Astoria Industries of Iowa, Inc. v. Brand FX Body Company ( 2010 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-08-144-CV
ASTORIA INDUSTRIES OF IOWA, INC. APPELLANT
V.
BRAND FX BODY COMPANY APPELLEE
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FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION 1
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In six issues, appellant Astoria Industries of Iowa, Inc. (Astoria) complains
of the trial court’s judgment awarding appellee Brand FX Body Company (Brand
FX) damages in the amount of $705,000 for trade dress infringement and
common law misappropriation, $682,200 for false advertising, and $400,000
in attorney’s fees on appellee’s trade dress infringement and false advertising
1
 See Tex. R. App. P. 47.4.
claims, in addition to $150,000 for attorney’s fees on appeal. We affirm the
judgment as modified.
I. BACKGROUND AND JURISDICTIONAL FACTS
Astoria and Brand FX are business competitors. They manufacture and
sell fiberglass utility bodies and work toppers 2 for commercial vehicles. Brand
FX’s work topper uses a stair-step roof line that it claims is unique and
brand-distinguishing. Initially, Astoria’s topper had a rounded or domed roof
line. In late 2002, however, Astoria developed a topper with a stair-step roof
design virtually identical to Brand FX’s topper.
Astoria engineer Randy Thole acknowledged that Astoria developed its
stair-step topper to be as similar to Brand FX’s design as possible. Astoria
obtained from one of its customers, Cook’s Pest Control (Cook’s), the
engineering drawings of Brand FX’s predecessor, Fibre Body, and used a Fibre
Body topper from Cook’s as a “plug” 3 to make a mold to manufacture its look-
2
 “Utility bodies” are covered cabinets that mount on the back portion
of a commercial truck frame, and “work toppers” are covered cabinets placed
on top of a pickup truck bed. Brand FX’s utility bodies are the subject of its
false advertising claim, and the stair-step roof design of its work topper is the
subject of its trade dress infringement claim. Trade dress refers to the design
or packaging of a product that serves to identify the product’s manufacturer or
source. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28, 121 S.
Ct. 1255, 1259 (2001).
3
 A plug is typically a wooden part that is supposed to look identical to
the finished product and used to build a mold. The mold is then used to
2
alike topper. Astoria then sold its stair-step toppers to Cook’s for
approximately one-half of the price charged by Brand FX.
Thereafter, in February 2003, Astoria began running a “DARE TO
COMPARE” advertisement for its utility bodies in an industry trade journal. The
advertisement ran ten times over the course of fourteen months. The
advertisement begins by stating, “When choosing fiberglass utility bodies,
Astoria Industries of Iowa should be your supplier!” The advertisement
compares “High Quality Astoria Bodies vs. Low Quality Brand X Bodies.”
Regarding the latter, the advertisement states: (1) “[B]uilt with sub-standard
materials”; (2) “Short term cost with long term expenses”; (3) “Built to their
standard”; and (4) “1-year warranty.”
In late May 2003, Brand FX notified Astoria of Brand FX’s belief that the
“DARE TO COMPARE” advertisement was false and disparaging and asked
Astoria to stop running it. Brand FX contended that Astoria’s reference to
“Brand X Bodies” was a poorly-disguised reference to Brand FX and that the
advertisement’s first three statements about Brand FX are demonstrably false.
Astoria continued to run the advertisement for another eleven months.
produce the finished product to the dimensions of the plug.
3
As a result of Astoria’s conduct, Brand FX sued Astoria under the Lanham
Act 4 for infringement of its trade dress topper design and false advertising of
utility bodies. Brand FX also brought claims of business disparagement,
defamation per se, common law and trade secret misappropriation, and tortious
interference with prospective relations. Astoria obtained summary judgment
dismissing Brand FX’s business disparagement claim, 5 and the remaining claims
were presented to the jury.
4
 15 U.S.C.A. § 1125(a) (West 2009). The Lanham Act provides civil
remedies for trade dress infringement and false advertising of trademarks or
trade dress. See id. Section 1125(a) specifically provides:
Any person who . . .
(A) is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association of
such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or
commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his
or her or another person’s goods, services, or commercial
activities, shall be liable in a civil action by any person who
believes that he or she is or is likely to be damaged by such
act.
Id.
5
 Astoria Indus. of Iowa, Inc. v. SNF, Inc., 223 S.W.3d 616, 639 (Tex.
App.—Fort Worth 2007, pet. denied) (op. on reh’g) (reversing, on interlocutory
appeal, trial court’s order denying Astoria’s requested summary judgment and
rendering take nothing judgment on Brand FX’s business disparagement claim).
4
The jury found Astoria liable for trade dress infringement and common
law misappropriation and determined that Astoria gained $705,000 in profits
on sales of its toppers as a result. The jury also found that Astoria committed
false advertising of its utility bodies and that Brand FX’s corrective advertising
damages totaled $52,200, but they determined that the false advertising
resulted in no profits for Astoria. Brand FX moved for judgment
notwithstanding the verdict (JNOV) on the jury’s finding that Astoria gained no
profits from its false advertising and asked for an award of $4,200,000 in
profits on the false advertising claim. The trial court granted Brand FX’s motion
in part, awarding it $630,000 in Astoria’s profits for false advertising, in
addition to the award on the jury verdict of $705,000 in profits on the trade
dress infringement claim. The judgment also awarded Brand FX $400,000 in
attorney’s fees on the trade dress and false advertising claims and $150,000
in additional attorney’s fees on appeal. This appeal followed.
II. ISSUES
In its first two issues, Astoria contends that the evidence is not legally
and factually sufficient to support two necessary elements of Brand FX’s trade
dress claim: that the stair-step topper design at issue is not functional and that
5
the design has acquired a secondary meaning. 6 Third, Astoria contends that
Brand FX’s state law design misappropriation claim is preempted by federal
patent law. Fourth, Astoria challenges the legal and factual sufficiency of
evidence supporting the award of its profits on Brand FX’s false advertising
claim. Fifth, Astoria contends that the trial court erroneously admitted hearsay
testimony without qualification and that this testimony is the only evidence
supporting the award of corrective advertising costs on the false advertising
claim. Sixth, Astoria complains that the award of attorney’s fees is not
authorized and, alternatively, that the appellate attorney’s fee award is not
properly conditioned on a successful appeal.
6
 See 15 U.S.C.A. § 1125(a)(3) (“In a civil action for trade dress
infringement under this chapter for trade dress not registered on the principal
register, the person who asserts trade dress protection has the burden of
proving that the matter sought to be protected is not functional.”); Wal-Mart
Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210–11, 215, 120 S. Ct.
1342–43, 1346 (2000) (holding trade dress is included under Lanham Act’s
trademark protections if it is inherently distinctive or distinctiveness is acquired
by developing secondary meaning, which denotes that, “in the minds of the
public, the primary significance of a [mark] is to identify the source of the
product rather than the product itself”).
