IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

SUN WATER SYSTEMS, INC, §

ET AL. §

§ CIVIL ACTION NO.4:05-CV-574-Y

VS. §

 §

VITASALUS, INC., ET AL. §

ORDER DENYING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION

The Court has before it Plaintiffs’ motion requesting that the

Court preliminarily enjoin Defendants from using certain trademarks

and trade dress in conjunction with the design and labeling of a

whole-house water-filtration system (doc. #27). Plaintiffs filed the

above-styled and -numbered case alleging trademark and trade-dress

infringement, unfair competition, and trademark dilution. The crux of

the dispute between the parties involves the use of certain trademarks

and trade dress in the marketing and sale of a whole-house waterfiltration system (hereinafter “whole-house system”) that the parties

sell to the public. After review of all the pleadings and appendices

regarding Plaintiffs’ motion for preliminary injunction, the Court

concludes that it should be DENIED. 

I. FACTUAL BACKGROUND

In 1988, plaintiff Charles Strand (“Strand”) and a partner formed

the International Purity Corporation (“IPC”) to manufacture various

water-filtration systems. One of the systems IPC manufactured was a

“point-of-entry” water-treatment system also known as a whole-house

system. The point-of-entry system filters water at the place water

enters a home from a municipal water supply. It attaches to the

 

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plumbing of a home and filters all of the water entering the home from

a municipal treatment facility.

The whole-house system contains two tanks in a “stacked tank

design.” This design serves a particular function. The water enters

the system through a coupling that connects the two stacked tanks.

The coupling directs the water upward into the top tank where it is

filtered using a particular type of media designed to separate out

certain perceived undesirable inorganic elements. That media is more

efficient when the water filters through it in an upward direction.

The water then flows downward into the bottom tank where the water

continues to be filtered using different mediae designed to separate

out more chemicals and organic elements. Those mediae are more

efficient when the water filters through them in a downward direction.

The two tanks are painted dark blue and, again, are connected by a

gray-colored coupling. The top of the pre-filter is light blue and

the shut-off valve to the unit has a bright-orange handle. The bottom

tank sits in a black plastic base. 

IPC called this system the “Rhino Whole House Water Treatment

System” or the “Rhino Deluxe Whole House Water Treatment System.” In

a single-page informational brochure, IPC explained how the Rhino

system functions and how its unique design made it superior to other

water filtration products. The brochure also contained the following

diagram illustrating how the whole-house system functions: 

 

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Diagram A

IPC filed an application with the United States Patent and Trademark

Office (“USPTO”) to register the word mark “Rhino” as its trademark

for “domestic water filtering units.” In the application, IPC stated

that the “Rhino” trademark was first used in commerce in 1992. The

USPTO approved the application and registered the trademark in 1993.

IPC assigned the Rhino trademark to Equinox International Corporation

(“EIC”) in 1996, and recorded that assignment at the USPTO in 1997.

Previously, in 1991, Strand’s partner sold his interest in IPC to

the owner of EIC. IPC became the exclusive manufacturer of all water-

 

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filtration systems EIC sold from approximately 1991 until 2000. The

first whole-house systems IPC manufactured for EIC were affixed with

two labels on the top blue tank of the system. The upper label was

white with an approximately one-inch vertical red bar on both ends of

the label. The white label stated, in blue lettering, “Rhino High

Efficiency Water Treatment System by International Purity Corporation,” and contained a solid-blue clip art of a rhinoceros. Lettered

in white on the red vertical bars was the legend, “A Product Of

International Purity Corporation.” The lower label contained the IPC

official logo and the words, “International Purity Corporation.”

Follow- ing are

illus- tration

s of t h o s e

labels.

Diagram B

 

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Diagram C

The bottom tank contained a smaller and less noticeable square

white label that identified the system as “Model: EQ-300 Whole House

Water Filtration System.” In the bottom right-hand corner of the

label was the name “Equinox International Corporation” along with the

corporation’s address. Following is an illustration of that label.

 

Diagram D

 

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Diagram E illustrates the placement of the three labels.

Diagram E

By 1994 the labels changed, and two new labels were affixed to

the top blue tank. The upper label was gold and in black lettering

stated: “Rhino High Efficiency Water Treatment System by Equinox.” It

contained a solid-white clip art of a rhinoceros. The lower label

contained the EIC logo. This logo contained a blue and gold,

partially shaded meridian globe with gold parallel lines running

horizontally and vertically, and a gold representation of a sun and a

full moon. Underneath the logo was the word “Equinox” in black

lettering. There no longer contained any reference to IPC and the IPC

logo no longer appeared on the system. EIC registered this logo with

the USPTO in 1993, and stated it was first used in commerce in 1992.

The USPTO cancelled the registration in 2003. The following illustrates of those labels. 

 

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Diagram F

But by 1995, the upper label changed again. The new label was

gold with a black outline around the edge of the label. In black

lettering it stated, “Equinox EQ-300 Whole House Water Treatment

System.” The lower label retained the EIC logo with the word

“Equinox.” Like the prior labels, these labels were affixed to the

top blue tank. Following illustrates that label. 

 

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Diagram G

The word mark “Rhino” no longer appeared on the label and there

no longer contained any depiction of a rhinoceros. In fact, the new

label changed the name of the whole-house system from the “Rhino High

Efficiency Water Treatment System” to the “Equinox EQ-300 Whole House

Water Treatment System.” And there is no evidence that EIC or IPC

ever used the trademark Rhino or a depiction of a rhinoceros in

connection with the marketing or sale of the whole-house system again.

In November 1999, the chief financial officer for EIC submitted

the following declaration to the USPTO regarding its use of the Rhino

registered trademark: 

The mark RHINO is presently not in use as this

mark is used as a private label for domestic water

filtering units. The mark was acquired by [EIC]

 

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in 1997 from the original applicant [IPC]. This

applicant continues to be the manufacturer of the

goods for the registrant. Presently, all goods

manufactured bear another of the registrant’s

mark, and there is no present capacity to produce

additional units under a private label mark.

Registrant does intend to use the RHINO mark once

capacity for production can be increased, or if

demand for the product under registrants’ [sic]

primary mark lessens, allowing for marking and

sale of private labeled products. 

The Rhino trademark registration expired in August 2004.

EIC registered “Equinox International Corporation” with the USPTO

in 1996 as its trademark for “distributorships featuring a full line

of environmentally safe products.” The USPTO canceled that mark in

2003. In 1993, EIC also registered the word mark “Equinox,” when used

together with EIC’s official logo, as its trademark for “domestic and

commercial water and air filtration systems.” There is no evidence

that EIC ever attempted to register the mark “EQ-300" as its trademark

for the whole-house system.

In 1998, EIC bought Strand’s interest in IPC. Thereafter, IPC

became a totally owned subsidiary of EIC and continued to operate as

a distinct corporation manufacturing EIC’s water-filtration systems.

EIC continued to market and sell its whole-house system using the same

design and the trademarks Equinox and EQ-300.

