Hot-Hed, Inc., and Cinaruco International, S.A. v. Safehouse Habitats (Scotland), LTD.

Opinion issued November

18, 2010

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-09-00547-CV

———————————

Hot-Hed, Inc. and Cinaruco International, S.A. , Appellants

V.

Safehouse

Habitats (Scotland), Ltd. , Appellee

On Appeal from the 215th District

Court

Harris County, Texas

Trial Court Case No. 2006-26781

O P I N I O N

Appellants, Hot-Hed, Inc. and Cinaruco

International, S.A. (collectively, “Hot-Hed”), appeal the trial court’s grant

of declaratory judgment against them in their suit for trademark infringement

against appellee, Safehouse Habitats (Scotland), Ltd. (“Safehouse”). In four issues, Hot-Hed argues that the trial

court erred in (1) entering declaratory judgment that the “Habitat” mark is not

eligible for protection as a trademark under Texas or federal law; (2) awarding

Safehouse attorney’s fees under the Texas Uniform Declaratory Judgment Act

(UDJA); (3) refusing Hot-Hed’s timely request to issue findings of fact

and conclusions of law on the attorney’s fees award; and (4) declining to

submit Hot-Hed’s proposed special issue on statutory trademark infringement to

the jury.

Safehouse also appeals the judgment

of the trial court. In three issues,

Safehouse argues that the trial court erred in (1) failing to either order the

cancellation of Hot-Hed’s Texas trademark registration or state that the term

“habitat” “has become incapable of serving as a mark under section

16.16(a)(4)(e) of the Texas Business and Commerce Code”; (2) failing to direct

the United States Patent and Trademark Office (USPTO) to dismiss Hot-Hed’s

proceedings before that office, or alternatively, failing to order Hot-Hed to

abandon those proceedings; and (3) failing to specify an award of post-judgment

interest in the judgment.

We modify and affirm as modified.

Background

Hot-Hed, a Texas corporation

involved with the development and manufacture of specialty products for the oil

and gas industry, began selling inflatable welding enclosures using the mark

“Habitat” in 1990. Hot-Hed obtained

registration of the “Habitat” mark through the USPTO in 1991. It subsequently allowed the federal

registration to lapse in 1998 when it failed to file an affidavit of continuing

use with the USPTO five years after it registered the mark. However, Hot-Hed continued to market its

welding enclosures using the mark “Habitat.”

Safehouse, a Scottish private

limited company, does business in Texas but has no regular place of business here. Safehouse designed and built its first

flexible welding enclosures in 2001 and started selling them in 2002 under the

name “Safehouse Habitats.” Hot-Hed first

learned of Safehouse and its welding enclosures at a trade conference in

Houston in 2006. Conference attendees

informed Hot-Hed that Safehouse was marketing a similar welding enclosure using

the term “habitat.”

In September 2005, Hot-Hed applied

for a new federal registration of its “Habitat” mark, and in March 2006,

Hot-Hed applied for registration of the trademark “Habitat” with the Texas

Secretary of State. The Secretary of

State issued a state trademark registration on May 30, 2006.

In March 2007, Safehouse timely

filed a notice of opposition to Hot-Hed’s application for federal trademark registration

of the mark “Habitat” with the USPTO.

Meanwhile, on May 1, 2006, Hot-Hed sued

Safehouse in Texas state court alleging Texas common law trademark infringement

and unfair competition based on Safehouse’s use of the term “habitat” for its

welding enclosures. In subsequent

amended petitions, Hot-Hed added causes of action for infringement of a

registered Texas trademark and for injury to business reputation and trademark

dilution under Texas Business and Commerce Code section 16.29. [1]

Safehouse attempted to remove Hot-Hed’s

state court action to federal court, arguing that Hot-Hed’s claims presented a

federal question. On appeal, the Fifth

Circuit determined that no federal question was presented by Hot-Hed’s claims

against Safehouse and the cause was remanded to state court on February 12, 2007.

Safehouse counterclaimed in the

state court suit, seeking “a judicial declaration [under the UDJA] that the

term ‘habitat’ is not eligible for trademark protection under either state or

federal law” and seeking to have Hot-Hed’s Texas registration of the “Habitat”

mark cancelled pursuant to Texas Business and Commerce Code sections 16.16 and

16.25. [2] Safehouse also petitioned for attorney’s fees

under Texas Business and Commerce Code section 16.25 and the UDJA. In its prayer, Safehouse asked that the trial

court dismiss each of Hot-Hed’s claims with prejudice and enter an order that

Hot-Hed take nothing on those claims; declare that the term “habitat” is

generic or descriptive and not eligible for protection under state or federal

law; cancel Hot-Hed’s Texas trademark registration for the term “Habitat”; and

award it attorney’s fees. It also generally

prayed for “such other and further relief in law and equity to which it may

show itself to be justly entitled.” [3]

On July 22, 2006, Safehouse applied

to the USPTO to federally register the mark “Safehouse Habitats,” and, on August

19, 2008, the USPTO issued a federal trademark registration for “Safehouse

Habitats.”

On August 27, 2008, Hot-Hed filed a

Petition of Cancellation asking the USPTO to cancel Safehouse’s federal registration

of “Safehouse Habitats.”

