Postar v. Hyland et al

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
LUBBOCK DIVISION
MICHAEL POSTAR,
Plaintiff,
v. 	No. 5:24-CV-019-H
GAVIN HYLAND, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
In 2017, twin brothers Michael and David Postar split their interests in Affordable
Storage, a self-storage business that they jointly owned and operated for many years. As
part of the split, the brothers assigned certain registered trademarks associated with the
business to a holding company in which they both own a 50% stake. Michael has exclusive
rights to use those marks in Lubbock County, whereas David has exclusive rights to use
them in Tom Green and Midland Counties. Years after the split, David, through his
company Gargoyle Management, Inc., licensed a derivative of one of the marks to the
brothers’ former employee, Gavin Hyland. Hyland and his wife operate their own self-
storage business, Slaton Affordable Storage, Inc. Their two locations—one of which is in
Lubbock County—are also named Affordable Storage.
Michael sued the Hylands, David, and their companies for, among other things,
trademark infringement, unfair competition, common-law misappropriation, and civil
conspiracy. Generally, Michael alleges that the defendants are violating federal and state
law by using unauthorized derivatives of the Affordable Storage IP to compete against
Michael in Lubbock County. Besides his substantive claims, Michael requests injunctive
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relief and a declaratory judgment voiding Hyland’s license agreement and finding that the
brothers’ holding company is the sole owner of the registered marks at issue.
The defendants moved for summary judgment on all claims. Dkt. Nos. 47; 49. The
Hyland defendants also moved to exclude the expert testimony of John M. Cone, a lawyer
specializing in trademark law. Dkt. No. 51.
The Court grants in part and denies in part the summary-judgment motions.
Because Michael does not own the registered marks at issue, he lacks statutory standing to
sue for trademark infringement under the Lanham Act. And there is no dispute that the
brothers’ holding company owns the registered marks. Accordingly, the defendants are
entitled to summary judgment on the trademark-infringement claim and to partial summary
judgment on Michael’s claim for declaratory relief. But genuine issues of material fact
remain for the other claims. As a result, the Court denies Michael’s request for preliminary
injunctive relief.
Lastly, the Court denies the Hyland defendants’ motion to exclude Cone’s expert
testimony. They assert that the opinions in Cone’s expert report are impermissible legal
conclusions, but the Court needs more context to know for sure. The motion (which looks
to effectively exclude all of Cone’s possible testimony) is, at this stage, premature.
1. 	Factual and Procedural Background
A. 	Factual Background
i. 	The Postar brothers—along with Gavin Hyland and his business,
Slaton Affordable Storage, Inc.—build a self-storage empire.
Michael Postar and his twin brother David used to jointly own a self-storage business
with locations throughout West Texas. Dkt. No. 49-2 at 3, 5. Their business went by the
name “Affordable Storage” and featured, as a logo, a yellow smiley face. Id. at 4; see Dkt.
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No. 50 at 51–60. By all accounts, the business was successful. Through “constant
innovation and creativity,” Michael and David developed Affordable Storage facilities in
Lubbock, Midland, and San Angelo. Dkt. Nos. 49-2 at 5; 59-1 ¶ 2.
Gavin Hyland began working for the Postar brothers in the early 2000s. Dkt. No.
49-2 at 5. A specialist in storage construction, Hyland was a “key employee” who later
earned an ownership interest in two of the brothers’ storage facilities. Id. On top of these
ownership interests, Hyland and his wife Myranda started their own self-storage business,
Slaton Affordable Storage, Inc. (SAS). Dkt. No. 50 at 4 ¶ 1. In 2011, SAS opened its first
location in Slaton, Texas—which is in Lubbock County—using the Affordable Storage
name and a yellow smiley face. Id. ¶ 2. SAS has used the same name and logo since. Id.
In 2013, SAS opened its second location in Brownfield, Texas. Id. ¶ 3. As with the
Slaton location, SAS branded the Brownfield facility with the Affordable Storage name and
the smiley face logo. Id. And, again, SAS has used the same name and logo since opening
the facility. Id. Images of both locations are included below. See Dkt. No. 50 at 12, 13.
According to David, the Postar brothers were supportive of the Hylands’ business,
despite not owning it. Dkt. No. 49-2 at 5. They did not view SAS as competition, noting
that potential customers were unlikely to drive to Slaton or Brownfield when they had
Slaton 	Brownfield
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Affordable Storage options closer to home. Id. Indeed, the brothers encouraged Gavin to
use the Affordable Storage name and smiley face logo. Id.
Michael and David were so supportive of SAS, in fact, that they included the Slaton
and Brownfield locations in their own Affordable Storage advertising. Id. at 6. From 2013
through 2017, the brothers listed the SAS facilities in their phone book advertising without
any indication that they were separately owned. See id. at 6, 11–24. To the contrary, several
ads suggested that all Affordable Storage locations are “Under Same Ownership.” Id. at 16,
20. During the same approximate period, the brothers also included the SAS locations on
their websites. See, e.g., id. at 49–52.
Michael did not take issue with SAS using the Affordable Storage brand during this
time. In his deposition, Michael acknowledged that he knew SAS was using the Affordable
Storage name and smiley face logo as early as 2011 and that he first objected to SAS’s
branding in 2020 or 2021. See Dkt. No. 89 at 8, 12. Also, six years after the Hylands
opened the Slaton location, Michael told Myranda in a recorded phone call that “[Y]’all can
use the name. Anybody can use the name affordable storage, if you wanted to. ‘Cus there’s
a whole bunch of them out there. You also have the rights to use a regular smiley face.
Anybody can use a regular smiley face.” Dkt. Nos. 50 at 42; 53.
ii. 	The Trademark Office registers the Affordable Storage marks.
In early 2017, the Postar brothers filed federal trademark applications related to the
Affordable Storage business with the United States Patent and Trademark Office. Dkt. Nos.
49-2 at 4; 59-1 ¶ 3. The Trademark Office registered seven marks on behalf of Michael’s
corporation. See Dkt. No. 49-2. Two of those marks—the Affordable Storage Logo and the
Crown Logo—are relevant here. See Dkt. No. 35 at 17, 19 (the Registered Marks).
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The registrations for these marks note that “[n]o claim is made to the exclusive right
to use” the phrase “AFFORDABLE STORAGE” apart from the registered mark. Id.
The Trademark Office granted incontestability status for the Registered Marks in
2023. Dkt. No. 62-4 at 5–6. When a trademark is deemed incontestable under 15 U.S.C.
§ 1065, “the registration constitutes ‘conclusive evidence’ of the registrant’s right to use the
mark,” subject to certain enumerated exceptions in 15 U.S.C. § 1115(b). Tex. Pig Stands, Inc.
v. Hard Rock Cafe Int’l, Inc., 951 F.2d 684, 690 (5th Cir. 1992) (quoting Soweco, Inc. v. Shell Oil
Co., 617 F.2d 1178, 1184 (5th Cir. 1980)). These exceptions include “equitable principles”
such as “laches, estoppel, and acquiescence.” 15 U.S.C. § 1115(b)(9).
iii. 	Michael and David split their business interests.
Around the same time they filed their federal trademark applications, the Postar
brothers decided to split their business interests through a Mediated Settlement Agreement
(MSA). See Dkt. No. 59-2. As part of the settlement, an intellectual property holding
company—Postar IP, LLC—was formed to hold the Registered Marks. See Dkt. No. 59-1
¶ 7. Accordingly, Michael assigned to Postar IP his corporation’s rights in the Registered
Marks. Id.; see Dkt. No. 50 at 32–37. Postar IP thus owns the Registered Marks in full.
Under Postar IP’s Company Agreement, the brothers both own 50 percent of the
company. 1 Dkt. No. 50 at 31. The Company Agreement—alongside the MSA—dictates
1 Besides David, none of the defendants here are parties to the Postar IP Company Agreement.
Affordable Storage Logo 	Crown Logo
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how the brothers can use the Affordable Storage brand. Id. at 17–18; Dkt. No. 59-2 at 24.
Michael has the exclusive right to use the Registered Marks held by Postar IP in Lubbock
County, Texas. Dkt. No. 50 at 17. David has the exclusive right to use the Registered
Marks held by Postar IP in Tom Green and Midland Counties, Texas. Id. Outside those
counties, the brothers share universal rights to the Registered Marks. Id.; see Dkt. No. 59-2
at 24. Neither brother may “assign, convey, sell, encumber or in any way alienate . . . all or
any part of his” interest in Postar IP without the prior written consent of the other brother.
Dkt. No. 50 at 25–26.
The Company Agreement also sets out decision-making and dispute-resolution
procedures. A unanimous-consent provision states that “[n]o act may be taken, sum
expended, decision made, or obligation incurred by” Postar IP except by the agreement of
both brothers. Id. at 21; see id. at 19 (noting that neither Michael nor David, “acting alone,
has any authority to act for, or to undertake or assume, any obligation, debt, duty or
responsibility on behalf of any other [brother] or the Company”). If there is a deadlock, the
decision is referred to arbitration. Id. at 21; Dkt. No. 59-2 at 7 ¶ 29. Under the MSA and
Company Agreement, all arbitration is tasked to Chris Nolland. Id. Nolland, “in his sole
discretion, will determine the best course of action to be taken.” Dkt. No. 50 at 21. That
“binding” decision “shall be non-appealable and enforceable by the District Court in which
the lawsuit between the [brothers] is pending.” Dkt. No. 59-2 at 7 ¶ 29.
iv. 	Postar IP executes a First License Agreement that permits the
Hylands and SAS to use the Registered Marks for three years.
After the split, Gavin Hyland chose to work exclusively with David. Dkt. No. 87-1
at 12. As part of a deal to buy out Hyland’s interest in one of Michael’s businesses, Postar
IP agreed to license its intellectual property to SAS for the operation and marketing of the
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Slaton and Brownfield locations. See Dkt. No. 50 at 38–41 (the First License Agreement).
An early draft of the First License Agreement barred SAS from using the Affordable Storage
name and smiley face signage—the same name and signage that it had used at its Slaton and
Brownfield locations since 2011 and 2013—at the conclusion of a three-year term. See Dkt.
No. 49-2 at 100–05. The Hylands refused to sign. Id. at 8 ¶ 13. The final draft removed the
restriction, thus limiting the license to the Registered Marks. See Dkt. No. 50 at 41. Still,
Michael maintains that the First License Agreement was meant to give the Hylands “time to
find a new logo or brand for their business.” Dkt. No. 58 at 36. That rebranding, Michael
suggests, required the Hylands to remove the original Affordable Storage name and signage
that was left out of the final Agreement. See Dkt. No. 59-9 at 44 ¶ 14. David disputes this
interpretation, arguing that Michael “already knew that SAS was going to continue using
derivatives of Postar IP when SAS refused to sign the earlier draft of the [First License]
Agreement that required SAS to stop using the name Affordable Storage and all smiley face
logos” at the conclusion of the licensing term. Dkt. No. 49-1 at 16.
Everyone agrees, however, that the final First License Agreement authorized SAS to
use the Registered Marks for a three-year term beginning on August 1, 2018, and ending on
July 31, 2021. Dkt. No. 50 at 38. Absent an extension, SAS agreed to immediately stop
using the Registered Marks when the license expired. Id. Both Michael and David signed
the First License Agreement in accordance with Postar IP’s Company Agreement. Id. at 40.
The Hylands contend that they “completely stopped using any of the trademarks”
covered by the First License Agreement on July 31, 2021. Dkt. No. 50 at 6 ¶ 8. Myranda
Hyland confirmed to David via email on August 1, 2021, that SAS removed the Registered
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Marks as required. Id. at 43. But SAS continued to use (and still uses today) its original
Affordable Storage name and smiley face signage. See Dkt. No. 91-1 at 58, 61–62.
v. 	David’s company, Gargoyle Management, Inc., enters into a
Second License Agreement with Gavin Hyland.
About one month after the First License Agreement expired, Gavin Hyland entered
into a Second License Agreement with David’s company, Gargoyle Management, Inc. See
Dkt. No. 50 at 46–48. The Second License Agreement granted Hyland a perpetual, non-
transferable license to use two trademarks that were not included in the First License
Agreement. The first is a word mark: “Why Pay a Lot for Storage.” Id. at 48. The second
is an image of a yellow smiley face with arms, legs, and gloved hands standing next to the
phrase “Affordable Self Storage.” Id. Much of this
litigation turns on the second mark, shown at right,
which the Court refers to as the Licensed Mark.
According to Michael, the Licensed Mark is an unauthorized “derivation” of the
Registered Marks that—under the Postar IP Company Agreement—David could not
unilaterally license to the Hylands for use in Lubbock County. E.g., Dkt. No. 58 at 10.
