Texas Ruling a ‘Major Trademark Victory’

Posted: September 24, 2009 in All Blogs, General Information

By George White, RE/MAX Times Online Managing Editor

Re/Max Look alikeThis scenario does not just happen in the states. In Cambridge, Guelph and Kitchener Ontario there have been instances where local smaller and mid sized companies have done the same things as noted in this article. They have tried to fool the public with their signs which were trademark infringements. The legal department of Re/Max Ontario Atlantic have suggested those real estate brokerages change their signs or face the courts. Don’t be fooled by these companies.

 

RE/MAX scored a major legal victory earlier this month when a federal judge ruled against an independent Texas brokerage for using red-over-white-over-blue yard signs that look too much like the trademarked RE/MAX design.

The Sept. 3 decision resolved the biggest question in a two-year trademark suit brought by RE/MAX International against Trend Setter Realty, a 700-agent brokerage in Houston and San Antonio. The court held that Trend Setter’s sign is trademark infringement under both federal and Texas law.

“In addition to the victory in this case, the judge’s ruling will serve as a very important precedent for us to use against future infringements of our red-over-white-over-blue bar design,” says RE/MAX Senior Vice President and Chief Legal Officer Geoff Lewis. “We made many attempts to get Trend Setter to settle with us and to change their sign before the case proceeded too far, but they refused.”

RE/MAX International will submit a recommended order this month directing Trend Setter — which is co-managed by a former RE/MAX Affiliate — to completely change the look of its signs or risk being held in contempt of court. The court opinion didn’t address the question of damages. RE/MAX International has asked the court whether it wishes the parties to brief the question of damages or proceed to a trial on that issue.

“This case easily represents our most favorable trademark decision since the Help-U-Sell case in the early 1990s,” says RE/MAX International Senior Counsel Adam Scoville, referencing a similar case involving sign design. He said the 57-page ruling “emphatically validates” the network’s exclusive rights to the red-over-white-over-blue design.

RE/MAX International filed the suit in 2007. In addition to trademark infringement, the action claimed the sign violated the Independent Contractor Agreement that Broker Deborah Miller had with RE/MAX Elite, which she left to help found Trend Setter. Trend Setter, which has what Scoville characterized as an “ultra-low support, ultra-low fee, low-services model,” counterclaimed to cancel RE/MAX International’s federal registration of the red-over-white-over-blue design. The judge ruled in favor of RE/MAX on both counts.

As part of its argument on the trademark issue, RE/MAX International commissioned a consumer survey to determine if the Trend Setter sign was confusing to the public. Some 225 adults were shown a photo of a Trend Setter sign and then asked whose sign it was, or who the company was affiliated with. More than a quarter of the participants associated the sign with RE/MAX.

In its ruling, the court quoted several survey respondents who, when asked why the tied the sign to RE/MAX, said, “Because it’s their sign; they are the only ones that I know of that have this color of sign,” and “It looks exactly like a RE/MAX sign.” This occurred despite the fact that Trend Setter’s sign contains no balloon and has a white bar modified into the shape of a roofline.

RE/MAX International also produced evidence that the specifications for the first version of the Trend Setter sign called for a “white background with R/M red and blue.” However, without a trial, the court wasn’t willing to say that Trend Setter intended to infringe upon the RE/MAX sign design.

“Even though I think a jury seeing this during a trial would be pretty skeptical of Trend Setter’s motives, this actually underscores an important point: Infringement depends on whether consumers are likely to confuse them for us,” Scoville says. “Smoking gun evidence that they intended to copy the RE/MAX sign is not required.”

The court rejected claims that the RE/MAX bar design is generic. It also cited the network’s diligence in policing its marks, noting that strict enforcement of Trademark & Graphic Standards significantly strengthens RE/MAX ownership of its brand and marks.

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