Subsequently, the Trademark Trial

and Appeals Board of the USPTO suspended the proceedings initiated by Hot-Hed

to register “Habitat” on behalf of Hot-Hed and to cancel Safehouse’s

registration of “Safehouse Habitats,” stating that the resolution of the issues

in the state court litigation could have a bearing on the issues in the federal

proceedings.

At trial of Hot-Hed’s state court

causes of action and Safehouse’s counterclaims, both sides presented evidence

regarding the use of the term habitat in relation to welding enclosures. Hot-Hed presented evidence that it possessed

a registration from the Texas Secretary of State for the term “Habitat” when

used in connection with inflatable welding enclosures. It also presented evidence that Safehouse had

used the term “Habitat” in marketing its welding enclosures. Hot-Hed’s founder, Louis Wardlaw, testified

that he invented the term “Habitat” as it related to welding enclosures and

that Hot-Hed was the first to use that mark to market inflatable welding

enclosures. Hot-Hed also presented

evidence that it had used the term “Habitat” continuously for twenty years and

that it had at one time secured federal registration of the mark.

Safehouse presented evidence that, from

their beginning in the 1960s, underwater welding enclosures were referred to as

“welding habitats” and that the term had been in continuous use since that time

to refer generally to welding enclosures, not just to Hot-Hed enclosures. Patents for other welding enclosures filed throughout

the last three to four decades by third parties referred to the welding

enclosures as “habitats.” Safehouse also

presented evidence that that term was used generally to refer to welding

enclosures by oil and gas companies, by the Minerals Management Services of the

United States Department of the Interior, and in an article entitled “Welding

Hot Work Habitats” that addressed the use of welding “habitats” in New Zealand

in 1990.

During the charge conference,

Hot-Hed objected generally to jury questions one through four as they were

submitted to the jury and filed two requested questions to replace the

submitted questions. The instructions requested

by Hot-Hed, and refused by the trial court, were unconditional questions. Question one asked whether the jury found it

“more likely so than not” that Hot-Hed has a “Texas common law trademark for

“HABITAT” that has been infringed by Safehouse.” This proposed instruction defined trademark,

listed the elements of common law trademark infringement, and included

instructions on when marks are eligible for protection and explanations of

other elements of common law trademark infringement. It likewise stated that Hot-Hed bore the

burden of proof on the issue generally, but it provided that Safehouse had the

burden of proving that Hot-Hed’s “Habitat” mark was not eligible for protection

by a preponderance of the evidence. The

second proposed jury instruction addressed Hot-Hed’s statutory cause of action

for infringement of a Texas registered trademark. The trial court refused both of these

proposed jury charges.

The first question the jury was

asked to consider was, “Do you find that the term ‘habitat’ is eligible for

protection as a trademark?” The

instructions with question one defined “trademark,” stated that Hot-Hed or

Cinaruco had the burden of proving whether the term “habitat” was eligible for

protection, and explained the requirements for determining whether a term is

eligible for protection. The jury

answered “No.” Jury questions two

through nine were contingent on the answer to jury question number one. Because the jury determined that “habitat”

was not eligible for trademark protection, it did not answer any of these

questions regarding the remaining elements of the parties’ claims.

Jury question ten asked, “Do you

find that Defendant Safe House is entitled to the recovery of its reasonable

and necessary attorney’s fees from Hot-Hed, Inc. and/or Cinaruco International,

S.A.?” The jury answered “Yes” for both

Hot-Hed and Cinaruco. Jury question

eleven asked, “Do you find more likely than not that Safe House’s use of the

“HABITAT” trademark will cause irreparable injury to the trademark owner? The trademark owner has the burden of proof

for this issue by a preponderance of the evidence.” The jury answered, “No.” The verdict was returned by ten of the twelve

jurors.

Safehouse moved for entry of judgment,

asking the trial court to enter a take-nothing judgment against both Hot-Hed

and Cinaruco on all four of their affirmative claims. Safehouse also asked that the trial court

enter a judgment declaring that the term “habitat” was not eligible for trademark

protection under either state or federal law and that “habitat” has become

incapable of serving as a mark, and ordering the cancellation of Hot-Hed’s

Texas registration of the term. In

addition, Safehouse’s proposed judgment asked the trial court to instruct the

USPTO and Hot-Hed to dismiss Hot-Hed’s proceeding against Safehouse, to cancel

its registration of the mark “Safehouse Habitats,” and to instruct the USPTO to

refuse to register “habitat” as a trademark in Hot-Hed’s application for

federal registration of the term.

Finally, Safehouse requested attorney’s fees based on the parties’

stipulation that the amount of reasonable and necessary attorney’s fees

incurred by Safehouse through trial was $1,255,000, and it requested that the

trial court assess costs against Hot-Hed and Cinaruco jointly and severally. [4]

The trial court signed its judgment

on April 20, 2009. It ordered “that

Plaintiffs HOT-HED, INC. and CINARUCO INTERNATIONAL, S.A. take nothing on each

of the claims against” Safehouse, declared that “the term ‘habitat’ is not

eligible as a trademark under Texas or Federal law, namely the Lanham Act,

Title 15 of the United States Code,” and ordered that Safehouse recover from

Hot-Hed and Cinaruco, jointly and severally, attorneys fees of $1,255,000, with

additional attorney’s fees in the event of an appeal. [5]

On May 29, 2009, Hot-Hed requested

findings of fact and conclusions of law on the trial court’s award of attorney

fees, citing the timelines of Texas Rule of Civil Procedure 297. On June 24, 2009, the trial court denied

Hot-Hed’s request for findings of fact and conclusions of law.

