cir. 2007); Martin K. Eby Constr. Co. v. Dallas Area
Rapid Transit, 369 F. 3d 464, 467 (5th Cir. 2004); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
In ruling on such a motion, the court cannot look beyond the pleadings. Id.; Spivey v. Robertson,
197 F.3d 772, 774 (5th Cir. 1999), cert. denied, 530 U.S. 1229 (2000). The pleadings include the
complaint and any documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498-99 (5th Cir. 2000). Likewise, “‘[d]ocuments that a defendant attaches to a motion to dismiss
are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central
to [the plaintiff’s] claims.’” Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d
429, 431 (7th Cir. 1993)).
The ultimate question in a Rule 12(b)(6) motion is whether the complaint states a valid claim
when it is viewed in the light most favorable to the plaintiff. Great Plains Trust Co. v. Morgan
Stanley Dean Witter, 313 F.3d 305, 312 (5th Cir. 2002). While well-pleaded facts of a complaint
are to be accepted as true, legal conclusions are not “entitled to the assumption of truth.” Iqbal, 129
S. Ct. at 1950 (citation omitted). Further, a court is not to strain to find inferences favorable to the
plaintiff and is not to accept conclusory allegations, unwarranted deductions, or legal conclusions.
R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005) (citations omitted). The court does not
evaluate the plaintiff’s likelihood of success; instead, it only determines whether the plaintiff has
pleaded a legally cognizable claim. United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355
F.3d 370, 376 (5th Cir. 2004).

Memorandum Opinion and Order – Page 6

III.

Analysis
A.

Plaintiff’s Motion for Partial Summary Judgment

The court first considers Plaintiff’s Motion for Partial Summary Judgment as to Tortious
Interference and Laches/Estoppel. Marshall contends that the record and undisputed facts make
clear that he is entitled to judgment as a matter of law on his interference with business and
contractual relations claim and that all of Fulton’s claims and counterclaims against him are barred
by laches and estoppel. The court addresses these matters separately.
1.

Interference with Business and Contractual Relations

Marshall’s Complaint generally alleges a claim for “interference with business and
contractual relations” under Texas law. Plaintiff specifies his claim by alleging that Fulton wrote
to various stores and businesses that sold Plaintiff’s products (which used the Trademark), and that
Fulton had the intention to cause such businesses to terminate their contracts with Plaintiff.
Marshall’s brief in support of his motion for partial summary judgment advances the same legal
theory. Accordingly, the court treats Plaintiff’s claim for “interference with business and contractual
relations” as the more widely recognized Texas cause of action for “tortious interference with an
existing contract.”
In Texas, the elements of a claim for tortious interference with an existing contract are: (1)
the existence of a contract subject to interference; (2) a willful and intentional act of interference by
the defendant; (3) damage proximately caused by that willful and intentional act; and (4) resulting
actual damage or loss. Johnson v. Baylor Univ., 188 S.W.3d 296, 304 (Tex. App.—Waco 2006, pet.
denied) (citing ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997)). Marshall
contends that he has developed business relationships over time with certain companies and vendors

Memorandum Opinion and Order – Page 7

that promote and sell his “Mr. Crappie” products, including Bass Pro, Eagle Claw, Academy, WalMart, and Betts Inc. He contends that Fulton was aware of these business relationships and sought
to interfere by sending cease and desist letters to the companies and vendors, wherein he directed
them to stop selling “Mr. Crappie” products because they violated Fulton’s trademark rights.
It is undisputed that Marshall had a licensing agreement with these companies whereby they
would sell his “Mr. Crappie” products. See, e.g., Pl.’s App. 49-50. It is also undisputed that
Defendant sent letters to some of these companies in 2008, advised them that their “Mr. Crappie”
products were infringing on Fulton’s trademark rights, and requested them to cease and desist the
use of the Trademark. Id. at 48. In light of these facts, the court determines that the first and second
elements of Marshall’s claim for tortious interference with an existing contract are satisfied.
Licensing contracts apparently existed between Marshall and these companies, and Fulton acted
willfully and intentionally when he mailed cease and desist letters to them. As to the third and
fourth elements, regarding proximate causation and resulting actual damage or loss, however,
satisfaction of the elements is unclear.
Marshall contends that he endured injury that was proximately caused by Fulton’s conduct
because “at least one customer receiving the letter stopped selling and/or removed some ‘Mr.
Crappie’ products from its shelves.” Pl.’s Br. in Supp. of Mot. Partial Summ. J. at 11. In his
deposition testimony, Marshall identified this customer as Academy, and he clarified that Academy
only stopped selling “some” of his “Mr. Crappie” products. Pl.’s App. 59 [156:13-15]. He further
testified that he was incapable of producing any documents that demonstrate that Academy actually
stopped sale of those products or Academy’s reasons for stopping sale of those products. Id. at 5859 [155:17-156:5]. He also stated that Academy continues to sell his products today. Id. at 59

