United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 21, 2006
Charles R. Fulbruge III
Clerk
No. 04-50308
FRANK G. LIBERTO,
Plaintiff-Appellee,
versus
D.F. STAUFFER BISCUIT COMPANY, INC.,
Defendant-Appellant
Appeal from the United States District Court
for the Western District of Texas
Before JONES, Chief Judge, and JOLLY and HIGGINBOTHAM, Circuit
Judges.
HIGGINBOTHAM, Circuit Judge:
The parties to this dispute over trademarks and the packaging
of animal crackers have been negotiating a settlement of their
dispute over the past eleven years–while continuing their
businesses and continuing to litigate. Today, we only add a
chapter to their saga, unable to find a principled closing. So, we
address trademarks, licenses, and unenforceable agreements to
agree, and final judgments are anything but that.
I
Frank G. Liberto manufactures and distributes snack foods,
employing a design with red and yellow stripes on his packaging
since 1950. Liberto registered his mark with the U.S. Patent and
Trademark Office in 1986. D.F. Stauffer Biscuit Co., Inc., is a
snack food company specializing in animal crackers. In 1987,
Stauffer began using red and yellow stripes on packaging similar to
Liberto’s mark, in connection with the sale of its animal crackers.
In 1988, Stauffer applied for registration of its package
design. Although the Principal Register of Trademarks already
contained Liberto’s mark, Stauffer’s application was approved and
published in the PTO’s official Gazette. Liberto did not file an
opposition to the registration within the statutory period, and
Stauffer’s registration, number 1,561,212 (“the 212 registration")
issued on October 17, 1989. Stauffer’s mark became incontestably
registered after October 17, 1994.
Nonetheless, in March of 1995, Liberto contacted Stauffer,
alleging that Stauffer’s use of the red and yellow stripes
infringed upon his trademark. Stauffer denied the allegation, and
Liberto filed his initial action against Stauffer, “the 1996
litigation.”
Over three years later on May 29, 1998, the parties executed
a settlement agreement, by which Liberto agreed to inter alia
dismiss his infringement action, to grant an exclusive license to
Stauffer for use of the striped design on Stauffer packaging.
Stauffer also agreed to enforce the mark against other food
manufacturers. Despite its incontestable right to use its own
mark, Stauffer agreed to pay Liberto royalties for use of his
design in connection with the sale of animal crackers. Stauffer
2
further agreed to join Liberto in a motion asking the district
court to adopt the Settlement Agreement as its Final Judgment in
the 1996 litigation.
The Settlement Agreement also contemplated that the parties
would continue to negotiate “the specific terms of [the] license to
be agreed upon.” After executing the agreement, but before the
joint motion for final judgment was filed, the parties negotiated
the details of the license for approximately ten months without
success. Liberto then urged the district court to approve the
settlement agreement and enter judgment. Stauffer did not oppose
the request, and, on March 22, 1999, the district court entered the
Settlement Agreement as Final Judgment in the case. Neither party
appealed, “ending” the 1996 litigation without an agreement over
the details of the license.
After judgment was entered, the parties continued to negotiate
the details of the license agreement. In particular, the parties
could not agree whether Stauffer owed back-royalty payments from
the date the Settlement Agreement was originally executed. Without
resolving that issue, Stauffer agreed that it was obligated to
“make quarterly royalty payments” from the date of Final Judgment
and issued a check in June 1999 to “confirm the agreement,”
followed by the first quarterly payment in August 1999.
Meanwhile, Liberto asked the district court to order
arbitration of the back-royalty issue. Stauffer did not object,
and the court ordered the parties into arbitration.
3
In November 1999, before any progress was made in the
arbitration proceeding, Stauffer informed Liberto that it would
make no further royalty payments. By the consent of both parties,
the arbitration was held in abeyance for the next 21 months, in
order to permit the parties to resolve their differences through
negotiation. By May 2001, however, no agreement had been reached,
and Liberto sought to resume arbitration.
Stauffer attempted to expand the scope of the arbitration
proceedings to visit issues of the 1996 litigation, such as
ownership of the mark, but the district court confined the
arbitration to the start-date issue. Finally, in October 2002, the
arbitrator concluded that the obligation to make royalty payments
to Liberto commenced upon execution of the Settlement Agreement.