On June 11, 2009, Hot-Hed moved for

judgment notwithstanding the verdict, and on June 19, 2009, Hot-Hed moved for

new trial. The trial court denied both of

these motions on July 27, 2009. Both

Hot-Hed and Safehouse appealed.

Validity of Safehouse’s Declaratory

Judgment Counter-Claim

In its first issue, Hot-Hed argues

that the trial court erred in entering declaratory judgment that the “Habitat”

mark is not eligible for protection as a trademark under Texas or federal law. Hot-Hed argues in part that the trial court

erred in entering this judgment because (1) eligibility for protection was

already an element of its claim for trademark infringement and (2) the

matter on which Safehouse sought a declaration was subsumed within Safehouse’s

action to cancel the trademark registration, which constituted a matured remedy

at law.

The

UDJA provides that:

A person interested under a

deed, will, written contract, or other writings constituting a contract or

whose rights, status, or other legal relations are affected by a statute,

municipal ordinance, contract, or franchise may have determined any question of

construction or validity arising under the instrument, statute, ordinance,

contract, or franchise and obtain a declaration of rights, status, or other

legal relations thereunder.

Tex. Civ.

Prac. & Rem. Code Ann. § 37.004 (Vernon 2008); US Bank, N.A. v. Prestige Ford Garland Ltd. P’ship , 170 S.W.3d 272,

278 (Tex. App.—Dallas 2005, no pet.).

Declaratory judgment is appropriate when a real controversy exists

between the parties, and the entire controversy may be determined by judicial

declaration. Adams v. First Nat’l Bank of Bells/Savoy , 154 S.W.3d 859, 873 (Tex.

App.—Dallas 2005, no pet.) (citing Scurlock

Permian Corp. v. Brazos County , 869 S.W.2d 478, 486 (Tex. App.—Houston [1st

Dist.] 1993, writ denied)). A trial

court may refuse to render or enter a declaratory judgment if the judgment will

not terminate the uncertainty or controversy giving rise to the

proceedings. Id. (citing Spurlock , 869

S.W.2d at 486 ).

The UDJA is “not available to

settle disputes already pending before a court.” Id.

(quoting BHP Petroleum Co. v. Millard ,

800 S.W.2d 838, 841 (Tex. 1990)).

“Ordinarily declaratory relief will not be granted where the cause of

action has fully matured and invokes a present remedy at law,” and “declaratory

judgment is improper if the relief requested is raised for the first time in an

amended petition and merely addresses the same issues as were raised in the

original petition.” Prestige Ford , 170 S.W.3d at 278 .

“In certain instances, however, a

defensive declaratory judgment may present issues beyond those raised by the

plaintiff.” Indian Beach Prop. Owners’ Ass’n v. Linden , 222 S.W.3d 682, 701

(Tex. App.—Houston [1st Dist.] 2007, no pet.); see also Millard , 800 S.W.2d at 842 (holding that defensive

declaratory judgment counter-claim that has greater ramifications than original

suit is proper). “To qualify as a claim

for affirmative relief, a defensive pleading must allege that the defendant has

a cause of action, independent of the plaintiff’s claim, on which he could

recover benefits, compensation or relief, even though the plaintiff may abandon

his cause of action or fail to establish it.”

Linden , 222 S.W.3d at 701 (quoting Gen. Land Office v. OXY U.S.A., Inc. , 789 S.W.2d 569, 570 (Tex.

1990)).

Fact issues in declaratory judgment

proceedings may be tried and determined in the same manner that issues of fact

are tried and determined in other civil actions. Id.

at 699 (citing Tex. Civ. Prac. &

Rem. Code Ann. § 37.007). “The

power to determine an issue of fact, however, ‘does not concomitantly carry

with it the power to render such a finding of fact as a declaratory

judgment.’” Id. (quoting Hill v. Heritage

Res., Inc. , 964 S.W.2d 89, 140 (Tex. App.—El Paso 1997, pet. denied)). If a factual dispute is the only issue to be

resolved, a declaratory judgment is not the proper remedy. Id.

Here, Hot-Hed alleged causes of

action for common law trademark infringement, unfair competition, statutory

infringement of a registered Texas trademark, and injury to business reputation

and trademark dilution — all causes

of action relating to Texas law. Safehouse’s

counterclaim under the UDJA sought a declaration from the trial court that

would encompass both state and federal eligibility of the term “Habitat” for trademark

protection and provide a ruling from the trial court that would dispose of

proceedings between Hot-Hed and Safehouse in the USPTO. Thus, Safehouse could elect to seek a

declaratory judgment and an adjudication of rights on which it could obtain relief.

This counterclaim constituted more than

a request that the trial court repeat a factual finding. See id.

at 699–701.

We conclude that Safehouse’s

declaratory judgment counterclaim stated a claim for affirmative relief and was

the proper subject of a declaratory judgment.