Memorandum Opinion and Order – Page 8

[156:17-18]. Defendant counters that there is no evidence of proximate causation from Fulton’s
cease and desist letters, nor is there evidence of resulting actual damage or loss sustained by
Marshall. In its review of the evidence, the court agrees with Fulton.
Marshall stated unequivocally in his deposition testimony that he could not quantify the
amount of damage or loss that resulted from Fulton’s conduct. Id. at 58-59 [155:17-156:5]. Further,
given that Marshall stated that Academy only stopped selling “some” of his “Mr. Crappie” products,
the court has a difficult time making the determination that Academy’s purported actions were
undertaken as a proximate result to Fulton’s cease and desist letter. Marshall’s deposition testimony
indicates that Academy stopped selling only some, not all, of the “Mr. Crappie” products, yet
Fulton’s letter demanded that Academy stop selling all of the “Mr. Crappie” products. See id. at 48.
This suggests that Academy did not act in compliance with the Fulton’s directives and could have
had other reasons, unrelated to Fulton’s conduct, for ceasing the sale of certain “Mr. Crappie”
products.
Accordingly, the court determines that a genuine issue of material fact exists with respect
to the third and fourth elements of Marshall’s claim. Namely, a genuine issue of material fact exists
with respect to whether Fulton’s conduct proximately caused injury to Fulton, and a genuine issue
of material fact exists with respect to whether Marshall suffered actual damage or loss as a result
of Fulton’s conduct. The court will therefore deny Marshall’s motion for partial summary judgment
with respect to his interference with business and contractual relations claim.
2.

Laches/Estoppel

Marshall also moves for partial summary judgment as to all of Fulton’s claims and
counterclaims because he contends that the record and evidence establish a viable defense of laches

Memorandum Opinion and Order – Page 9

and estoppel. Specifically, Plaintiff argues that Fulton is barred from injunctive or monetary relief
because he inexcusably delayed in asserting his challenge to Marshall’s trademark rights, and
Marshall was prejudiced by the delay. “Laches is founded on the notion that equity aids the vigilant
and not those who slumber on their rights.” National Ass’n of Gov’t Emps. v. City Pub. Serv. Bd.
of San Antonio, Tex., 40 F.3d 698, 708 (5th Cir. 1994) (quotations and citation omitted). To assert
the defense of laches, a defendant must satisfy three elements: (1) the existence of a delay by
plaintiff in filing suit; (2) the delay was not excused; (3) undue prejudice resulted to the defendant’s
ability to present an adequate defense. Id. (citing Geyen v. Marsh, 775 F.2d 1303, 1310 (5th Cir.
1985).
The record establishes that Fulton sent his first cease and desist letter, which related to the
Trademark, to Marshall in 1998. Seventeen months later, on October 31, 1999, Fulton sent another
cease and desist letter to Plastilite Corporation, a supplier for both Fulton and Marshall, and
threatened legal action. In 2000 and 2001, Fulton became aware of Marshall’s federal registration
of the Trademark and continued use, yet took no legal action. On March 19, 2004, Fulton sent
another letter to Marshall warning of potential litigation related to Fulton’s alleged trademark rights.
On February 25, 2008, Fulton threatened Marshall again and disclosed his intention to send cease
and desist letters to Marshall’s customers. In March 2008, Fulton offered to sell his interest in the
Trademark to Marshall for millions of dollars. Finally, on October 28, 2008, Marshall (not Fulton)
filed suit against Defendant in this court. Fulton subsequently filed a lawsuit against Plaintiff in
Oklahoma state court on November 12, 2008, which was later consolidated with this action.
Marshall contends that the ten-year delay from his initial contact with Fulton until this
lawsuit constituted an inexcusable delay in Fulton’s assertion of alleged trademark rights. Marshall