In 1999, the Federal Trade Commission (“FTC”) and several states

filed suit in federal court alleging that EIC and its subsidiaries

engaged in various deceptive trade practices including, among other

things, operating an illegal pyramid scheme. As a result of the suit,

EIC and its subsidiaries were placed into permanent receivership in

 

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1 http://www.equinox-products.com

2 http://www.equinoxinternational.com

10

April 2000. The receiver was directed to liquidate all of the assets

and prepare EIC and its subsidiaries for dissolution. Moreover, the

receiver was prohibited from conveying “any proprietary rights to the

names “Equinox” or “Equinox International Corporation.”

Shortly after EIC went into receivership, Defendants and former

EIC distributors John Cloutier, David Kircos, and Robert Cloutier

formed Equinox Products L.L.C. (“Equinox Products”) and opened an

internet website1 for the marketing and sale of various products

including the Equinox EQ-300 whole-house system. 

Beginning in April 2000, Equinox Products began marketing and

advertising efforts for the Equinox EQ-300. This included using

written sales materials, emails, faxes, and the verbal use of the

trademarks Rhino, Equinox, and EQ-300. Then, in June 2000, Equinox

Products began selling liquidated and remaining EIC whole-house system

inventories on-line throughout the country. These whole-house systems

contained either the “Rhino High Efficiency Water Treatment System by

Equinox” label or the “Equinox EQ-300 Whole House Water Treatment

System” label as well as the Equinox logo label as shown above. 

By late 2000, the EIC receiver placed an internet hyperlink to

Equinox Products’s website on the receiver’s official webpage2

advising:

 

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Equinox Products

If you are interested in purchasing or

selling products or accessories previously sold by

Equinox International, please visit website

http://www.equinox-products.com/.

. . . 

Water Filtration Customers

The supplier/manufacturer for the Equinox

Water Filtration Products is no longer in business. We will provide information on other

sources of products and/or replacement parts in

the future, if they become available.

In 1998, after Strand had sold his remaining interest in IPC to

EIC, Strand formed Sun Water Systems, Incorporated (“Sun Water”). Sun

Water markets its water-filtration products under the trade name

“Aquasana.” And in September 2000, Strand began purchasing remaining

water-filtration assets of EIC’s subsidiary, IPC, through the EIC

receiver. These assets included any remaining inventory, component

parts, labels, equipment, certifications, boxes, advertising materials, patents, as well as all “allowable trade marks.” A year later,

in September 2001, Sun Water was assigned all of EIC’s rights and

ownership in the registered trademark “Rhino.” 

According to Defendants, in February 2001, and per the recommendation of the EIC receiver, Strand contacted them to sell off his

remaining EIC whole-house system inventory. Defendants claim that

Strand told them that he “wished to unload his entire EIC liquidated

inventory . . . to raise cash for Sun Water/Aqusana’s point-of-use .

. . water filters.” Subsequently, Defendants, as Equinox Products,

 

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contracted with Strand, as Sun Water, to purchase the inventory that

had been bought from the EIC receiver. 

Equinox Products purchased from Sun Water liquidated EIC wholehouse systems that were pre-labeled with the EIC logo labels and

labels using the trademarks Equinox and EQ-300 but not the Rhino mark

or a picture of a rhinoceros. Sun Water sold most of its remaining

inventory of EIC liquidated whole-house systems to Equinox Products

from February until June 2001. None of the whole-house systems

purchased from Sun Water bore any marks of Sun Water or its trade name

Aquasana. 

During this time, Equinox Products’ supply of liquidated EIC

whole-house systems became insufficient to meet demand. Realizing

that they needed a new manufacturer for the systems, Equinox Products

contracted with various companies to produce them, including, in June

2001, Sun Water. Sun Water had a large supply of obsolete Rhino

labels, so it began applying them to the new systems. These labels

had not been affixed to new whole-house systems in more than six

years. 

Equinox Products began receiving the newly manufactured systems

from Sun Water around July 2001. When it did, it affixed to them an

additional white label that read, in black lettering, “Equinox EQ300." Equinox Products then sold the systems to the public bearing

the Rhino, Equinox, and EQ-300 trademarks. Following is an illustration.

 

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Diagram I

None of the units Sun Water manufactured for Equinox Products bore any

marks informing the consumer that they were manufactured by Sun Water

nor that they were a product of Equinox Products. 

In April 2002, Defendants received an email from the counsel for

the EIC receiver demanding that Defendants “cease and desist from

operating a business enterprise using the name ‘Equinox.’” In

response, Equinox Products voluntarily changed its name to Vitasalus,

Incorporated, but its website to this day remains the same. The EIC

receiver has never asserted any objection to Defendants’ use of

equinox-products as the internet domain name for their web-based

business. And despite this name change, Defendants continued to

market and sell their newly manufactured whole-house systems under the

names Equinox, EQ-300, and Rhino. The sales of this product are

largely achieved through their website.

 

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3 http://www.aquasana.com

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Starting in December 2002, however, Sun Water began marketing the

“EQ-300 Rhino Whole House Filter System” for direct purchase from its

website.3 Although the Aquasana website indicates that the unit it

sells is the “EQ-300 Rhino” system, the picture of the unit on the

Aquasana website showed the unit with the two Equinox labels affixed

to the top blue tank (diagram G) and the small, square EQ-300 label

(Diagram D) on the bottom tank. And still, other than the system’s

being offered through the Aquasana website, nothing in the description

of the unit or its picture on the website would lead a potential

consumer to believe that the “EQ-300 Rhino” was a product of Sun

Water. Moreover, Plaintiffs admit, “Some of the old labels purchased

from the receiver of EIC were used on the new whole-house . . .

systems.” 

In October 2003, the relationship between Plaintiffs and

Defendants began to change. Plaintiffs began to demand that Defendants sign an “Authorized Direct Dealer Agreement.” According to

Defendants, they had resisted signing any direct-dealer agreement

because they were not interested in being a distributor for Sun Water

or Aquasana. Rather, Defendants wanted Sun Water to remain as the

manufacturer of their new whole-house systems they had been selling

for the past two years. However, Sun Water’s president, Strand, sent

a letter to Defendants informing them that starting October 15, 2003,

all dealers who choose to deal directly with

[Sun Water] must complete and return a signed copy

of the ‘Authorized Direct Dealer Agreement. Any

 

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Dealer who chooses not to comply with the terms of

the “Agreement,” will either be referred to a

socking Distributor for future purchases or be

unable to make future direct purchases of [Sun

Water’s] Products . . . . 

Faced with the threatened loss of its manufacturer, Defendants

reluctantly signed the direct-dealer agreement. 

Defendants, now as Vitasalus, made their final purchase of

Sun Water manufactured systems around February 2004. Defendants

secured a new manufacturer for the system in August 2004. And the

direct-dealer agreement expired by its own terms in October 2004. 

