Thomas Abraham v. Alpha Chi Omega , 708 F.3d 614 ( 2013 )


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  •      Case: 12-10525   Document: 00512138845    Page: 1   Date Filed: 02/07/2013
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    February 7, 2013
    No. 12-10525                    Lyle W. Cayce
    Clerk
    THOMAS KENNETH ABRAHAM, doing business as Paddle Tramps
    Manufacturing Company,
    Plaintiff - Appellant Cross-Appellee
    v.
    ALPHA CHI OMEGA; ALPHA CHI OMEGA FRATERNITY
    INCORPORATED; ALPHA DELTA PI; ALPHA DELTA SORORITY
    CORPORATION; ALPHA GAMMA DELTA; ET AL,
    Defendants - Appellees Cross-Appellants
    Appeals from the United States District Court
    for the Northern District of Texas
    Before JONES, GARZA, and PRADO, Circuit Judges.
    EMILIO M. GARZA, Circuit Judge:
    The original opinion in this case was issued by the panel on December 6,
    2012. No member of the panel nor judge in regular active service of the court
    having requested that the court be polled on rehearing en banc (FED. R. APP. P.
    35 and 5TH CIR. R. 35), the petition for rehearing en banc is DENIED.
    Because this panel has revised Part IV.A of their prior opinion, the
    petition for panel rehearing is GRANTED in part. The following is substituted
    therefor. In all other respects, the petition for panel rehearing is DENIED:
    Case: 12-10525     Document: 00512138845        Page: 2   Date Filed: 02/07/2013
    No. 12-10525
    Thomas Kenneth Abraham (“Abraham”), doing business as Paddle Tramps
    Manufacturing Company (“Paddle Tramps”), appeals the district court’s order
    granting a partial preliminary injunction against his use of trademarks
    belonging   to   32   fraternity   and   sorority    organizations    (the   “Greek
    Organizations”). The Greek Organizations cross-appeal the limitation on the
    injunction. We AFFIRM.
    I
    Abraham founded Paddle Tramps in Lubbock, Texas in 1961 as a company
    that manufactured wooden paddles and decorations for fraternity and sorority
    members. Paddle Tramps has always sold products bearing the names of
    fraternities and sororities and has always used the names of fraternities and
    sororities to advertise its products.
    Abraham began selling the paddles by showing samples and taking orders
    at fraternity and sorority house visits. He created the ordered products by
    carving Greek letters and affixing them and other decorations onto wooden
    paddles. By the late 1960s, Abraham began wholesaling the component parts
    of paddles, such as wooden Greek and Roman letters and wood-carved crests, to
    college bookstores or craft stores for customers to buy and assemble. Also in the
    late 1960s, Abraham began distributing catalogues with fraternity and sorority
    names and crests to advertise his products.
    Abraham invested heavily in equipment, advertising, and employees. He
    had to completely rebuild his business three times—once after a fire in 1966,
    then after a tornado in 1970, and still again after another fire in Paddle
    Tramps’s manufacturing plant in 1980.
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    In 1997, Abraham established a website for Paddle Tramps. The website
    initially only advertised Paddle Tramps’s products, then in 2001 it began
    allowing customers to purchase items online. At all times the website displayed
    fraternity and sorority names, as well as Paddle Tramps’s products that
    reproduced fraternity and sorority crests. Abraham testified Paddle Tramps
    continued to sell almost exactly the same products it had been selling in the
    1960s after the creation of the website in 1997.
    In 1990, 29 years after Abraham founded Paddle Tramps, the Greek
    Organizations contacted him for the first time about licensing. The entity that
    contacted him was called Greek Properties, and the letter invited Abraham to
    join their group. Abraham did not respond. Greek Properties followed up with
    another letter in 1991. It attached an application for admission into Greek
    Properties, which required Abraham to sign a statement promising not use any
    Greek Properties’s member organizations’s marks or terminology without
    written consent. Again, Abraham did not respond. The following year, Greek
    Properties sent Abraham a brochure, but never again attempted to get him to
    join.
    In 1995, Dan Shaver (“Shaver”) sent a letter to Abraham on behalf of
    Sigma Chi threatening to sue Paddle Tramps for trademark infringement.
    Abraham’s son Kyle responded, saying Paddle Tramps was not interested in
    licensing Sigma Chi’s marks after continuously using Sigma Chi’s name and
    crest on its products for 34 years without complaint. Over the next 13 years,
    Shaver periodically sent additional letters to Abraham on behalf of an entity
    called Affinity Marketing Consultants.           Affinity Marketing Consultants
    represented about 70 fraternities and sororities. These letters sometimes invited
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    Paddle Tramps to join a fraternity or sorority’s licensing program, sometimes
    ordered Paddle Tramps to cease and desist, and sometimes threatened to sue.