6
III. SUFFICIENCY OF THE EVIDENCE SUPPORTING BRAND FX’S
TRADE DRESS INFRINGEMENT CLAIM
A. Standard of Review
We may sustain a legal sufficiency challenge only when (1) the record
discloses a complete absence of evidence of a vital fact, (2) the court is barred
by rules of law or of evidence from giving weight to the only evidence offered
to prove a vital fact, (3) the evidence offered to prove a vital fact is no more
than a mere scintilla, or (4) the evidence establishes conclusively the opposite
of a vital fact. 7 In determining whether there is legally sufficient evidence to
support the finding under review, we must consider evidence favorable to the
finding if a reasonable factfinder could and disregard evidence contrary to the
finding unless a reasonable factfinder could not. 8
Anything more than a scintilla of evidence is legally sufficient to support
the finding. 9 When the evidence offered to prove a vital fact is so weak as to
do no more than create a mere surmise or suspicion of its existence, the
7
 Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex.
1998) (op. on reh’g), cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert,
"No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361,
362–63 (1960).
8
 Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex.
2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005).
9
 Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex.
1996); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996).
7
evidence is no more than a scintilla and, in legal effect, is no evidence. 10 More
than a scintilla of evidence exists if the evidence furnishes some reasonable
basis for differing conclusions by reasonable minds about the existence of a
vital fact.11
When reviewing an assertion that the evidence is factually insufficient to
support a finding, we set aside the finding only if, after considering and
weighing all of the evidence in the record pertinent to that finding, we
determine that the evidence supporting the finding is so weak, or so contrary
to the overwhelming weight of all the evidence, that the answer should be set
aside and a new trial ordered. 12
B. Trade Dress Infringement—Functionality
To prevail on a claim of trade dress infringement under the Lanham Act,
a plaintiff must prove three elements: (1) the packaging or design is not
primarily functional, (2) it has acquired a “secondary meaning” by which the
public identifies it with the source of the product rather than merely the product
10
 Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983).
11
 Rocor Int’l, Inc. v. Nat’l Union Fire Ins. Co., 77 S.W.3d 253, 262
(Tex. 2002).
12
 Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on
reh’g); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); In re King’s Estate,
150 Tex. 662, 244 S.W.2d 660, 661 (1951).
8
itself, and (3) the alleged infringement creates a likelihood of confusion. 13 The
burden of proof is on the person who asserts trade dress protection. 14 All three
elements are questions of fact for the jury. 15
Generally, a product is functional if it (1) is essential to the use or purpose
of the article, or (2) affects the cost or quality of the article. 16 If the asserted
trade dress is not functional under this initial test, courts may also consider the
“competitive necessity” test of whether the exclusive use of the feature or
design “would put competitors at a significant non-reputation-related
disadvantage.” 17
13
 See 15 U.S.C.A. § 1125(a); TrafFix, 532 U.S. at 28, 121 S. Ct. at
1257; Samara Bros., 529 U.S. at 210–11, 215, 120 S. Ct. at 1342–43, 1346.
14
 See 15 U.S.C.A. § 1125(a)(3) (providing that burden is on person
asserting protection to prove trade dress is not functional when trade dress is
unregistered); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 766 n.4,
112 S. Ct. 2753, 2756 n.4 (1992) (holding burden is on manufacturer to
establish secondary meaning when trade dress is not inherently distinctive).
15
 See Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 537 (5th Cir.
1998), abrogation on other grounds recognized by Eppendorf-Netheler-Hinz
GMBH v. Ritter GMBH, 289 F.3d 351, 356 (5th Cir.), cert. denied, 537 U.S.
1071 (2002).
16
 TrafFix, 532 U.S. at 32–33, 121 S. Ct. at 1261–62. Without
objection, the jury was instructed that “[a] product feature is considered
functional if it is essential to the use or purpose of the product or if it affects
the cost or quality of the product.”
17
 Id.; see also Eppendorf-Netheler-Hinz GMBH, 289 F.3d at 356.
9
The jury in this case found that the asserted trade dress, Brand FX’s stair-
step topper design, is “primarily non-functional.” Astoria contends that the
evidence is not legally sufficient to support this finding.
To establish that the stair-step design is primarily nonfunctional, Brand FX
offered the testimony of its owner and operator, Alfred Finley. Finley has been
in the industry since 1969. He formed and ran Fibre Body from 1984 until
1999. He started Brand FX in 2001 and has run the company ever since.
Finley testified that the stair-step topper design is not essential to the use or
purpose of the work topper and does not affect the work topper’s cost or
quality. Finley also testified that his competitors primarily sold dome-shaped
toppers, and that the dome shape is not functional or essential to the use of the
work topper.
The jury also heard testimony regarding the stair-step design’s lack of
functionality from Sam Alfano, the Cook’s employee in charge of purchasing its
work toppers and overseeing its truck fleet. Alfano purchased approximately
ninety to one hundred toppers per year on behalf of Cook’s. He testified that,
to his knowledge, the stair-step design is not essential to the use or purpose of
the work topper, nor does it affect the topper’s cost or quality. Cook’s
purchased stair-step toppers from Astoria for the same price as Astoria’s dome-
shaped toppers.
10
Testimony from three Astoria witnesses—Robert Wolf, Randy Thole, and
Jack Brannan—also relates to the stair-step design’s lack of functionality. Wolf,
Astoria’s president and owner, testified that the stair-step design is not
essential to a topper, that he preferred the dome-shaped roof design, and that
the stair-step design was not good for manufacturing. Wolf stated that the
stair-step design was only “essential” to Cook’s in order to match its existing
fleet:
Q: Is [the stair-step topper design] essential or not essential?
....
A: It is essential for what Mr. Cook’s designed [sic] is.
Q: . . . You didn’t tell me that in your deposition. You said it
wasn’t essential.
A: It’s not if you allow me to design the topper. I don’t need
the stair step. But if you’re going to use that design, it’s
very essential. [Emphasis added.]
Thole, Astoria’s engineer who developed its version of the stair-step
topper, also testified that the stair-step design is not essential to the use or
purpose of a work topper. Brannan, Astoria’s former chief engineer, likewise
testified that the stair-step design is not essential to strengthen the roof of a
topper because the dome shape gives the roof enough strength for the topper’s
intended use.
11
Based on our consideration of evidence favorable to the challenged
finding if a reasonable factfinder could, and disregarding evidence contrary to
the finding unless a reasonable factfinder could not, we hold that there is legally
sufficient evidence to support the finding that Brand FX’s stair-step topper
design is primarily nonfunctional.
Astoria also contends that the evidence is factually insufficient to support
the finding of nonfunctionality. As evidence contrary to the finding, Astoria
cites the testimony of Finley, Brannan, and Wolf that the molded shape of the
design increases the strength of the topper’s roof without added materials, or
increases the topper’s “sectional modulus.” 18 Finley testified on “sectional
modulus” as follows:
Q: Tell us what [sectional modulus] is.