Propriety of Trial Court’s

Declaratory Judgment

Hot-Hed also argues in its first

issue that the trial court erred in entering declaratory judgment that the term

“habitat” was ineligible for trademark protection under either Texas or federal

law because (1) Safehouse failed to secure jury findings necessary to overcome

the statutory presumption of validity to which the mark was entitled and to

support the declaration; (2) the declaratory judgment failed to specify the

category of goods or services with respect to which the mark is ineligible for

protection and thus is overly broad; and (3) the declaratory judgment was

unsupported by the pleadings as to Cinaruco because Safehouse never asserted a

claim for declaratory judgment against Cinaruco.

1.

Necessity of jury findings

to overcome presumption and support declaration

Hot-Hed argues that the jury’s

negative answer to question one “is not a finding by a preponderance of the

evidence that ‘Habitat’ is not eligible for protection as a mark because the

special issue placed the burden of proving eligibility for protection on

Hot-Hed.” Safehouse first contends that

Hot-Hed failed to preserve this argument.

However, Hot-Hed filed an alternative jury charge, which provided that

Safehouse bore the burden of proving that the mark “Habitat” was ineligible for

protection as a trademark.

We conclude that Hot-Hed’s

submission of its alternative jury charge preserved this argument. See Tex. R. Civ. P. 274 (“A party objecting

to a charge must point out distinctly the objectional matter . . . . Any complaint as to a question, definition,

or instruction . . . is waived unless specifically included in the objections”).

Hot-Hed essentially argues that the

jury finding to question number one is insufficient to support the declaratory

judgment because the question failed to place the burden of proving eligibility

on Safehouse and because the evidence was insufficient to support the jury’s

conclusion. [6] Safehouse contends that the “presumption of

validity” that arises from a Texas trademark registration does not shift the

burden of proof to the party challenging the validity of the mark, it merely

shifts to the challenging party the burden of producing or going forward with

the evidence; once some evidence is produced, the presumption disappears and

the burden of proof remains on Hot-Hed.

Safehouse argues that Hot-Hed failed to carry its burden of persuasion

that the “habitat” mark was eligible for protection, and the jury finding that

it was not eligible sufficiently supported the trial court’s declaratory

judgment. Thus, Safehouse was not

required to procure additional jury findings to overcome the presumption.

To determine whether

the evidence is legally sufficient to support a finding, we review the entire

record, crediting favorable evidence if reasonable jurors could and

disregarding contrary evidence unless reasonable jurors could not. See City of Keller v. Wilson, 168

S.W.3d 802, 827 (Tex. 2005). If the

evidence would enable reasonable and fair-minded people to differ in their

conclusions, then it is legally sufficient to support the finding. See id. In reviewing the factual sufficiency of the

evidence, we consider all the evidence and set the finding aside only if it is

so contrary to the overwhelming weight of the evidence as to be clearly wrong

and unjust. Cain

v. Bain,

709 S.W.2d 175, 176 (Tex. 1986) (per curiam). Whether reviewing the evidence for legal or

factual sufficiency, we assume that jurors decided questions of credibility or

conflicting evidence in favor of the finding if they reasonably could do so. See City

of Keller,

168 S.W.3d at 819–20 . We do not substitute our judgment for that of

the trier-of-fa ct if the evidence falls within this

zone of reasonable disagreement. Id. at 822.

The Texas Business and Commerce

Code provides that:

A certificate of

registration issued by the secretary of state under this chapter, or a copy of

it certified by the secretary of state, is admissible in evidence as prima

facie proof of

(1) the validity of the

registration;

(2) the registrant’s

ownership of the mark; and

(3) the registrant’s exclusive

right to use the mark in commerce in this state in connection with the goods or

services specified in the certificate, subject to any conditions and

limitations stated in the certificate.

Tex. Bus.

& Com. Code Ann . § 16.15(c) (Vernon 2002). “Registration creates a rebuttable

presumption that the party registering the mark is the owner thereof, and that

the registration is valid and exclusive to the registrant.” All Am.

Builders, Inc. v. All Am. Siding of Dallas, Inc. , 991 S.W.2d 484, 489 (Tex.

App.—Fort Worth 1999, no pet.). “A mark,

valid and exclusive to the registrant, is nothing more than constructive notice

in this state of the registrant’s claim of ownership.” Id.

at 489 n.5. (citing Tex. Bus. & Com.

Code Ann . § 16.15(b)). A

rebuttable presumption shifts the burden of producing evidence to the party

against whom it operates. Id. at 489 (citing Gen. Motors Corp. v. Saenz , 873 S.W.2d 353, 359 (Tex. 1993)). Once evidence contradicting the presumption has

been offered, the presumption is extinguished and shall not be weighed or

treated as evidence, and the presumption has no effect on the burden of

persuasion. Id. (citing Saenz , 873

S.W.2d at 359 ).