Defendants soon sold the remaining units from Sun Water and

then began ordering from their new manufacturer. That manufacturer

assembles the units using industry standard tanks, parts, and mediae,

and ships the units to Defendants unlabeled. The units are substantially similar in design and color to the units Sun Water previously

manufactured and the units EIC sold for many years. 

Defendants decided to distinguish their new product from the

one Sun Water had manufactured. At first, Defendants attempted to

accomplish this by using a new label affixed to the top blue tank.

The new label identified the filtration system as the “Blue Rhino EQ300 Whole House Water Filtration System.” In the center of the label

was Vitasalus’s official logo. Following is an illustration.

 

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Diagram J

Currently, Defendants market their product as the “Premium EQ-300

Rhino Whole House Water Filtration System.” The label is the same

except it identifies the system as the “Premium EQ-300" instead of the

“Blue Rhino EQ-300,” as illustrated in Diagram K, below.

Diagram K

Although Defendants’ system is similar to the one Sun Water

manufactured and EIC sold years prior, as illustrated below, there are

noticeable differences. The tanks are larger and painted a lighter

shade of blue than Sun Water’s and EIC’s older units. Plus, Defen-

 

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dants’ website takes great care in informing the customer of the

differences between its “Premium EQ-300 Rhino” model and the “older

EQ-300s” as illustrated below. 

Diagram L

Presently, Sun Water markets its whole-house system as: “The

Original EQUINOX Rhino EQ-300 Whole House Water Filter System.” It

affixes two new labels to the top blue tank. The upper label is a new

“Rhino” label that is a darker shade of blue than that previously

 

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used. It features a white outlined image of a rhinoceros. On the top

of the label is the word “Rhino” in bright-red lettering. And in

white lettering is the phrase, “High Efficiency/high capacity Water

Treatment System By Sun Water Systems Incorporated.” The side of the

label reads, in fine print: “A Product of: Sun Water Systems, Inc.,”

and gives the address and phone number of Sun Water. On the bottom

right side of the label is a small sticker with “Model EQ-300" on it.

The lower label contains the Sun Water-Aquasana logo. It is white

with a blue swirl design. Under the swirl design is “Aquasana” in

blue lettering, all as can be seen in Diagrams M and N, below. 

Diagram M

Diagram N

 

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Sun Water registered the word mark “Equinox” as its trademark for

water filters in January 2005. In its application, Sun Water claimed

it first used the mark in commerce in April 2002. Vitasalus filed an

application to register the word mark Equinox in March 2005, and

claimed that it first used the mark in commerce in January 1997. Sun

Water filed an opposition to Vitasalus’s registration, so that

application is currently stayed pending the resolution of this case.

Both parties filed applications for trademark registrations for the

word mark EQ-300. Vitasalus filed its application in March 2005, and

stated that it first used the mark in commerce in January 1997. Sun

Water filed its application in February 2006, but the application does

not state when Sun Water claims it first used the word mark in

commerce. Both applications are currently stayed pending the

resolution of this case.

As mentioned above, Sun Water was assigned any rights and

ownership EIC had in the registered trademark, “Rhino.” But also as

mentioned above, that trademark registration expired in August 2004.

Inexplicably, however, Sun Water filed an application with the USPTO

to register the word mark Rhino in July 2004, claiming it first used

the mark in commerce in August 1992. Like the other applications

above, it is stayed pending the resolution of this case.

Finally, Sun Water received trademark registrations from the

Texas Office of the Secretary of State for the word marks Rhino, EQ300, and Equinox in April 2006. There is no evidence that the product

 

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design of the whole-house system is registered as a trade dress under

federal or state law.

II. Analysis

To obtain a preliminary injunction, Plaintiffs must clearly

establish: (1) a substantial likelihood of success on the merits; (2)

a substantial threat of irreparable harm if the injunction is not

granted; (3) that the threatened injury to Plaintiffs outweighs any

harm to Defendants that may result from the injunction; and, (4) that

the injunction will not undermine the public interest. See Roho, Inc.

v. Marquis, 902 F.2d 356, 358 (5th Cir. 1990); Allied Mktg. Group, Inc.

v. CDL Mktg., Inc., 878 F.2d 806, 809 (5th Cir. 1989). A preliminary

injunction is an extraordinary remedy, and it is well-settled law that

it will only be granted if Plaintiffs clearly carry their burden of

persuasion on all four factors. Allied Mktg. Group, Inc., 878 F.2d at

809. If the Court concludes that Plaintiffs have failed to carry

their burden on any one of the four factors, then the Court must deny

the motion for a preliminary injunction and the Court need not address

any of the remaining factors. “The decision whether to grant a

preliminary injunction is within the discretion of the district

court.” Id.

Plaintiffs’ allege that Defendants are infringing on their

trademarks and trade dress and seek to have the Court preliminarily

enjoin Defendants from further infringement. To understand trademark

law is to understand two very important concepts: First, trademark law

 

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seeks to promote free-market competition. Union National Bank of

Laredo, Texas v. Union National Bank of Austin, Texas, 909 F.2d 839,

843-44 (5th Cir. 1990). It is not intended to create monopolies. Id.

It accomplishes this by protecting consumers against confusion as to

the origin of a product. It ensures that consumers will be fully

capable of identifying the true source of a product thereby giving

them the ability to shop different brands. 

Second, trademark law seeks to protect the good will of producers

in their trade names, which free-riders may attempt to appropriate by

using the producer’s mark or one that is deceptively similar. Id. It

seeks to protect a business’s hard-won goodwill from others who may

seek to unfairly appropriate that goodwill by marketing a cheaper, but

inferior, product—the result of which is to temporarily reap the

benefits of trading on that goodwill until it has been tarnished and

is no longer marketable.

A trademark is not a right that exists in gross. Rather, it is

the right to the goodwill flowing from the identification of a

specific product with a particular business. Aircraft Novelties

Corporation v. Baxter Lane Company of Amarillo, 685 F.2d 988, 990 (5th

Cir. 1982). The primary significance of a trademark in the minds of

the consuming public is not the product but the producer. Society of

Financial Examiners v. National Association of Certified Fraud

Examiners, Inc., 41 F.3d 223, 227 (5th Cir. 1995). A trademark tells

a consumer that any product bearing that mark originated from a

particular business and carries with it all of the goodwill and

 

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reputation associated with that business. The same is true of trade

dress.

A. Plaintiffs’ Likelihood of Success on the Merits as to Trade Dress

and Trademark Infringement

1. Trade Dress

It is well established that trade dress can

be protected under federal law. The design or

packaging of a product may acquire a distinctiveness which serves to identify the product with its

manufacturer or source; and a design or package

which acquires this secondary meaning, assuming

other requisites are met, is a trade dress which

may not be used in a manner likely to cause

confusion as to the origin, sponsorship, or

approval of the goods. In these respects protection for trade dress exists to promote competition.

Traffix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28

(2001). Trade dress may include features like size, shape, color or

color combinations, textures, graphics, and even certain sales

techniques that characterize a particular product as coming from a

certain source. Sunbeam Products, Inc. v. The West Bend Company, 123

F.3d 246, 251 n.3 (1997).