    Abraham either ignored these letters or responded by stating he refused to enter
    into a licensing agreement.
    In December 2007, the 32 Greek Organizations in this litigation,
    represented by Affinity Marketing Consultants and Shaver, sued Abraham for
    patent infringement and unfair competition in the Southern District of Florida.
    The Florida district court dismissed the suit for improper venue. Abraham then
    sued the Greek Organizations in April 2008 in the instant litigation for a
    declaratory judgment that he was not infringing on their marks. The Greek
    Organization asserted counterclaims for trademark infringement and unfair
    competition under the Lanham Act, 
    15 U.S.C. § 1051
     et seq., and for unfair
    competition and trademark dilution under Texas state-law claims. They sought
    monetary and injunctive relief.
    Abraham moved for summary judgment on his affirmative defenses of
    laches and acquiescence, and the Greek Organizations moved for summary
    judgment on the liability portion of their substantive claims, injunctive relief,
    and an accounting. The district court granted the Greek Organizations’s motion
    in part, concluding Abraham infringed the Greek Organizations’s names,
    insignia, and symbols, creating a likelihood of confusion among the public in
    violation of the Lanham Act and Texas’s unfair competition law. Further, the
    district court concluded Abraham diluted the Greek Organizations’s marks in
    violation of Texas’s trademark dilution law. Abraham does not contest these
    determinations on appeal. The court denied Abraham’s motion for summary
    judgment on his affirmative defenses of laches and acquiescence, denied the
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    Greek Organizations’s counter-defense of unclean hands, and ordered a trial on
    those issues.
    At the end of the evidence presented at that trial, the district court denied
    the parties’s motions for judgment as a matter of law. The jury returned a
    special verdict finding: (1) Abraham proved his laches defense; (2) Abraham
    proved his acquiescence defense with respect to one of the Greek Organizations
    (Pi Kappa Alpha); and (3) the Greek Organizations did not prove their unclean
    hands counter-defense.
    Abraham moved for judgment on the verdict, and the Greek Organizations
    renewed their motion for judgment as a matter of law. In an unorthodox point
    of error, the Greek Organizations collapsed an improper jury instruction claim
    with a sufficiency of the evidence claim, arguing the jury was improperly
    instructed on unclean hands and laches and no properly instructed jury would
    have had a legally sufficient evidentiary basis to find Abraham established his
    laches defense or had clean hands. The Greek Organizations’s motion also
    asserted the issue of acquiescence should not have gone to the jury, and asked
    the court to enter a permanent injunction barring Abraham’s future use of their
    marks. The district court denied the Greek Organizations’s renewed motion,
    finding the jury was properly instructed, the issue of acquiescence was properly
    submitted to the jury, and there was sufficient evidence to support Abraham’s
    laches defense and the jury’s finding of clean hands.         The court granted
    Abraham’s motion for judgment on the verdict, finding his laches defense
    precluded the monetary relief sought by the Greek Organizations.
    The court further determined laches did not bar entry of a permanent
    injunction on Abraham’s future use of the Greek Organizations’s marks. The
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    court permanently enjoined Abraham from some future uses of the Greek
    Organizations’s marks, concluding the “degree of prejudice” such an injunction
    would impose on Abraham was not significant enough to bar injunctive relief.
    The injunction prevents Abraham from selling or using in his advertising three
    categories of the Greek Organizations’s marks: (1) the Greek letter combinations
    associated with the parties to this lawsuit; (2) the full names or nicknames
    associated with the parties to this lawsuit; and (3) any crest, coat of arms, seal,
    flag, badge, emblem, or slogan identifiable with any of the parties to this lawsuit,
    including copies of the Greek Organizations’s crests Abraham carved out of
    wood.
    The injunction allows Abraham to sell and include in his advertising
    decals of the Greek Organizations’s crests he purchased wholesale from licenced
    vendors, as well as what Abraham calls the “double raised crest backing.” This
    crest backing is carved in the shape of a given Greek Organization’s crest, upon
    which Paddle Tramps affixes a licenced decal.
    Abraham timely appealed the district court’s entry of a permanent
    injunction based on the jury finding that he established a laches affirmative
    defense, and because the laches here were particularly long, unreasonable, and
    inexcusable. The Greek Organizations timely cross-appealed the district court’s
    rejection of their motion for judgment as a matter of law, asserting the jury
    instructions were improper and the jury findings on laches and unclean hands
    are unsupported by the evidence. They also appeal the scope of the injunction,
    asserting Abraham should have been enjoined from continuing to sell the double
    raised crest backings in the shape of the Greek Organizations’s crests.