While the arbitration was pending, Liberto filed this action,
“the 2002 litigation,” seeking payment of royalties under the
Settlement Agreement. Liberto plead federal trademark
infringement, including cross-merchandising, common law trademark
infringement, unfair competition, dilution, and bad faith
negotiation. So, when negotiations dissolved for the last time in
2002, the parties returned to the district court to resolve “any
and all remaining disputes between them.”
In April 2003, while the litigation was in progress, Liberto
gave notice to Stauffer that its license to use the striped mark on
its packaging would be terminated in May, if it failed to pay
accrued royalties back to the execution date of the Settlement
4
Agreement. Stauffer refused, and Liberto formally terminated the
license, although Stauffer continued to use the design.
Then, on March 10, 2004, the district court ruled on the
parties’ cross-motions for summary judgment, granting partial
judgment for Liberto on his claim of federal trademark
infringement, Texas trademark infringement, trademark dilution,
unfair competition, and breach of contract. The district court
enjoined Stauffer from use of the striped design and ordered the
surrender or destruction of all packaging, advertisements, or other
materials on which the mark appeared. Stauffer appeals the grant
of injunctive relief.
II
“We review a grant of injunctive relief for abuse of
discretion; findings of fact for clear error; and conclusions of
law de novo.”1 “The district court abuses its discretion if it (1)
relies on clearly erroneous factual findings when deciding to grant
or deny the permanent injunction (2) relies on erroneous
conclusions of law when deciding to grant or deny the permanent
injunction, or (3) misapplies the factual or legal conclusions when
fashioning its injunctive relief.”2
1
Commun. Workers of Am. v. Ector County Hosp. Dist., 392 F.3d 733, 737
(5th Cir. 2004).
2
Peaches Entertainment Corp. v. Entertainment Repertoire Assocs., 62 F.3d
690, 693 (5th Cir. 1995).
5
III
In support of the injunction, the district court held that the
Settlement Agreement was an enforceable contract under Texas law.
Stauffer argues that the Settlement Agreement is an unenforceable
“agreement to agree.” We agree.
The validity of the Settlement Agreement turns largely on the
text of the agreement itself, with repairs to the reading given it
by the parties in their performance, such as Stauffer’s quarterly
royalty payment made under the Settlement Agreement.
Under Texas law, settlement agreements are “enforceable in the
same manner as any other written contract.”3 A contract is
“legally binding only if its terms are sufficiently definite to
enable a court to understand the parties’ obligations.”4 An
agreement to make a contract at a future time is enforceable if it
is “specific as to all essential terms.”5 By contrast, where an
agreement leaves essential terms open for future negotiations, it
is not a binding contract but, rather, an unenforceable “agreement
to agree.”6 Thus, whether the Settlement Agreement is an
enforceable contract turns upon whether its “essential terms” are
3
Martin v. Black, 909 S.W.2d 192, 195 (Tex. App. Houston 1995, writ
denied).
4
Fort Worth Independent School Dist. v. City of Fort Worth, 22 S.W.3d 831
(Tex. 2000).
5
Id. (quoting Foster v. Wagner, 343 S.W.2d 914, 920-21 (Tex. Civ. App.
El Paso 1961)).
6
Id. (citing Pine v. Gibraltar Savings Ass’n, 519 S.W.2d 238, 244 (Tex.
Civ. App. Houston 1975)).
6
set forth in the agreement or are left to future negotiation.
Whether a given term is “essential” to a contract is matter of
law to be reviewed de novo,7 a determination turning largely on the
type of contract at issue,8 and Liberto contends that it is
enforceable as a license agreement. We ask then whether, according
to Texas law, the Settlement Agreement contains all of the
essential terms of a trademark license agreement.
As a general matter, Texas courts have consistently held that
a contract may be held void for indefiniteness if it fails to
specify “the time of performance, the price to be paid, the work to
be done, the service to be rendered, or the property to be
transferred.”9 The Settlement Agreement expressly enunciates the
general scope of the license: an “exclusive license” to use
Liberto’s “red and yellow stripes Trademark...in the sale of Animal
Crackers.” The Settlement Agreement also stipulates the amount to
be paid in royalties: “0.38% of gross revenue from sales of Animal
Crackers,” with an annual minimum and maximum of $62,500 and
$150,000, respectively, “to be adjusted annually according to the
U.S. Consumer Price index.”