Generally, it has been recognized that there are two categories

of trade dress. One is the product’s packaging. Because the

packaging of a product is used most often to identify the product’s

source, product-packaging trade dress can be inherently distinctive—that is, no proof of secondary meaning need be shown. Wal-Mart

Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 212, 215 (2000).

However, product-design trade dress “is not inherently distinctive,”

 

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and cannot be protected without a showing of secondary meaning. Id.

And the Supreme Court has cautioned against the misuse or overextension of product-design trade-dress protection. Id. at 29; WalMart Stores, Inc., 529 U.S. at 213. 

In the case of product design, . . . consumer

predisposition to equate the feature with the

source does not exist. Consumers are aware of the

reality that, almost invariably, even the most

unusual of product designs—such as a cocktail

shaker shaped like a penguin—is intended not to

identify the source, but to render the product

itself more useful or more appealing.

Wal-Mart Stores, 529 U.S. at 213. Thus, the inquiry is whether the

product design creates a distinct visual impression upon the consumer

that identifies the product’s source, thereby distinguishing it from

products manufactured by others. Sunbeam, 123 F.3d at 251. 

To establish product-design trade-dress infringement, Plaintiffs

must first demonstrate that it qualifies for protection by establishing that the product design has acquired secondary meaning and that

the particular design features are nonfunctional. Id; see also WalMart Stores, 529 U.S. at 214; Traffix, 523 U.S. at 29. 

To demonstrate secondary meaning, Plaintiffs “must show that, in

the minds of the public, the primary significance of a product feature

. . . is to identify the source of the product rather than the product

itself.” Inwood Laboratories, Inc., et al. v. Ives laboratories,

Inc., 456 U.S. 844, 851 n.11 (1982); see also Kellog Company v.

National Biscuit Company, 305 U.S. 111, 118-19 (1938). The gravamen

of secondary meaning is the consumer’s association of the product’s

 

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design to a single source of that product. Sunbeam Products, Inc.,

123 F.3d at 253. Thus, if the consumer has become accustomed to

identifying a particular product through its design and not the source

of that product, the product design is not protectable trade dress.

See e.g. Kellog Company, 305 U.S. at 121(holding that the public had

become accustomed to identifying the cereal “shredded wheat” by the

particular pillow-shaped design but did not associate that design with

the product’s source). 

The determination of whether a product’s design has acquired

secondary meaning “is primarily an empirical inquiry,” and “survey

evidence is the most direct and persuasive evidence of secondary

meaning.” Sunbeam Products, Inc., 123 F.3d at 253-54. But consumer

surveys are not the only relevant evidence to establish secondary

meaning. “In addition, the court may consider the length and manner

of the use of a mark, the nature and extent of advertising and

promotion of the mark, the sales volume of the product, and instances

of actual confusion.” Id. at 254. Nevertheless, the ultimate

determination of secondary meaning remains an empirical question of

consumer association of the product design to its manufacturing

source. Id.

With this in mind, the Court concludes that Plaintiffs have

failed to meet their burden of demonstrating a substantial likelihood

of establishing at trial that the design of the whole-house system has

acquired secondary meaning—that is, that the design has become

 

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synonymous with Sun Water or Aquasana in the minds of the consuming

public. 

First, Plaintiffs have not submitted any survey evidence to prove

that the stacked-tank design and color scheme of the whole-house

system has come to be uniquely associated as a product of Sun Water or

Aquasana. And the evidence Plaintiffs have submitted fails to

demonstrate that the public has come to identify that product design

and color scheme as a product manufactured by Sun Water. 

Throughout their motion, Plaintiffs claim that the design of the

whole-house system is the “Sun Water trade dress.” Strand claims in

his affidavit that,

The selection of colors of the pieces of the

system by [Sun Water] was arbitrary, and taken as

a whole, serves no function either to describe the

product or to assist in its effective packaging.

This color scheme serves only to identify the

system as coming from [Sun Water].

But as Strand concedes, he created that product design when he owned

IPC and partnered with EIC. Thus, it is impossible that Strand’s

design of the whole-house system was intended to serve as identifying

the product as coming from a company that would not exist for at least

another six years. If the design of the product was intended to

acquire any secondary meaning, it was to identify the whole-house

system as a product of EIC—not Sun Water or Aquasana. 

The stacked-tank design and color scheme Strand claims he created

were for a product that IPC manufactured and EIC sold from 1991 until

2000. The evidence establishes that, by 1995, IPC became a hidden

manufacturing resource of the whole-house system for EIC. And by

 

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26

1995, the whole-house system bore no marks indicating that it was a

product of IPC; rather, all of its marks identified it as a product of

EIC. In 1998, Strand sold all of his ownership and interest in IPC to

EIC. 

Strand did not form Sun Water until 1998. When formed, Sun Water

was, and remains to this day, a separate and distinct business from

IPC and EIC. And between 2000 and 2002, Sun Water was a hidden

manufacturing resource for Vitasalus (formerly Equinox-Products),

producing the whole-house system using the same product design.

During that time, the whole-house system bore no marks identifying it

as a product manufactured by Sun Water. The whole-house system was

available for purchase through Equinox Products’ website, which

advertised itself as a place where one could purchase products that

originated from EIC. It wasn’t until late 2002 that Sun Water began

to sell the whole-house system to the public. Thus, any secondary

meaning that developed in the product design of the whole-house

system, if any, would be associated with EIC and not Sun Water or

Aquasana. Accordingly, Plaintiffs cannot claim any proprietary rights

in the product-design trade dress that, at best, identifies the wholehouse system as a product of another company and not theirs. 

Nevertheless, even assuming that the product design has acquired

secondary meaning identifying it with Sun Water, the trade dress is

not protectable because the whole-house system’s design and color

scheme serve particular functions. In a civil action for infringement

of unregistered trade dress, “the person who asserts trade dress

 

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4 This article is also reproduced at

http://www.darthmouth.edu/~etrnsfer/water.htm.

27

protection has the burden of proving that the matter sought to be

protected is not functional.” 15 U.S.C. § 1125(a)(3). 

As Defendants point out, the color blue has often been associated

with water and various water products. Defendants have provided

evidence of numerous water filtration systems, some of which are

whole-house systems, that are blue colored. Thus, the blue coloring

of the tanks more likely serves an aesthetic function designed to make

the whole-house system more appealing to a potential customer. To

allow Plaintiffs the exclusive use of the color blue in association

with the marketing and sale of water filters would put competitors at

a “significant non-reputation-related disadvantage.” Traffix, 532

U.S. at 32. Blue is the only color that is almost exclusively

associated with water, and routinely blue is more specifically

connected with water that is clear, pure, healthy, and beautiful. See

Charles L. Braun and Sergi N. Smirnov, Why is Water Blue?, J. CHEM. EDU.