Michael uses the following graphic to support the point:
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Id. David, for his part, contends that he had authority to authorize the Hylands’ use of the
Licensed Mark (what he calls “Smiley Character”) because it was created by a Gargoyle
employee after the brothers’ split. Dkt. No. 49-2 at 9 ¶ 17; see id. (David: “I never thought
Smiley Character was a derivative of Postar IP . . . .”). To add to the confusion, Gavin
Hyland represents that the Second License Agreement only licensed trademarks owned by
Gargoyle (Dkt. No. 48 at 7) and that there is “no overlap in scope” between the trademarks
licensed under the First and Second License Agreements (Dkt. No. 50 at 7 ¶ 9). Even then,
Hyland testified at his deposition that he only used the Licensed Mark for six weeks before
taking it down at David’s request. Dkt. No. 85-1 at 17.
vi. 	Michael brings federal and state claims for the defendants’ alleged
misuse of the Registered Marks.
In 2024, Michael filed this lawsuit, raising federal and state claims for, among other
things, trademark infringement, unfair competition, common-law misappropriation, and
civil conspiracy. Dkt. No. 1. He twice amended his complaint. See Dkt. Nos. 23; 35.
Michael’s Second Amended Complaint is now the operative pleading. Dkt. No. 35.
Michael’s allegations fall into two broad camps. First, Michael alleges that the
defendants conspired to employ the Second License Agreement to permit the Hylands’ use
of the Licensed Mark, an unauthorized derivative of the Registered Marks, in violation of
the Postar IP Company Agreement. Dkt. No. 35 ¶¶ 19–21. More specifically, Michael
claims that David is using his employee Hyland to compete with Michael in Lubbock
County—even though Michael possesses exclusive rights to the Affordable Storage brand in
Lubbock, and even though David cannot unilaterally assign Postar IP’s rights to the
Registered Marks under the Company Agreement. Id. Second, Michael alleges that the
Hylands and SAS are employing unauthorized derivatives of the Registered Marks by
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continuing to use the Affordable Storage name and smiley face signage that has been affixed
to the Slaton and Brownfield facilities for 20+ years. Id. ¶¶ 24, 34; see Dkt. No. 58 at 32.
As for relief, Michael seeks actual damages, punitive damages, lost profits, and
disgorgement of the defendants’ profits. Dkt. No. 35 ¶ 60. He also requests attorney’s fees
under 15 U.S.C. § 1117(a), a declaratory judgment that the Second License Agreement is
null and void, and a preliminary and/or permanent injunction preventing the Hylands and
SAS from using the Registered Marks or their derivations in any self-storage business. Id.
¶¶ 45, 53, 63. The defendants raised a limitations defense. Dkt. Nos. 38 at 22; 41 at 14–15.
Before the Court are two motions for summary judgment: one from the Hylands and
SAS, and one from David and Gargoyle. Dkt. Nos. 47; 49. Michael responded (Dkt. Nos.
58; 61), and the defendants replied (Dkt. Nos. 64; 65). Also before the Court is the Hyland
defendants’ motion to strike the expert testimony of John M. Cone, a Plano-based
trademark attorney. Dkt. No. 51. Michael responded to that motion, too. Dkt. No. 56.
B. 	Procedural History
This lawsuit involves several long-running disputes surrounding the split-up of the
Postar businesses. Over nearly eight years, there has been state and federal litigation, three
arbitrations, mediations, and cease-and-desist letters. See, e.g., Postar v. Postar, et al., No.
5:24-CV-022 (N.D. Tex.) (copyright suit); Postar v. Postar, 5:24-CV-159 (N.D. Tex.) (another
trademark infringement suit); Postar v. Postar, et al., No. 5:24-CV-165, Dkt. No. 28 (N.D.
Tex. Mar. 12, 2025) (granting David’s motion to remand a different case to the 72nd
Judicial District Court for Lubbock County, Texas); Dkt. Nos. 59-4; 59-8 at 1–2; see also
Landmark Am. Ins. Co. v. Gargoyle Mgmt. Inc., No. 5:24-CV-038, 2025 WL 576604, at *1
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(N.D. Tex. Feb. 14, 2025) (Burch, J.) (noting the brothers’ “contentious relationship”). This
procedural history, though complicated, is key to understanding the instant litigation.
i. 	First Arbitration
The story begins in April 2018, shortly after the split. Through their attorney, David
and Gargoyle sent Michael a cease-and-desist letter alleging that he was improperly using
the “Gargoyle Mark” in his self-storage business. Dkt. No. 59-4 at 1–2. The Gargoyle
Mark, like the Licensed Mark from the Second License Agreement, featured a “smiley face
with arms and legs and gloved hands with thumbs pointing back toward the smiley face.”
Id. at 1. According to David and Gargoyle, the Gargoyle Mark was not part of the Postar
IP Company Agreement and thus was not subject to its exclusive-territory provisions. Id.
In response, Michael asserted his purported rights to use an anthropomorphic smiley
face. See Dkt. No. 59-5 at 1–2. And he contested David and Gargoyle’ use of the Gargoyle
Mark. Id. In his counsel’s view, “[s]imply taking the Smiley Face and adding arms and
legs” is a “mere variation” on the Registered Marks, which Michael has exclusive rights to
use in Lubbock County. Id. at 2.
Under the MSA, the brothers submitted the dispute over the Gargoyle Mark to
Nolland for arbitration. 2 Dkt. No. 59-1 ¶ 11. After a
hearing, Nolland issued the First Arbitration Award. See
Dkt. No. 59-7. What David called the Gargoyle Mark,
Nolland called the Smiley Mark. Id. at 1. Nolland
described the Smiley Mark as “a smiley face character,
2 The first arbitration also involved Michael’s own infringement claim based on David’s use of a
mark consisting of a box with arms and legs (Box Guy) that Michael alleged was confusingly
similar to the smiley face character. See Dkt. No. 59-5 at 1. That dispute is not relevant here.
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typically yellow in color . . . with arms, legs, hands, and feet.” Id. Exhibit B to the Award,
incorporated above, included a visual depiction of the Smiley Mark. Id. at 23.
Critically, Nolland concluded that, despite any rights that David may have in the
Smiley Mark, “Michael contractually and otherwise has the exclusive rights as between
Michael and David to use the Smiley mark or any iterations thereof in Lubbock County,
Texas, in connection with the storage business.” Id. at 9 ¶ 17; see id. ¶ 16 (basing this
conclusion on “pre-split up activity,” the “mediation agreements,” and “related documents
entered into between Michael and David to effectuate their business split up”). To avoid
any doubt, Nolland further clarified that the Smiley Mark and its iterations broadly include
“the classic Smiley face, a Smiley face with a crown, a Smiley face with appendages (hands
or arms), or the ‘Smiley person’ (a Smiley face with arms, legs, gloved or un-gloved hands,
and feet, etc.), and substantially similar depictions.” Id. ¶ 17. In other words, Nolland
made clear that only Michael can use a smiley face with arms and legs in Lubbock County,
even if David technically owns the Smiley Mark and even though David has his own
exclusive rights in Tom Green and Midland Counties. Id. ¶¶ 17–19.
Moreover, “[f]or purposes of clarity, avoidance of further conflict or disputes, and to
forestall and prevent any attempts to ‘end run’ the rights set forth in [the] Award,” Nolland
instituted certain “prophylactic measures” with respect to the brothers’ Smiley Mark rights.
Id. ¶ 21. Specifically, David’s and Michael’s respective rights to the Smiley Mark and its
iterations “shall not be licensable or sub-licensable to unrelated third parties.” Id. And to
the extent David obtains legal protections for the Smiley Mark, “any license, sub-license, or
transfer thereof by David” must be made “subject to Michael’s rights” and with Michael
specifically referenced in the documents effectuating any such agreement. Id. ¶ 22.
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To summarize, years before David, through Gargoyle, licensed the Licensed Mark to
Gavin Hyland, a binding arbitral award concluded that Michael had exclusive rights to use
the Smiley Mark and its iterations in Lubbock. Moreover, the First Arbitration Award put
strict limits on the brothers’ ability to license their respective rights in the Smiley Mark.
ii. 	Second Arbitration, Nolland’s Recusal, and Lead-up to the Third
Arbitration
About four years after the First Arbitration Award, the brothers fired off another
round of accusations pertaining to the use of internet website domain names, among other
things. Dkt. No. 59-8 at 1–2. After mediation failed, the brothers proceeded to a second
arbitration before Nolland. Dkt. No. 59-1 ¶ 13. Nolland later issued a Second Arbitration
Award, the details of which are not relevant here. See Dkt. No. 59-9 at 1–12.
Some months later, in August 2023, Michael sent a letter to Nolland alleging that
David had recently begun “using derivations of the Registered Marks belonging to Postar
IP.” Id. at 14. Listed as an example was the Licensed Mark—the yellow smiley face with
arms, legs, and gloved hands standing next to the phrase “Affordable Self Storage” that
Gargoyle licensed to Gavin Hyland in the Second License Agreement two years prior. Id.
Based on these purported developments, as well as the Hylands’ alleged “unlicensed use of
derivations of the Registered Trademarks held by Postar IP,” id. at 13, Michael requested a
third arbitration to “prevent David from using the derivative marks” or, alternatively, to
“require David to transfer the derivative marks to Postar IP.” Id. at 16.
Over David’s objections, Nolland determined that these issues, among others, were
arbitrable under the Company Agreement and MSA. Id. at 31–32. He set a final arbitration
hearing for August 2024. Dkt. No. 59-16 at 26.
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Then things took a turn. After David’s counsel raised for the first time concerns
about Nolland’s prior participation in unrelated mediations with Michael’s counsel,
Nolland recused himself as the parties’ arbitrator for all current or future disputes, effectively
canceling the August 2024 arbitration. Id. at 24 ¶ 6, 37–39. Thereafter, the brothers could
not agree on a single replacement arbitrator. Dkt. No. 89 at 40 & n.60. But with the help of
the Lubbock County Office of Dispute Resolution, the parties agreed to present the
outstanding matters to a panel of three arbitrators. Id. at 39; Postar v. Postar, No. 5:24-CV-
159, Dkt. No. 35 at 1 (N.D. Tex. June 23, 2025). The panel held a hearing from September
8–11, 2025. Dkt. No. 89 at 24. Although the Hylands and SAS were not parties to the
arbitration, their counsel was present during Gavin Hyland’s testimony. Id. at 25.
iii. 	Third Arbitration Award
The arbitration panel issued the Third Arbitration Award on November 12, 2025—
months after briefing on the defendants’ summary-judgment motions was complete. See
Dkt. No. 89 at 20–84. Several of the panel’s binding conclusions bear on this litigation.
First, the panel generally addressed the concept of “derivations.” Id. at 33–34. The
term “derivation,” the panel explained, “is not a term of art in trademark law.” Id. at 33.
And despite Michael’s repeated claims to the contrary (see, e.g., Dkt. No. 58 ¶¶ 48, 67, 69,
98, 101, 103, 108), the “Postar IP [Company] Agreement . . . makes no mention of
derivations.” Dkt. No. 89 at 33. Nevertheless, based mainly on the testimony of David’s
trademark expert, the panel concluded that “any ‘derivation’ (mark that includes one of the
Postar IP marks or a variation of one of those marks) is the property of Postar IP.” Id. at 34.
With that background, the panel concluded that the Licensed Mark, which “create[s]
the same consumer impression” as to the Registered Marks, belongs to Postar IP. Id. at 66.
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Thus, “David did not have the authority to license that mark to Mr. Hyland” in the Second
License Agreement. Id. at 69. Yet the panel did not grant Michael’s request to void the
Second License Agreement, noting that Gavin Hyland “is no longer using” the Licensed
Mark. Id. at 68–69. So the Second License Agreement remains in effect.
Lastly, the panel denied Michael’s request that it authorize Postar IP to take over this
lawsuit against the Hylands. Id. at 70. The panel recognized that “Postar IP has a right to
stop others from using Postar IP marks even if that use is not causing monetary damage to
Postar IP.” Id. at 71. But it ultimately concluded that “significant factors weigh[] against a
lawsuit by Postar IP against Mr. Hyland.” Id. at 72. For instance, on the panel’s view, SAS
is not a significant competitor with Michael’s Affordable Storage business. Id. And by
filing this lawsuit without Postar IP’s consent, Michael “deprived Postar IP of choices that
cannot be corrected simply by Postar IP taking over the lawsuit.” Id. Accordingly, while
the panel “recognize[d] [this] lawsuit may continue,” it declined to authorize Postar IP to
step into Michael’s shoes as the plaintiff. Id.