A: Basically, the higher the sectional modulus, the higher the
stiffness . . . of the laminate.
Q: It gives you a stronger design without having to use
additional materials; isn’t that correct?
A: Correct.
Q: All right. Functionality; isn’t that correct?
18
 See, e.g., Epic Metals Corp. v. Souliere, 99 F.3d 1034, 1038 (11th
Cir. 1996) (holding that a steel deck’s corrugated dovetail profile impacts the
sectional modulus of the deck, determining how much stress the product will
tolerate and ultimately affecting the product’s strength).
12
A: I have been told that the definition of functional is essential,
and that the top can be built without the stair-step design
and still be functional. Does it serve a function? Yes.
Brannan also testified about the functionality of Brand FX’s stair-step
design:
Q: [Y]ou don’t necessarily need the stair-step design to have the
proper strength for the intended use of that, true?
A: If you wanted to minimize the cost and eliminate the need for
additional materials, then a stair-step design is really the way
to go.
....
Q: Your opinion is that the stair step design is functional in that
it increases the strength of the topper, true?
A: That’s correct.
The jury also heard evidence from Wolf that the stair-step design allows
the topper to carry heavier loads on its roof without added material costs.
Photographs and drawings were introduced showing the placement of a load-
carrying rack on the roof of the topper.
However, the jury also heard evidence showing that it is not essential for
a topper to have added roof strength or the ability to carry heavier loads on the
roof: Brand FX’s advertisements did not promote the topper’s added strength
13
due to the stair-step design, 19 and some introduced photographs of the topper
showing no roof rack and no load on the top. Additionally, Brannan testified
that he was asked to look at ways to strengthen the roof design of another of
Astoria’s products, a flat-topped full utility body cover, and that he did not even
consider using a stair-step design to strengthen the roof of that product.
Astoria also challenges evidence of nonfunctionality presented by Brand
FX. Astoria contends that Finley provides the sole testimony supporting
nonfunctionality and that his testimony is conclusory.20 However, testimony
from Alfano, Thole, Brannan, and Wolf also provides evidence of
nonfunctionality. And Finley’s testimony was supported by his years of
experience as a fiberglass manufacturer and designer and was based on his
specific knowledge of the stair-step design and its manufacture beginning in
1996 when he bought the company that had owned the design, Northwest
19
 Astoria points to a Brand FX advertisement stating that “[w]ith a
BRAND FX topper, you’re assured of outstanding strength and durability in a
product weighing substantially less than steel or aluminum.” But that
advertisement promotes the advantages of Brand FX’s fiberglass product over
metal toppers, not any advantages of the stair-step design over toppers with
other roof shapes.
20
 See City of San Antonio v. Pollock, 284 S.W.3d 809, 818 (Tex.
2009) (holding that a scientific opinion is conclusory and cannot be considered
probative evidence “if no basis for the opinion is offered, or the basis offered
provides no support”).
14
Body, and decided to incorporate it into the product line of his own company,
Fibre Body.
Astoria also argues that Alfano’s testimony of nonfunctionality is
conclusory and is not probative because he was a fact witness and an
accountant by training. However, Alfano testified based on his first-hand
experience as the person who purchases and manages Cook’s fleet of toppers
and utility bodies, including toppers with stair-step and dome-shaped roofs.
Alfano’s experience thus involved the use, purpose, cost, and quality of toppers
purchased and used by Cook’s, all factors relating to the stair-step roof design’s
functionality. 21
Considering and weighing all of the evidence in the record pertinent to the
finding of nonfunctionality, we determine that the evidence supporting the
finding is not so weak, or so contrary to the overwhelming weight of all the
evidence, that the answer should be set aside and a new trial ordered. 22
Accordingly, we hold that there is factually sufficient evidence to support the
jury’s finding that Brand FX’s stair-step topper design is primarily nonfunctional.
We overrule Astoria’s first issue.
21
 See TrafFix, 532 U.S. at 32–33, 121 S. Ct. at 1261–62 (holding that
a product is generally functional if it is essential to the use or purpose of the
article or affects the cost or quality of the article).
22
 See Pool, 715 S.W.2d at 635; Garza, 395 S.W.2d at 823.
15
C. Trade Dress Infringement—Secondary Meaning
To prevail on its trade dress infringement claim, Brand FX also bore the
burden at trial of proving that the topper’s stair-step design has acquired a
secondary meaning. 23 Trade dress acquires secondary meaning when, “in the
minds of the public, the primary significance of [the design] is to identify the
source of the product rather than the product itself.” 24 The existence of
secondary meaning is a question for the trier of fact, and a trier of fact’s finding
on this issue will not be disturbed unless clearly erroneous. 25
Secondary meaning may be established through a combination of the
following nonexhaustive list of evidentiary factors: (1) length and manner of
use of the trade dress, (2) volume of sales, (3) amount and manner of
advertising, (4) nature of use of the trade dress in newspapers and magazines,
(5) consumer-survey evidence, (6) direct consumer testimony, and (7) the
23
 15 U.S.C.A. § 1125(a); Samara Bros., 529 U.S. at 210, 215, 120
S. Ct. at 1343, 1346.
24
 Samara Bros., 529 U.S. at 211, 215, 120 S. Ct. at 1343, 1346; see
15 U.S.C.A. § 1125(a). The jury was instructed without objection that trade
dress “acquires ‘secondary meaning’ if it is uniquely associated with a specific
source and identifies the source of the product rather than the product itself.”
25
 Sunbeam Prods. Inc. v. W. Bend Co., 123 F.3d 246, 253 (5th Cir.
1997), cert. denied, 523 U.S. 1118 (1998), abrogation on other grounds
recognized by Eppendorf-Netheler-Hinz GMBH, 289 F.3d at 356.
16
defendant’s intent in copying the trade dress. 26 The ultimate determination of
whether trade dress has acquired secondary meaning remains a question of
consumer association. 27
The jury found that the stair-step topper roof design had acquired
secondary meaning. Astoria contends that the evidence is not legally sufficient
to support this finding.
In support of secondary meaning, Brand FX introduced evidence regarding
length and manner of its use of the stair-step topper design. Brand FX and its
predecessors Northwest Body and Fibre Body have continuously used the
design since at least the mid-1990s, and had done so exclusively until Astoria
copied the design in late 2002. As further support of secondary meaning,
Brand FX also introduced evidence of Astoria’s intent in copying the design;
Thole and Wolf testified that Astoria intentionally copied Brand FX’s stair-step
design with the intent of having Astoria’s design be as close as possible to
Brand FX’s design. Additionally, Brand FX presented direct testimony from two
customers—one end user and one distributor—supporting a finding of secondary
meaning because they uniquely identified or associated the stair-step roof
26
 Pebble Beach Co., 155 F.3d at 541; Sunbeam Prods, 123 F.3d at
254.