70(8), 612 (1993).4 Thus, where a manufacturer employs a color scheme

to serve the non-trademark function of satisfying “the noble instinct

for giving the right touch of beauty to common and necessary things,

. . . it is open to their competitors to do the same.” Qualitex

Company v. Jacobson Products Company, 514 U.S. 159, 170 (1995)(internal quotations and citations omitted). 

Likewise, the black base in which the system’s bottom tank sits

also has a particular function. It serves to protect the bottom tank

 

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28

as it sits on the floor. And the shut-off valve serves as a safety

mechanism, and its orange color is commonly used in the plumbing

industry to identify that valve as the shut-off valve. 

Finally, Plaintiffs’ own evidence establishes that the stackedtank design serves a particular function designed to make the water

filtering system more efficient. As explained by Plaintiffs, one

filtering media is more efficient when the water filters through it in

an upward direction. The other filtering mediae is more efficient

when the water filters through it in a downward direction. And Strand

concedes that the product’s design “adds additional cost to the system

. . . .” The Supreme Court has explained that “a product feature is

functional, and cannot serve as a trademark, if it is essential to the

use or purpose of the article or if it affects the cost or quality of

the article . . . .” Qualitex Company, 514 U.S. at 165. Here, the

stacked-tank design is essential to the use of the water filter,

affects its cost, and affects the quality of the filtered water. 

Trade dress protection must subsist with the

recognition that in many instances there is no

prohibition against copying goods and products.

In general, unless an intellectual property right

such as a patent or copyright protects an item, it

will be subject to copying. As the Court has

explained, copying is not always discouraged or

disfavored by the laws which preserve our competitive economy. Allowing competitors to copy will

have salutary effects in many instances. 

Traffix Devices, Inc., 532 U.S. at 29. 

Even assuming that the design of the whole-house system is

protected, Plaintiffs still must demonstrate infringement. Sunbeam

Products, Inc., 123 F.3d at 251. Infringement occurs when there is a

 

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29

likelihood of confusion between Plaintiffs’ product and Defendants’

product. Id. In determining the likelihood of confusion, the

district court must apply what is called the “digits of confusion”

test. Id. at 257. These “digits” include: (1) similarity of the two

products; (2) identity of retail outlets and purchasers; (3) identity

of advertising media; (4) strength of the trade dress; (5) intent of

defendants; (6) similarity of design; (7) actual confusion; and, (8)

degree of care employed by consumers. Id. “Proof of actual confusion

is not a prerequisite, and no single factor is dispositive of the

likelihood of confusion.” Id. Furthermore, these factors are not all

inclusive and other factors present in a particular case may inform

the Court’s decision.

Weighing the factors listed above, the Court concludes that

Plaintiffs have failed to demonstrate a substantial likelihood of

establishing at trial the probability of confusion. Plaintiffs do

present a couple of instances where actual confusion has occurred.

But Defendants have also presented instances where customers have

requested additional information about the differences between their

product and Plaintiffs’ product. While actual confusion is a factor,

the couple of instances presented by Plaintiffs are easily offset by

Defendants’ instances that show potential consumers using a strong

degree of care before purchasing a whole-house system. 

The whole-house system is relatively expensive, ranging from

five-hundred to more than a thousand dollars. The more expensive a

product, the more likely a consumer will spend more time researching

 

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30

the product and carefully comparing the product to its competitors.

This reduces the likelihood of confusion. 

And while both products are similar, the evidence shows that

Defendants take great care in informing potential consumers that their

newer “Premium EQ-300 Rhino” system is different from the “older”

model sold by Plaintiffs or others. Defendants’ website places side

by side pictures of the system Plaintiffs sell and the system that EIC

sold next to their system. There is also a chart that describes the

specific differences between the systems. After their fallout with

Plaintiffs, Defendants sought to sever all ties and association with

Plaintiffs. In furtherance of that goal, Defendants sought out a new

manufacturing source to produce a newer and different whole-house

system from the one they had Plaintiffs manufacture for them. It also

seems clear that Defendants understood that they would be competing

with Plaintiffs in the sale of the whole-house system. Defendants’

newer “premium” model is their attempt to distinguish their product

from the one that originates from Plaintiffs. This is clear evidence

that Defendants have no intention of having their product confused

with Plaintiffs’. 

As discussed above, even assuming Plaintiffs have a protectable

trade dress in the design of the whole-house system, it is not a

particularly strong trade dress. Many other competitors besides

Defendants use blue coloring with the marketing of their water filters

and other competitors also utilize the stacked-tank design. Blue is

a fairly universal mark for water products and the orange handle is

 

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5 Plaintiffs have brought trademark infringement claims against Defendants

based on both federal and Texas law.

31

commonly used in the plumbing industry to identify a shut-off valve.

Thus, even if Plaintiffs can claim any protection in the productdesign trade dress of their whole-house system, they fail to demonstrate a substantial likelihood of establishing infringement by

Defendants. 

2. Trademarks “Equinox,” “EQ-300,” and “Rhino” 

The Lanham Act protects both registered and unregistered

trademarks. See 15 U.S.C. §§ 1114 (registered marks) and 1125(a)

(unregistered marks). 

A party seeking an injunction for trademark

infringement must clear several hurdles in order

to prevail. First, he must prove that the name he

seeks to protect is eligible for protection. He

must then prove he is the senior user. Having

proven these elements, he must then show a likelihood of confusion between his mark and that of the

defendant. Finally, because he is asking for the

equitable remedy of an injunction, he must show

that the likelihood of confusion will actually

cause him irreparable injury for which there is no

adequate legal remedy.

Union National Bank of Laredo, Texas v. Union National Bank of Austin,

Texas, 909 F.2d 839, 844 (5th Cir. 1990); see also Zapata Corporation

v. Zapata Trading International, Inc., 841 S.W.2d 45, 47

(Tex.App.—Houston 1992.)(“A common law trademark infringement action

under Texas law presents no difference in issues than those under

federal trademark infringement actions.”).5

 Thus, to demonstrate

trademark infringement, Plaintiffs must prove that they are the owners

 

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32

of a valid and protectable mark and that Defendants’ use of their

trademark or a deceptively similar mark creates a likelihood of

confusion. 

The first issue in any trademark infringement case is whether the

word or phrase is initially registerable or protectable. Id. To make

this determination, the Court must first decide into which of the

following categories the word or phrase belongs: (1) generic; (2)

descriptive; (3) suggestive; (4) arbitrary; or, (5) fanciful. Two

Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). These are

not clearly defined categories; rather, they are like tones in a

spectrum that tend to blur at the edges and merge together. See

Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 790-92

(5th Cir. 1983), overruled on other grounds in KP Permanent Make-up,

Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 116 (2004). Thus,

a mark may fall into the blurred area between two categories.

Moreover, “the categorization of a term is properly considered a

matter of fact because the appropriate categorization is not selfevident.” Union National Bank, 909 F.2d at 846. 