Following the Third Arbitration Award, the Court allowed the parties to supplement
the summary-judgment record and their briefing on the motions. See, e.g., Dkt. Nos. 84–91.
Both motions for summary judgment are now ripe for review.
2. 	The Defendants’ Motions for Summary Judgment
A. 	Legal Standards
i. 	Summary Judgment
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “A genuine dispute of material fact exists if a reasonable jury could
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enter a verdict for the non-moving party.” Doe v. Edgewood Indep. Sch. Dist., 964 F.3d 351,
358 (5th Cir. 2020). The moving party “bears the initial responsibility of demonstrating the
absence of a genuine issue of material fact,” Jones v. United States, 936 F.3d 318, 321 (5th
Cir. 2019) (internal omission and alteration omitted) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)), and “identifying those portions of [the record] which it believes
demonstrate [that] absence.” Celotex Corp., 477 U.S. at 323.
In evaluating a summary-judgment motion, the Court draws all reasonable
inferences in the light most favorable to the nonmoving party. Darden v. City of Fort Worth,
880 F.3d 722, 727 (5th Cir. 2018). However, “the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no genuine issue of material fact.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986) (emphasis in original). “A fact
‘is material if its resolution could affect the outcome of the action.’” Dyer v. Houston, 964
F.3d 374, 379 (5th Cir. 2020) (quoting Sierra Club, Inc. v. Sandy Creek Energy Assocs., LP, 627
F.3d 134, 134 (5th Cir. 2010)). The Court must consider materials cited by the parties, but it
may also consider other materials in the record. Fed. R. Civ. P. 56(c)(3).
“Where the nonmovant bears the burden of proof at trial, the movant may merely
point to an absence of evidence, thus shifting to the non-movant the burden of
demonstrating by competent summary judgment proof that there is an issue of material fact
warranting trial.” Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 301–02 (5th Cir. 2020)
(quoting In re La. Crawfish Producers, 852 F.3d 456, 462 (5th Cir. 2017)). The movant,
however, does not need to “negate the elements of the nonmovant’s case.” Austin v. Kroger
Tex., LP, 864 F.3d 326, 335 (5th Cir. 2017) (emphasis in original) (quoting Little v. Liquid Air
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Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)). “If the moving party fails to meet [its]
initial burden, the motion must be denied, regardless of the nonmovant’s response.” Pioneer
Expl., LLC v. Steadfast Ins. Co., 767 F.3d 503, 511 (5th Cir. 2014) (quoting Kee v. City of
Rowlett, 247 F.3d 206, 210 (5th Cir. 2001)).
When the moving party has met its burden, “the nonmoving party cannot survive a
summary judgment motion by resting on the mere allegations of its pleadings.” Duffie v.
United States, 600 F.3d 362, 371 (5th Cir. 2010). Rather, the nonmovant must identify
specific evidence in the record and articulate how the evidence supports its claim. Willis v.
Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014); see also Fed. R. Civ. P. 56(c)(1)(A). “This
burden will not be satisfied by ‘some metaphysical doubt as to the material facts, by
conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.’”
Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005) (quoting Little, 37 F.3d at
1075). Additionally, Rule 56 does not impose a duty on the Court to “sift through the
record in search of evidence” to support the nonmovant’s opposition to the motion for
summary judgment. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)
(quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915–16 & n.7 (5th Cir. 1992)).
“A failure on the part of the nonmoving party to offer proof concerning an essential
element of its case necessarily renders all other facts immaterial and mandates a finding that
no genuine issue of fact exists.” Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164
(5th Cir. 2006). If the nonmoving party “fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party will bear the
burden of proof at trial,” summary judgment must be granted. Celotex Corp., 477 U.S. at
322–23. “Where the record taken as a whole could not lead a rational trier of fact to find for
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the non-moving party, there is no ‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 288 (1968)).
ii. 	Trademarks
Trademarks help consumers find what they seek while protecting businessowners’
investments in their reputations. S. Rep. No. 79-1333, at 3–4 (1946). Any “word, name,
symbol, or device, or any combination thereof” used “to identify and distinguish” goods in
commerce can be a trademark. Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v.
Smack Apparel Co., 550 F.3d 465, 475 (5th Cir. 2008) (quoting 15 U.S.C. § 1127). The
common-law rule that “[o]ne who first uses a distinct mark in commerce . . . acquires rights
to that mark” holds true today. B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 142
(2015). Those rights allow the owner of the mark to prevent the use by others of similar
marks on similar goods. See, e.g., Prestonettes, Inc. v. Coty, 264 U.S. 359, 368 (1924).
a. 	The Lanham Act
“Though federal law does not create trademarks, Congress has long played a role in
protecting them.” B & B Hardware, 575 U.S. at 142 (internal citation omitted). “The
foundation of current federal trademark law is the Lanham Act, enacted in 1946.” Matal v.
Tam, 582 U.S. 218, 224 (2017); see Trademark Act of 1946, ch. 540, 60 Stat. 427 (codified as
amended at 15 U.S.C. § 1051 et seq.). The Act has two main functions: First, to “protect the
public so it may be confident that, in purchasing a product bearing a particular trade-mark
which it favorably knows, it will get the product which it asks for and wants to get.” S. Rep.
No. 79-1333, at 3 (1946). And, second, to “secur[e] to the [trademark] owner the goodwill
of his business.” Id. More broadly, the Act “was intended to make ‘actionable the
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deceptive and misleading use of marks’ and ‘to protect persons engaged in . . . commerce
against unfair competition.’” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 767–68
(1992) (quoting 15 U.S.C. § 1127).
To those ends, Congress provided causes of action for, among other things,
trademark infringement and unfair competition.3 See Jack Daniel’s Props., Inc. v. VIP Prods.
LLC, 599 U.S. 140, 147 (2023). Section 1114 of Title 15 governs infringement of registered
trademarks. Cf. U.S. Patent & Trademark Off. v. Booking.com B.V., 591 U.S. 549, 552–53
(2020) (outlining the federal trademark registration system and the benefits that accrue to
registrants). Under Section 1114, the owner of a registered trademark may bring a civil
action alleging that there is a likelihood of confusing the infringer’s mark for the plaintiff’s.
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 117–18 (2004).
The Lanham Act’s unfair-competition provision, Section 1125(a), “goes beyond
trademark protection.” Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 29
(2003). It broadly covers a “myriad of deceptive commercial practices,” including false
designation of origin and false advertising. Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1383
(5th Cir. 1996) (quoting Res. Devs. v. Statue of Liberty-Ellis Island Found., 926 F.2d 134, 139
(2d Cir. 1991)). Section 1125(a) also provides an infringement cause of action for
unregistered trademarks. Matal, 582 U.S. at 225. Generally, the likelihood-of-confusion
analysis for Section 1114 infringement claims also applies to unfair-competition actions
under Section 1125(a). Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 483 (5th Cir.
3 The Lanham Act also includes a cause of action for the dilution of famous marks—think Dupont,
Buick, and Kodiak—which does not require a likelihood of confusion. See 15 U.S.C. § 1125(c);
Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 431 (2003). And a Lanham Act plaintiff may allege
infringement of trade dress—the “total image and overall appearance” of a product. Two Pesos, 505
U.S. at 764 n.1 (quoting Blue Bell Bio-Med. v. Cin-Bad, Inc., 864 F.2d 1253, 1256 (5th Cir. 1989)).
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2004); see also Matrix Essentials, Inc. v. Emporium Drug Mart, Inc., 988 F.2d 587, 592 (5th Cir.
1993) (“As with trademark infringement, the touchstone of a section 1125(a) unfair
competition claim is whether the defendant’s actions are ‘likely to cause confusion.’”).
b. 	State Trademark and Unfair Competition Law
The federal trademark scheme “peacefully co-exist[s]” with intellectual property
protections on the state level. 3 McCarthy on Trademarks & Unfair Competition § 22:1 (5th
ed. 2025). As in the federal system, markholders may register their trademarks with state
authorities. See Hot-Hed, Inc. v. Safehouse Habitats (Scotland), Ltd., 333 S.W.3d 719, 729–30
(Tex. App.—Houston [1st Dist.] 2010, pet. denied) (quoting Tex. Bus. & Com. Code Ann.
§ 16.15(c)). They may also assert common-law rights in unregistered marks. 3 McCarthy
on Trademarks § 22:1. State trademark law—often styled as unfair competition—rarely
differs from its federal counterpart. Id.; see also United Drug Co. v. Theodore Rectanus Co., 248
U.S. 90, 97 (1918) (“The law of trade-marks is but a part of the broader law of unfair
competition; . . . .”). “A trademark infringement and unfair competition action under Texas
common law,” for example, “presents essentially ‘no difference in issues than those under
federal trademark infringement actions.’” Amazing Spaces, Inc. v. Metro Mini Storage, 608
F.3d 225, 235 n.7 (5th Cir. 2010) (quoting Horseshoe Bay Resort Sales Co. v. Lake Lyndon B.
Johnson Improvement Corp., 53 S.W.3d 799, 806 n.3 (Tex. App.—Austin 2001, pet. denied)).
B. 	Analysis
i. 	The Court grants summary judgment to the defendants on Michael’s
trademark-infringement claim under the Lanham Act.
Count One alleges trademark infringement in violation of Section 1114 of the
Lanham Act. Dkt. No. 35 ¶¶ 23–26. According to Michael, the Hylands and SAS are using
the Registered Marks and their derivations to falsely indicate to consumers that their self-
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storage business is associated with the Affordable Storage brand. Id. ¶ 24. The defendants’
alleged unauthorized use of the Registered Marks—aided by the Second License Agreement
with Gargoyle—is said to cause confusion or to deceive current and potential customers by
suggesting affiliation with Michael or “the original ‘Affordable Storage’ business.” Id. ¶ 25.
“To prevail on [a] claim of trademark infringement under the Lanham Act, [the
claimant] must show two elements: (1) [he] possesses a legally protectable trademark and
(2) [the alleged infringer’s] use of this trademark ‘creates a likelihood of confusion as to
source, affiliation, or sponsorship.’” Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc., 851
F.3d 440, 450 (5th Cir. 2017) (quoting Nola Spice Designs, LLC v. Haydel Enters., Inc., 783
F.3d 527, 536 (5th Cir. 2015)); see 15 U.S.C. § 1114(1). For infringement actions under
Section 1114, there is another “threshold element”: “Whether a plaintiff has a sufficient
interest in a mark to sue under the Lanham Act.” Rex Real Est. I, LP v. Rex Real Est. Exch.,
Inc., 80 F.4th 607, 616 (5th Cir. 2023). This is “a question of statutory standing.”4 Id.
a. 	Michael lacks statutory standing.
Because Michael lacks statutory standing, his trademark-infringement claim fails as a
matter of law. The cause of action in Section 1114 is available only to “the registrant” of
the trademarks at issue. See 15 U.S.C. § 1127 (defining “registrant” to embrace “the legal
representatives, predecessors, successors and assigns of such . . . registrant”). Under the
Lanham Act, the owner of a trademark is the proper party to apply for registration. 15
U.S.C. § 1051(a)(1) (“The owner of a trademark used in commerce may request registration
4 Statutory standing “does not implicate subject-matter jurisdiction.” Lexmark Int’l Inc. v. Static
Control Components, Inc., 572 U.S. 118, 134 n.4 (2014). “Instead, it asks the merits question of
whether or not a particular cause of action authorizes an injured plaintiff to sue.” Simmons v. UBS
Fin. Servs., Inc., 972 F.3d 664, 666 (5th Cir. 2020) (internal quotation marks omitted).
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of its trademark . . . .”). Thus, the Fifth Circuit has held that “only an owner or a true
assignee has statutory standing to bring a claim under [Section 1114].” Rex Real Est. I, LP,
80 F.4th at 616 (citing Neutron Depot, LLC v. Bankrate, Inc., 798 F. App’x 803, 806 (5th Cir.
2020)). Put another way, if a plaintiff does not “own the [registered] mark outright,” then
he lacks standing to assert an infringement claim under the statute. Neutron Depot, LLC, 798
F. App’x at 806; accord Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., 726 F.3d 62,
72 (2d Cir. 2013).
Michael does not own the Registered Marks. Recall that Michael’s corporation
assigned the Registered Marks to Postar IP as part of the brothers’ settlement. Dkt. No. 50
at 32–37. In doing so, Michael’s corporation conveyed to Postar IP “all of [its] right, title
and interest of whatever kind” in the Registered Marks, including “all rights to sue for past,
present, and future infringements or misappropriations of the Marks.” Id. at 34; see also 3
McCarthy on Trademarks § 18:1 (“An ‘assignment’ of a mark is an outright sale of all rights
in that mark.”). As Michael concedes, Postar IP thus owns the Registered Marks. Dkt. No.