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    II
    We review jury instructions for abuse of discretion. Garriott v. NCsoft
    Corp., 
    661 F.3d 243
    , 247 (5th Cir. 2011). “A challenge to jury instructions must
    demonstrate that the charge as a whole creates substantial and ineradicable
    doubt whether the jury has been properly guided in its deliberations. . . . Even
    if the challenger proves the instructions misguided the jury, we reverse only if
    the erroneous instruction affected the outcome of the case.” Price v. Rosiek
    Const. Co., 
    509 F.3d 704
    , 708 (5th Cir. 2007).
    We review de novo the district court’s denial of a motion for judgment as
    a matter of law, applying the same standards as the district court. Ill. Cent. R.R.
    Co. v. Guy, 
    682 F.3d 381
    , 392–93 (5th Cir. 2012). Judgment as a matter of law
    is proper when “a reasonable jury would not have a legally sufficient evidentiary
    basis to find for the party on that issue.” FED. R. CIV. P. 50(a). “This will only
    occur if the facts and inferences point so strongly and overwhelmingly in the
    movant’s favor that jurors could not reasonably have reached a contrary verdict.”
    Brown v. Sudduth, 
    675 F.3d 472
    , 477 (5th Cir. 2012) (internal quotation marks
    omitted).   We “credit the non-moving [party’s] evidence and disregard all
    evidence favorable to [the moving party] that the jury is not required to believe.
    After a jury trial, [the] standard of review is especially deferential.” 
    Id.
     (internal
    quotation marks and citations omitted).
    Lastly, we review the district court’s grant of injunctive relief for an abuse
    of discretion. Am. Rice, Inc. v. Producers Rice Mill, Inc., 
    518 F.3d 321
    , 334 (5th
    Cir. 2008). “An abuse of discretion automatically inheres in an injunctive decree
    if the trial court misinterpreted applicable law. . . . As with injunctive relief
    generally, an equitable remedy for trademark infringement should be no broader
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    than necessary to prevent the deception.” Westchester Media et al. v. PRL USA
    Holdings, et al., 
    214 F.3d 658
    , 671 (2000) (citations omitted).
    III
    The Greek Organizations appeal the entirety of the jury’s verdict. First,
    they assert the district court improperly instructed the jury on laches and
    unclean hands. Second, they assert the jury’s findings on laches and unclean
    hands are unsupported by sufficient evidence.
    A
    A laches defense cannot be asserted by a party with unclean hands
    because it is equitable. See Bd. of Supervisors for La. State Univ. Agric. & Mech.
    Coll. v. Smack Apparel Co., 
    550 F.3d 465
    , 490 (5th Cir. 2008). “A defendant who
    intentionally infringes a trademark with the bad faith intent to capitalize on the
    markholder’s good will lacks the clean hands necessary to assert the equitable
    defense.” 
    Id.
    The district court instructed the jury on laches as follows:
    To prevail on their claim that Mr. Abraham may not
    assert the laches or acquiescence defenses because he
    has unclean hands, the Greek Organizations must
    prove by a preponderance of the evidence that Mr.
    Abraham knowingly intended to use the Greek
    Organizations’ marks for the purpose of deriving benefit
    from the Greek Organizations’ goodwill.
    Unclean hands may be found only where the unlicensed
    user “subjectively and knowingly” intended to cause
    mistake or to confuse or deceive buyers. Mere
    awareness of a trademark owner’s claim to the same
    mark does not amount to having unclean hands nor
    establishes bad intent necessary to preclude laches and
    acquiescence defenses. The owner of the mark must
    demonstrate that at the time the unlicensed user began
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    using the marks or sometime thereafter, said
    unlicensed user knowingly and intentionally did so with
    the bad faith intent to benefit from or capitalize on the
    mark owner’s goodwill.
    In this instruction, the district court used language from Conan Properties, Inc.
    v. Conans Pizza, Inc., 
    752 F.2d 145
    , 150 (5th Cir. 1985). In Conan Properties, we
    held:
    [T]he critical issue is whether [the infringer] was an
    intentional infringer and therefore lacked the clean
    hands necessary to assert the equitable defenses of
    laches and acquiescence. . . . Passing off [products as
    endorsed by the trademark owner] may be found only
    where the defendant “subjectively and knowingly”
    intended to confuse buyers. This court has recognized
    that a defendant’s mere awareness of a plaintiff’s claim
    to the same mark neither amounts to passing off nor
    establishes the bad intent necessary to preclude the
    availability of the laches defense. The plaintiff’s
    burden, therefore, is heavy. To foreclose the laches and
    acquiescence defenses, the plaintiff must offer
    something more than mere objective evidence to
    demonstrate that the defendant employed the allegedly
    infringing mark with the wrongful intent of capitalizing
    on its goodwill.
    
    Id.
     (quoting 2 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 25:1, §31:2
    (1st ed. 1973)) (internal citations omitted).