Generic terms are considered the weakest marks and “are never

eligible for trademark protection.” Union National Bank, 909 F.2d at

844. Generic terms identify a genus or class of things of which the

particular item is merely a member. Id. at 845. “Fish,” for example,

“is a generic term which applies with equal force to sole, haddock,

perch, salmon, bass, and carp.” Id. 

 

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33

Descriptive terms, while protectable, are weaker marks and may

only be protected after proof that the mark has developed secondary

meaning. Id. at 844; Wal-Mart Stores, Inc. v. Samara Brothers, Inc.,

529 U.S. 205, 211 (2000). As mentioned above, secondary meaning

occurs “when, in the minds of the public, the primary significance of

a [mark] is to identify the source of the product rather than the

product itself.” Wal-Mart Stores, Inc., 529 U.S. at 211 (internal

quotations omitted). Descriptive terms require secondary meaning

because, by their nature, they normally serve to identify a characteristic or quality of a product or service. Union National Bank, 909

F.2d at 845. Descriptive terms, for example, are usually adjectives

such as “green,” “speedy,” “reliable,” “mighty,” or “pretty.” Id.

But descriptive terms can be geographical such as “Texas,” “Midwest,”

“Fort Worth,” or “Rodeo Drive.” Id. 

Suggestive, arbitrary, and fanciful terms are considered the

strongest marks and are all protectable without proof of secondary

meaning because they are considered to be “inherently distinctive.”

Wal-Mart Stores, Inc., 529 U.S. at 211; Union National Bank, 909 F.2d

at 844. An inherently distinctive mark is a mark that by its

“intrinsic nature serves to identify a particular source of a product

. . . .” Two Pesos, Inc., 505 U.S. at 768. 

Suggestive terms are marks that suggest rather than describe some

particular product characteristic. Union National Bank, 909 F.2d at

845. Suggestive marks require “the consumer to exercise the imagination in order to draw a conclusion as to the nature of goods and

 

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34

services.” Zatarains, 698 F.2d at 791. Oft-cited examples of

suggestive marks are “Tide” for laundry detergent and “Penguin” for

refrigerators. Wal-Mart Stores, Inc., 529 U.S. at 211; Union National

Bank, 909 F.2d at 845. 

Arbitrary and fanciful terms are marks that “bear no relationship

to the products or services to which they are applied.” Zatarains,

698 F.2d at 791. Arbitrary terms are ordinary words that do not

suggest or describe the product or services involved. Arbitrary

marks, for example, are “Fish” as applied to a bank or “Camel” as

applied to cigarettes. Wal-Mart Stores, Inc., 529 U.S. at 211; Union

National Bank, 909 F.2d at 845. Fanciful terms, by contrast, are

coined or made-up words such as “Xerox,” or “Kodak.” Id. 

Applying these categories here, the Court concludes that

Plaintiffs have demonstrated a substantial likelihood of establishing

that the marks “Rhino,” “Equinox,” and “EQ-300" are protectable. The

Rhino mark is used in conjunction with a depiction of a rhinoceros and

is applied to the whole-house system. A rhinoceros is typically

viewed as a strong or powerful animal that many attribute an aggressive personality. When a consumer sees the Rhino mark in conjunction

with the depiction of a rhinoceros, especially with the most recent

depiction used by Sun Water, the mark tends to suggest to the consumer

that the whole-house system is a strong or powerful filtering system

that will aggressively filter out perceived undesirable impurities in

the water. But it is also arbitrary in the sense that many other

animals having the same attributes as a rhinoceros could have been

 

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35

chosen—a bull for example. The Rhino mark, thus, seems to fall into

that blurred area between suggestive and arbitrary. Either way, the

Court concludes that Rhino is protectable as a fairly strong trademark.

The Equinox mark, when used in conjunction with the whole-house

system, is an arbitrary mark. Ordinarily, “equinox” refers to the two

times per year when the sun crosses the equator, causing the day and

night to be of equal length. See WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY

421 (1991). When used in conjunction with the whole-house system, the

mark Equinox bears no relationship to the product. Its only purpose

was to identify the whole-house system as a product of EIC. Thus, the

Court concludes that the Equinox mark is protectable as a strong

trademark.

Finally, the EQ-300 mark is clearly a fanciful mark. It is a

made-up combination of letters and numerals. While it has been used

to designate the model number of the whole-house system, the “EQ” part

of the fanciful mark directs the consumer back to the Equinox mark.

The evidence shows that through the 1990s, EIC repeatedly used “EQ” in

combination with numerals as model numbers for its various waterfiltration systems with the same effect—to identify that product model

as a product of EIC. Therefore, the EQ-300 fanciful mark really

serves to further identify the whole-house system with its source.

The Court concludes that the EQ-300 mark is also protectable as a

strong trademark.

 

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36

Having determined that the marks Rhino, Equinox, and EQ-300 are

protectable, Plaintiffs must now establish that they are the owners of

the marks. Plaintiffs registered all three marks with the Texas

secretary of state. Under Texas law, a certificate of registration is

prima-facie proof of the validity of the mark, the registrant’s

ownership of the mark, and the registrant’s exclusive right to use the

mark in commerce. Texas A & M University System v. University Book

Store, Inc., 683 S.W.2d 140, 144 (Tex.App.—Waco 1984, writ denied).

Similarly, section 1115(a) of the Lanham Act provides for a presumption of validity and ownership in a registered mark. But under both

Texas and federal law, these are rebuttable presumptions. Texas A &

M University System, 683 S.W.2d at 144; 15 U.S.C. §§ 1065 and 1115(a);

Zatarains, 698 F.2d at 793, n.4. This is especially true if the mark

was fraudulently registered or has since been abandoned, and an

opposing party is not precluded from proving any legal or equitable

defense or defect that could otherwise be asserted if the mark had not

been registered. Id.; Tex. Occ. Code 16.16 (a)(4). 

Turning first to the Rhino mark, the Court concludes that EIC and

IPC long ago abandoned that mark. Under the Lanham Act, a mark is

abandoned 

when its use has been discontinued with intent not

to resume such use. Intent not to resume may be

inferred from the circumstances. Nonuse for three

consecutive years shall be prima facie evidence of

abandonment. “Use” of a mark means the bona fide

use of that mark made in the ordinary course of

trade, and not made merely to reserve a right in

a mark.

 

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37

15 U.S.C. § 1127; see also Tex. Occ. Code 16.16(a)(4) (directing Texas

secretary of state to cancel a registration on a finding that the

registered mark has been abandoned). To establish abandonment, it

must be shown that the owner of the mark discontinued use of the mark

and intended not to resume its use. Vais Arms, Inc. v. George Vais,

383 F.3d 287, 293 (5th Cir. 2004). Intent is determined by an

objective test. Id. 