27
 Sunbeam Prods., 123 F.3d at 254.
17
design with Brand FX. The customers also testified to actual confusion by
Astoria’s use of the trade dress by incorrectly identifying a picture of Astoria’s
topper as Brand FX’s based on its stair-step roof design. Accordingly, Brand
FX introduced evidence supporting three of the factors relevant to consumer
association indicative of secondary meaning. 28
Based on our consideration of evidence favorable to the challenged
finding if a reasonable factfinder could, and disregarding evidence contrary to
the finding unless a reasonable factfinder could not, we hold that there is legally
sufficient evidence to support the finding that Brand FX’s stair-step topper
design has acquired secondary meaning.
Astoria contends that the evidence is factually insufficient to support the
finding of secondary meaning because there is purportedly no evidence
regarding other factors that traditionally indicate secondary meaning has been
acquired. For instance, consumer-survey evidence of identification of the trade
dress with its source is the most direct and persuasive evidence to establish
secondary meaning. 29 Here, Brand FX performed no consumer surveys.
Moreover, there is no evidence of two other factors traditionally indicative of
28
 See id.
29
 See id. at 254–55.
18
secondary meaning: media coverage and advertising expenditures by Brand FX
promoting its stair-step design. 30
With regard to length and exclusivity of use, Astoria contends that the
evidence offered by Brand FX actually contradicts a finding of secondary
meaning because Brand FX did not begin selling its stair-step toppers until
2002. However, evidence of a predecessor’s use may establish the length and
exclusivity of a plaintiff’s use. 31 Brand FX introduced evidence that Northwest
Body developed the stair-step topper design before it was acquired by Fibre
Body Industries in approximately 1996, and Brand FX subsequently acquired
Fibre Body’s intellectual property rights in 2002. The evidence shows that only
Brand FX and the prior owners of the design used it, to the exclusion of all
others, from at least 1996 until Astoria developed its look-alike topper in 2002.
Thus, the length and exclusivity of use by Brand FX and the prior owners of the
design support a finding of secondary meaning.
30
 See Pebble Beach Co., 155 F.3d at 541; Sunbeam Prods., 123 F.3d
at 254.
31
 See, e.g., Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d
786, 791 (5th Cir. 1983) (holding that plaintiff established secondary meaning
through predecessor’s prior continued use of the mark and other factors),
overruled on other grounds by KP Permanent Make-Up, Inc. v. Lasting
Impression I, Inc., 543 U.S. 111, 116, 124, 125 S. Ct. 542, 547, 551 (2004).
19
Regarding direct customer testimony, Astoria contends that the testimony
introduced by Brand FX was insufficient because it came from only two
witnesses—one distributor and one end user—and their past association with
Brand FX makes their testimony of little weight. However, cases Astoria cites
in support of these contentions are distinguishable. For example, Astoria relies
on a case in which the direct testimony of seven witnesses was outweighed by
evidence of a consumer survey establishing a lack of customer identification, 32
but Astoria introduced at trial no evidence establishing a lack of customer
identification. Astoria also cites a case in which six customers’ testimony of
confusion was insufficient in comparison to the number of potential customers,
consisting of all buyers of telephone and network installation services in the
Southern California area. 33 Here, the number of customers who testified, two,
must be weighed against the number of potential customers, which in this case
are businesses that purchase utility bodies and work toppers. 34
32
 Vision Ctr. v. Opticks, Inc., 596 F.2d 111, 115 (5th Cir. 1979), cert.
denied, 444 U.S. 1016 (1980).
33
 Japan Telecom, Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 875
(9th Cir. 2002).
34
 As circumstantial evidence of the relevant number of potential
purchasers of utility bodies and work toppers, the trade journal in which Astoria
ran its “DARE TO COMPARE” advertising campaign had a monthly circulation
of approximately 18,000.
20
Astoria also contends that its intent in copying the design does not
support secondary meaning because it did not intend to fool Cook’s as to the
topper’s source. Astoria argues that it was merely responding to Cook’s own
request that Astoria offer a look-alike topper. However, Astoria concedes that
it developed its stair-step topper with the intent that it look as similar to Brand
FX’s design as possible. Thus, Astoria intended to confuse those looking at its
topper into assuming that it had the same source as the Brand FX toppers in
Cook’s existing fleet.
Considering and weighing all of the evidence in the record pertinent to the
finding of secondary meaning, we determine that the evidence supporting the
finding is not so weak, or so contrary to the overwhelming weight of all the
evidence, that the answer should be set aside and a new trial ordered. 35
Accordingly, we hold that there is factually sufficient evidence to support the
jury’s finding that Brand FX’s stair-step topper design has acquired secondary
meaning. We overrule Astoria’s second issue.
35
 See Pool, 715 S.W.2d at 635; Garza, 395 S.W.2d at 823.
21
IV. FEDERAL PATENT LAW DOES NOT PREEMPT BRAND FX’S
MISAPPROPRIATION CLAIM
In its third issue, Astoria contends that Brand FX’s common law design
misappropriation claim conflicts with, and is thus preempted by, federal patent
law.
A common law misappropriation claim alleges a form of unfair
competition under Texas law. 36 “The law of unfair competition is the umbrella
for all statutory and nonstatutory causes of action arising out of business
conduct which is contrary to honest practice in industrial or commercial
matters.” 37 To prevail on a claim of common law misappropriation, the plaintiff
has the burden of establishing: (1) the creation of its 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 the defendant is burdened with little or
none of the expense incurred by the plaintiff, and (3) commercial damage to the
36
 U.S. Sporting Prods., Inc. v. Johnny Stewart Game Calls, Inc., 865
S.W.2d 214, 218 (Tex. App.—Waco 1993, writ denied).
37
 Id. at 217. Other unfair competition claims include theft of trade-
secrets and “palming off” one’s product as that of another. Id.
22
plaintiff.38 Here, Brand FX claims that Astoria misappropriated the stair-step
roof design of its toppers.
There is a presumption against federal preemption of state actions. 39
However, state laws are preempted if they conflict with valid federal law by
creating an “obstacle to the accomplishment and execution of the full purposes
and objectives of Congress.” 40 Astoria asserts that Brand FX’s misappropriation
claim conflicts with Astoria’s right, created under federal patent law, to copy
and use product features that are in the public domain. 41
The Supreme Court has held that state regulation of intellectual property
“must yield to the extent that it clashes with” federal patent law. 42 The Court
determined that “the efficient operation of the federal patent system depends
upon substantially free trade in publicly known, unpatented design and
38
 Id. at 218.
39
 Wyeth v. Levine, 129 S. Ct. 1187, 1194–95 & 1195 n.3 (2009)
(quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S. Ct. 2240, 2250
(1996)).
40
 Id. at 1193 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S. Ct.
399, 404 (1941)); see BIC Pen Corp. v. Carter, 251 S.W.3d 500, 504 (Tex.
2008).