Here, the presumption that arose

from Hot-Hed’s evidence that “habitat” was a registered trademark in Texas was

that Hot-Hed was the owner of the “habitat” mark and that the registration was

valid and exclusive to it. [7] See Tex. Bus. & Com. Code Ann . §

16.15(c)(3); All Am. Builders , 991

S.W.2d at 489 . At trial, Safehouse

presented evidence that the term “habitat” had been used since the 1960s as a

generic term referring to welding enclosures and that multiple companies had

used the term “habitat” to describe their welding enclosure. This evidence was sufficient to rebut the

presumption that the registration of the “habitat” mark was valid and that the

mark was protectable at the time Hot-Hed sought registration. Thus, the presumption was extinguished and

the burden of persuading the jury that the term “habitat” was eligible for

protection remained with Hot-Hed. See All Am. Builders , 991 S.W.2d at 489 .

The

elements in common law trademark infringement under Texas law are the same as

those under federal trademark law. Id. at 488 . Thus the party seeking to establish trademark

infringement must first establish that the name it seeks to protect is eligible

for protection. Id. at 488–89 (citing Union

Nat’l Bank, Laredo v. Union Nat’l Bank, Austin , 909 F.2d 839, 844 (5th Cir.

1990)). Whether a word or phrase is

eligible for protection is determined by the category to which is belongs: (1)

generic; (2) descriptive; (3) suggestive; or (4) arbitrary. Id. at

489 (citing Union Nat’l Bank, Laredo ,

909 F.2d at 844 ). Generic terms are

never eligible for protection, whereas descriptive terms may only be protected

after the party seeking to establish infringement provides proof that the term

for which it seeks protection has a secondary meaning. [8] Id.

At

trial, Hot-Hed produced evidence that it had used the term “habitat” for twenty

years in connection with its inflatable welding enclosures, that it had

previously obtained federal registration of the “habitat” mark, and that it

currently held a Texas registration of the mark. It also presented Wardlaw’s testimony that he

was the first one to use the term as it relates to welding enclosures in the

1990s. However, Safehouse presented

copious evidence that the term “habitat” had been in use to describe welding

enclosures generally for decades before Hot-Hed claimed it created and began

using the term, including numerous patent applications and other instances of

use. This evidence was sufficient to allow

reasonable and fair-minded jurors to conclude that “habitat” was ineligible for

protection.

After

considering the evidence introduced at trial and the jury instructions on when

a word or phrase is eligible for trademark protection, the jury concluded that

“habitat” was not eligible for trademark protection. To reach this finding, the jury necessarily

had to conclude that the mark was either generic or descriptive with no

secondary meaning. See id. , 991 S.W.2d at 489 ; see

also Union Nat’l Bank, Laredo , 909 F.2d at 844 . The jury’s finding was not so contrary

to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain, 709 S.W.2d at 176 ; see also City

of Keller, 168 S.W.3d at 819–20 (holding that we assume that jurors decided

questions of credibility or conflicting evidence in favor of finding if they

reasonably could do so). We conclude

that this finding was sufficient to support the trial court’s declaration that

the mark was ineligible for protection under Texas and federal law.

2. Specificity of declaration

Hot-Hed also argues that the trial

court’s declaration was overbroad because “no basis exists for a declaration

that the “Habitat” mark is ineligible for protection with respect to any

product or service other than welding enclosures.” As Safehouse points out in its brief,

although the term “habitat” has been used as a registered trademark by third

parties for non-welding goods like wine, herbicide, and fishing equipment, the

judgment here does not adjudicate the use of the term in any of those contexts. See

Stark v. Benckenstein , 156 S.W.3d 112, 118 (Tex. App.—Beaumont 2004, pet.

denied) (stating in declaratory judgment context that “a trial court’s

declarations do not prejudice the rights of any person not a party to the

proceeding”). Thus, we determine that

the trial court’s judgment was limited to a declaration that “habitat” is not

eligible for trademark protection in connection with welding enclosures and any

related accessories or other items, and we modify the judgment to reflect the

proper scope of the declaration. See Lee v. O’Leary , 742 S.W.2d 28, 33

(Tex. App.—Amarillo 1987) (“Courts of Appeals have the power to modify the

amount of recovery and reform a judgment to conform with the pleadings and

evidence.”), rev’d on other grounds , Lee v. Key West Towers, Inc. , 783 S.W.2d

586 (Tex. 1989); see also State Nat’l

Bank v. Farah Mfg. Co. , 678 S.W.2d 661, 697 (Tex. App.—El Paso 1984, writ

dism’d by agr.) (holding same); Wenk v.

City Nat’l Bank , 613 S.W.2d 345, 353 (Tex. Civ. App.—Tyler 1981, no writ)

(holding same).

We modify the trial court’s

declaratory judgment to state that “the term ‘habitat’ is not eligible as a

trademark under Texas or Federal law, namely the Lanham Act, Title 15 of the

United States Code, when used in

connection with welding enclosures and any related accessories or items .”

We overrule Hot-Hed’s first issue.

Result of Declaratory Judgment

In

its first issue on cross-appeal, Safehouse argues that the trial court erred in

failing to order the cancellation of Hot-Hed’s Texas trademark registration and

in not stating that the term “habitat” “has become incapable of serving as a

mark under section 16.16(a)(4)(E) of the Texas Business and Commerce Code.” In its second issue, Safehouse argues that the

trial court erred in failing to direct the USPTO to dismiss Hot-Hed’s

proceedings before that office, or alternatively, in failing to order Hot-Hed

to abandon those proceedings.

