Laches? Unclean Hands? It's All Greek to the Fifth Circuit - U.S. Fifth Circuit
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Laches? Unclean Hands? It's All Greek to the Fifth Circuit

If you were ever in a fraternity or a sorority, you probably received a paddle. It’s part of the Big Bro/Little Bro, Big Sis/Little Sis tradition. The “Little” makes or buys a paddle for the “Big.”

If you purchased a paddle after 1961, you may have bought it from today’s Fifth Circuit litigant: Thomas Abraham.

Yes, folks; we have officially located the most frat-tastic opinion ever published by the Fifth Circuit Court of Appeals. (Phi Chi Chi Alpha, if you will.)

Abraham founded Paddle Tramps in Lubbock, Texas in 1961 as a company that manufactured wooden paddles and decorations for fraternity and sorority members. Paddle Tramps has always sold products bearing the names of fraternities and sororities and has always used the names of fraternities and sororities to advertise its products.

In the early 90s, the Greek organizations began contacting Abraham about licensing their letters. In 1995, Dan Shaver contacted Abraham on behalf of Sigma Chi, and threatened to sue Paddle Tramps for trademark infringement.

Over the next 13 years, Shaver periodically sent additional letters to Abraham on behalf of an entity called Affinity Marketing Consultants, which represented about 70 fraternities and sororities. The letters alternated between inviting Paddle Tramps to join a Greek licensing program, ordering the company to cease and desist, and threatening to sue. Abraham either ignored these letters, or responded by stating he refused to enter into a licensing agreement.

In 2007, 32 Greek Organizations, represented by Affinity Marketing Consultants and Shaver, sued Abraham for patent infringement and unfair competition. The case was dismissed for improper venue. In 2008, Abraham sued the Greek Organizations for a declaratory judgment that he was not infringing on their marks. The Greek Organization asserted counterclaims for trademark infringement and unfair competition under the Lanham Act and Texas state law.

The Greek Organizations won summary judgment on the infringement claims, but Abraham won the jury vote on the issues of laches, acquiescence, and unclean hands.

The Greeks soldiered on to the Fifth Circuit, challenging both the jury instructions and findings on laches and unclean hands. The Fifth Circuit affirmed the district court on both points.

The appellate court concluded that the district court didn’t abuse its discretion in instructing the jury that to prove unclean hands the Greek Organizations had to show Abraham knowingly and intentionally infringed upon the marks with the bad faith intent to benefit from or capitalize on the Greek Organizations’ goodwill by confusing or deceiving buyers.

And, given the circuit’s “especially deferential” standard of review for evidence after a jury trial, the court held that the evidence was legally sufficient for a jury to find for Abraham on the unclean hands issue.

This is a fact-intensive case, but worth a read if you’re litigating a long-running dispute and arguing laches.

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