Memorandum Opinion and Order – Page 10

further contends that he has been prejudiced by Fulton’s delay because he relied to his detriment on
the lapse by expanding his business around the Trademark. Fulton argues that mere delay does not
warrant accepting a laches defense and that “prejudice” must constitute more than expenditures in
promoting a business. After conducting its review and researching the matter, the court agrees with
Fulton.
The laches period begins to run in a trademark infringement action when the claimant knew
or should have known of the alleged infringement. Elvis Prseley Enters., Inc. v. Capece, 141 F.3d
188, 205 (5th Cir. 1998) (citing Armco, Inc. v. Armco Burglar Alarm Co., 693 F.2d 1155, 1161-62
(5th Cir. 1982)). “Any acts after receiving a cease and desist letter are at the defendant’s own risk
because [he] is on notice of the plaintiff’s objection to such acts.” Id. (citing Conan Props., Inc. v.
Conans Pizza, Inc., 752 F.2d 145, 151-52 (5th Cir. 1985)). Here, it is undisputed that Fulton had
notice of Marshall’s alleged infringement in 1998 and sent a cease and desist letter to him that same
year. Over the course of the next decade, Fulton continued to apprise Marshall of his disapproval
of Marshall’s use of the Trademark. Marshall nevertheless continued expanding his business and
using the Trademark. Finally, in 2008, Marshall took initiative and filed suit against Fulton to
protect his trademark rights. This litigation followed.
The court does not believe that Fulton’s conduct over the past decade constitutes an
inexcusable delay. Marshall was placed on notice as early as 1998 that his continued use of the
Trademark was hotly contested by Fulton. That Marshall made the decision to continue using the
Trademark, despite Fulton’s protests, and that Fulton elected to not immediately take legal action,
in no way undermines Fulton’s objections to such conduct; Fulton can hardly be said to have

Memorandum Opinion and Order – Page 11

“acquiesced” to Marshall’s use of the Trademark because he notified Marshall in writing
consistently every few years that Marshall was infringing on Fulton’s legal rights.
Further, the court believes that even if the delay were inexcusable, there has been no showing
of undue prejudice. Specifically, it was Marshall that initiated legal action. This suggests that
Marshall is prepared to demonstrate and prove his legal rights to the Trademark and that he will not
be prejudiced by having to defend against Fulton’s contrary assertions. The court is unpersuaded
that Marshall’s expansion of business around the Trademark constitutes detrimental reliance on
Fulton’s inaction. Nothing in the record indicates that Fulton ever condoned Marshall’s use of the
Trademark, and Marshall continued using the Trademark at his own risk. Moreover, nothing in the
record even intimates that Marshall would not have elected to expand his business anyway,
regardless of Fulton’s legal assertions concerning the Trademark. For these reasons, the court will
deny Marshall’s motion for summary judgment with respect to its laches and estoppel defense.
B.

Defendant’s Motion for Partial Summary Judgment

The court next considers Defendant’s Motion for Partial Summary Judgment Against
Plaintiff Wally Marshall. Fulton moves for partial summary judgment on all of Marshall’s claims
because he contends that Marshall is not the listed owner of the registration-in-suit and cannot assert
rights arising therefrom. Further, Fulton contends that he is the senior user of the “Mr. Crappie”
mark and that his legal rights to the Trademark are therefore superior to Marshall’s. Finally, Fulton
contends that there is no evidence in the record to support any of Marshall’s causes of action. The
court addresses these matters separately.

Memorandum Opinion and Order – Page 12

1.

Owner of the Registration-in-Suit

Fulton contends that Marshall’s lawsuit is invalid because Marshall is not the registered
owner of the Trademark. Fulton argues that the owner of the registration-in-suit is a Texas
corporation called “WALLY MARSHALL,” and that Marshall never corrected this mistake with
the United States Patent and Trademark Office. Accordingly, Fulton argues that Marshall’s claims
relating to the Trademark should be dismissed because he has no legal right to assert them. Marshall
counters that the corporation designation was, in fact, a mistake and that such mistake is of no
consequence because it was inadvertent and nobody could have been reasonably deceived or
confused by it. The court agrees with Marshall.
It is apparent from the record that Marshall has always used the Trademark in his individual
capacity. Fulton correctly notes that there is no Texas corporation by the name of “WALLY
MARSHALL” and that such corporation has never existed in Texas. This fact only strengthens
Marshall’s contention that the corporation designation was a mistake and that the registration was
intended to designate Marshall as the owner of the Trademark in his personal capacity. The court
refuses to exalt form over substance and explicitly declines Fulton’s invitation to dismiss Marshall’s
claims merely because of a labeling error. In any event, the registration makes clear that an entity
or person named “Wally Marshall” asserted a legal right to ownership of the “Mr. Crappie” mark
in 1998, and received the federal Trademark in 1999. Fulton was placed on notice then that he was
not the only person with an interest in the Trademark, which is evidenced by his correspondence
with Marshall in 1998.