7
See, e.g., America’s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617,
625 (Tex. App. San Antonio 1996).
8
See T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221
(Tex. 1992).
9
See, e.g., Engelman Irrigation Dist. v. Shields Bros., Inc., 960 S.W.2d
343, 352 (Tex. App. Corpus Christi 1997) (quoting University National Bank v.
Ernst & Whinney, 773 S.W.2d 707, 710 (Tex. App. San Antonio 1989)).
7
However, the grant language of the Settlement Agreement is in
the future tense, for example: “Plaintiff will grant to Defendant
an exclusive license...” (emphasis added). The Settlement
Agreement expressly leaves open for future negotiation the
“specific terms” of the license, and the “action to be taken [by
the parties] to protect the trademark.” Other terms are simply
omitted–neither specified nor designated for future negotiation.
Most notably, the Settlement Agreement fails to mention the
duration of the license or the grounds for its renewal or
termination.10 Also, the time of performance was not manifest in
the Settlement Agreement, as evidenced by the protracted
arbitration to determine the effective date of the royalty
payments.
Recognizing the attendant risk in granting any trademark
license–the possibility that the licensee will use the mark in a
way that undermines its secondary meaning, thereby potentially
rendering the mark generic11 or abandoned–12 nearly all licensing
10
“The term of the license should be specifically stated in the license
because the law of some states provides that a license without a stated term is
terminable at the will of either party upon reasonable notice.” See MCCARTHY §
18:43.
11
See MCCARTHY § 17:8 (“If a ‘trademark’ symbol is used as a generic name
of a product or service, it ceases to function to identify a single source of
that generic thing. ... Sometimes a mark becomes abandoned to generic usage as
a result of the trademark owner’s failure to police the mark, so that widespread
usage by competitors leads to a generic usage among the relevant public, who see
many sellers using the same word or designator.”).
12
See MCCARTHY § 17:6 (“Licensing a mark without adequate control over the
quality of goods or services sold under the mark by the licensee may cause the
mark to lose its significance as a symbol of equal quality-hence, abandonment.”);
8
agreements contain clauses specifying the manner in which the
licensed mark may be used. “In a license, the licensee is engaging
in acts which would infringe the licensor’s mark but for the
permission granted in the license. In that event, quality control
is essential.”13 Given its centrality, leaving necessary terms of
control to be determined in future negotiations militates against
the finding of a binding contract. About this reality, Liberto
says that he is entitled to “rely upon the reputation of the
licensee” in lieu of formal quality control strictures. This is
unpersuasive. Liberto intended that some mechanism would
ultimately be implemented, yet there is no evidence that the
parties later agreed upon specific methods of protecting the mark.
Liberto argues that, even if the Settlement Agreement were not
a binding contract when executed in 1998, Stauffer nonetheless
ratified it by making an initial royalty payment in August 1999.
We are not persuaded. Under Texas law, a contact is ratified when
a party recognizes its validity by acting under it or by
see also Exxon Corp v. Oxxford Clothes, 109 F.3d 1070, 1075 (5th Cir. 1997) (“A
naked license is a trademark licensor's grant of permission to use its mark
without attendant provisions to protect the quality of the goods or services
provided under the licensed mark. A trademark owner's failure to exercise
appropriate control and supervision over its licensees may result in an
abandonment of trademark protection for the licensed mark” (internal citations
omitted).).
13
MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:79 (4th ed.) (emphasis
added), cited in, Brennan’s Inc. v. Dickie Brennan & Co., Inc 376 F.3d 356 (5th
Cir. 2004).
9
affirmatively acknowledging it.14 The difficulty here is that the
Settlement Agreement never had sufficiently definite terms.15 Any
subsequent affirmative act, unless it created an enforceable
contract in its own right, is, at most, only another non-binding
promise. Nothing in the record suggests that the parties agreed
upon the duration of the contract, the enforcement mechanisms, or
any of the outstanding terms during the period prior to Stauffer’s
royalty payment.
We conclude that the Settlement Agreement was an agreement to
agree, not a contract, and Stauffer’s failure to pay royalties was
not a breach of contract warranting injunctive relief.