A. Cancellation of

Hot-Hed’s Texas Trademark Registration

In its counterclaim, Safehouse

sought cancellation of Hot-Hed’s Texas registration of the term “habitat” as a

trademark. It argues on appeal that the

trial court erred in refusing to grant relief on this claim. The Business and Commerce Code provides that:

The secretary of state shall

cancel

. . . .

(4) a registration

concerning which a district or appellate court has rendered a final judgment,

which has become unappealable, cancelling the registration or finding that

(A) the registered mark has

been abandoned;

(B) the registrant under

this chapter or under a prior act is not the owner of the mark;

(C) the registration was

granted contrary to the provisions of this chapter;

(D) the registration was

obtained fraudulently; or

(E) the registered mark has

become incapable of serving as a mark.

Tex. Bus. &

Com. Code Ann . § 16.16(a)(4) (Vernon 2002); All

Am. Builders , 991 S.W.2d at 489 n.5.

Safehouse

presented evidence at trial that the term “habitat” was used generally to refer

to welding enclosures. We have already

concluded that this evidence was sufficient to support the jury’s conclusion,

and we have likewise concluded that Hot-Hed’s arguments that Safehouse failed

to obtain the proper jury findings are unavailing. The jury’s finding that the term “habitat” is

ineligible for trademark protection establishes that the mark has become

incapable of serving as a mark. See All Am. Builders , 991 S.W.2d at

488–89 (“The threshold issue is whether the word or phrase is initially

eligible for protection.”). We conclude

that Safehouse was entitled to an order from the trial court cancelling

Hot-Hed’s Texas registration of the mark “habitat” on the ground that it is no

longer capable of serving as a mark. See Tex.

Bus. & Com. Code Ann . § 16.16(a)(4)(E).

Therefore,

we modify the judgment to include an order cancelling Hot-Hed’s Texas

registration of the mark “habitat.”

We

sustain Safehouse’s first issue on cross-appeal.

B. Dismissal of

Proceedings before USPTO

Safehouse

also argues that the trial court erred in failing to order the USPTO to dismiss

Hot-Hed’s petition to cancel Safehouse’s federal registration of “Safehouse

Habitats” and to deny Hot-Hed’s application for federal registration of the

mark “habitat,” or, alternatively, in failing to order Hot-Hed to abandon those

proceedings.

However, Safehouse never made any

affirmative claim for such relief in its pleadings. Texas Rule of Civil Procedure 301 requires

that the “judgment of the court shall conform to the pleadings, the nature of

the case proved and the verdict.” Tex. R. Civ. P . 301; see also Stoner v. Thompson , 578 S.W.2d

679 , 682–84 (Tex. 1979) (holding that judgment cannot grant relief that is not

contained in party’s pleadings and that general prayer for relief cannot

“enlarge a pleading to the extent that it embraces an entirely different cause

of action”). Because Safehouse did not

file pleadings requesting relief on these grounds, it cannot now complain that

the judgment does not grant that relief.

We

overrule Safehouse’s second issue on cross-appeal.

Attorney Fees

In

its second issue, Hot-Hed argues that the trial court erred in awarding Safehouse

attorney’s fees under the UDJA and that there was no basis for entering

judgment against Cinaruco because Safehouse never pleaded any counterclaims

against Cinaruco.

We

review a trial court’s award of attorney’s fees under the UDJA for an abuse of

discretion. City of Carrollton v. RIHR Inc. , 308 S.W.3d 444, 454 (Tex. App.—Dallas

2010, pet. denied); Lesikar v. Moon ,

237 S.W.3d 361, 375 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). A trial court abuses its discretion when it

reaches a decision so arbitrary and unreasonable as to constitute a clear and

prejudicial error of law. Lesikar , 237 S.W.3d at 375 .

1. Safehouse’s entitlement to fees under the UDJA

Section

37.009 of the UDJA provides, “In any proceeding under this chapter, the court

may award costs and reasonable and necessary attorney’s fees as are equitable

and just.” Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Vernon

2008). However, a party cannot use the

UDJA to obtain an otherwise impermissible attorney’s fee. RIHR ,

308 S.W.3d at 454 . “It is an abuse of

discretion to award attorney’s fees under the Uniform Declaratory Judgment Act

when the statute is relied upon solely as a vehicle to recover attorney’s

fees.” Id. (citing Tex. State Bd. of

Plumbing Exam’rs v. Assoc. Plumbing-Heating-Cooling Contractors of Tex., Inc. ,

31 S.W.3d 750, 753 (Tex. App.—Austin 2000, pet. dism’d)); see also City of Houston v. Texan Land & Cattle Co. , 138 S.W.3d

382, 392 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (holding that party may

not use declaratory judgment action to seek same relief afforded under another

of its causes of action to obtain otherwise impermissible attorney’s fees). We note that the parties stipulated to the amount of

attorney’s fees, and Hot-Hed does not contend that they were unreasonable or

unnecessary — only

that Safehouse was not entitled to any attorney’s fees at all.

We have already addressed Hot-Hed’s

arguments that Safehouse’s declaratory judgment counterclaim was improper

because it did not seek affirmative relief other than the relief that was

already available through other claims pending before the trial court, and we

concluded that Safehouse’s UDJA claim was proper. Safehouse succeeded on its declaratory

judgment claim. Therefore, we conclude

that the trial court did not abuse its discretion in awarding Safehouse

attorney’s fees.