Memorandum Opinion and Order – Page 13

2.

Senior Use of the “Mr. Crappie” Mark

Fulton argues that, irrespective of whether the registration-in-suit remains in this case, he
was the first between the parties to start using the “Mr. Crappie” name in commerce and is therefore
the senior user of the Trademark. Accordingly, he contends that it is his actual use, not Marshall’s
registration, that creates Fulton’s legal rights in the Trademark and his priority of ownership.
It is a well-settled tenet of trademark law that ownership of a mark is established by use, not
by registration. Union Nat’l Bank of Tex., Laredo, Tex. v. Union Nat’l Bank of Tex., Austin, Tex.,
909 F.2d 839, 842 (5th Cir. 1990). The first in time to use a trademark is generally held to be the
“senior” user and is entitled to enjoin other “junior” users from using the mark, subject to limits
imposed by the senior user’s market and natural area of expansion. Id. at 842-43. “A mark need not
be registered in order to obtain protection [under the Lanham Act] because ‘[o]wnership of
trademarks is established by use, not by registration.’” Board of Supervisors for LSU Agric. & Med.
Coll. v. Smack Apparel Co., 550 F.3d 465, 475 (5th Cir. 2008) (quoting Union Nat’l, 909 F.2d at
842). The parties do not dispute that Fulton first used the “Mr. Crappie” mark as early as June 1996
in Oklahoma Game & Fish magazine. Def.’s App. 4. Fulton secured an Oklahoma state trademark
registration for the trademark “Mr. Crappie Bait & Tackle” in 2003. Id. at 5-6. In contrast,
Marshall’s earliest identified use of the “Mr. Crappie” mark was in November 1997, and he filed
a federal application to register the Trademark in 1998, which he obtained in 1999. Id. at 7-17.
Fulton concedes that the alleged scope of his use of the Trademark presents a fact question.
Because the record is undisputed that Fulton began using (and continues to use) the
Trademark in commerce prior to Marshall, the court determines that Fulton possesses at least some
ownership rights over the “Mr. Crappie” mark. That said, it is uncontested that Fulton’s use of the

Memorandum Opinion and Order – Page 14

Trademark is limited to Fulton’s connection with his bait and tackle shop located in Fort Gibson,
Oklahoma, whereas Marshall’s use of the Trademark is on a national scale. The court further
determines that the general nature of the goods sold by Fulton and Marshall are sufficiently similar,
such that overlap of the Trademark used by each party would create a likelihood of confusion as to
the source of the goods. By no means, however, does the court’s determination suggest that Fulton
is entitled to the exclusive right to use the Trademark and enjoin Marshall from such use under all
circumstances. The alleged scope of Fulton’s ownership and senior use of the Trademark presents
a genuine issue of material fact, and the court must deny summary judgment on this point.
3.

Marshall’s Claims

Fulton contends that there is no evidence to support any of Marshall’s claims in this lawsuit.
Specifically, Fulton argues that Marshall has failed to show or produce any evidence concerning
necessary elements of his alleged causes of action. The court addresses Marshall’s seven claims:
false designation of origin, federal trademark infringement, common law trademark infringement,
common law unfair competition, violation of section 16.29 of the Texas Business and Commerce
Code, defamation (including libel, slander, and injurious falsehood), and interference with business
and contractual relations.
With respect to Marshall’s claims for false designation of origin, federal trademark
infringement, common law trademark infringement, common law unfair competition, and violation
of section 16.29 of the Texas Business and Commerce Code, all of these claims present the same
fact question. That is, the limits imposed by Fulton’s market and natural area of expansion. Fulton
readily admits that the exact territorial limits of his market and natural area of expansion is a
question of fact. He nevertheless contends that this fact question does not prevent summary