The evidence overwhelmingly establishes that EIC and IPC had

abandoned the Rhino mark as early as 1995 when the whole-house system

EIC sold no longer bore any label bearing the Rhino mark or the

depiction of the rhinoceros. Beginning in 1995, the whole-house

system became known as the “Equinox EQ-300 Whole House Water Treatment

System.” The intent was obvious: to tell the consumer that the wholehouse system was a product that came from EIC. From 1995 until 2000,

when EIC and IPC were placed into permanent receivership, the Rhino

mark was never used again. After more than three consecutive years of

nonuse, there is a presumption that EIC and IPC abandoned the Rhino

mark. 

Furthermore, the declaration of EIC’s chief financial officer is

insufficient to evidence an intent not to abandon the Rhino mark.

First, that declaration was made in 1999, four years after EIC and IPC

had since discontinued using the Rhino mark. Second, but more

importantly, the declaration simply contains a vague expression of

subjective intent to resume using the mark at some unspecified date in

the future. The declaration also conditions EIC’s intent to resume

 

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38

use of the Rhino mark. According to the declaration, EIC never

planned on resuming its use of the Rhino mark unless “capacity for

production can be increased, or if demand for the product under

registrants’ [sic] primary mark lessens . . . .” (Emphasis added.)

Such vague subjective and conditional statements cannot defeat a claim

of abandonment. Id. at 294. In fact, the declaration admits that the

Rhino mark is not EIC’s “primary mark.” Thus, that declaration

implies that EIC’s intent in not relinquishing the Rhino mark was to

hoard the mark and prevent its use by others. See Exxon Corporation

v. Humble Exploration Company, 695 F.2d 96, 102 (5th Cir. 1983); Vais,

383 F.3d at 293, n.14. “If all a party had to do to avoid a holding

of abandonment was to testify that he never had any intent to abandon

the mark, or never had any intent not to resume use, then no mark

would ever be held abandoned.” Id. at 294, n.15 (internal quotations

and citations omitted). Thus, the Court concludes that EIC and IPC

abandoned the Rhino mark.

As noted, Plaintiffs purchased from EIC and IPC, among other

things, “all allowable trademarks.” And EIC had transferred to Sun

Water any and all rights it had in the registered Rhino mark. Having

long since abandoned the Rhino mark, EIC and IPC had no rights in that

mark to sell or transfer to Plaintiffs. Furthermore, the evidence

clearly establishes that Defendants began using the Rhino mark long

before Plaintiffs. Because the Rhino mark had been abandoned,

Defendants were free to take it for themselves. 

 

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39

Like the trade dress discussed above, Plaintiffs attempt to “back

date” their claim of first use of the Rhino mark to 1988 when Strand

first used that mark in connection with IPC’s manufacture of the

whole-house system. Throughout their affidavits, Plaintiffs attempt

to equate IPC’s and EIC’s uses of the Rhino mark to Sun Water’s. But

like the trade dress discussed above, the Court cannot find that

Strand intended the Rhino mark to identify the whole-house system with

a company that would not exist for at least another six years. When

the Rhino mark was used in commerce, it was used by and to cultivate

the goodwill of IPC and EIC, not Sun Water or Aquasana. Therefore,

Plaintiffs cannot claim IPC’s and EIC’s use of the mark as their own.

IPC and EIC no longer had any goodwill in the Rhino mark to assign to

Plaintiffs since they abandoned its use long before the mark’s

assignment. Accordingly, the Court concludes that Plaintiffs have

failed to demonstrate a substantial likelihood of establishing

ownership in the Rhino mark. 

Turning next to the Equinox and EQ-300 marks, the Court concludes

that Plaintiffs have failed to demonstrate a substantial likelihood of

establishing ownership in those marks as well. Although Plaintiffs

have successfully registered the Equinox and EQ-300 marks under the

Texas code and have successfully registered the Equinox mark under the

Lanham Act, as noted above, those registrations are not conclusive

evidence of Plaintiffs’ ownership in those marks. And Plaintiffs’

claim to ownership in those marks is subject to any legal or equitable

 

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40

defense or defect that might have been asserted by a non-registrant

just as if such mark had not been registered. 

The evidence shows that at the time Plaintiffs registered the

Equinox and EQ-300 marks, they were not the senior users. See Union

National Bank, 909 F.2d at 844 (stating a plaintiff claiming trademark

infringement must prove the mark “is eligible for protection” and that

the plaintiff “is the senior user”). Plaintiffs own application for

the registration of the Equinox mark concedes that they did not begin

to use that mark until April 2002. The evidence clearly establishes

that Defendants had been using that mark for at least two years

beginning in 2000. Also, the evidence establishes that Defendants

began using the EQ-300 mark nearly two years prior to Plaintiffs.

Furthermore, the evidence shows that Plaintiffs were fully aware

of Defendants’ use of the Equinox and EQ-300 trademarks prior to

Plaintiffs’ use. In fact, during that time, Plaintiffs were the

hidden manufacturing resource for Defendants’ whole-house system. And

during that time, it was Plaintiffs who placed labels that identified

the system as the Rhino whole-house system by IPC or EIC—with no marks

identifying Sun Water or Aquasana. Thus, the implication is that for

the two years Sun Water manufactured whole-house systems for Vitasalus, Sun Water had no intention of appropriating or cultivating the

goodwill in the trademarks Equinox or EQ-300 because there was no way

for the consuming public to associate those trademarks with Sun Water

or its trade name, Aquasana. 

 

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41

But just like the trade dress and the Rhino mark above, here too,

Plaintiffs attempt to capitalize on EIC’s use of these marks between

1995 and 2000 because Strand was associated with EIC during most of

that time. But just like the trade dress and Rhino mark issues

discussed above, it is obvious that the Equinox and EQ-300 marks were

intended to serve as identifying the whole-house system as coming from

EIC and not a company that would not exist for at least another six

years. Therefore, Plaintiffs cannot claim IPC’s and EIC’s use of the

Equinox and EQ-300 marks as their own. 

Additionally, Plaintiffs have failed to present any empirical

evidence that the Equinox and EQ-300 marks have become or are

synonymous with Sun Water or Aquasana. Instead, the evidence in this

case can, at best, be interpreted in two ways—either the marks are

synonymous with EIC or the marks are synonymous with the whole-house

system itself and not its origin. Either way, because a trademark has

no significance apart from the goodwill it symbolizes, Plaintiffs fail

to establish ownership in the Equinox and EQ-300 marks. 

First, if the Equinox and EQ-300 marks prompt any association as

to the origin of the whole-house system, it is clearly with EIC and

not Sun Water or Aquasana—or Vitasalus, for that matter. These marks

had been used in connection with identifying the whole-house system as

a product of EIC from at least 1994 until 2000. Even still, Defendants, as former EIC distributors, continued to use the marks after

EIC was placed into receivership in connection with a business they

formed that explicitly and unambiguously informed the consumer that it

 

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42

sold products originating from and previously sold by EIC. Still

more, the EIC receiver placed a notice on the receiver’s official

internet webpage that advised the public to visit Defendants’ internet

website “if you are interested in purchasing or selling products or

accessories previously sold by Equinox International . . . .” Even

the EIC receiver became concerned that Defendants’ internet business

conveyed the misconception to the consuming public that EIC remained

in operation and continued to produce merchandise. All of this shows

that the Equinox and EQ-300 marks were synonymous with EIC—not Sun

Water or Aquasana. The record is simply devoid of any evidence that

the marks Equinox and EQ-300 ever had been, or has since become,

associated in the minds of the consuming public with Sun Water,

Aquasana, or Vitasalus. What is fairly clear in the record is that

both Plaintiffs and Defendants have used the Equinox and EQ-300 marks

to capitalize on the goodwill associated with those marks that had

accrued since EIC employed them in 1994. 