58 at 46 (“[A]ll parties agree the Registered Marks are owned by Postar IP . . . .”). So only
Postar IP has statutory standing to sue for infringement of the Registered Marks.
Michael’s counterarguments are unpersuasive. For starters, he argues for the first
time in his response that he brought this suit “individually and derivatively on behalf of
Postar IP.” Id. at 23. To his credit, Michael acknowledges that this theory was “not
explicitly stated” in his live pleading. Id. Indeed, his Second Amended Complaint does not
come close to satisfying the requirements for alleging a derivative action under Federal Rule
of Civil Procedure 23.1. As Michael admits, his amended complaint “does not explicitly
allege” with particularity any efforts that he made to have David agree to a lawsuit against
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the Hylands or the reasons for not doing so. Id.; see Fed. R. Civ. P. 23.1(b)(3). Those flaws
are reason enough to discount Michael’s effort to recast this suit as a derivative action.
But Michael’s attempt to defend Postar IP’s rights suffers from more fundamental
flaws. Under the Company Agreement’s unanimous-consent provisions, neither brother
may act alone on behalf of Postar IP. E.g., Dkt. No. 50 at 21. Michael did not obtain
David’s consent to bring an infringement suit on Postar IP’s behalf. See Dkt. No. 58 at 23–
24. Nor did he secure the arbitrator’s tie-breaking vote. See id. at 26. Thus, the Company
Agreement bars Michael from unilaterally asserting Postar IP’s rights in this lawsuit.
Still, Michael argues that his failure to properly bring a lawsuit on Postar IP’s behalf
should not pose an obstacle here. He notes that the Company Agreement is governed by
Texas law, see Dkt. No. 50 at 29, and that “matters of internal corporate power are in the
first instance controlled by state law.” Dkt. No. 58 at 24 (quoting Clark v. Lomas & Nettleton
Fin. Corp., 625 F.2d 49, 52 n.3 (5th Cir. 1980)). On that understanding, Michael identifies
two state statutes—Texas Business Organizations Code §§ 101.463 and 101.452(a)(1)(A)—
that he says allow the Court to treat this suit as a derivative action “if justice requires.” Dkt.
No. 58 at 25–26. The Court need not elaborate on those statutes here. Even if the statutes
apply, “reasons of equity” (as Michael puts it) do not supersede the Company Agreement’s
plain text. Id. at 24. And what constitutes “equity” in this case is far from clear. There is
much water under the bridge, and the Court is not equipped to determine whether either
brother is “the mastermind working behind the scenes” to deprive the other sibling of his
rights. Id. at 26.
If any doubt remained, the Third Arbitration Award dispels it. The panel denied
Michael’s request that it authorize Postar IP to take over this lawsuit. Dkt. No. 89 at 70.
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The panel explained that “significant factors” weighed against a lawsuit by Postar IP,
including Gavin Hyland’s “long and intertwined relationship” with the brothers and the
lawsuit’s “potential to be bad press for Postar IP brands.” Id. at 72. What’s more, Michael
“deprived Postar IP of choices” by “filing [this] lawsuit without [the company’s] approval
and counsel.” Id. As the panel explained, those choices “cannot be corrected simply by
Postar IP taking over [this] lawsuit.” Id. Accordingly, Michael failed to secure the tie-
breaking vote to authorize a trademark-infringement suit by the only entity with statutory
standing to protect the Registered Marks, and there is little reason to exercise whatever
equitable authority the Court has to greenlight a derivative action that Michael did not raise
until over a year after he filed this lawsuit.5 Compare Dkt. No. 1, with Dkt. No. 58 at 23.
* 	* 	*
In short, because Michael does not own the Registered Marks, he lacks statutory
standing to sue the defendants for allegedly infringing those marks under Section 1114. See
Rex Real Est. I, LP, 80 F.4th at 616. And Michael’s attempt to refashion this individual suit
as a derivative action is unavailing. The Court therefore grants summary judgment to the
defendants on Michael’s trademark-infringement claim.
ii. 	Genuine issues of material fact remain on Michael’s other claims.
Although the Court grants the defendants’ summary-judgment motions with respect
to the trademark-infringement claim, it largely denies the motions as to the remaining
5 For the same reasons, Michael’s late-stage request in his summary-judgment response for leave to
amend his complaint is too little, too late. Dkt. No. 58 at 23; see Marucci Sports, LLC v. Nat’l
Collegiate Athletic Ass’n, 751 F.3d 368, 378 (5th Cir. 2014) (explaining that reasons to deny leave to
amend include undue delay and futility of amendment).
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claims. Drawing all inferences in Michael’s favor, see Darden, 880 F.3d at 727, there are still
genuine issues of material fact on those counts.
a. 	Unfair Competition under the Lanham Act
Count Two alleges unfair competition under Section 1125(a) of the Lanham Act.
Dkt. No. 35 ¶¶ 27–32. Michael contends that the defendants continue to make “false or
misleading statements of fact about their connection or association” with the original
Affordable Storage business. Id. ¶ 28. This alleged deception is material, Michael alleges,
because it “deceives a substantial segment of potential consumers” and influences their
“purchasing decision by suggesting that [the defendants] are themselves the original
‘Affordable Storage’ business and legally authorized to use the marks.” Id. ¶ 30.
To prevail on a Lanham Act unfair-competition claim, the plaintiff must establish:
“(1) A false or misleading statement of fact about a product; (2) Such statement either
deceived, or had the capacity to deceive a substantial segment of potential consumers;
(3) The deception is material, in that it is likely to influence the consumer’s purchasing
decision; (4) The product is in interstate commerce; and (5) The plaintiff has been or is likely
to be injured as a result of the statement at issue.” Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227
F.3d 489, 495 (5th Cir. 2000). The Second Amended Complaint does not specify whether
this claim arises under subsection (a)(1)(A), for false designation of origin, or subsection
(a)(1)(B), for false advertising. See Dkt. No. 35 ¶ 32. But district courts in the Fifth Circuit
usually apply the same five elements to claims under both subsections. See, e.g., Nestle USA,
Inc. v. Ultra Distribuciones Mundiales S.A. de C.V., 516 F. Supp. 3d 633, 651 n.11 (W.D. Tex.
2021); see also Heartbrand Beef, Inc. v. Lobel’s of N.Y., LLC, No. V-08-62, 2009 WL 311087, at
*2 (S.D. Tex. Feb. 5, 2009) (“[T]he Fifth Circuit consistently lists five elements to be proven
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whether the claim arises under subsection (a)(1)(A) or (B) . . . .”). And David and Gargoyle
argue that summary judgment is appropriate no matter the theory of liability. Dkt. No. 49-1
at 15. There is no reason for the Court to deviate from the common practice here.
As an initial matter, Michael’s unfair-competition claim does not have the same
statutory-standing defect as his trademark-infringement claim. See supra, Section 2.B.i.a.
Section 1125(a) provides a cause of action to “any person who believes that he or she is or is
likely to be damaged by [the unlawful] act.” 15 U.S.C. § 1125(a)(1). Therefore, Section
1125(a) “does not require a plaintiff to establish ownership of a trademark as an element of
its cause of action.” Rex Real Est. I, LP, 80 F.4th at 617. That makes sense. Section 1125(a)
is broadly focused on deceptive trade practices, Seven-Up Co., 86 F.3d at 1383, and its “plain
language . . . does not require that a plaintiff possess or have used a trademark in U.S.
commerce.” Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697, 706 (4th Cir. 2016). So
unlike his trademark-infringement claim, Michael is free to allege an unfair-competition
claim despite not owning the Registered Marks.
Even so, summary judgment is still inappropriate. Between their two motions, the
defendants argue that there are no remaining fact issues on any of the elements of Michael’s
unfair-competition claim. Dkt. Nos. 48 at 12–17; 49-1 at 15–18. The summary-judgment
evidence, however, is not nearly as one-sided as the defendants suggest.
1. 	False or Misleading Statement of Fact
On the first element, the defendants contend that they have not used in commerce a
false or misleading statement of fact about their self-storage services. Dkt. Nos. 48 at 13–14;
49-1 at 15–17. They maintain that the Second License Agreement gave SAS the right to use
the Licensed Mark; it did not authorize SAS to use the Registered Marks or their derivations
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to associate the business with the original Affordable Storage brand, nor did SAS ever make
any false statements about Michael’s storage facilities.6 See Dkt. Nos. 48 at 14; 49-1 at 16.
Moreover, David and Gargoyle argue that there is nothing to stop the Hylands and SAS
from using the Affordable Storage name and smiley face logo at the Slaton and Brownfield
locations—just as they have for over two decades. Dkt. No. 49-1 at 16–17. Therefore, the
argument concludes, there is no evidence that the defendants made a false or misleading
statement of fact associating SAS with Michael’s Affordable Storage business. Id.
A reasonable jury could conclude otherwise. As early as 2018, David knew from the
First Arbitration Award that only Michael could use the Smiley Mark in Lubbock County,
even if David technically owned the mark. Dkt. No. 59-7 at 9 ¶ 17. The First Arbitration
Award also placed strict limits on David’s ability to license the Smiley Mark. See id. at 11–
12 ¶¶ 21–22. Yet three years after the First Arbitration Award, David (through Gargoyle)
licensed a mark to Gavin Hyland that falls squarely within Nolland’s definition of the
Smiley Mark; the Licensed Mark also features “a Smiley face with arms, legs, gloved or un-
gloved hands, and feet.” Id. at 9 ¶ 17. Then, in the Third Arbitration Award, the panel
concluded that the Licensed Mark is the property of Postar IP and that David did not have
authority to execute the Second License Agreement. Dkt. No. 89 at 73. Against this
backdrop, a reasonable jury could conclude that the defendants used the Second License
Agreement—signed only a month after the First License Agreement expired—to endorse
6 The Hylands and SAS offer a twist on this argument. They contend that the Second Amended
Complaint only challenges the execution of the Second License Agreement, which “was a private
agreement, not a publicly facing advertisement made ‘in commerce.’” Dkt. No. 48 at 14. On that
view, there can be no false statement of fact because no actual or potential customer viewed the
Agreement. Id. That, however, is an unduly narrow view of Michael’s allegations. Fairly read,
the Second Amended Complaint alleges that the Second License Agreement permits “continue[d]
unauthorized use of the Registered Marks and derivations thereof.” Dkt. No. 35 ¶ 29.
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the Hylands’ use of an unauthorized mark to falsely maintain their association with the
Affordable Storage brand.
As for the signage, there is a fact dispute about the Hylands’ authority to use the
Affordable Storage name and smiley face logo after the First License Agreement expired in
2021.7 In a sworn declaration, Michael represented that the parties negotiated to give Gavin
Hyland “the right to use certain of the Registered Marks belonging to Postar IP” for a three-
year period. Dkt. No. 59-9 at 43 ¶ 11. According to Michael, “[t]his would have given the
Hyland Defendants three years to find their own trademark and brand, create a logo, and
start using it, and to move away from use of the Affordable Storage trademark and brand.”
Id. In other words, Michael represents in his declaration that the parties understood the
First License Agreement to function as a complete (and final) encapsulation of the Hylands’
association with the Affordable Storage brand. See id.
Sworn declarations based on personal knowledge, even if they are self-serving, are
sufficient to create a genuine issue of material fact. Guzman v. Allstate Assurance Co., 18 F.4th
157, 160–61 (5th Cir. 2021). Whether to believe Michael (or any other party) is up to the
jury, not the Court. See Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224, 245 (5th Cir. 2016)
(“[A]t this summary judgment stage . . . a court may make no credibility determinations.”
(internal quotation marks omitted)). If the jury believes Michael’s account, it could find that
the Hylands and SAS misleadingly associated their self-storage business with the original
7 The Hylands and SAS contest this framing. They argue that the Second Amended Complaint does
not allege that the signage constitutes unfair competition. Dkt. No. 64 at 10. But Count Two
incorporates and realleges allegations in the preceding paragraphs, which include references to the
signage. See Dkt. No. 35 ¶¶ 24; 27.
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Affordable Storage brand by continuing to use the name and smiley face logo after the
parties agreed that they would cease such use at the end of the three-year lease term.