Memorandum Opinion and Order – Page 15

judgment because Marshall has not shown any evidence that Fulton’s use of the Trademark has
exceeded those territorial limits. The court takes a different view.
If the precise territorial limits of Fulton’s market and area of expansion are undefined (which
Fulton concedes they are), it would be impossible for Marshall to make a showing that Fulton had
exceeded those territorial limits, other than Marshall’s blanket assertions that Fulton was in
violation. Here, Marshall has demonstrated that Fulton has used and continues to use the
Trademark, and has even gone so far as to contact Marshall’s business associates regarding alleged
improper use of the Trademark. Marshall contends that these actions by Fulton have amounted to
valid claims of false designation, trademark infringement, and unfair competition. Whether
Marshall’s contentions are correct can only be determined once the extent of Fulton’s territorial
limits is established. Because a fact question exists, the court will deny summary judgment with
respect to these five claims.
With respect to Marshall’s claim for defamation, Fulton contends that Marshall has no
evidence that Fulton made libelous or slanderous statements, or that Fulton’s conduct caused
damages. To bring a claim for defamation under Texas law, the plaintiff must establish the
following elements: (1) a false statement about the plaintiff was made; (2) the statement was
published to a third party without legal excuse; and (3) the plaintiff’s reputation was damaged as a
result. Fiber Sys. Int’l., Inc. v. Roehrs, 470 F.3d 1150, 1161 (5th Cir. 2006) (citing Moore v.
Waldrop, 166 S.W.3d 380, 384 (Tex. App.—Waco 2005, no pet.)). In a claim for defamation per
se, “[t]he words are so obviously hurtful that they require no proof that they caused injury in order
for them to be actionable.” Id. (internal quotations omitted). A claim for defamation per quod,
however, requires proof of actual damages. Id. n.8 (citing Moore, 166 S.W.3d at 384).

Memorandum Opinion and Order – Page 16

Marshall’s Complaint makes clear that he seeks recovery under defamation per se because
Fulton published defamatory statements concerning Plaintiff’s business. Among the categories of
written or printed statements that are classified as actionable per se include those “that are
falsehoods that injure one in his office, business, profession, or occupation.” Columbia Valley Reg’l
Med. Ctr. v. Bannert, 112 S.W.3d 193, 199 (Tex. App.—Corpus Christi 2003, no pet.) (citing Knox
v. Taylor, 992 S.W.2d 40, 50 (Tex. App.—Houston [14th Dist.] 1999, no pet.); see Tex. Civ. Prac.
& Rem. Code Ann. § 73.001 (Vernon 2011). Marshall contends that at least one of his business
associates, Academy, stopped selling certain “Mr. Crappie” products as a result of Fulton’s cease
and desist letter, which caused Marshall financial injury. Marshall further contends that there was
no other reason, but for Fulton’s letter, for Academy to stop selling those products.
The court believes that Marshall’s defamation claim presents at least two fact questions.
First, the court identifies a fact question as to whether Fulton acted “without legal excuse” when he
sent the letter to Academy. The record indicates that Fulton honestly thinks that he is the owner of
the Trademark and was entitled to protect his interests. Whether he actually possessed an adequate
legal excuse will turn on the determination whether Fulton’s conduct exceeded the territorial limits
of his Trademark use. Second, the court identifies a fact question with respect to Academy’s
reasoning behind pulling some of Marshall’s products from its shelves. Marshall believes that the
only reason Academy stopped selling some of his products was because of Fulton’s letter; however,
that Academy continued selling at least some of Marshall’s products after being contacted by Fulton
suggests that there may have been other, unrelated reasons for Academy’s actions. Based on the
record, the court has serious concerns about the viability of this claim. In any event, the court

Memorandum Opinion and Order – Page 17

determines that Marshall has arguably raised sufficient evidence to create a fact question, and
summary judgment will be denied.
Finally, with respect to Marshall’s claim for interference with business and contractual
relations, which the court treats as a claim for tortious interference with an existing contract based
on its above analysis regarding Marshall’s motion for partial summary judgment, the court again
identifies fact questions. As discussed above within the context of Marshall’s motion for summary
judgment, the court determines that fact questions exist with respect to whether Marshall sustained
damage that was proximately caused by Fulton’s willful and intentional acts and whether actual
damage or loss resulted. As to whether a valid contract existed that was subject to interference by
Fulton’s willful and intentional acts, the court is satisfied that Marshall has produced sufficient
evidence to advance his claim. The court accordingly will deny summary judgment.
C.