2. Safehouse’s entitlement to fees from Cinaruco

We likewise conclude that the trial

court did not err in granting attorney’s fees jointly and severally against

Hot-Hed and Cinaruco. We observe that Safehouse’s

last amended counterclaim was filed before the amended petition adding Cinaruco

as a plaintiff and that Hot-Hed and Cinaruco’s subsequent pleadings were styled

as “plaintiffs’” response to the counterclaims.

Furthermore, jury question number ten explicitly listed both Hot-Hed and

Cinaruco as possible parties against whom Safehouse could collect attorney’s

fees. Neither plaintiff entered any

objection to this instruction. Thus, this

issue was tried by consent even though it was not raised in the pleadings. See Tex. R. Civ. P . 67 (“When issues not

raised by the pleadings are tried by express or implied consent of the parties,

they shall be treated in all respects as if they had been raised in the

pleadings.”).

3. Trial court’s ability to sign award for

attorney’s fees

Hot-Hed also argues that the award

of attorney’s fees was improper in this case because the final judgment,

including the award of attorney’s fees, was not signed by the judge who

presided over the trial. [9] This argument is likewise unavailing. The authority cited by Hot-Hed involved a situation

in which a second judge entered judgment after the first judge heard all of the

evidence during a bench trial. See W.C. Banks, Inc. v. Team, Inc. , 783

S.W.2d 783, 786 (Tex. App.—Houston [1st Dist.] 1990, no writ). That case is distinguishable from the present

case. Here, the trial was to a jury and

there were no facts that needed to be determined by the trial court before

entering judgment.

We overrule Hot-Hed’s second issue.

4. Trial court’s obligation to file findings of

fact and conclusions of law

In its third issue, Hot-Hed argues

that the trial court erred in refusing its timely request pursuant to Texas Rule

of Civil Procedure 297 to issue findings of fact and conclusions of law on the

attorney’s fees award. Safehouse argues

that the trial court was not required to enter findings of fact and conclusion

of law on this issue. We agree.

Texas Rule of Civil Procedure 296 entitles

a party to request that a trial court file findings of fact and conclusions of

law “in any case tried . . . without a jury.”

Tex. R. Civ. P. 296. Rule 297 provides the deadlines for trial

courts to file its findings and conclusions.

Tex. R. Civ. P. 297. Those rules do not require the trial court in

this case to issue findings of fact and conclusions of law. Here, the trial was to a jury. Furthermore, there were no determinations of

fact that were required, as the parties stipulated the amount of reasonable and

necessary attorney’s fees.

We overrule Hot-Hed’s third issue.

5. Safehouse’s entitlement to post-judgment

interest

In

its third issue on cross-appeal, Safehouse argues that the trial court erred in

failing to specify an award of post-judgment interest in the judgment. Hot-Hed contends that the award of

post-judgment interest is inappropriate because Safehouse is not entitled to

any attorney’s fees. We have already

determined, however, that the trial court did not abuse its discretion in

awarding attorney’s fees.

The Texas Finance Code provides

that “[a] money judgment of a court in this state must specify the postjudgment

interest rate applicable to that judgment.”

Tex. Fin. Code Ann . §

304.001 (Vernon 2006); see also Office of

Att’y Gen. of Tex. v. Lee , 92 S.W.3d 526, 528 (Tex. 2002) (per curiam) (holding

under predecessor statute that code “does not require, as a prerequisite for

accruing interest, that judgments specifically include an award of postjudgment

interest”); RAJ Partners, Ltd. v. Darco

Constr. Corp. , 217 S.W.3d 638, 653 (Tex. App.—Amarillo 2006, no pet.)

(“[P]ostjudgment interest is mandated by statute, and is recoverable even if

the trial court’s judgment does not mention it.”). Thus, Safehouse is entitled to post-judgment

interest at a rate of five percent compounded annually. See Tex. Fin. Code Ann . § 304.003(c)(2)

(Vernon 2006) (providing that postjudgment interest rate is five percent per

year if prime rate as published by Board of Governors of Federal Reserve System

is less than five percent); id. §

304.006 (Vernon 2006) (providing that post-judgment interest compounds

annually).

Accordingly,

we modify the judgment to clarify that Safehouse is entitled to post-judgment interest

by adding the following sentence: Safehouse

shall also recover from plaintiffs, jointly and severally, post-judgment

interest at a rate of five percent, compounded annually.

We

sustain Safehouse’s third issue on cross-appeal.

Charge Error

In its fourth issue, Hot-Hed argues

that the trial court erred in declining to submit Hot-Hed’s proposed special

issue on statutory trademark infringement to the jury.

We review a trial court’s decision

to refuse an instruction in its charge for an abuse of discretion. Dew v.