IV
The district court held, in part, that since Stauffer could
have relied upon its incontestability defense in the 1996
litigation but, instead, chose to settle, it is precluded from
contesting the merits or raising any affirmative defenses in this
action involving the same trademark infringement cause of action.16
Stauffer contends that trademark infringement has never been
14
See, e.g., Wetzel v. Sullivan, King, & Sabom, 745 S.W.2d 78, 81 (Tex.
App. Houston 1988).
15
See Engleman Irrigation Dist., 960 S.W.2d at 352; Harris v. Archer, 134
S.W.3d 411, 427 (Tex. App. Amarillo 2004) (stating “[a] void contract cannot be
ratified; a voidable contract can be ratified”).
16
Settlement agreements waiving substantial rights of parties and
compromising a disputed liability are as conclusive as judgment following full
litigation. See J. Kahn Co. v. Clark, 178 F.2d 111, 114 (5th Cir. 1949).
10
adjudicated, that the district court erred in ruling for Liberto,
and that judgment should be rendered in its favor.17 We conclude
that the district court should not have applied the doctrines of
res judicata and judicial and licensee estoppel.18
A.
Res judicata applies only where (1) the parties to the
respective actions are identical; (2) the prior judgment was
rendered by a court of competent jurisdiction; (3) the prior action
resulted in a final judgment on the merits; and (4) the same cause
of action is involved in both cases.19 “The res judicata effect of
a prior judgment is a question of law that we review de novo.”20
“When ‘reasonable doubt exists as to what was decided in the first
action, the doctrine of res judicata should not be applied.’"21
As only element (3) is disputed, the applicability of res judicata,
here, turns on whether the Final Judgment in the 1996 litigation
qualifies as a judgment “on the merits.” We are persuaded that it
17
The invalidity of the Settlement Agreement as an enforceable license
agreement bears no relevance on the enforceability of the judgment entered by the
court in the 1996 litigation, as Stauffer contends. All of the case law which
Stauffer cites in support of its contention concerns the invalidity of judgments
on jurisdictional grounds.
18
Licensee estoppel is inapplicable because the Settlement Agreement is
not a valid license agreement, as we explained.
19
See Russell v. SunAmerica Securities, Inc., 962 F.2d 1169, 1172 (5th
Cir. 1992).
20
See Davis v. Dallas Area Rapid Transit, 383 F.3d 309, 313 (5th Cir.
2004).
21
Mohamed v. Exxon Corp., 796 S.W.2d 751, 755 (Tex. App. 1990) (quoting
In re Braniff Airways, 783 F.2d 1283, 1289 (5th Cir. 1986)).
11
does not.
No court has ever adjudicated the merits of Liberto’s
trademark infringement claim. The Final Judgment entered in the
1996 litigation is a one page document, incorporating the
Settlement Agreement by reference, not mentioning any of the
substantive infringement issues raised by Stauffer.22 The district
court in the 1996 litigation neither found trademark infringement
nor decided the merits of Stauffer’s incontestability defense.
Of course there are circumstances where “a settlement
agreement approved and embodied in a final judgment of the court is
entitled to full res judicata effect.”23 Res judicata applies where
the parties to a settlement objectively manifest an intent to
cement their agreement with claim preclusion.24
22
The full text reads:
The court has been fully informed that the parties have
compromised and settled their differences in the form of a
“Settlement Agreement” which is attached hereto as Exhibit A.
The court specifically finds the Settlement Agreement
sufficiently defines the terms of the settlement between the
parties.
It is ORDERED that the Settlement Agreement attached hereto be
entered as the judgment of this Court. Any other relief
requested herein that is not provided for in the Settlement
Agreement is hereby denied.
Each side to bear its own attorney’s fees and costs.
23
Matter of West Texas Marketing Corp., 12 F.3d 497, 500 (5th Cir. 1994)
(internal quotations omitted).
24
“Thus, when determining the effect to be given a decree entered by
consent of the parties, consideration is to be given to their intention with
respect to the finality to be accorded the decree as reflected by the record and
the words of their agreement.” Kaspar Wire Works, Inc. v. Leco Engineering &
Machine, Inc., 575 F.2d 530, 540 (5th Cir. 1978) (holding that a consent judgment
dismissing a prior declaratory judgment action alleging patent invalidity and
12
However, the Settlement Agreement contains no clear statement
regarding res judicata, reading, in relevant part:
Plaintiff will grant to Defendant an exclusive
license to use its alternating red and yellow
stripes Trademark for Defendant’s use in the sale
of Animal Crackers, the specific terms of such
license to be agreed upon.