Plaintiff’s Motion to Dismiss Defendant’s Counterclaim

Marshall moves to dismiss Fulton’s counterclaim for fraud on the trademark office pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief
could be granted. “A third party may petition to cancel a registered trademark on the ground that
the ‘registration was obtained fraudulently.’” In re Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009)
(quoting 15 U.S.C. § 1064(3)). “Fraud in procuring a trademark registration or renewal occurs when
an applicant knowingly makes false, material representations of fact in connection with his
application.” Id. (citing Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed.Cir.1986)).
Here, Fulton contends that Marshall knowingly made a false and material representation of
fact in connection with his federal application to register the “Mr. Crappie” mark. Specifically,
Fulton argues that Marshall fraudulently represented to the United States Patent and Trademark

Memorandum Opinion and Order – Page 18

Office that he was an agent for the “WALLY MARSHALL” Texas corporation. Fulton contends
that, in actuality, no corporation by that name exists, or has ever existed, in Texas and that Marshall
accordingly lied on his federal trademark application by making such a representation. Fulton
further contends that Marshall made such representations in bath faith because Marshall “knew or
should have known” that he was referring to himself as “Mr. Crappie,” and was not acting on behalf
of a corporation that he knew did not exist.
Marshall contends that Fulton’s pleadings are deficient and that his counterclaim should be
dismissed because Fulton fails to allege the required elements of a claim for fraud on the trademark
office and his assertions are factually insufficient. The court agrees with Marshall in that Fulton’s
counterclaim omits facts from which the court could reasonably infer that a fraud claim has been
stated. Specifically, Fulton does not explain why or assert how Marshall’s alleged misrepresentation
was “material.” From the court’s understanding of Fulton’s counterclaim, Fulton appears to take
issue with Marshall’s representation of himself as a corporation, rather than as an individual. On
the face of Fulton’s pleadings, there is no indication that Marshall intended to deceive the trademark
office or that he sought to conceal his involvement with respect to use of the Trademark. Indeed,
Marshall’s name is identical to the corporation’s. The court cannot draw a reasonable inference
from the pleadings that Marshall intended to use the name of a fictitious entity for the purpose of
inducing the trademark office to register his Trademark. Marshall asserts that he made an honest
mistake when he listed himself as a corporation, and the pleadings make no indication that the
trademark office would not have approved his Trademark’s registration if Marshall has correctly
identified himself as an individual.

Memorandum Opinion and Order – Page 19

In other words, the court believes that Fulton’s counterclaim is completely lacking in the
plausibility that Iqbal requires. There must be more “than a sheer possibility that a defendant has
acted unlawfully.” Iqbal, 129 S. Ct. at 1949 (internal citations omitted). Further, the court is
convinced that Fulton cannot amend his counterclaim in such a way that could reasonably
characterize Marshall’s alleged misrepresentation as “material.” Accordingly, the court believes that
attempts at amendment would be futile. Regardless of how Fulton could amend, his fraud claim
would be missing the key element of materiality. Moreover, Fulton has not requested leave to
amend, and the deadline for amendment of pleadings and most other pretrial deadlines have long
passed. Allowing amendment at this stage would result in unnecessary delay in that this case is
approximately two and a half years old, and the court would be required to extend certain pretrial
deadlines that have already expired. Fulton has therefore failed to state a claim upon which relief
could be granted, and dismissal of his fraud counterclaim is appropriate pursuant to Rule 12(b)(6)
of the Federal Rules of Civil Procedure.
IV.

Conclusion
For the reasons stated herein, the court denies Plaintiff’s Motion for Partial Summary

Judgment as to Tortious Interference and Laches/Estoppel; denies Defendant’s Motion for Partial
Summary Judgment Against Plaintiff Wally Marshall; and grants Plaintiff’s Motion to Dismiss
Defendant’s Fraud on the Trademark Office Affirmative Defense and Counterclaim. Fulton’s
counterclaim for fraud on the trademark office is dismissed with prejudice for failure to state a
claim upon which relief could be granted.
The court has denied both motions for summary judgment and dismissed the fraud
counterclaim. This legal squabble has been going on for over twelve years and has culminated in

Memorandum Opinion and Order – Page 20

the filing of two lawsuits. The court’s ruling squarely informs the parties of the posture of this case
and their respective positions. It is time for the parties to consider seriously whether the dispute can
be resolved through settlement. Although neither side ever receives all that it sues for when a case
is settled, expenses and attorney’s fees will continue to grow so long as this litigation persists. This
legal brouhaha needs to come to an end, as neither side is “out of the woods” if the matter proceeds
to trial. In this vein, the court urges the parties to let reason and common sense prevail, and engage
in fair, levelheaded negotiations. Accordingly, the court directs the parties to discuss settlement
options and inform it in writing by May 21, 2011, whether the parties can resolve their differences
by settling this action.
It is so ordered this 29th day of April, 2011.

_________________________________
Sam A. Lindsay
United States District Judge

Memorandum Opinion and Order – Page 21