Crown Derrick Erectors, Inc. , 208 S.W.3d 448, 456 (Tex. 2006). “If an instruction might aid the jury in

answering the issues presented to them, or if there is any support in the

evidence for an instruction, the instruction is proper.” Louisiana-Pacific

Corp. v. Knighten , 976 S.W.2d 674, 676 (Tex. 1998) (per curiam); see also Tex. R. Civ. P. 278 (addressing submission of questions,

definitions, and instructions to jury);

Dew , 208 S.W.3d at 456 (“A party is entitled to a jury question,

instruction, or definition if the pleadings and evidence raise an

issue.”). A trial court’s error in

refusing an instruction is reversible, however, only if it “probably caused the

rendition of an improper judgment.” Dew , 208 S.W.3d at 456 ; see also Tex. R. App. P. 44.1(a) (addressing reversible error in civil

cases).

Assuming, without deciding, that

Hot-Hed was entitled to submission of the charge in the form it requested,

Hot-Hed cannot show that any alleged error probably caused the rendition of an

improper judgment. As we have already

concluded, the judgment was properly based on the jury’s conclusion that the

mark “habitat” is not eligible for trademark protection. This was a threshold consideration to all of

Hot-Hed’s claims against Safehouse, and Hot-Hed has presented no evidence that

the jury might have decided that question differently had the charge not been

submitted in the conditional format used by the trial court.

We overrule Hot-Hed’s fourth issue.

Conclusion

We

modify the judgment of the trial court in the following manner:

·

We modify the trial court’s declaration to state

that “the term ‘habitat’ is not eligible as a trademark under Texas or Federal

law, namely the Lanham Act, Title 15 of the United States Code, when used in connection with welding

enclosures and any related accessories or items .”

·

We add the following sentence following the above

sentence: “The Court orders that Hot-Hed’s Texas registration of the term

“habitat” when used in relation to inflatable welding enclosures is cancelled.”

·

We add the following sentence following the award of

attorney’s fees and court costs: “Safehouse shall also recover from plaintiffs,

jointly and severally, post-judgment interest at a rate of five percent,

compounded annually.”

We affirm as modified.

Evelyn

V. Keyes

Justice

Panel

consists of Justices Keyes, Higley, and Bland.

[1] After it filed this suit, Hot-Hed

transferred its rights to the “Habitat” mark to Cinaruco International, S.A., a

Panamanian corporation and related entity also owned by Louis Wardlaw, and

Cinaruco granted Hot-Hed an exclusive license to use the “Habitat” mark in the

United States. After the transfer,

Safehouse challenged Hot-Hed’s capacity to sue for trademark infringement

because of the assignment to Cinaruco.

Cinaruco transferred the rights to the mark back to Hot-Hed. Additionally, the second amended petition

added Cinaruco as a plaintiff.

[2] Safehouse also alleged that Hot-Hed

attained its Texas trademark registration through fraud; however, Safehouse did

not seek entry of judgment on this issue and does not raise any arguments

regarding this cause of action on appeal.

[3] Safehouse’s first amended answer and

counterclaim was filed March 27, 2008, and named only Hot-Hed as a

plaintiff. Hot-Hed entered its second

amended petition adding Cinaruco as a plaintiff on April 21, 2008, and

Safehouse never filed another amended answer and counterclaim.

[4] The stipulation was entered on the

record during trial by both sides as to the amount of reasonable and necessary

fees only.

[5]

On May 20, 2009, Safehouse moved to modify or

reform the judgment, arguing that the trial court’s judgment should include the

order cancelling Hot-Hed’s Texas registration of “Habitat” and ordering the

dismissal or denial of the USPTO proceedings.

[6] Hot-Hed does not challenge the jury’s

finding that the “habitat” mark was not eligible for protection in its first

issue. However, in its argument

regarding the appropriateness of attorney’s fees, it contends that the evidence

was legally and factually insufficient because:

[T]he record establishes

that (1) Hot-Hed was the first to use the “Habitat” mark to market inflatable

welding enclosures and has used the mark continuously for twenty years; (2)

Hot-Hed secured a federal registration for the same mark . . . ; (3) the Texas

Secretary of State concluded that Hot-Hed’s mark is eligible for protection, as

evidenced by the fact that Hot-Hed received a Texas registration; (4) the

district court denied Safehouse’s request for summary judgment, concluding that

the case presented a close enough question that resolution by a jury was

required; and (5) two of the jurors in this case agreed with Hot-Hed that its

mark was eligible for protection.

Therefore, we address the

legal and factual sufficiency of the evidence to support the jury’s finding in

this issue.

[7] Hot-Hed did not obtain a federal

registration of the term “Habitat.”

Therefore, we do not address the presumption under the federal statutory

scheme.

[8] Suggestive and arbitrary or fanciful terms are

protectable without proof of secondary meaning.

All Am. Builders, Inc. v. All Am.

Siding of Dallas, Inc. , 991 S.W.2d 484, 489 (Tex. App.—Fort Worth 1999, no

pet.) (citing Union Nat’l Bank, Laredo v. Union Nat’l Bank, Austin , 909 F.2d 839,

844 (5th Cir. 1990) and

Zatarains, Inc. v. Oak Grove Smokehouse,

Inc. , 698 F.2d 786 , 790–91 (5th Cir. 1983)). There is no suggestion in this case, however,

that the term “habitat” is suggestive, arbitrary, or fanciful.

[9] The Hon. Levi Benton presided over the

trial, but left the bench before entering final judgment. He was succeeded by the Hon. Steven

Strickland, who entered the final judgment.