But the jury could also draw the opposite conclusion. There is the recorded phone
call in which Michael told Myranda that anyone can use the Affordable Storage name and
smiley face logo. Dkt. No. 38 ¶ 22. And recall that for several years Michael and David
advertised SAS’s Slaton and Brownfield locations as their own. See Dkt. No. 49-2 at 6. A
jury could also look at the unsigned draft of the First License Agreement—which would
have expressly barred SAS from using the name and logo at the conclusion of the lease
term—and conclude that the memorialized version did not bar the Hylands from using the
Affordable Storage name and logo after 2021. See id. at 100–05. Plus, a jury may even find
that the signage—which is somewhat generic and located in areas where Michael does not
have Affordable Storage locations—is unlikely “to cause confusion, or to cause mistake, or
to deceive as to the affiliation, connection, or association” of SAS with the original
Affordable Storage brand. See 15 U.S.C. § 1125(a)(1)(A); Dkt. No. 48 at 26. Likelihood of
confusion, the Fifth Circuit has often said, is a question of fact. See, e.g., Elvis Presley Enters.,
Inc. v. Capece, 141 F.3d 188, 196 (5th Cir. 1998). Given these open questions, among others,
Michael has carried his burden to show that fact issues remain on the first element of his
unfair-competition claim.
2. 	Deception
Next, David and Gargoyle argue that there is no evidence of deception or potential
deception—the second element of the unfair-competition claim. Dkt. No. 49-1 at 17. But
Michael points to more than a “scintilla of evidence” suggesting otherwise. Anderson, 477
U.S. at 252. He represents in his declaration that “[c]onsumers or customers of the Hyland
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Defendants have called [him] or [his] Affordable Storage businesses confused about who
owned the stores in Slaton or Brownfield and complained about the service they have
received or their ability to reach someone on the phone to discuss the Hyland Defendants’
services.” Dkt. No. 59-9 at 45. He identifies a text message indicating that SAS packages
were sent to Michael’s Affordable Storage location on 32nd Street. Dkt. No. 62-8 at 1. And
he notes that Myranda Hyland recognized in an interrogatory response that SAS received
an invoice from a gravel company that was intended for one of Michael’s businesses. See id.
at 10; see also Bradley v. Allstate Ins. Co., 620 F.3d 509, 527 n.21 (5th Cir. 2010) (explaining
that interrogatory responses “may be used as evidence for assessing summary judgment”
(citing Fed. R. Civ. P. 56(c)). Lastly, as noted above, deception (which is synonymous with
likelihood of confusion) is a question of fact. See 15 U.S.C. § 1125(a)(1)(A); Elvis Presley
Enters., Inc., 141 F.3d at 196. From this evidence, a jury could conclude that SAS’s name
and smiley face signage has the capacity to deceive a substantial segment of consumers into
thinking that the business is associated with the original Affordable Storage brand.
Granted, some of this evidence is from 2018—years before the defendants entered
into the Second License Agreement. See Dkt. No. 62-8 at 1, 10. But the Hylands were still
using the Affordable Storage name and logo in 2018, and Michael’s representation in his
declaration about customer confusion is not temporally limited. See Dkt. No. 59-9 at 45.
Plus, to prevail on this element, Michael only needs to show that the defendants’ alleged
actions have the capacity to deceive. See Pizza Hut, Inc., 227 F.3d at 495. At the very least,
there is enough uncertainty to preclude summary judgment.
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3. 	Materiality
David and Gargoyle do not offer more clarity on the materiality element, arguing
that the record is “void [of] any evidence” that the defendants’ use of the Licensed Mark, for
example, is “material to the consumer or influence[s] purchasing decisions.” See Dkt. No.
49-1 at 17–18. To show materiality, a plaintiff must “introduce evidence of the statement’s
impact on consumers.” Pizza Hut, Inc., 227 F.3d at 495. Though it is a closer call, Michael
has carried that burden here.
To start, Michael’s evidence of misdirected packages and invoices is somewhat
probative. See Dkt. No. 62-8 at 1, 10. Drawing all inferences in Michael’s favor, the fact
that items meant for one entity were sent to the other suggests that a customer could be
equally deceived into thinking that the two Affordable Storage businesses are the same.
More significant, though, are Michael’s statements in his declaration that consumers
expressed actual confusion. See Dkt. No. 59-9 at 45. Again, Michael represents that the
Hylands’ customers “have called [him] or [his] Affordable Storage businesses confused
about who owned the stores in Slaton or Brownfield.” Id. They also “complained about the
service they have received or their ability to reach someone on the phone to discuss” the
Hylands’ self-storage services. Id. The implication, then, is that the customers were actually
confused about SAS’s relationship with Michael’s Affordable Storage business.
David and Gargoyle counter that these statements from unidentified customers are
inadmissible hearsay, although they do not explain why. Dkt. No. 65 at 20. To be sure,
summary judgment evidence cannot be based on hearsay. Fowler v. Smith, 68 F.3d 124, 126
(5th Cir. 1995). But despite this general prohibition, a court “may consider hearsay at the
summary judgment stage if the hearsay could be reduced to a form admissible at trial.”
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Temple v. WFAA-TV, Inc., No. 3:21-CV-1250, 2023 WL 146249, at *1 (N.D. Tex. Jan. 9,
2023) (quotation omitted); see Maurer v. Independence Town, 870 F.3d 380, 384 (5th Cir. 2017)
(noting that the evidence “cited to support or dispute a fact need only be capable of being
presented in a form that would be admissible in evidence”) (citation modified).
Michael’s statements in his declaration could—at the very least—be reduced to an
admissible form at trial. For starters, it is far from clear that they are inadmissible hearsay.
Hearsay is an out-of-court statement offered to prove the truth of the matter asserted in the
statement. Fed. R. Evid. 801(c). Here, Michael does not appear to offer the customers’ out-
of-court statements for the truth of the matter asserted. Take the second statement, for
example. Michael is not looking to prove that the customers received poor service at the
Slaton and Brownfield locations or that they could not reach an SAS employee to discuss
the Hylands’ self-storage business. Instead, Michael needs to prove the “touchstone” of the
unfair competition claim: that the customers were confused about the relationship between
the two businesses. Matrix Essentials, Inc., 988 F.2d at 592. Thus, the evidentiary value of
the statement does not lie in the truth of its assertions; rather, it lies in the fact that the
customers were apparently confused because they called Michael, not SAS, to complain.
Put differently, “the significance of [the] statement ‘lies solely in the fact that it was made.’”
United States v. Cantu, 876 F.2d 1134, 1137 (5th Cir. 1989) (quoting United States v. Bobo, 586
F.2d 355, 372 (5th Cir. 1978)). It is not offered to prove the truth of the matter asserted. Id.
The first statement is a bit trickier. Michael contends that customers called him or
his businesses “confused about who owned the stores in Slaton or Brownfield.” Dkt. No.
59-9 at 45. The context of those statements is not clear. If the dialogue was posed in the
form of a question (“Who owns the Slaton location?”), then there would be no hearsay
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problem. See United States v. Lewis, 902 F.2d 1176, 1179 (5th Cir. 1990) (“[M]ost questions
and inquires[] are not hearsay because they do not, and were not intended to, assert
anything.”). Or if the customers made statements that compel an inference of confusion—
like the second statement above—then those too would not constitute inadmissible hearsay
because they would not be offered for the truth of the matter asserted. The Court would
need more trial context to be sure. But at this juncture, the fact that the first statement could
be reduced to an admissible form at trial is enough. See Maurer, 870 F.3d at 384.
In short, there remains a genuine factual dispute on the materiality prong of the
unfair-competition claim. A reasonable jury could conclude based on Michael’s testimony,
as well as the evidence of misdirected packages and invoices, that consumers were actually
confused by SAS’s use of the Affordable Storage name and signage. No more is required to
defeat summary judgment on this element.
4. 	Interstate Commerce
The defendants also contend that there is no genuine fact dispute on the fourth,
interstate-commerce element. As they put it, this case “does not involve interstate
commerce,” Dkt. No. 48 at 15, because “[s]elf-storage is, for the most part, a very local
business.” Dkt. No. 49-1 at 18. This argument is unpersuasive.
The Lanham Act defines “commerce” to mean “all commerce which may lawfully
be regulated by Congress.” 15 U.S.C. § 1127. Congress’s power under the Commerce
Clause, in turn, includes the power to regulate interstate commerce. U.S. Const. art. I, § 8,
cl. 3. The Supreme Court has broadly interpreted this power to permit regulation of the
channels and instrumentalities of interstate commerce, as well as activities that substantially
affect interstate commerce. Gonzales v. Raich, 545 U.S. 1, 16–17 (2005) (citing Perez v. United
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States, 402 U.S. 146, 150 (1971)). This authority allows Congress to regulate “purely local
activities” that have a “substantial effect on interstate commerce” in the aggregate. Id. at 17.
This understanding has translated over to the Lanham Act. “Because one need not
direct goods across state lines for Congress to regulate the activity under the Commerce
Clause, there is likewise no such per se condition for satisfying the Lanham Act’s ‘use in
commerce’ requirement.” Perry v. H.J. Heinz Co. Brands, LLC, 994 F.3d 466, 474 (5th Cir.
2021) (quoting Christian Faith Fellowship Church v. adidas AG, 841 F.3d 986, 995 (Fed. Cir.
2016)). Even a “brief study of modern Commerce Clause cases reveals that seemingly de
minimis intrastate activities can influence interstate commerce, be regulated by Congress,
and thus count as uses in commerce for purposes of the Lanham Act.” Id.
Against that backdrop, summary judgment is clearly inappropriate on the interstate-
commerce element. Here is just one example: Michael points to evidence that the Hylands
use derivatives of the Registered Marks and/or the Affordable Storage name and smiley face
logo on their website. See, e.g., Dkt. No. 62-7 at 17–20. Of course, it is blackletter law that
the internet is a “facilit[y] or means of interstate commerce.” United States v. Barlow, 568
F.3d 215, 220 (5th Cir. 2009). Thus, there remains at least a fact dispute about whether the
defendants’ self-storage business is in interstate commerce.
5. 	Injury
Lastly, the defendants argue that there is no evidence that Michael is likely to be
injured by the defendants’ allegedly false or misleading statements. Dkt. Nos. 48 at 15–16;
49-1 at 18. This argument fails, too. If the jury agrees with Michael’s theory of the case—
that the defendants are falsely associating themselves with the Affordable Storage brand by
using unauthorized marks or the Affordable Storage name and signage in areas where he
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has exclusive rights—then it stands to reason that Michael is “likely” to be injured by that
conduct. See Pizza Hut, Inc., 227 F.3d at 495. And for reasons explained, Michael has
produced some evidence of actual consumer confusion. See supra, Section 2.B.ii.a.3.
Therefore, like the other elements of the unfair-competition claim, there are still genuine
issues of material fact as to Michael’s alleged injuries. The Court therefore denies summary
judgment on this claim.
b. 	Reverse Passing Off under the Lanham Act
Next is Count Three: reverse passing off under the Lanham Act. Michael alleges
that the defendants are passing their self-storage business off as Michael’s by falsely
designating their services through continued use of the Registered Marks, notwithstanding
Michael’s exclusive right to use the marks in Lubbock County. Dkt. No. 35 ¶ 34. This
continued use, Michael contends, creates a likelihood of consumer confusion. Id.
Reverse passing off (or reverse palming off, as it is sometimes called) is “a species of
Lanham Act violation in which a ‘producer misrepresents someone else’s goods or services
as his own.’” Jaso v. The Coca Cola Co., 435 F. App’x 346, 356 n.9 (5th Cir. 2011) (quoting
Dastar Corp., 539 U.S. at 27 n.1). “A defendant may also be guilty of reverse palming off by
selling or offering for sale another’s product that has been modified slightly and then labeled
with a different name.” Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir. 1990). In Dastar
Corp., the Supreme Court held that Section 1125(a) of the Lanham Act covers claims for
reverse passing off. 539 U.S. at 30. Given the cause of action’s roots in Section 1125(a), a
plaintiff must prove that the defendant used a “false designation of origin” of “goods or
services.” McArdle v. Mattel Inc., 456 F. Supp. 2d 769, 783 (E.D. Tex. 2006) (quoting 15
U.S.C. § 1125(a)(1)). And as with the unfair-competition claim, this requirement includes a
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likelihood-of-confusion analysis. See Keane v. Fox Television Stations, Inc., 297 F. Supp. 2d
921, 935 (S.D. Tex. 2004).
Because fact issues remain on the unfair-competition claim, and because of the
substantial overlap between the causes of action, the Court also denies summary judgment
on the reverse passing off claim. As explained, there are still jury questions on whether the
defendants made false or misleading statements by using the Licensed Mark or the
Affordable Storage name or smiley face logo after the expiration of the Second License
Agreement. See Dkt. No. 48 at 19. In light of the Third Arbitration Award, a reasonable
jury could find that the defendants used an unauthorized derivative of the Registered Marks
after the permission lapsed. In doing so, the Hylands and SAS (in theory) misrepresented
themselves as the original Affordable Storage brand in a way that creates a likelihood of
consumer confusion—a quintessential fact issue. See Elvis Presley Enters., Inc., 141 F.3d at
196. Moreover, as explained in the context of the unfair-competition claim, the defendants’
assertion that there is no evidence to satisfy the interstate-commerce element is unavailing.