    The Greek Organizations assert the jury instruction was erroneous for two
    reasons. First, they assert error in the explanation of “confusion” or “deception.”
    Quoting Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem
    Manufacturing, Inc., 
    510 F.2d 1004
    , 1012 (5th Cir. 1975) (“Professional Hockey”),
    the Greek Organizations assert the “confusion or deceit requirement is met by
    the fact that the defendant duplicated the protected trademarks and sold them
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    to the public knowing that the public would identify them as being the
    [trademark holder’s] trademarks.” 
    Id.
     Professional Hockey, however, is not an
    unclean hands case. This quotation appears in Professional Hockey’s discussion
    of the fifth element in a trademark infringement claim under 
    15 U.S.C. § 1114
    ,
    which requires the infringing use to likely cause confusion, to cause mistake, or
    to deceive. 
    Id.
     If the confusion or deception required to make out a case of
    trademark infringement were the same as the confusion or deception required
    to make out an unclean hands counter-defense, then every trademark infringer
    would necessarily have unclean hands. That is not so.
    Second, the Greek Organizations assert the district court’s instruction
    misguides the jury by stating “mere awareness” of a trademark owner’s claim to
    the mark is not enough to establish unclean hands. The correct instruction,
    according to the Greek Organizations, comes from the second footnote in Conan
    Properties, 
    752 F.2d at
    151 n.2: the pertinent confusion is to be inferred or
    presumed if Abraham “intended to derive benefit from or capitalize” on the
    marks. Again, the Greek Organizations confuse the elements of a trademark
    infringement claim with the showing necessary to prove unclean hands. The
    footnote in Conan Properties states “knowledge” of a trademark owner’s claim
    to the mark “may give rise to a presumption that the defendant intended to
    cause public confusion as to the source or sponsorship of the product or service.”
    
    Id.
     at 151 n.2. The very next sentence makes clear that such a presumption does
    not arise in the unclean hands analysis: “The same showing, however, does not
    give rise to a presumption that the defendant intended to appropriate the
    plaintiff’s goodwill from its use of the allegedly infringing mark.” Id.; see Smack
    Apparel, 
    550 F.3d at 490
    . The district court did not abuse its discretion in
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    instructing the jury that to prove unclean hands, the Greek Organizations had
    to show Abraham knowingly and intentionally infringed upon the marks with
    the bad faith intent to benefit from or capitalize on the Greek Organizations’s
    goodwill by confusing or deceiving buyers.
    The Greek Organizations next assert the jury’s rejection of their unclean
    hands counter-defense is unsupported by the evidence because Abraham stated
    at trial that his infringing products “drive the sales” of Paddle Tramps’s other
    products. According to the Greek Organizations, this admission by Abraham
    demonstrates he intentionally capitalized on the Greek Organizations’s goodwill.
    In Smack Apparel, we affirmed the trial court’s finding of unclean hands where
    the infringing apparel manufacturer “admitted that it intentionally incorporated
    the [trademark owner] Universities’ color schemes and other indicia in order to
    specifically call the Universities to the public’s mind, thus deriving a benefit
    from the Universities’ reputation.” Smack Apparel, 
    550 F.3d at 490
    .
    This case is distinguishable from Smack Apparel. Abraham introduced
    evidence tending to show a lack of bad faith: Paddle Tramps helped to create the
    market for fraternity and sorority paddles decades before the Greek
    Organizations had a licencing program, Abraham’s intent was to service
    fraternities and sororities, not to capitalize on their goodwill in bad faith, the
    products are virtually the same today as they were in the 1960s, and Paddle
    Tramps never passed itself off as being sponsored or endorsed by the Greek
    Organizations.    Given our “especially deferential” standard of review for
    evidence after a jury trial, Brown, 
    675 F.3d at 477
    , we hold this evidence is
    legally sufficient to allow a jury to find for Abraham on the unclean hands issue
    because it supports a showing of Abraham’s lack of bad faith.
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    B
    “Laches is an inexcusable delay that results in prejudice to the defendant.”
    Smack Apparel, 
    550 F.3d at 489
    . Laches has three elements: “(1) delay in
    asserting one’s trademark rights, (2) lack of excuse for the delay, and (3) undue
    prejudice to the alleged infringer caused by the delay.” 
    Id. at 490
    . The Greek
    Organizations assert the jury was improperly instructed on the “lack of excuse”
    and “undue prejudice” elements, and there was insufficient evidence to support
    the jury’s special verdict finding each of the elements satisfied.