Also, Stauffer did not in the settlement agreement renounce its
rights to its own registered mark as a condition of the settlement.
Likewise, the Settlement Agreement does not tacitly adjudicate
the merits of trademark infringement. Resolution of a trademark
infringement case via a settlement agreement need not necessarily
result in an adjudication of the merits; simply because Stauffer
agreed to negotiate a license for the use of Liberto’s mark in the
context of a trademark infringement action does not demand the
conclusion that Stauffer’s mark is infringing.25 It signifies only
that Stauffer will pay to use Liberto’s mark, independent and
irrespective of the viability of its own mark. In fact, the
language of the Settlement Agreement can fairly be read to
distinguish the two marks, reinforcing their distinctiveness rather
than relinquishing Stauffer’s ownership. In short, the language of
the Settlement Agreement is, at best, inconclusive, offering little
support for finding that incorporating it into an agreed judgment
non-infringement did not bar the defendants from contesting the validity of
plaintiffs' patent because the parties did not specifically include the patent
that was the subject of this lawsuit in their consent judgment).
25
“[T]he purpose of a consent decree is typically to avoid the litigation
of any issue.” Kaspar Wire Works, Inc., 575 F.2d at 539.
13
gave it any preclusive teeth.
Liberto argues that the Settlement Agreement effectuates
Stauffer’s renunciation of rights in its mark, but there is no
evidence that Stauffer was of that mind. Beyond the conclusory
statement that Stauffer had agreed to forgo its defenses in
exchange for the right to negotiate a license,26 Liberto only cites
Stauffer’s Advisory to the Court in support of its contention.
However, the Advisory–leading to the entry of the Settlement
Agreement as Final Judgment–does not admit infringement. Rather,
it shows Stauffer’s consent to incorporating the Settlement
Agreement into a Final Judgment.27
The district court pointed to the principle that res judicata
bars claims or defenses that were or could have been raised during
a previous litigation.28 “As we have previously put it: ‘The effect
26
Even so, foregoing such a defense is not the equivalent of an
adjudication of trademark infringement.
27
Granting summary judgment in favor of Stauffer is inappropriate on the
record before this Court because we must accept Liberto’s testimony as true. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is, at least,
a fact question as to whether Stauffer manifested an intent to forgo its defenses
for the benefit of the license agreement to be negotiated.
28
The doctrine of res judicata “treats a judgment, once rendered, as the
full measure of relief to be accorded between the same parties on the same
‘claim’ or ‘cause of action.’ [It] incorporates the doctrines of merger and bar,
thereby extending the effect of a judgment to the litigation of all issues
relevant to the same claim between the same parties, whether or not those issues
were raised at trial.” St. Paul Mercury Ins., Co. v. Williamson, 224 F.3d 425,
436 (5th Cir. 2002) (holding that the successful defense of fraud in a negligence
action is not res judicata as to a subsequent action brought by the defendant for
malicious prosecution) (citing Kaspar Wire Works, Inc., 575 F.2d at 535). “If
[the four] conditions are satisfied, claim preclusion prohibits either party from
raising any claim or defense in the later action that was or could have been
raised in support of or in opposition to the cause of action asserted in the
prior action.” U.S. v. Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994) (citing In re
14
of a judgment extends to the litigation of all issues relevant to
the same claim between the same parties, whether or not raised at
trial.’”29 Stauffer did not raise its incontestability defense
during the 1996 litigation, though having earlier raised the issue
in a declaratory judgment action in Pennsylvania district court.30
However, the parties turned to an alternative solution to quieting
the lawsuit–an agreement to pursue a license to use Liberto’s mark,
pretermitting a determination of liability.31 And, agreeing to a
license is consistent with Stauffer maintaining rights in its own
mark, particularly where no language in the Settlement Agreement
precludes a later assertion of rights to the registered mark. The
cases cited by the district court do not resolve our issue because
there was never an express or implied adjudication on the merits of
trademark infringement, a necessary predicate to res judicata.
Such a result neither betrays the equities in the case nor
Howe, 913 F.2d 1138, 1144 (5th Cir. 1990)).