Dkt. Nos. 48 at 20–21; 49-1 at 19. The Court therefore denies summary judgment on
Michael’s reverse passing off claim under the Lanham Act.
c. 	Palming Off
Now for the state claims. In Count Four, Michael alleges that the defendants—
through the false designation of unauthorized marks—are palming off their self-storage
services as Michael’s in violation of the common law. Dkt. No. 35 ¶ 36. These allegations
significantly overlap with those for the reverse passing off claim.8 See id. ¶¶ 34, 36.
8 Palming off is the opposite of reverse passing off. Dastar Corp., 539 U.S. at 27 n.1. It occurs “when
a producer misrepresents his own goods or services as someone else’s.” Id.
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Texas common law recognizes palming off as a single theory under the broader
umbrella of unfair-competition law. U.S. Sporting Prods., Inc. v. Johnny Stewart Game Calls,
Inc., 865 S.W.2d 214, 217 (Tex. App.—Waco 1993, writ denied). It is rarely used, and the
elements of the claim are not clearly defined in the case law.9 But the parties appear to
agree that the plaintiff must at least show that the defendant’s actions caused a likelihood of
confusion. See Dkt. Nos. 35 ¶ 36; 48 at 21; 49-1 at 21. This tracks the reasoning in Hudgens
v. Goen, 673 S.W.2d 420, 423 (Tex. App.—Fort Worth 1984, writ ref’d n.r.e.), which one
commentator cited for the elements of a palming off claim. James E. Hudson, III, A Survey
of the Texas Unfair-Competition Tort of Common-Law Misappropriation, 50 Baylor L. Rev. 921,
924 & n.9 (1998); see Dkt. No. 49-1 at 21 (David and Gargoyle relying on Hudgens for the
relevant elements). It is also consistent with the views of a leading trademark scholar, who
notes that palming off is typically a “synonym” for likelihood of confusion. 3 McCarthy on
Trademarks § 25:2. The Fifth Circuit agrees: “Unfair competition is a common law tort that
occurs when one business entity ‘palms off’ its products as those of another . . . . [T]he test is
likelihood of confusion.” Ky. Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368,
382 (5th Cir. 1977); see also B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254, 1261,
(5th Cir. 1971) (“[T]he offending mark must so closely approximate the original mark that
there is likely to be ‘palming off’ of one product as the other.”).
Under Hudgens, a palming-off plaintiff must prove two elements: (1) the “plaintiff’s
use of its trade name has acquired a secondary meaning; and (2) “the similarity of the name
used by the defendant’s place of business would be likely to confuse the public.” 673
S.W.2d at 423. Secondary meaning occurs when, in the public’s mind, a mark becomes
9 The Texas Civil Pattern Jury Charge does not include a model instruction for palming off.
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associated with a particular source. Horseshoe Bay Resort Sales Co., 53 S.W.3d at 807; see Wal-
Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 211 (2000).
With that understanding of the applicable law, it is again clear that genuine fact
disputes remain. Secondary meaning—which the Fifth Circuit has labeled a question of
fact—is especially up in the air. Amazing Spaces, Inc., 608 F.3d at 234. David and Gargoyle
assert that “when the public sees an advertisement for ‘Affordable Storage’ with a smiley
face logo, the public thinks it is a storage facility” and does not associate it with Michael’s
Lubbock locations and the original Affordable Storage brand. Dkt. No. 49-1 at 21. But
Michael’s evidence of actual confusion suggests otherwise. See Dkt. No. 59-9 at 45.
As for likelihood of confusion, the Hylands and SAS largely dodge the question,
arguing instead that they did not use the Registered Marks after the Second License
Agreement expired. Dkt. No. 48 at 22. Again, this argument misses the point. A rational
jury could find based on the Third Arbitration Award that the Hylands and SAS employed
an unauthorized derivative of the Registered Marks owned by Postar IP. Furthermore,
based on Michael’s representations about his conversations with actual consumers (see Dkt.
No. 59-9 at 45), a jury could conclude that there is a likelihood of confusion stemming from
the Hylands’ use of the Affordable Storage name and smiley face logo. 10 Or the jury could
come out the other way—maybe it would find that there was no impediment to SAS using
the name and logo beyond the three-year lease term or that no consumer would confuse the
10 David and Gargoyle argue that they are entitled to summary judgment on this claim because there
is no evidence that Michael and SAS are in competition. Dkt. No. 49-1 at 20. But a jury may
think differently: SAS has a location in Lubbock County, the geographic area for which Michael
has exclusive rights to the Registered Marks and where he has many Affordable Storage locations.
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Hylands’ locations for Michael’s. See supra, Section 2.B.ii.a.1. As with the other claims,
that uncertainty precludes summary judgment on Count Four.
d. 	Unfair Competition by Common-Law Misappropriation
The story is much the same for Count Five: unfair competition by common-law
misappropriation. Here, Michael alleges that he created the Registered Marks, that the
defendants were burdened with little or none of the expense to develop those marks, and
that the defendants’ use of the marks or their derivatives in competition with him is
therefore unlawful under Texas common law. Dkt. No. 35 ¶¶ 37–38.
“The elements of the tort of unfair competition by misappropriation, also called
‘common-law misappropriation,’ are ‘(1) the creation of [the] plaintiff’s product . . . through
extensive time, labor, skill, and money; (2) the defendant’s use of that product in
competition with the plaintiff, thereby gaining a special advantage in that competition (i.e.,
a ‘free ride’) because defendant is burdened with little or none of the expense incurred by the
plaintiff; and (3) commercial damage to the plaintiff.’” Baylor Scott & White v. Project Rose
MSO, LLC, 633 S.W.3d 263, 287 (Tex. App.—Tyler 2021, pet. denied) (quoting BP Auto.,
LP v. RML Waxahachie Dodge, LLC, 448 S.W.3d 562, 572 (Tex. App.—Houston [1st Dist.]
2014, no pet.)). Like palming off, “[u]nlawful competition by misappropriation is one of
multiple torts in the unfair competition umbrella.” Id.
On the first element, there appears to be a dispute about whether Michael created the
Registered Marks. Michael contends that the parties agree on this point (Dkt. No. 58 at 39–
40), but David and Gargoyle disagree (Dkt. No. 49-1 at 23). According to those defendants,
Michael and David created the marks when they were working together. Id. They do not
cite any summary-judgment evidence for that proposition. See id. Further, David and
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Gargoyle argue that, because the Registered Marks were ultimately assigned to Postar IP,
“there can be no doubt that the marks in question are not Michael Postar’s creation.” Id.
These arguments do not hold water. For one, there is evidence in the form of Michael’s
declaration that Michael started the Affordable Storage business and only later brought
David into the fold. See Dkt. No. 59-1 ¶ 2. Drawing all inferences in Michael’s favor, a jury
could find that he created the Registered Marks. Plus, the fact that the Registered Marks
were assigned to Postar IP years after they were first used says nothing about who created
them. Thus, there are fact disputes remaining on the first element of this claim.
Next, the defendants contend that there is no evidence that they are using the
Registered Marks or their derivations in competition with Michael. See Dkt. No. 49-1 at 23.
But, again, a jury could find that Michael and SAS compete in Lubbock County, where
SAS has a location and where Michael has exclusive rights to use the Registered Marks in
connection with many Affordable Storage locations. See supra, note 10. And consider too
the evidence that consumers are actually confused about the connection between Michael’s
Affordable Storage locations and SAS’s. See Dkt. No. 59-9 at 45. That suggests that the
parties’ self-storage facilities are not as disassociated as the defendants say.
For the same reasons, genuine fact disputes remain on the third element—
commercial damage. Michael’s evidence of actual confusion—limited as it is—suggests that
consumers could choose an SAS location in Lubbock County because of its purported
association with the original Affordable Storage brand. See id. At this stage, Michael’s
showing is enough to defeat summary judgment. See Int’l Shortstop, Inc. v. Rally’s, Inc., 939
F.2d 1257, 1264 (5th Cir. 1991) (“[T]he plaintiff need not offer all of the evidence tending to
support its case, only enough evidence ‘from which a jury might return a verdict in [its]
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favor.’” (quoting Anderson, 477 U.S. at 257) (alteration in original)). Thus, the Court denies
summary judgment on Michael’s claim for unfair competition by common-law
misappropriation.
e. 	Civil Conspiracy
Next, in Count Five, Michael alleges that the defendants conspired to accomplish an
unlawful purpose—namely, the Hylands’ unauthorized use of the Registered Marks after
the First License Agreement expired. Dkt. No. 35 ¶ 40. The defendants accomplished this
purpose, Michael alleges, through the overt act of executing the Second License Agreement.
Id. This civil conspiracy claim also arises under Texas common law.
To show a civil conspiracy, a plaintiff must prove five elements: “(1) two or more
persons, (2) an object to be accomplished, (3) a meeting of minds on the object or course of
action, (4) one or more unlawful, overt acts, and (5) damages.” Baty v. ProTech Ins. Agency,
63 S.W.3d 841, 864 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).
To show a meeting of minds, “the participants must at least have knowledge of the
object and purpose of a conspiracy.” Lesikar v. Rappeport, 33 S.W.3d 282, 302 (Tex. App.—
Texarkana 2000, pet. denied). Such knowledge and agreement “may be established by
circumstantial evidence.” Id. Generally, facts and circumstances that permit a “natural
inference . . . that the unlawful, overt acts were committed in furtherance of common
design, intention, or purpose of the alleged conspirators” are sufficient. Id. (quoting Int’l
Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581 (Tex. 1963)). The plaintiff does not
need to show that the conspirators took every action “in concert” with each other. Id.
(quoting Int’l Bankers Life Ins. Co., 368 S.W.2d at 582). “[J]oint participation in the
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transactions” and “enjoyment of the fruits of the transactions” allow a court to reasonably
infer a conspiracy. Id. (quoting Int’l Bankers Life Ins. Co., 368 S.W.2d at 582).
The defendants argue that there is no genuine dispute of material fact as to whether
the defendants had a meeting of minds. Dkt. Nos. 48 at 28–29; 49-1 at 25. But there is
sufficient circumstantial evidence to make it past summary judgment on this element.
When the brothers split in 2017, Gavin Hyland chose to work with David, not Michael.
Dkt. No. 87-1 at 12. Then, when the First License Agreement expired, the defendants
entered into the Second License Agreement only a month later. See Dkt. No. 50 at 46–48.
That Agreement authorized Gavin Hyland to use a derivative of the Registered Marks in
Lubbock County even though, according to David’s deposition testimony, “all the
employees”—Gavin included—“were aware of how the company was split.” Dkt. No. 59-
16 at 46; see Dkt No. 89 at 69. With this evidence, a jury could find that David and Hyland
had a meeting of minds to employ the Second License Agreement to evade the geographic
restrictions in the Postar IP Company Agreement.
Following the Third Arbitration Award, summary judgment is clearly inappropriate
on the fourth, unlawful-act element. The panel found that “David licensed a mark to Mr.
Hyland that is a variation of a Postar IP mark that belongs to Postar IP” and that “David
did not have the authority to license that mark to Mr. Hyland.” Dkt. No. 89 at 69. So there
is enough evidence for a jury verdict on this element.
Lastly, the defendants’ argument on damages fails for the same reasons as before.
See supra, Section 2.B.ii.a.5. Michael has some evidence of actual consumer confusion, and
it is undisputed that the Hylands are operating a self-storage facility in Lubbock County,
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where Michael has exclusive rights to use the Registered Marks and their derivations. That
creates a fact dispute for damages. The Court denies summary judgment on this claim.
f. 	Assisting or Encouraging
Count Six, assisting or encouraging under Texas common law, is similar to the civil
conspiracy claim. According to Michael, the defendants “engaged in activity which
accomplished a tortious result.” Dkt. No. 35 ¶ 42. More specifically, he claims that David
assisted the Hylands with committing unfair competition by using Gargoyle to enter into the
Second License Agreement, despite knowing that it did not own the Registered Marks or
their derivations. Id. Moreover, David’s “assistance or encouragement was a substantial
factor in causing Hyland’s tortious conduct.” Id.
Only David and Gargoyle move for summary judgment on this claim. See Dkt. No.
49-1 at 27–28. Michael appears to agree with them that the elements of the assisting-or-
encouraging claim come from Section 876(b) of the Restatement (Second) of Torts.11 See id.;
Dkt. No. 61 at 46–47. Under that provision, the defendant is liable for the conduct of
another which causes harm if the defendant “knows that the other’s conduct constitutes a
breach of duty and gives substantial assistance or encouragement to the other so to conduct
himself.” Juhl v. Airington, 936 S.W.2d 640, 643 (Tex. 1996) (quotation omitted).