    The Greek Organizations first assert the jury instruction on the lack of
    excuse element was deficient because it did not explain that a trademark owner
    is excused from delay in taking action against de minimis infringements. The
    Greek Organizations rely on Conan Properties, a number of cases from our sister
    circuits, and a leading trademark and unfair competition treatise. They rely on
    a footnote in Conan Properties which states, “Since incidental and isolated
    infringement may be difficult to detect and cost ineffective to halt, a plaintiff
    may make a conscious business decision to prosecute only those defendants who
    pose a threat to its mark.” Conan Properties, 
    752 F.2d at
    153 n.4. This sentence,
    however, is in Conan Properties’s discussion of whether the laches barred a
    permanent injunction, not in a discussion of whether laches applies. Conan
    Properties held laches do not necessarily bar permanent injunctive relief, 
    id. at 153
    , and this footnote provides additional justification for that rule: it might not
    make economic sense for a trademark owner to go after de minimis infringers,
    but if a de minimis infringer begins to diminish the value of the mark more in
    the future, the trademark holder should be entitled to a permanent injunction
    notwithstanding the applicability of laches.       
    Id.
     at 153 n.4.     The Conan
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    Properties discussion of de minimis infringement does not speak to whether
    laches applies.
    The Greek Organizations cite other sources that provide support for the
    doctrine of progressive encroachment, “which allows a trademark owner to
    ‘tolerate de minimis or low-level infringements’ and still have the right to ‘act
    promptly when a junior user either gradually edges into causing serious harm
    or suddenly expands or changes its mark.’” AM Gen. Corp. v. DaimlerChrysler
    Corp., 
    311 F.3d 796
    , 823 (7th Cir. 2002) (quoting 6 MCCARTHY ON TRADEMARKS
    AND   UNFAIR COMPETITION § 31:21 (4th ed. 2001)).          The district court did,
    however, instruct the jury on the doctrine of progressive encroachment over
    Abraham’s objection. The district court instructed the jury:
    Under the doctrine of progressive encroachment, the
    trademark owner’s delay is excused where the
    unlicensed user begins to use the trademark in the
    market, and later modifies or intensifies its use of the
    trademark to the effect that the unlicensed user
    significantly impacts the trademark owner’s good will
    and business reputation, so that the unlicensed user is
    placed more squarely in competition with the
    trademark owner. The mark owner need not sue until
    the harm from the unlicensed user’s use of the mark
    looms large. It is therefore the significant increase in
    the scope of the unlicensed user’s business, not reliance
    on the same general business model, that supports the
    doctrine of progressive encroachment.
    (emphasis added). In light of this instruction—which the Greek Organizations
    do not appeal—and the Greek Organizations’s misplaced reliance on Conan
    Properties, we hold the district court did not abuse its discretion in its
    instruction to the jury on the lack-of-excuse element of laches.
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    The Greek Organizations assert the evidence was insufficient to support
    the jury’s finding that they lacked an excuse for their delay in bringing suit
    because at all times Abraham’s infringement was de minimis. Just under 2.5%
    of Paddle Tramps’s revenue derives from the sale of infringing products, and the
    average royalty owed by Paddle Tramps to each of the Greek Organizations for
    the past few years of infringing conduct was only $140.78 annually. There is,
    however, evidence in the record to support the jury’s finding. The creation of
    Paddle Tramps’s website in 1997 and the sale of infringing products directly
    from that website in 2001 could be considered “an increase in the scope of the
    unlicensed user’s business,” which the district court correctly instructed could
    support a finding of progressive encroachment. The jury could have determined
    that the intervening six years between 2001 and 2007, when the Greek
    Organizations brought suit, is itself an unexcused delay sufficient to satisfy the
    lack-of-excuse element of laches. See Conan Properties, 
    752 F.2d at 149
     (finding
    by jury that five-and-a-half-year unexcused delay supported finding of laches).
    The jury, therefore, had a legally sufficient evidentiary basis for concluding that
    the lack-of-excuse element was satisfied.
    The Greek Organizations next assert the district court’s jury instruction
    on the undue influence element of laches confused the test for acquiescence with
    the test for laches. The district court, however, correctly instructed the jury that
    the elements of laches are (1) delay, (2) lack of excuse, and (3) undue prejudice
    and the elements of acquiescence are (1) assurances, (2) reliance, and (3) undue
    prejudice.   Though the instructions on undue prejudice for each equitable
    defense are similar, they are not identical. On the undue prejudice element of
    laches, the district court instructed the jury:
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    An unlicensed user is unduly prejudiced when, in
    reliance on the trademark owner’s unexcused delay in
    filing suit, he or she makes major business investments
    or expansions that depend on the use of the marks;
    these investments and expansions would suffer
    appreciable loss if the marks were enforced; and this
    loss would not have been incurred had the trademark
    owner enforced his rights earlier. The amount of
    prejudice suffered by the unlicensed user in a given
    case may vary with the length of the delay; that is, the
    longer the period of delay, the more likely it is that
    undue prejudice has occurred. The period of delay
    begins when the trademark owner knew or should have
    known of the unlicensed user’s use of the marks and
    ends when the trademark owner files suit against the
    unlicensed user. Therefore, to determine whether Mr.