41
 See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141,
152, 109 S. Ct. 971, 978 (1989).
42
 Id. at 152, 109 S. Ct. at 978.
23
utilitarian conceptions.” 43 In the same opinion, the Court held that state unfair
competition laws, in contrast, generally serve a different purpose by providing
“protection against copying of nonfunctional aspects of consumer products.” 44
Thus, the Court determined that state unfair competition laws typically are not
preempted 45 unless they conflict with federal patent law by protecting or
regulating the “functional aspects” of a product. 46
Turning to the facts of our case, we already have held that the record
contains legally and factually sufficient evidence supporting the jury’s finding
that Brand FX’s stair-step topper design is not functional. 47 This holding is fatal
to Astoria’s preemption argument, because federal patent law does not preempt
43
 Id. at 156, 109 S. Ct. at 980 (emphasis added).
44
 Id. at 158, 109 S. Ct. at 981 (emphasis added).
45
 Id. at 164, 109 S. Ct. at 985 (holding in part that “the law of unfair
competition . . . [has] coexisted harmoniously with federal patent protection for
almost 200 years, and Congress has given no indication that [its] operation is
inconsistent with the operation of the federal patent laws”).
46
 Id. at 156, 159, 109 S. Ct. at 980, 982 (emphasis added) (holding
Florida statute is preempted because it is “aimed directly at preventing the
exploitation of the design and utilitarian conceptions embodied in the product
itself” and “constrict[s] the spectrum of useful public knowledge” (emphasis
added)).
47
 See 15 U.S.C.A. § 1125(a); Samara Bros., 529 U.S. at 210, 215,
120 S. Ct. at 1343, 1346.
24
state unfair competition laws that protect against the copying of product’s
nonfunctional aspects.48 Accordingly, we overrule Astoria’s third issue.
V. AWARD OF PROFITS ON BRAND FX’S FALSE ADVERTISING CLAIM
In its fourth issue, Astoria contends that the evidence is not legally or
factually sufficient to support an award of Astoria’s utility body profits on Brand
FX’s false advertising claim and that the award amounts to an impermissible
penalty. 49 The jury found that Astoria’s profits on its sale of utility bodies
during the relevant time period was zero. Brand FX filed a motion for JNOV
contending that no evidence supported the jury’s zero profits finding and
requesting an award of Astoria’s utility bodies profits. After an evidentiary
hearing, the trial court granted Brand FX’s JNOV motion and awarded it
$630,000 as the amount of Astoria’s profits related to sales of its advertised
utility bodies during the period of time the “DARE TO COMPARE” advertisement
ran. 50
48
 See Bonito Boats, 489 U.S. at 158, 109 S. Ct. at 981.
49
 On appeal, Astoria does not challenge the jury’s finding that it is
liable for false advertising or that Brand FX “has been or is likely to be injured”
as a result; it only challenges lost profits awarded on the claim.
50
 Alternative to its JNOV motion, Brand FX requested that the trial
court disregard the jury’s zero lost profits finding. As the following dated and
initialed docket entry states, the court granted JNOV rather than the alternative
relief Brand FX requested: “1/24/08 – P motion JNOV is granted awarded
$630,000 FWD [the Honorable Fred W. Davis].”
25
A. JNOV Standard of Review
A trial court may disregard a jury verdict and render a JNOV if no
evidence supports the jury finding on an issue necessary to liability or if a
directed verdict would have been proper. 51 A directed verdict is proper only
under limited circumstances: (1) when the evidence conclusively establishes the
right of the movant to judgment or negates the right of the opponent; or (2)
when the evidence is insufficient to raise a material fact issue. 52
To determine whether the trial court erred by rendering a JNOV, we view
the evidence in the light most favorable to the verdict under the well-settled
standards that govern legal sufficiency review. 53 We must credit evidence
favoring the jury verdict if reasonable jurors could and disregard contrary
evidence unless reasonable jurors could not. 54
51
 See Tex. R. Civ. P. 301; Tiller v. McLure, 121 S.W.3d 709, 713 (Tex.
2003); Fort Bend County Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 394
(Tex. 1991).
52
 Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74,
77 (Tex. 2000); Farlow v. Harris Methodist Fort Worth Hosp., 284 S.W.3d
903, 919 (Tex. App.—Fort Worth 2009, pet. denied).
53
 See Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex.
2003).
54
 Cent. Ready Mix Concrete Co., 228 S.W.3d at 651; see Tanner v.
Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009).
26
B. False Advertising Under the Lanham Act and Available Remedies
To establish a prima facie case of liability for false advertising under the
Lanham Act, the plaintiff must show that (1) the defendant made a false
statement of fact about its product in a commercial advertisement, (2) the
statement actually deceived or has a tendency to deceive a substantial segment
of its audience, (3) the deception is likely to influence a purchasing decision, (4)
the defendant caused the false statement to enter interstate commerce, and (5)
the plaintiff has been or is likely to be injured as a result. 55
Remedies available to a plaintiff on a Lanham Act false advertising claim
include the defendant’s profits on the falsely advertised product:
[T]he plaintiff shall be entitled . . . subject to the principles of
equity, to recover . . . defendant’s profits . . . . The court shall
assess such profits and damages or cause the same to be assessed
under its direction. In assessing profits the plaintiff shall be
required to prove defendant’s sales only; defendant must prove all
elements of cost or deduction claimed. . . . If the court shall find
that the amount of the recovery based on profits is either
inadequate or excessive the court may in its discretion enter
judgment for such sum as the court shall find to be just, according
to the circumstances of the case. Such sum in either of the above
circumstances shall constitute compensation and not a penalty. 56
55
 Logan v. Burgers Ozark Country Cured Hams Inc., 263 F.3d 447, 462
(5th Cir. 2001).
56
 15 U.S.C.A. § 1117(a) (West 2009) (emphasis added).
27
These remedies are designed to compensate the plaintiff for any injury suffered,
prevent unjust enrichment, or deter unlawful conduct. 57 In determining whether
an award of the defendant’s profits is appropriate, a trial court is afforded
“great latitude” and “wide discretion,” 58 and we review the trial court’s decision
for an abuse of discretion. 59
Evidentiary factors relevant to the determination of whether an award of
profits is appropriate on a Lanham Act false advertising claim include but are
not limited to:
(1) whether the defendant had the intent to confuse or deceive, (2)
whether sales have been diverted, (3) the adequacy of other
remedies, (4) any unreasonable delay by the plaintiff in asserting
his rights, (5) the public interest in making the misconduct
unprofitable, and (6) whether it is a case of palming off. 60
57
 See Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 340
(5th Cir. 2008); Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882, 889
(Tex. App.—Dallas 2004, no pet.).
58
 Martin’s Herend Imports, Inc. v. Diamond & Gem Trading USA, Co.,
112 F.3d 1296, 1304 (5th Cir. 1997).
59
 Pebble Beach Co., 155 F.3d at 554.