David and Gargoyle argue that they are entitled to summary judgment on this claim
because there is no evidence that David had the requisite knowledge to assist or encourage
the Hylands or SAS to commit a tort. Dkt. No. 49-1 at 28. They point to David’s testimony
11 Texas law may not even recognize a cause of action for assisting or encouraging that is distinct
from civil conspiracy. See Reynolds v. Sanchez Oil & Gas Corp., No. 01-18-940-CV, 2023 WL
8262764, at *9 (Tex. App.—Houston [1st Dist.] 2023, no pet.) (collecting cases). But David and
Gargoyle do not argue that this claim is not cognizable.
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in his affidavit that he “was not thinking in legal terms” when he licensed the Licensed
Mark to Gavin Hyland. Dkt. No. 49-2 at 9. In David’s mind, the Licensed Mark “was
different than the Postar IP logos,” and it was his right to license the mark because his
“employees came up with [it] after the split.” Id. Given this testimony, the argument goes,
“David did not believe he was assisting anyone in committing” a tort. Dkt. No. 49-1 at 28.
This argument ignores the First Arbitration Award. After David began using an
anthropomorphic smiley character following the split, Nolland concluded that only Michael
could use the Smiley Mark in Lubbock County. See supra, Section 1.B.i. Yet three years
after the First Arbitration Award, David licensed to Gavin Hyland a mark that falls squarely
within Nolland’s definition of the Smiley Mark. See Dkt. No. 59-7 at 9 ¶ 17. In fact, David
seems to acknowledge in his affidavit that the Licensed Mark is in tension with the First
Arbitration Award. See Dkt. No. 49-2 at 9–10 (“It had been many years since the 2018
Arbitration regarding Smiley Character and that was not fresh on my mind.”). And that
context does not even consider the later conclusion in the Third Arbitration Award that
David did not have authority to license the Licensed Mark to Gavin Hyland. Dkt. No. 89
at 69. Thus, a genuine fact dispute remains as to David’s knowledge. He is not entitled to
summary judgment on this claim.
iii. 	The Court grants partial summary judgment to the defendants on
Michael’s claim for declaratory relief.
Finally, there is Michael’s claim for relief under the Declaratory Judgment Act, 28
U.S.C. § 2201. Dkt. No. 35 ¶¶ 43–52. Michael asks the Court to enter a declaratory
judgment that the “Defendants do not own the Registered Marks or derivations thereof, and
therefore [the] Defendants’ Second License Agreement is null and void.” Id. ¶ 45.
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The Declaratory Judgment Act provides that, “[i]n a case of actual controversy
within its jurisdiction . . . any court of the United States . . . may declare the rights and other
legal relations of any interested party seeking such declaration, whether or not further relief
is or could be sought.” 28 U.S.C. § 2201(a). When considering an action for declaratory
judgment, a “court must ask (1) whether an actual controversy exists between the parties in
the case; (2) whether it has authority to grant declaratory relief; and (3) whether to exercise
its broad discretion to decide or dismiss a declaratory judgment action.” Frye v. Anadarko
Petroleum Corp., 953 F.3d 285, 294 (5th Cir. 2019) (internal quotation marks omitted).
“‘[A]ctual controversy’ refers to an Article III case or controversy.” Id. (citing MedImmune,
Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007)).
To start, there is no actual controversy about whether the defendants “own the
Registered Marks or derivations thereof.” Dkt. No. 35 ¶ 45. The defendants acknowledge
that Postar IP owns the Registered Marks. Dkt. Nos. 48 at 32; 49-1 at 29. And the Third
Arbitration Award makes clear that “any ‘derivation’ (mark that includes one of the Postar
IP marks or a variation of one of those marks) is the property of Postar IP.” Dkt. No. 89 at
34. Because there is no actual controversy as to who owns the Registered Marks and its
derivations, the Court grants summary judgment to the defendants as to this part of
Michael’s claim for declaratory relief.
That leaves Michael’s second request: to declare the Second License Agreement null
and void. See Dkt. No. 35 ¶ 45. The Court will not grant such relief at this stage. For one,
with fact issues remaining as to injury, it is unclear whether Michael can show that the
Second License Agreement has or continues to injure him in the constitutional sense. After
all, an Article III injury in fact must be “actual or imminent.” Clapper v. Amnesty Int’l USA,
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568 U.S. 398, 409 (2013) (quoting Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149
(2010)). The arbitration panel seemed to pick up on this point. Despite concluding that
Michael lacked authority to license a derivation of the Registered Marks to Gavin Hyland,
the panel denied Michael’s request to void the Second License Agreement. Dkt. No. 89 at
69. It apparently did so because Gavin Hyland is no longer using the Licensed Mark. Id. at
68. Indeed, there is evidence that Gavin only used the mark for six weeks several years ago.
Dkt. No. 85-1 at 17. So a judgment declaring the Second License Agreement null and void
may not even redress Michael’s claimed injuries. See Clapper, 568 U.S. at 409. Given this
uncertainty, “considerations of practicality and wise judicial administration” counsel
against exercising the Court’s discretion to enter declaratory relief at this juncture. Wilton v.
Seven Falls Co., 515 U.S. 277, 288 (1995).
iv. 	The Court denies summary judgment on the defendants’ statute-of-
limitations defenses.
The defendants, for their part, allege that Michael’s claims are barred under the
applicable statutes of limitations. The Hylands and SAS maintain that both the federal and
state claims are time-barred, whereas David and Gargoyle only challenge the state claims.
Dkt. Nos. 48 at 35–36; 49-1 at 31. Because there are outstanding fact issues, and because
the defendants have not established that they are entitled to judgment as a matter of law, the
Court denies summary judgment on these affirmative defenses.12
12 “For a defendant to obtain summary judgment on an affirmative defense, it must establish beyond
dispute all of the defense’s essential elements.” Bank of La. v. Aetna U.S. Healthcare Inc., 468 F.3d
237, 241 (5th Cir. 2006). Thus, while a defendant can prevail on a statute-of-limitations defense at
the summary-judgment stage, there must be no factual dispute about when the limitations period
began to run. See In re Beef Industry Antitrust Litig., 600 F.2d 1148, 1170 (5th Cir. 1979).
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1. 	Federal Claims
The Lanham Act does not contain a statute of limitations. See Jaso, 435 F. App’x at
356. Accordingly, courts refer to analogous state statutes of limitations in resolving federal
trademark and unfair competition claims. See, e.g., Mary Kay, Inc. v. Weber, 601 F. Supp. 2d
839, 859 (N.D. Tex. 2009). “In Texas, a ‘Lanham Act violation is governed by the four[-]
year statute of limitations under Texas law.’” Id. at 860 (quoting Edmark Indus. SDN. BHD.
v. S. Asia Int’l (H.K.) Ltd., 89 F. Supp. 2d 840, 846 (E.D. Tex. 2000)); see also Jaso, 435
F. App’x at 356 (“The parties do not dispute, and we assume for purposes of this case, that
the most analogous Texas statute of limitations for a Lanham Act claim is the four-year
statute of limitations applied to fraud claims under § 16.004 of the Texas Civil Practice &
Remedies Code.”). Here, the parties agree that Texas law sets out a four-year limitations
period for Michael’s federal claims. Dkt. Nos. 48 at 35; 58 at 48.
Michael commenced this action on January 12, 2024. Dkt. No. 1. Thus, any federal
causes of action that accrued before January 12, 2020, are time-barred. According to the
Hylands and SAS, that means Michael cannot proceed on any of his Lanham Act claims.
Dkt. No. 35 at 48. As they put it, Michael was “well aware” of SAS’s use of the Affordable
Storage name and smiley face logo since at least 2013. Id. Indeed, he included the Slaton
and Brownfield locations in his Affordable Storage advertising well before 2020. Id.
But Michael alleges that the federal violations did not occur until the defendants
entered into the Second License Agreement on August 26, 2021. Dkt. No. 58 at 48; see Dkt.
No. 35 ¶ 28 (alleging Lanham Act unfair competition “[i]n executing the Second License
[Agreement]”). A jury could find that at all times before then SAS’s use of the Affordable
Storage name and the smiley face logo was with Michael’s consent. See Dkt. No. 59-9 at 43.
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That was, after all, the stated point of the First License Agreement: to give the Hylands
“time to find a new logo or brand for their business.” Dkt. No. 58 at 36. Because Michael
argues that the complained-of conduct did not occur until 2021—which is within the four-
year limitations period—there remain fact disputes for a jury on this affirmative defense.
2. 	State Claims
Turning to the state claims, there is a legal dispute about the applicable limitations
period. The defendants maintain that Texas’s two-year statute of limitations for tort actions
bars Michael’s state claims. Dkt. Nos. 48 at 36; 49-1 at 31; see Tex. Civ. Prac. & Rem. Code
§ 16.003. Michael, for his part, argues that his state claims are continuing torts in that they
involve “wrongful conduct inflicted over a period of time that is repeated until desisted, and
each day creates a separate cause of action.” Dkt. No. 58 at 49 (quoting Exxon Mobil Corp. v.
Rincones, 520 S.W.3d 572, 592 (Tex. 2017)). On that view, the claim does not accrue until
the allegedly wrongful conduct ceases, thus allowing his state claims to proceed. Id.
At this stage, the defendants have not “establish[ed] beyond dispute” that their
statute-of-limitations defense applies. Bank of La., 468 F.3d at 241. No defendant addressed
Michael’s continuing-tort theory in their reply in support of their motion for summary
judgment. See Dkt. Nos. 64; 65. And the case law is far from clear. Another judge in this
district noted the widespread disagreement on the appropriate statute of limitations for
Texas unfair competition claims. See Louis Vuitton Malletier, S.A.S. v. Keep it Gypsy, Inc., No.
3:23-CV-2569, 2024 WL 3927819, at *8–9 (N.D. Tex.) (Horan, J.), report & recommendation
adopted, 2024 WL 3933673 (N.D. Tex. Aug. 23, 2024). Some courts have applied the two-
year limitations period. See id. Others have recognized that “Texas law treats trademark-
infringement as a ‘continuing tort.’” Springboards to Educ., Inc. v. Scholastic Book Fairs, Inc.,
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No. 3:17-CV-054, 2018 WL 1806500, at *8 (N.D. Tex. Apr. 17, 2018) (quoting Horseshoe
Bay Resort Sales Co., 53 S.W.3d at 812). And still other courts have reasoned that Texas’s
two-year statute of limitations applies to unfair competition claims, but a plaintiff can still
bring such claims for violations within the limitations period. See, e.g., Derrick Mfg. Corp. v.
Sw. Wire Cloth, Inc., 934 F. Supp. 796, 807–08 (S.D. Tex. 1996).
Because trademark infringement falls within the broader umbrella of unfair
competition, Baylor Scott & White, 633 S.W.3d at 287, Michael’s claims for palming off and
common-law misappropriation—two other forms of unfair competition—may also be
continuing torts. The same would go for the civil conspiracy and assisting or encouraging
claims. See Agar Corp., Inc. v. Electro Cirs. Int’l, LLC, 580 S.W.3d 136, 138 (Tex. 2019)
(holding that the statute of limitations for civil conspiracy coincides with that of the
underlying tort); 36-A O’Connor’s Texas Causes of Action § 4 (2026 ed.) (“Assisting or
encouraging does not have its own statute of limitations . . . Thus, the limitations period for
a claim of assisting or encouraging depends on the limitations period for the underlying
tort.”). The defendants have so far made no attempt to explain why the continuing-tort
doctrine does not foreclose Michael’s state claims.
A defendant asserting an affirmative defense “must establish beyond peradventure all
of the essential elements” of the defense “to warrant [summary] judgment in his favor.”
Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th Cir. 2003) (emphasis in original)
(quoting Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th Cir. 2002)). “[T]he ‘beyond
peradventure’ standard is ‘heavy,’” requiring a showing that the movant is entitled to
judgment as a matter of law. Carolina Cas. Ins. Co. v. Sowell, 603 F. Supp. 2d 914, 923 (N.D.
Tex. 2009) (quotation omitted); see Fed. R. Civ. P. 56(a). The defendants have not carried
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their burden at this stage. Therefore, they are not entitled to summary judgment on their
statute-of-limitations defense.
v. 	Injunctive relief is inappropriate at this time.