    Abraham has been unduly prejudiced by the Greek
    Organizations’ delay, you must consider what business
    investments and expansions Mr. Abraham made
    between the time the Greek Organizations knew or
    should have known of his use of their marks and the
    time they filed suit against him.
    The Greek Organizations contend the instructions should have asked
    whether an injunction would “destroy[] the investment in the capital,” quoting
    Elvis Presley Enter., Inc. v. Capece, 
    141 F.3d 188
    , 206 (5th Cir. 1998)). In Elvis
    Presley, we held no undue prejudice was shown where changing the name of the
    infringer defendant’s nightclub would not have destroyed the investment of
    capital in that nightclub. Elvis Presley, 
    141 F.3d at 206
    . Even the Greek
    Organizations, however, do not assert that destruction of the investment of
    capital is the definitive test. Rather, they assert the question should be whether
    the infringer would suffer losses that would have been avoided had the
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    trademark owner not delayed. This test is in line with the discussion of undue
    prejudice in a leading treatise:
    [P]rejudice encompasses actions by the defendant that
    it would not have taken or consequences it would not
    have suffered had the plaintiff brought suit
    promptly. . . . Laches is a good defense if plaintiff’s long
    failure to exercise its legal rights has caused defendant
    to rely to its detriment by building up a valuable
    business around its trademark.
    6 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 31:12 (4th ed. 2001).
    The district court did not abuse its discretion in its jury instruction on undue
    prejudice as its instruction tracks this test.
    The Greek Organizations also contend the jury’s finding of undue prejudice
    is not supported by the evidence.        This is a close question.         The Greek
    Organizations compare this case to a case from a sister circuit, University of
    Pittsburgh v. Champion Products, Inc., 
    686 F.2d 1040
     (3d Cir. 1982). The
    University of Pittsburgh sued Champion for manufacturing shirts and other
    apparel on which Champion printed the university’s logo and other marks. 
    Id. at 1043
    . The Third Circuit held Champion did not suffer undue prejudice due
    to the university’s delay in bringing suit:
    Pitt is only one of approximately 10,000 schools and
    colleges whose names or designs [Champion] imprint[s]
    on soft goods. . . . Champion built its physical plant, art
    department and sales force in order to design, produce
    and market soft goods with marks and designs of every
    kind. . . . The only tangible investments in Pitt’s
    designs, per se, are the screen stencils used for
    imprinting the designs—which are produced in
    quantity, used for no more than a few dozen shirts, and
    then destroyed.
    16
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    No. 12-10525
    
    Id. at 1048
    . The Greek Organizations assert that like in Champion Products,
    the infringing items sold by Paddle Tramps make up a small percentage of
    Paddle Tramps’s overall sales, and the investments in equipment made by
    Paddle Tramps can be used—and indeed are mostly used—for producing non-
    infringing products. Thus, they assert Paddle Tramps would suffer no undue
    prejudice if it were enjoined from selling infringing products.
    Though this case is similar to Champion Products, Paddle Tramps
    ultimately marshaled legally sufficient evidence at trial to support the jury’s
    finding of undue prejudice. Abraham testified he rebuilt the business three
    times—twice after fires and once after a tornado—and he would not have done
    so had he known the Greek Organizations would later sue him to enforce their
    trademarks. The rebuilding required investments of millions of dollars into
    equipment, advertising, and employee salaries. In addition, Abraham testified
    the infringing products, while perhaps a small percentage of his total sales, drive
    the sale of his non-infringing products because without them customers might
    choose to purchase the component parts to their paddles somewhere else. This
    is sufficient for a jury to find the sale of the infringing products would have a
    greater effect on total sales than in Champion Products. Therefore, the test for
    undue prejudice is met: had the Greek Organizations brought suit earlier,
    Abraham may not have rebuilt his business after the fires or tornado and may
    not have invested millions of dollars into the business. Furthermore, Abraham
    relies on the small percentage of sales of infringing products to drive his other
    sales. Therefore, the district court correctly denied the Greek Organizations’s
    motion for judgment as a matter of law.
    17
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    No. 12-10525
    IV
    Abraham challenges the injunction entered by the district court. He
    asserts injunctive relief is unavailable where a trademark owner’s laches was
    long, unreasonable, and inexcusable. He asserts he should be permitted to
    continue selling his infringing products and using the Greek Organizations’s
    names, insignia, and symbols in advertisements. The Greek Organizations also
    challenge the injunction entered by the district court, asserting it was not
    sufficiently comprehensive by permitting the sale of Abraham’s double raised
    crest backings.