Second, even if the Equinox and EQ-300 marks are no longer

synonymous with EIC, the evidence tends to show that these marks have

evolved to become synonymous with the product itself rather than the

source of the product. “Where an article may be manufactured by all,

a particular manufacturer can no more assert exclusive rights in a

form in which the public has become accustomed to see the article and

which, in the minds of the public, is primarily associated with the

article rather than a particular producer, than it can in the case of

a name with similar connections in the public mind.” Kellogg Company,

 

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43

305 U.S. at 120 (concluding that the public had become accustomed to

associating the name “shredded wheat” with the cereal and not the

producer of the cereal). Here, even if the Equinox and EQ-300 marks

are not, or are no longer, associated with EIC, the evidence tends to

show that the consuming public has come to associate those marks with

the whole-house system, rather than any source of that product. This

is evident from the fact that various outlets after the dissolution of

EIC continued to sell the whole-house system using the Equinox and EQ300 marks as identifiers of the system rather than identifiers of the

system’s source. The examples provided by Defendants of customer

inquiries into the differences between their premium model EQ-300

Rhino system and older Equinox EQ-300 systems illustrate customer

identification of the marks Equinox and EQ-300 with the system rather

than the system’s source. In those examples, customers identified the

whole-house system by the marks Rhino, Equinox, and EQ-300, and there

is no indication that the customers connected those marks to any

particular manufacturer. Instead, that connection came from Defendants’ website. And Plaintiffs’ new label and website use the marks

Rhino, Equinox, and EQ-300 to identify system and not the system’s

origin. Plaintiffs’ marks Sun Water and Aquasana are what identify

their system as coming from themselves. Thus, the clear implication

is that the marks Equinox, Rhino, and EQ-300 now identify the

particular stacked-tank whole-house system and not the system’s

manufacturer. 

 

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44

In their motion, Plaintiffs emphasize that Defendants are

precluded from asserting any ownership rights in the marks Rhino,

Equinox, and EQ-300 because Defendants were, and had signed agreements

to be, distributors of EIC products and then later Plaintiffs’

products. But since the Court has already determined that Plaintiffs

have failed to demonstrate a substantial likelihood of establishing

that they are the owners of the above-mentioned marks, the Court need

not decide at this time what, if any, effect Defendants’ distributorship agreements with EIC and Plaintiffs may have on their ability to

claim ownership in any of these marks. Plaintiffs cannot claim

ownership in the Rhino mark because it had been abandoned. And they

cannot claim ownership in the Equinox and EQ-300 marks because those

marks either symbolize the goodwill of EIC, or they have come to

identify the whole-house system itself and not its producer. 

Finally, even assuming Plaintiffs’ ownership in the Rhino,

Equinox, and EQ-300 marks, under the digits-of-confusion test

mentioned above, they fail to demonstrate a substantial likelihood of

establishing infringement. As discussed in more detail above, and not

repeated here, Defendants take great care to distinguish their wholehouse system from that of Plaintiffs. Specifically regarding the use

of the Rhino, Equinox, and EQ-300 marks, Defendants also use the word

“premium” to further differentiate their whole-house system from that

of the “older” models. 

 

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45

B. Plaintiffs’ Likelihood of Success on Their Claims of Common Law

Unfair Competition and Trademark Dilution

1. Common Law Unfair Competition

“Unfair competition is a form of unlawful business injury which

consists essentially, in the passing off or attempting to pass off on

the public, the goods or business of one person as and for the

business of another.” Taylor Made Golf Company, Inc. v. MJT Consulting Group, LLC, 265 F.Supp.2d 732, 745 (N.D.Tex. 2003)(internal

quotations and citations omitted). “As a general rule, the same facts

which would support an action for trademark infringement would also

support an action for unfair competition.” Marathon Manufacturing

Company v. Enerlite Products Corporation, 767 F.2d 214, 217 (5th Cir.

1985). The gravamen of any unfair-competition claim is the likelihood

of the consuming public’s confusing the products of one business with

those originating from another. Id. 

Plaintiffs argue that,

Defendants have demonstrated their intent to pass

off their goods as those of [Sun Water]. These

efforts have been shown by Defendants’ use of the

[Sun Water] trademarks and trade dress on products

that are almost identical to those sold by [Sun

Water]. Based on these actions alone, [Plaintiffs

have] demonstrated the likelihood of confusion. 

But as discussed above, Defendants’ website carefully and explicitly

distinguishes their whole-house system from that of Plaintiffs. The

evidence shows that Defendants intentionally altered their product so

that there would be no mistaken association of them with Plaintiffs.

It is clear that Defendants have no intention on passing off their

product as that of Plaintiffs. Thus, the Court’s analysis need go no

 

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further. Plaintiffs have failed to meet their burden of establishing

a substantial likelihood of success on the merits.

2. Trademark Dilution

At its core, “trademark dilution is the weakening of the ability

of a mark to clearly and unmistakably distinguish the source of a

product.” The Scott Fetzer Company v. House of Vacuums, Inc., 381

F.3d 477, 489 (5th Cir. 2004). Under federal law, to establish

trademark dilution, Plaintiffs must first prove that they are the

owners “of a famous mark that is distinctive.” 15 U.S.C. §

1125(c)(1). Under Texas law, Plaintiffs must first prove that they

are the owners of a distinctive mark. Tex. Bus. & Com. Code § 16.29;

see also The Scott Fetzer Company, 381 F.3d At 489 (discussing the

differences between the federal law and state law). 

Again, the Court has concluded that Plaintiffs have failed to

demonstrate a substantial likelihood of establishing their ownership

in the disputed trademarks. Therefore, the Court’s analysis may

conclude. 

III. Conclusion

After careful review of Plaintiffs’ motion for a preliminary

injunction, the responses and replies, and the evidence submitted by

the parties, the Court concludes that Plaintiffs have failed to meet

their burden of proving a substantial likelihood of success on the

merits. More specifically, there is no evidence that the product-

 

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design trade dress at issue has acquired secondary meaning, and even

if it has, the design features are functional and therefore cannot be

protected trade dress. Further, there is no evidence that the

trademarks at issue are synonymous in the minds of the public with Sun

Water or its trade name Aquasana. Moreover, Plaintiffs failed to

establish their ownership in the trademarks. Consequently, Plaintiffs’ motion (doc. #27) for a preliminary injunction is DENIED.

SIGNED February 28, 2007.

 

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