29
Shanbaum, 10 F.3d at 310-311 (quoting Kaspar Wire Works, 575 F.2d at
535); see also Allen v. McCurry, 101 S. Ct. 411, 414 (1980) (dealing with the
applicability of claim preclusion to § 1983 actions and stating that claim
preclusion applies to claims that "were or could have been raised" in a prior
action that involved "the parties or their privies" when the prior action had
been resolved by "a final judgment on the merits").
30
He did so in a declaratory judgment action filed in Pennsylvania, which
was dismissed for lack of personal jurisdiction over Liberto after the
commencement of Liberto’s 1996 infringement action in Texas. Stauffer filed a
motion to stay the proceedings in Texas pending the outcome of the Pennsylvania
case. After the dismissal in Pennsylvania, Stauffer and Liberto petitioned the
district court in Texas to allow the parties to commence arbitration.
31
“Judicial finality -- the predicate for res judicata -- arises only
from a final decision rendered after the parties have been given a reasonable
opportunity to litigate a claim before a court of competent jurisdiction.”
Kaspar Wire Works, Inc., 575 F.2d at 537-538 (citations omitted).
15
offends public policy. Stauffer gained nothing by delaying the
ultimate adjudication of the case, all the while attempting to
negotiate a license,32 and Liberto would not likely have prevailed
in its 1996 action had Stauffer not agreed to enter into the
negotiations detailed by the Settlement Agreement, later entered as
a Final Judgment.
The Final Judgment ordered by the district court neither
clearly expresses nor is predicated upon the conclusion that
Stauffer infringes Liberto’s mark. The Final Judgment in the 1996
litigation did not resolve the dispute. It was final only in its
name.
B.
The district court also found that Stauffer was judicially
estopped from raising any defense to trademark infringement in the
2002 litigation. Where a party successfully urges a particular
position in a prior legal proceeding, the doctrine of judicial
estoppel prevents it from “taking a contrary position in a
subsequent proceeding where its interests have changed.”33 We have
identified two limitations to its application: “(1) it may be
applied only where the position of the party to be estopped is
clearly inconsistent with its previous one; and (2) [the] party
32
The district court found and it is not contested that Stauffer did not
engage in bad faith negotiations.
33
Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed. Cir. 1996).
16
must have convinced the court to accept that previous position.”34
The district court found that Stauffer was estopped from
advancing any affirmative defense to its liability to Liberto
because it “chose to abide by [Liberto’s] Motion to Enter judgment
when it filed its Advisory to the Court” in the 1996 litigation.
Stauffer responds, arguing that it did not urge or convince the
court to accept any position in conflict with its defense to
trademark infringement. Rather, Stauffer contends that it merely
filed an Advisory stating that it did not oppose Liberto’s motion
to enter the Settlement Agreement as Final Judgment, a settlement
which purported only to bind the parties to further license
negotiations. We agree with Stauffer and hold that the district
court erred in its finding of judicial estoppel.
V
The Lanham Act gives to district courts power to issue
injunctions, “according to the principles of equity and upon such
terms as the court may deem reasonable to prevent the violation of
any right of the registrant of a mark.”35 Trademark infringement
remains to be decided, including Stauffer’s incontestability
34
In re Coastal Plain, Inc., 179 F.3d 197, 206 (5th Cir. 1999).
35
15 U.S.C. § 1116; see also Seatrax, Inc. v. Sonbeck Int’l, Inc., 200
F.3d 358, 369 (5th Cir. 2000). The issue of damages pursuant to 15 U.S.C. §
1117(a) is not properly before this court.
17
defense and any improper cross-merchandising.36 Thus, the district
court abused its discretion in issuing the injunction; we vacate
and remand for further proceedings, consistent with this opinion.
VACATED and REMANDED.
36
The test for trademark infringement is likelihood of confusion–a fact
question. See Scott Fetzer Co. v. House of Vacuums, Inc., 381 F.3d 477, 482 (5th
Cir. 2004). The record before us does not adequately develop the issue.
However, Stauffer asserts its incontestability defense, against which Liberto
offers no substantive rebuttal in his motions for summary judgment. Liberto
argues the inadequacy of Stauffer’s description of color in the trademark
registration, but this is not an exception to the incontestability of a
trademark. See Texas Pig Stands, Inc. v. Hard Rock Cafe Int'l, Inc., 951 F.2d
684, 690 (5th Cir. 1992). Still, Stauffer may have waived his incontestability
defense.
18