    A
    “A finding of laches alone ordinarily will not bar . . . injunctive relief,
    although it typically will foreclose a demand for an accounting or damages.”
    Conan Properties, 
    752 F.2d at 152
    .          This is because “courts construe [a
    trademark owner’s] unreasonable delay to imply consent to the [infringer’s]
    conduct, which amounts to nothing more than a revocable license; the license is
    revoked once the plaintiff objects to the [infringer’s] infringement.” 
    Id.
     (citing
    Menendez v. Holt, 
    128 U.S. 514
     (1888)). We have stated, “There is no doubt that
    laches may defeat claims for injunctive relief as well as claims for an
    accounting.” Armco, Inc. v. Armco Burglar Alarm Co., Inc., 
    693 F.2d 1155
    , 1161
    n.14 (5th Cir. 1982).
    In Conan Properties, we reversed an injunction barring infringing
    restaurant owners from continuing to use the name “Conans” for their
    restaurants in the Austin, Texas area. Conan Properties, 
    752 F.2d at 152
    . We
    stated, “The jury’s affirmative finding of acquiescence establishes the reliance
    necessary to preclude the issuance of an injunction.” 
    Id.
            We upheld the
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    injunction barring the use of the infringing mark outside the Austin geographic
    area:
    An injunction against future infringement in a
    particular locale when laches and acquiescence have
    been found, as in this case, is properly denied if the
    plaintiff’s delay or other conduct either induced reliance
    on the defendant’s part or will result in substantial
    prejudice to the defendant if the plaintiff is permitted
    to enforce its rights in the trademark. Whether
    phrased as ‘reliance’ or ‘prejudice’, the effect is the
    same—the defendant has done something it otherwise
    would not have done absent the plaintiff’s conduct.
    The result is different, however, when the asserted
    future infringement would occur in a geographical area
    other than the one in which the plaintiff waived its
    right to protect its mark. In the new geographical area
    where the defendant has not yet expanded its business,
    the defendant is hard pressed to demonstrate how it
    could have relied to its detriment upon the plaintiff’s
    inactivity or other conduct.         Stated simply, the
    defendant at best can show only that the plaintiff
    acquiesced or unreasonably delayed in protecting its
    mark in the local area. . . . In this case we conclude
    that Conans has made sufficient showings of reliance
    and prejudice in the Austin area to justify denying an
    injunction, but has failed to offer any evidence, let alone
    carry its burden of demonstrating that it would be
    prejudiced if barred from infringing on [the plaintiff’s]
    mark in any area other than Austin.
    
    Id. at 153
    . Therefore, a finding of laches or acquiescence may bar injunctive
    relief if the trademark owner conducted itself in a way that induced the
    19
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    infringer’s reliance or if an injunction would result in “substantial prejudice” to
    the infringer. Id.1
    The district court found that “courts consistently focus on the degree of
    prejudice the defendant would suffer in the event the infringing use is enjoined,”
    citing Conan Properties, 
    752 F.2d at 153
    .                 Champion Products held the
    injunction “must depend upon the degree to which Pitt’s delay may have
    prejudiced Champion.” Champion Products, 
    686 F.2d at 1046
    . The district
    court’s “degree of prejudice to the infringer” test is very close to both this
    Champion Products test and Conan Properties’s “substantial prejudice” test.
    Abraham objects to the district court’s “degree of prejudice” test because
    he claims it puts the burden on him to show why an injunction should not issue
    on particular infringing conduct. It is well-established that the party seeking a
    permanent injunction must demonstrate:
    (1) that it has suffered an irreparable injury; (2) that
    remedies available at law, such as monetary damages,
    are inadequate to compensate for that injury; (3) that,
    considering the balance of hardships between the
    plaintiff and defendant, a remedy in equity is
    warranted; and (4) that the public interest would not be
    disserved by a permanent injunction. The decision to
    grant or deny permanent injunctive relief is an act of
    equitable discretion by the district court, reviewable on
    appeal for abuse of discretion.
    eBay Inc. v. MercExchange, LLC, 
    547 U.S. 388
    , 391 (2006) (citations omitted).
    The district court’s test did not erroneously place the burden on Abraham;
    rather, it correctly considered the relevant factors. As to the first factor, a
    1
    We recognize Conan Properties addressed prejudice in geographic areas rather than
    prejudice resulting from different types of infringing products, but Conan Properties still holds
    the propriety of an injunction turns on prejudice to the infringer. 
    Id.