In his amended complaint, Michael asks the Court to enjoin the defendants from
using the Registered Marks and their derivations in connection with their storage business
during this suit, which he defines to include the Affordable Storage name and smiley face
logo. 13 Dkt. No. 35 ¶¶ 53–59. A preliminary injunction is an “extraordinary and drastic
remedy” that may not issue unless the plaintiff shows clear entitlement to relief. TitleMax of
Tex., Inc. v. City of Dallas, 142 F.4th 322, 328 (5th Cir. 2025) (quoting Canal Auth. of Fla. v.
Callaway, 489 F.2d 567, 573 (5th Cir. 1974)). This is in large part because a preliminary
injunction is meant to “preserve the status quo” until a trial on the merits. Exhibitors Poster
Exch., Inc. v. Nat’l Screen Serv. Corp., 441 F.2d 560, 561 (5th Cir. 1971).
Here, Michael asks the Court to dramatically alter the status quo by enjoining the
defendants from using branding that has been in place since 2011. See Dkt. No. 35 ¶ 56.
And he does so against the backdrop of significant outstanding factual disputes on almost all
his claims. Thus, he has not shown a significant likelihood of success on the merits, nor
does the balance of hardships tip in his favor. See Dennis Melancon, Inc. v. City of New Orleans,
703 F.3d 262, 268 (5th Cir. 2012). Either conclusion is sufficient to deny Michael’s request
for a preliminary injunction. Id.
* 	* 	*
In sum, the Court grants the defendants’ summary judgment motions as to the
trademark infringement claim under Section 1114 of the Lanham Act. Because Michael
13 Michael did not file a separate motion for preliminary injunction.
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does not own the Registered Marks, he lacks statutory standing to bring an infringement
action under that provision. The Court also grants partial summary judgment on Michael’s
claim for declaratory relief because there is no actual controversy that Postar IP owns the
Registered Marks. Genuine issues of material fact remain, however, as to the other claims.
And the defendants have not shown at this stage that they are entitled to summary judgment
on their limitations defense, nor has Michael met the high bar for preliminary injunctive
relief. Thus, the Court otherwise denies the defendants’ summary-judgment motions.
3. 	Motion to Exclude Expert Testimony of John M. Cone
A. 	Legal Standard
The admissibility of evidence is governed by federal law. See Reed v. Gen. Motors
Corp., 773 F.2d 660, 663 (5th Cir. 1985). Federal Rule of Evidence 702 permits opinion
testimony from a witness “‘qualified as an expert by knowledge, skill, experience, training,
or education’ if the expert’s knowledge will assist the trier of fact and (1) ‘the testimony is
based on sufficient facts or data,’ (2) ‘the testimony is the product of reliable principles and
methods,’ and (3) ‘the expert has reliably applied the principles and methods to the facts of
the case.’” Cedar Lodge Plantation, LLC v. CSHV Fairway View I, LLC, 753 F. App’x 191, 195
(5th Cir. 2018) (quoting Fed. R. Evid. 702). The trial court is the gatekeeper, permitting
expert testimony only if the proponent establishes its admissibility by a preponderance of the
evidence. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993); Mathis v. Exxon
Corp., 302 F.3d 448, 459–60 (5th Cir. 2002).
“[T]he rejection of expert testimony is the exception rather than the rule.” Harrison v.
Aztec Well Servicing Co., No. 1:20-CV-038, 2022 WL 125315, at *2 (N.D. Tex. Jan. 13, 2022)
(Hendrix, J.) (quoting Fed. R. Evid. 702, advisory committee’s notes to 2000 amendment).
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The gatekeeping function applies only to the expert testimony’s admissibility; it does not
extend to its weight, which is properly left to the jury. United States v. 14.38 Acres of Land, 80
F.3d 1074, 1077 (5th Cir. 1996). After all, “[i]t is the role of the adversarial system, not the
court, to highlight weak evidence.” Primrose Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d 546,
562 (5th Cir. 2004). “Vigorous cross-examination, presentation of contrary evidence, and
careful instruction on the burden of proof are the traditional and appropriate means of
attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596.
Under Rule 704(a), “[a]n opinion is not objectionable just because it embraces an
ultimate issue.” But “this rule does not allow an expert to render conclusions of law.”
Snape-Drape, Inc. v. C.I.R., 98 F.3d 194, 198 (5th Cir. 1996). This is because “our legal
system reserves to the trial judge the role of deciding the law for the benefit of the jury.”
Askanase v. Fatjo, 130 F.3d 657, 673 (5th Cir. 1997). “[A]llowing an expert to give his
opinion on the legal conclusions to be drawn from the evidence both invades the court’s
province and is irrelevant.” Owen v. Kerr-McGee Corp., 698 F.2d 236, 240 (5th Cir. 1983).
The expert must “bring to the jury more than the lawyers can offer in argument.” Salas v.
Carpenter, 980 F.2d 299, 305 (5th Cir. 1992) (quotation omitted). “[T]he task of separating
impermissible questions which call for overbroad or legal responses from permissible
questions is not a facile one.” Thomas v. W&T Offshore, Inc., Civ. A. No. 16-14694, 2018 WL
4223589, at *7 (E.D. La. Aug. 27, 2018) (quoting Owen, 698 F.2d at 240). But it still
“requires courts to exclude questions or answers from experts that ‘would supply the jury
with no information other than the expert’s view of how its verdict should read.’” Id.
(quoting Owen, 698 F.2d at 240).
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B. 	Analysis
The Hylands and SAS move to exclude the expert testimony of John M. Cone, an
attorney who specializes in trademark law. Dkt. No. 51; see Dkt. No. 52 at 22–41 (Cone’s
expert report). Michael identified Cone as his expert witness to testify about (1) whether
Michael has protectable rights in various marks; (2) whether those rights have priority over
the Hylands’ use of certain marks; and (3) whether the Hylands’ use of those marks is likely
to cause confusion. See Dkt. No. 56 at 6.
i. 	According to the defendants, Cone’s opinions in his expert report
are impermissible legal conclusions.
The defendants do not challenge Cone’s qualifications as an expert. See Fed. R.
Evid. 702. Nor do they challenge the reliability of the methodology underlying Cone’s
expert report. See id.; Daubert, 509 U.S. at 590–92. Instead, they argue that the opinions in
his report are impermissible legal conclusions that invade the province of the Court and
merely tell the jury what result to reach. Dkt. No. 52 at 2. In their motion, the defendants
object to 30 statements or opinions contained in Cone’s report. Id. at 4–19. Each objection
features the same stock argument: “This is an improper legal conclusion, seeking to tell the
jury what law governs an issue and what the law means. It is not an opinion to help the
factfinder understand the evidence or an issue in question.” See, e.g., id. at 12–13. Taken
together, these objections effectively seek a blanket prohibition on Cone’s testimony.
Michael assures the Court that “Mr. Cone’s ‘legal conclusions’ will not be presented
to the jury.” Dkt. No. 56 at 7. He argues that there is no way to know at this point whether
these purported “legal opinions” will “actually be offered at trial.” Id. at 8. Besides, he
says, nothing prevents experts from relying on legal authority in forming their opinions. Id.
In response to the defendants’ 30 objections, Michael offers his own stock response: “This is
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not a legal conclusion because it does not omit the supporting facts; it is based on Mr.
Cone’s analysis of the relevant sources as applied to his independent and objective review of
the pleadings and other documents identified in his report.” See, e.g., id. at 13–14.
ii. 	It is premature to exclude Cone’s expert testimony.
The Court denies the defendants’ motion to exclude Cone’s expert testimony as
premature. “Courts have found that the presence of impermissible legal conclusions in an
expert’s report is not a sufficient basis to strike the entirety of his testimony, particularly
where, as here, his report ‘provides additional, potentially admissible opinion[s].’” Am. Can!
v. Arch Ins. Co., 597 F. Supp. 3d 1038, 1047 (N.D. Tex. 2022) (alteration in original)
(quoting Novedea Sys., Inc. v. Colaberry, Inc., No. 6:20-CV-180, 2021 WL 6618488, at *2
(E.D. Tex. Nov. 8, 2021) (Kernodle, J.)). For example, Cone is expected to testify that the
Hylands’ use of certain marks is likely to cause confusion with marks owned by Postar IP.
See Dkt. No. 52 at 35–40. His opinions could be inadmissible to the extent they articulate a
legal standard or tell the jury what result to reach. See Owen, 698 F.2d at 240. But it
remains true that experts “may testify as to legal matters that involve questions of fact.”
Waco Int’l, Inc. v. KHK Scaffolding Hou. Inc., 278 F.3d 523, 533 (5th Cir. 2002); see Viacom Int’l
v. IJR Cap. Invs., LLC, 891 F.3d 178, 192 (5th Cir. 2018) (“Likelihood of confusion is a
question of fact.”).
“[T]he line between permissible and impermissible lines of questioning can be
difficult to draw, particularly without the context of live testimony at trial.” Am. Can!, 597
F. Supp. 3d at 1048 (quoting Tajonera v. Black Elk Energy Offshore Operations, LLC, Civ. A.
No. 13-0366, 2016 WL 8274173, at *8 (E.D. La. May 26, 2016)). Because Michael
represents that Cone’s opinions will not be offered as legal conclusions (Dkt. No. 56 at 7–8,
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21), and because the Court needs more trial context to determine whether specific testimony
invades the province of the jury, the defendant’s pretrial request for nearly wholesale
exclusion puts the cart before the horse.
That said, the Court will not permit any testimony at trial that constitutes an
improper legal conclusion. Cone may not, for example, “definitively state what law
applies” by articulating what he views as the applicable legal tests under the Lanham Act
and Texas common law. Alt Platform, Inc. v. Beckett Collectibles, LLC, No. 3:22-CV-2867,
2025 WL 790252, at *3 (N.D. Tex. Mar. 11, 2025). Nor may he opine that the defendants
violated the law or offer legal conclusions as to any element of any claim. Id. To the extent
Cone’s opinions are framed in this manner at trial, they are inadmissible.
In sum, the Court needs more context to determine whether Cone’s opinions will
take the form of impermissible legal conclusions, if they are offered at all. The defendants
are effectively asking for a blanket ban on Cone’s testimony, yet his report offers potentially
permissible opinions that do not necessarily constitute improper statements of law. Thus,
the defendants’ concerns are “better addressed” through a “contemporaneous objection at
trial.” Am. Can!, 597 F. Supp. 3d at 1048 (quoting Novedea Sys., Inc., 2021 WL 6618488, at
*2). The Court therefore denies the motion to exclude Cone’s testimony.
4. 	Conclusion
For these reasons, the Court grants in part and denies in part the defendants’ motions
for summary judgment (Dkt. Nos. 47; 49). Michael lacks statutory standing under Section
1114 of the Lanham Act, meaning he cannot pursue a claim for infringement of the
Registered Marks. And because there is no dispute about who owns the Registered Marks,
the Court grants partial summary judgment on Michael’s claim for declaratory relief.
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But there are still genuine issues of material fact for the remaining claims, requiring
the denial of Michael’s request for preliminary injunctive relief. Nor have the defendants
conclusively established their statute of limitations defense at this stage. Lastly, because it is
premature, the Court denies the Hyland defendants’ motion to exclude the expert testimony
of John M. Cone (Dkt. No. 51).
Michael’s motion for leave to file a response to David and Gargoyle’s supplemental
brief in support of their summary-judgment motion (Dkt. No. 92) is denied.14
So ordered on January 20, 2026.
JAMES WESLEY HENDRIX
UNITED STATES DISTRICT JUDGE
14 After the Third Arbitration Award, the Court allowed the parties to supplement the summary-
judgment record and their briefing on the motions. See, e.g., Dkt. Nos. 84–91. Initially, the
defendants only moved to supplement the summary-judgment record with additional evidence. See
Dkt. Nos. 80; 81. Unlike Michael, they did not file supplemental briefs addressing the relevance of
the Third Arbitration Award. See Dkt. Nos. 84; 86. In order to obtain full briefing on the Award,
the Court gave the defendants another opportunity to file a supplemental brief in support of their
motions for summary judgment. Dkt. No. 88 at 2. Only David and Gargoyle took the Court up
on its offer. See Dkt. No. 91. Soon after those defendants filed their supplemental brief, Michael
filed the pending motion for leave to file another response in opposition. Dkt. No. 92. The Court
already accomplished its goal of securing both sides’ briefing on the Third Arbitration Award.
And “in motion practice for this district the movant is normally entitled to file the last pleading.”
Gen. Motors Corp. v. Am. Ecology Env’t Servs. Corp., No. 399-CV-2625, 2001 WL 1029519, at *1 n.2
(N.D. Tex. Aug. 30, 2001). The Court therefore denies Michael’s pending motion and declines to
docket his proposed response to David and Gargoyle’s supplemental brief. See Dkt. No. 92-1.
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