60
 Am. Rice, 518 F.3d at 338; Quick Techs., Inc. v. Sage Group PLC,
313 F.3d 338, 349 (5th Cir. 2002), cert. denied, 540 U.S. 814 (2003).
28
No one factor is fatal or controlling. 61 In any event, an award of profits is not
appropriate “unless there is some proof that plaintiff lost sales or profits, or that
defendant gained them.” 62
As the Lanham Act provides, “[i]n assessing profits the plaintiff shall be
required to prove defendant’s sales only; defendant must prove all elements of
cost or deduction claimed” against its gross sales. 63 The Supreme Court
acknowledged that this method of calculating profits may result in the plaintiff
receiving a windfall in cases “where it is impossible to isolate the profits” from
conduct that violates the Lanham Act, but the Court determined that “the
windfall should go to the plaintiff rather than the wrongdoer.” 64 And “Congress
did not put upon the despoiled the burden . . . of showing that but for the
defendant’s unlawful [activity], particular customers would have purchased the
plaintiff’s goods.” 65
61
 Quick Techs., 313 F.3d at 349. Brand FX does not contend that this
is a case of palming off, but that there is evidence of each of the other factors
supporting an award of Astoria’s profits.
62
 Logan, 263 F.3d at 464–65.
63
 15 U.S.C.A. § 1117(a).
64
 Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S.
203, 207, 62 S. Ct. 1022, 1025 (1942); see also Qaddura, 141 S.W.3d at
889.
65
 Mishawaka, 316 U.S. at 206, 62 S. Ct. at 1024 (emphasis added).
29
C. JNOV Awarding Astoria’s Utility Body Profits to Brand FX
Brand FX presented evidence that utility body sales were diverted by
Astoria’s false advertising. 66 Specifically, Finley testified for Brand FX that its
utility body sales decreased 21% during Astoria’s advertising campaign and
increased 54% thereafter. This type of statistical evidence is sufficient to show
sales diversion under § 1117 because the statute does not require the plaintiff
to show that, “but for the defendant’s unlawful [activity], particular customers
would have purchased the plaintiff’s goods.” 67 In addition, Scott Metzger,
Astoria’s head of sales and marketing, testified that potential customers sought
additional information from Astoria in response to its advertising. Of those
potential customers, Astoria and Brand FX competed for sales to Altec and
Omaha Public Power District; Altec is now one of Astoria’s largest customers;
and Astoria replaced Brand FX as the supplier for Omaha Public Power
District. 68
66
 See Logan, 263 F.3d at 464–65; Pebble Beach Co., 155 F.3d at 555.
67
 Qaddura, 141 S.W.3d at 889 (emphasis added).
68
 Astoria argues that this evidence cannot support diversion of sales
because it fails to establish that any particular sale was won by Astoria or lost
by Brand FX. However, this evidence is circumstantial evidence of sales
diversion, particularly as Brand FX and Astoria comprise approximately ninety
percent of the fiberglass utility body and work topper market. Any ultimate fact
may be proved by circumstantial evidence. Russell v. Russell, 865 S.W.2d
929, 933 (Tex. 1993). A fact is established by circumstantial evidence when
30
Regarding Astoria’s intent to confuse or deceive, Wolf, Thole, and
Metzger each testified that they knew the advertisement contained false
statements with respect to Brand FX. Astoria still continued to run the false
advertisement for approximately eleven months after Brand FX’s attorney sent
it a cease and desist letter.
Whether or not other remedies are adequate is also a factor courts
consider when determining whether an award of profits is appropriate. 69 In
cases of willful misconduct in which the defendant is unjustly enriched, other
remedies, such as injunctive relief, have been found inadequate because they
will not deter future misconduct. 70 Here, the jury was not asked to find
whether Astoria’s false advertising was willful, 71 but evidence of Astoria’s
the fact may be fairly and reasonably inferred from other facts proved in the
case. Id.
69
 See Maltina Corp. v. Cawy Bottling Co., 613 F.2d 582, 586 (5th Cir.
1980).
70
 See id.
71
 The jury was asked if they found “by clear and convincing evidence
that the harm to Brand FX resulted from malice,” and they were instructed that
“malice” means “a specific intent by Astoria to cause substantial injury or harm
to Brand FX.” The jury answered “No.” This answer is not controlling on the
issue of willful misconduct because the court’s determination of whether an
award of lost profits is appropriate on a false advertising claim does not require
“clear and convincing evidence,” and it considers the defendant’s intent to
commit the violation, not its intent “to cause substantial injury or harm.” See
15 U.S.C.A. § 1117(a); Am. Rice, 518 F.3d at 338; Quick Techs., 313 F.3d
31
willful misconduct in the record includes testimony that Astoria knew the
advertisement was false as to Brand FX and still chose to continue running it
even after receiving Brand FX’s cease and desist letter. Based on the
willfulness of Astoria’s violation, other remedies are not appropriate to
compensate Brand FX and to deter future misconduct. 72 In addition, an award
of profits serves the public interest in this case by ensuring that willful false
advertising violations are not profitable. 73
The trial court implicitly determined that an equitable award of Astoria’s
profits was appropriate and determined the amount of the award based on the
framework established in 15 U.S.C.A. § 1117(a), which requires the plaintiff
“to prove defendant’s sales only; defendant must prove all elements of cost or
deduction claimed” against sales. 74 Brand FX’s damages expert, Daniel
Jackson, testified without objection that Astoria had $4.2 million in sales
revenue on its utility bodies during the period it committed false advertising.
Jackson based his testimony on historical sales figures produced by Astoria
during the lawsuit.
at 349.
72
 See Maltina Corp., 613 F.2d at 586.
73
 See Am. Rice, 518 F.3d at 338.
74
 See 15 U.S.C.A. § 1117(a).
32
Although § 1117 provides that the defendant must prove all elements of
cost or deduction claimed from its sales revenue, 75 Astoria did not present any
evidence of its costs or deductions. In addition, the manner in which Astoria
produced its financial figures did not allow for a determination of its profit
margin on the product. The most analogous information presented to the jury
regarding profit margin was Brand FX’s 38.5% profit margin on the sales of its
toppers.
Based on the evidence, the trial court determined that Astoria obtained
$4.2 million in utility body sales revenue during the period it falsely advertised
and that Astoria’s profit margin was fifteen percent. Accordingly, the court
awarded Brand FX $630,000 in Astoria’s profits on the false advertising claim.
Implicit in the court’s award is its determination that the amount awarded
constitutes compensation for Brand FX and not a penalty. 76 Viewing the
evidence in the light most favorable to the jury’s finding that Astoria had zero
utility body profits during the relevant time period, 77 we hold that the trial
court’s JNOV awarding Brand FX $630,000 in Astoria’s utility body profits is
75
 See id.
76
 See id.
77
 See Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex.
2003).
33
proper because the evidence is insufficient to raise a material fact issue
regarding the costs or deductions to be applied against Astoria’s sales. 78 We
overrule Astoria’s fourth issue.