    20
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    leading treatise states, “All that must be proven to establish liability and the
    need for an injunction against infringement is the likelihood of confusion—injury
    is presumed.” 5 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 30:2
    (4th ed. 2001). As to the second, the same treatise states, “[T]here seems little
    doubt that money damages are ‘inadequate’ to compensate [owner] for
    continuing acts of [infringer].” Id. The district court properly considered the
    final two factors, explaining that:
    In order to determine whether the injunction should
    issue, the Court balances the equities, weighing the
    degree of prejudice Abraham would suffer if either use
    was permanently enjoined against the Greeks’ right to
    exclusive use of the marks and the public interest in
    avoiding consumer confusion caused by their continued
    use.
    Therefore, the district court did not abuse its discretion by relying on Conan
    Properties to use the “degree of prejudice” test in fashioning injunctive relief.2
    B
    The district court applied its degree of prejudice test to Abraham’s use of
    the Greek Organizations’s names and insignia in its advertising and to
    Abraham’s sale of wood-carved replicas of the Greek Organizations’s names,
    crests and identifiable objects, as well as the sale of the double raised crest
    backings. The court reasoned Abraham could easily continue to advertise all of
    his products without using the Greek Organizations’s names and insignia. He
    could, for example, use the names and insignia of fraternities and sororities that
    2
    Although Conan Properties and Champion Products used somewhat different
    language, the “degree of prejudice” test comes within the sound discretion of the district court,
    which we do not disturb. Conan Properties, 
    752 F.2d at 153
    ; Champion Products, 
    686 F.2d at 1046
    .
    21
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    do not have licensing programs. He could use fictional names. In addition, the
    court rejected Abraham’s request to avoid a ban by including disclaimers. The
    district court further enjoined Abraham’s sale of objects containing the Greek
    Organizations’s full names, those objects copied from the Greek Organizations’s
    crest or insignia, and wood reproductions of their crests. The only product the
    district court did not enjoin Abraham from selling was the double raised crest
    backings. With respect to that particular product, the district court determined
    the potential prejudice to Abraham is comparable with the prejudice to the
    defendants in Conan Properties, who had invested considerably in their business
    due to the trademark owner’s delay.
    The district court did not abuse its discretion in crafting an injunction to
    balance the equities. See Taco Cabana Int’l v. Two Pesos, Inc., 
    932 F.2d 1113
    ,
    1127 (5th Cir. 1991) (holding district court has “considerable discretion in
    fashioning an appropriate remedy for infringement”). The injunction prevents
    Abraham from selling products that make up less than 2.44% of his total sales.
    This will not put Abraham out of business. The infringing item Abraham can
    continue to sell, the double raised crest backing, is the product Abraham
    contended drove his sales of other non-infringing products—the only item that
    if enjoined from selling, would cause Abraham substantial prejudice.
    Moreover, the district court did not abuse its discretion by not ordering
    disclaimers in lieu of a ban. Abraham relies on Westchester Media v. PRL USA
    Holdings, Inc., 
    214 F.3d 658
     (5th Cir. 2000) to assert requiring disclaimers is
    preferable.   Unlike in Westchester Media, the district court here did not
    “misinterpret applicable law,” so an abuse of discretion does not “automatically
    inhere[.]” Westchester Media, 
    214 F.3d at 671
    . In that case, we determined the
    22
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    magistrate judge “unduly discounted the First Amendment interests impaired
    by the injunction[.]” 
    Id.
     Therefore, an abuse of discretion automatically inhered,
    and we reviewed the injunction with that in mind. Here, however, the district
    court did not misapply the law, so our review is limited to an abuse of discretion
    standard.
    In Westchester Media, we determined the First Amendment interests of
    the trademark infringer counseled against an outright ban. 
    Id.
     (“Where the
    allegedly infringing speech is at least partly literary or artistic . . . and not solely
    a commercial appropriation of another’s mark, the preferred course is to
    accommodate trademark remedies with First Amendment interests.”). That is
    clearly not our case here, as Abraham does not suggest his use of the Greek
    Organizations’s marks is “expressive to an appreciable degree[.]” 
    Id.
     See also
    Better Bus. Bureau of Metro. Houston v. Med. Dirs., Inc., et al., 
    681 F.2d 397
    , 404
    (1982) (finding First Amendment commercial speech interests favor requiring
    disclaimers over outright ban).          Abraham asserts factors besides First
    Amendment interests do counsel in favor of disclaimer and are present here,
    such as laches and acquicense. The district court determined a proper balance
    of the equities favors a ban despite the presence of these factors. Whether we
    would have made the exact same conclusion in the first instance is irrelevant
    because the district court applied the law correctly. The determination is
    reasonable, and we hold the district court did not abuse its discretion in
    fashioning this remedy.
    The Greek Organizations assert they deserve a comprehensive injunction
    that covers the double raised crest backing. As we have discussed, however, the
    23
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    district court properly balanced the equities in resolving this dispute and did not
    abuse its discretion in fashioning injunctive relief.
    V
    For these reasons, we AFFIRM.
    24