VI. ADMISSION OF HEARSAY EVIDENCE OF BRAND FX’S
CORRECTIVE ADVERTISING COSTS
In its fifth issue, Astoria argues that the trial court erred by admitting
Jackson’s expert testimony regarding Brand FX’s corrective advertising costs
because his testimony contained, and was merely a conduit for, hearsay
evidence Jackson obtained from advertising executive Tom Prikryl. Astoria
contends that this portion of Jackson’s testimony was, therefore, inadmissible
and, in the alternative, should only have been admitted with a proper limiting
instruction under Texas Rule of Evidence 705. 79
78
 See Prudential Ins. Co. of Am., 29 S.W.3d at 77; Farlow, 284
S.W.3d at 919. Brand FX urges us to review the trial court’s profits award for
abuse of discretion. See Pebble Beach Co., 155 F.3d at 554. Because the trial
court submitted the issue to the jury and granted JNOV, we review its decision
under the JNOV standard. See, e.g., Tex. Pig Stands, Inc. v. Hard Rock Cafe
Int’l, Inc., 951 F.2d 684, 697 (5th Cir. 1992) (reviewing under JNOV standard
trial court’s decision to overturn recovery based on jury’s § 1117(a) finding).
Astoria presented no evidence of its costs or deductions as required by
§ 1117(a) and, thus, we would reach the same result under either the JNOV
or the abuse of discretion standard. See id.
79
 Although Astoria challenges its admissibility, Astoria does not contest
the competence of Jackson’s opinion testimony regarding Brand FX’s corrective
advertising damages as unreliable, irrelevant, or otherwise. And although we
acknowledge Astoria’s post submission letter brief enclosing a copy of the slip
opinion in City of San Antonio v. Pollock, 284 S.W.3d 809 (Tex. 2009), in
34
A. Standard of Review
A trial court’s rulings in admitting evidence are reviewable under an abuse
of discretion standard. 80 An appellate court must uphold the trial court’s
evidentiary ruling if there is any legitimate basis in the record for the ruling. 81
To determine whether a trial court abused its discretion, we must decide
whether the trial court acted without reference to any guiding rules or
principles; in other words, we must decide whether the act was arbitrary or
unreasonable. 82 An appellate court cannot conclude that a trial court abused
its discretion merely because the appellate court would have ruled differently
in the same circumstances. 83
which the supreme court reaffirms that “bare baseless opinions will not support
a judgment even if there is no objection to their admission in evidence,” Astoria
does not assert that Jackson’s opinion regarding corrective advertising costs
is baseless or conclusory.
80
 In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005); Nat’l Liab. & Fire
Ins. Co. v. Allen, 15 S.W.3d 525, 527–28 (Tex. 2000) (op. on reh’g).
81
 Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex.
1998).
82
 Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings,
134 S.W.3d 835, 838–39 (Tex. 2004).
83
 E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558
(Tex. 1995); see also Low, 221 S.W.3d at 620.
35
To obtain reversal of a judgment based upon an error in the trial court, the
appellant must show that the error occurred and that it probably caused
rendition of an improper judgment or probably prevented the appellant from
properly presenting the case to this court. 84 The complaining party must usually
show that the whole case turned on the evidence at issue. 85 If erroneously
admitted evidence was crucial to a key issue, the error was likely harmful. 86 We
examine the entire record in making this determination of harm. 87 Error in
admitting evidence is generally harmless if the objecting party “open[s] the
door” by introducing the same or similar evidence, 88 the objecting party later
permits the same or similar evidence to be introduced without objection, 89 or
84
 Tex. R. App. P. 44.1(a); see Reliance Steel & Aluminum Co. v.
Sevcik, 267 S.W.3d 867, 871 (Tex. 2008); Romero v. KPH Consolidation, Inc.,
166 S.W.3d 212, 225 (Tex. 2005).
85
 Interstate Northborough P’ship v. State, 66 S.W.3d 213, 220 (Tex.
2001); City of Brownsville v. Alvarado, 897 S.W.2d 750, 753–54 (Tex. 1995).
86
 State v. Cent. Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex.
2009); Reliance Steel, 267 S.W.3d at 873.
87
 Interstate Northborough P’ship, 66 S.W.3d at 220.
88
 Bay Area Healthcare Group, Ltd. v. McShane, 239 S.W.3d 231, 234
(Tex. 2007); Sw. Elec. Power Co. v. Burlington N. R.R., 966 S.W.2d 467, 473
(Tex. 1998).
89
 Bay Area Healthcare Group, 239 S.W.3d at 235; Richardson v.
Green, 677 S.W.2d 497, 501 (Tex. 1984).
36
the contested evidence is merely cumulative of properly admitted evidence and
is not controlling on a material issue dispositive of the case. 90
B. Error Admitting the Contested Hearsay Evidence, if Any, is Harmless
Outside the presence of the jury and before Jackson testified at trial,
Astoria objected to the admission of “any evidence obtained from Tom Prikryl”
as being “third-party hearsay” and to Brand FX using Jackson as a “conduit for
hearsay.” Alternatively, Astoria sought a limiting instruction under rule 705 of
the Texas Rules of Evidence that the jury “be instructed not to accept the
information obtained from [Prikryl] for the truth of the matter asserted.” 91 The
90
 Interstate Northborough P’ship, 66 S.W.3d at 220; Gee v. Liberty
Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989).
91
 Admission of otherwise inadmissible facts or data underlying an
expert’s opinion is governed by Texas Rule of Evidence 705, which provides in
relevant part:
(a) Disclosure of Facts or Data. The expert may testify in
terms of opinion or inference and give the expert’s reasons therefor
without prior disclosure of the underlying facts or data, unless the
court requires otherwise. The expert may in any event disclose on
direct examination, or be required to disclose on cross-examination,
the underlying facts or data.
....
(d) Balancing test; limiting instructions. When the underlying
facts or data would be inadmissible in evidence, the court shall
exclude the underlying facts or data if the danger that they will be
used for a purpose other than as explanation or support for the
expert’s opinion outweighs their value as explanation or support or
are unfairly prejudicial. If otherwise inadmissible facts or data are
disclosed before the jury, a limiting instruction by the court shall be
37
court overruled the objections and denied Astoria’s motion for a limiting
instruction. Astoria did not object at trial and does not argue on appeal that
Jackson cannot rely on facts not otherwise admissible in evidence, including
hearsay evidenced from an advertising executive regarding corrective
advertising costs. 92
Jackson testified that his opinion regarding Brand FX’s corrective
advertising costs was based on information provided to him by Prikryl:
Q: Did you summarize your damages as it relates to this “Dare
to Compare” advertisement?
A: Yes, I did.
Q: And what are the summary damages that you calculated?
A: . . . If you look at the corrective advertising based upon Mr.
Prykel’s [sic] information and what he believed would be
necessary to accomplish it, it’s $76,200.
given upon request.
Tex. R. Evid. 705(a), (d) (emphasis added).
92
 In its briefing before the court, Astoria states that “[n]o one can
dispute that Tex[as] R[ule of] Evid[ence] 703 allows an expert to rely on facts
not otherwise admissible in evidence” and that “experts are typically allowed
to disclose otherwise inadmissible hearsay for the limited purpose of explaining
the basis of their opinions” even though such hearsay is not admissible for its
truth [citation omitted].”
38
Jackson also testified that it was “reasonable and customary” in his profession
as a certified public accountant to rely on an advertising expert to determine the
proper cost of corrective advertising.
Whether or not the trial court erred in admitting Jackson’s testimony
about information provided by Prikryl, such testimony is cumulative of other
testimony that was admitted without objection. Separately and without
reference to Prikryl, Astoria’s counsel solicited the following testimony from
Jackson:
Q: [Y]ou’re the one telling [the jury] to award $76,000 for
future corrective advertising on something that hadn’t run
since four years ago and had no impact on the two people
who came here [to testify]?
A: If they determine Astoria did falsely advertise. If they
determine [Astoria] didn’t falsely advertise, I’d say don’t
award [Brand FX] a penny. [Emphasis added.]
This testimony establishes Jackson’s opinion regarding Brand FX’s corrective
advertising costs, does not reference information provided by Prikryl, and was
admitted without objection. Any error by the trial court in admitting the
contested testimony is harmless because Astoria later permitted similar
evidence to be introduced without objection during its cross-examination of
Jackson and the contested evidence is merely cumulative of properly admitted
evidence on Jackson’s opinion regarding Brand FX’s corrective advertising
39
costs. 93 Accordingly, we hold that the trial court’s error in admitting the
contested heresay testimony, if any, did not probably cause the rendition of an
improper judgment. 94 We overrule Astoria’s fifth issue.
VII. ATTORNEY’S FEES
In its sixth and final issue, Astoria contends that the trial court erred by
awarding attorney’s fees on Brand FX’s trade dress infringement and false
advertising claims because this is not an “exceptional case” in which an award
of fees is authorized by the Lanham Act and, alternatively, because appellate
fees were not properly conditioned on a successful appeal.
The Lanham Act provides that “the court in exceptional cases may award
reasonable attorney fees to the prevailing party.” 95 The prevailing party has the
burden to demonstrate the exceptional nature of the case by clear and
convincing evidence. 96 Clear and convincing evidence is that measure or degree
93
 See Bay Area Healthcare Group, 239 S.W.3d at 235; Interstate
Northborough P’ship, 66 S.W.3d at 220; Gee, 765 S.W.2d at 396; Richardson,
677 S.W.2d at 501.
94
 See Tex. R. App. P. 44.1(a)(1); Interstate Northborough P’ship, 66
S.W.3d at 220.
95
 15 U.S.C.A. § 1117(a).
96
 Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir. 1996)
(citing CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 65 (5th Cir.
1992)).
40
of proof that will produce in the mind of the trier of fact a firm belief or
conviction as to the truth of the allegations sought to be established. 97
Exceptional cases include when the defendant’s violation of the Lanham
Act is malicious, fraudulent, deliberate, or willful. 98 The trial court should
decide whether a case is exceptional “by examining all the facts and
circumstances.” 99 “The determination as to whether a case is exceptional is
left to the sound discretion of the trial court.” 100 We review a decision to
award attorney’s fees for an abuse of discretion and the trial court’s finding as
to whether the case is exceptional for clear error. 101
Regarding Astoria’s trade dress infringement, the evidence establishes
that Astoria knew that Brand FX owned the rights to the unique stair-step
design and that Cook’s warned Astoria not to violate Brand FX’s rights. Astoria
proceeded to copy Brand FX’s design anyway, using Brand FX’s drawings and
one of its toppers as a “plug” to produce a stair-step topper mold. Thole, the
97
 Tex. Civ. Prac. & Rem. Code Ann. § 41.001(2) (Vernon 2008);
Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 31 (Tex. 1994).
98
 Seven-Up Co., 86 F.3d at 1390.
99
 CJC Holdings, 979 F.2d at 65.
100
 Seven-Up Co., 86 F.3d at 1390.
101
 Schlotzsky’s, Ltd. v. Sterling Purchasing & Nat’l Distribution Co.,
520 F.3d 393, 402 (5th Cir. 2008).
41
Astoria engineer in charge of the project, stated at the time that he knew that
Astoria’s actions were “improper” and “wrongful.”
Regarding Astoria’s false advertising, three Astoria witnesses conceded
that the “DARE TO COMPARE” advertisement contained statements that were
false with respect to Brand FX. Astoria nonetheless ran the advertisement, and
continued to run it for eleven months after receiving Brand FX’s cease and
desist letter.
Based on the record in this case, we hold that the trial court could find
by clear and convincing evidence that Astoria deliberately and willfully
committed trade dress infringement and false advertising. The trial court’s
finding that this is an exceptional case is not clearly erroneous, and its decision
to award attorney’s fees is not an abuse of discretion. 102
A trial court may not, however, grant a party an unconditional award of
appellate attorney’s fees, because to do so could penalize the other party for
pursuing a meritorious appeal. 103 We therefore hold that the trial court erred by
102
 See, e.g. Schlotzsky’s, Ltd., 520 F.3d at 402 (affirming award of
attorney’s fees based on defendant’s bad faith misrepresentations in violation
of Lanham Act); Taco Cabana Int’l, 932 F.2d at 1127–28 (affirming award of
attorney’s fees based on defendant’s “brazen imitation” of direct competitor’s
trade dress).
103
 Weynand v. Weynand, 990 S.W.2d 843, 847 (Tex. App.—Dallas
1999, pet. denied).
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failing to condition the award of appellate fees on a successful appeal. 104
Accordingly, we modify the judgment to reflect that Brand FX is only eligible to
receive attorney’s fees upon successful appeal, and we affirm the award of
attorney’s fees as modified. 105
VIII. CONCLUSION
We modify the trial court’s judgment to reflect that Brand FX is only
eligible to receive appellate attorney’s fees if successful on appeal, and we
affirm the judgment as modified.
BOB MCCOY
JUSTICE
PANEL: LIVINGSTON and MCCOY, JJ.
DELIVERED: April 8, 2010
104
 See J.C. Penney Life Ins. Co. v. Heinrich, 32 S.W.3d 280, 290 (Tex.
App.—San Antonio 2000, pet. denied).
105
 See Tex. R. App. P. 43.2(b) (providing appellate court may modify
judgment and affirm as modified); see also Tully v. Citibank (South Dakota),
N.A., 173 S.W.3d 212, 219 (Tex. App.—Texarkana 2005, no pet.) (modifying
judgment to condition attorney’s fees on successful appeal); Heinrich, 32
S.W.3d at 290 (same).
43