Non-TM owner can use 43(a) to challenge confusing use

Postar v. Hyland, 2026 WL 145934, No. 5:24-CV-019-H (N.D. Tex. Jan. 20, 2026)

This case allows a non-TM owner to bring a false advertising/unfair competition claim over allegedly confusing use of a trademark, and I think it’s right to do so, despite some fumbles over other parts of the law.

The facts are complicated, but the basics are:

In 2017, twin brothers Michael and David Postar split their interests in Affordable Storage, a self-storage business that they jointly owned and operated for many years. As part of the split, the brothers assigned certain registered trademarks associated with the business to a holding company in which they both own a 50% stake. Michael has exclusive rights to use those marks in Lubbock County, whereas David has exclusive rights to use them in Tom Green and Midland Counties. Years after the split, David, through his company Gargoyle Management, Inc., licensed a derivative of one of the marks to the brothers’ former employee, Gavin Hyland. Hyland and his wife operate their own self-storage business, Slaton Affordable Storage, Inc. Their two locations—one of which is in Lubbock County—are also named Affordable Storage.

Michael’s resulting trademark infringement claim failed because he is not the owner of the mark, and the holding company requires unanimous consent to act.

Slaton Affordable Storage opened in 2011 in Lubbock County using the Affordable Storage name and a yellow smiley face, which the other Affordable Storage businesses also used. David argued that the brothers didn’t view SAS as competition, because potential customers were unlikely to drive to Slaton or Brownfield when they had Affordable Storage options closer to home, and they even encouraged Hyland to use the Affordable Storage name and smiley face logo and included the Slaton and Brownfield locations in their own Affordable Storage advertising and websites. Several ads suggested that all Affordable Storage locations were “Under Same Ownership.”

SAS location

Michael acknowledged at deposition that he knew SAS was using the Affordable Storage name and smiley face logo as early as 2011 and that he first objected to SAS’s branding in 2020 or 2021. Six years after the Hylands opened the Slaton location, Michael told SAS’s co-owner in a recorded phone call that “[Y]’all can use the name. Anybody can use the name affordable storage, if you wanted to. ‘Cus there’s a whole bunch of them out there. You also have the rights to use a regular smiley face. Anybody can use a regular smiley face.”

word + design registration

In 2017—the same year as the split and transfer to the IP holding company, Postar IP—the Postars applied to and received two registrations for their logos with disclaimers of “AFFORDABLE STORAGE.” (The other has a crown on the smiley face.) Postar IP then entered into a license agreement permitting SAS to use the registered marks for three years; although an early draft said that SAS would stop using the Affordable Storage name and smiley face signage at the conclusion of a three-year term, SAS refused to sign. Still, absent an extension, SAS agreed to immediately stop using the registered marks when the license expired. “But SAS continued to use (and still uses today) its original Affordable Storage name and smiley face signage.”

SAS then entered into a second license agreement with David granting SAS a perpetual, non-transferable license to use, relevantly, an image of a yellow smiley face with arms, legs, and gloved hands standing next to the phrase “Affordable Self Storage.”

Image licensed under second license 

Fundamentally, Michael argued that David was using his former employee to compete with Michael in Lubbock County, where Michael has exclusive rights, even though David cannot unilaterally assign Postar IP’s rights. There was also a binding arbitral award concluding that Michael had exclusive rights to use the Smiley Mark and its iterations in Lubbock and that David couldn’t grant any license that wasn’t subject to Michael’s rights. A later arbitration panel concluded that “any ‘derivation’ (mark that includes one of the Postar IP marks or a variation of one of those marks) is the property of Postar IP.” Thus, the mark licensed to SAS, which created the same impression as the registered marks, belonged to Postar AP, although the panel didn’t void the second license agreement because SAS was no longer using the licensed mark.

Michael lacked statutory standing under §32: he was not the registrant. Neither brother may act alone on behalf of Postar IP.

However, the court reasoned, §43(a)(1)(A) (false designation of origin) and (B) (false advertising) were still available, although it applied the materiality requirement to both claims so there was no difference in analysis. Section 43 “does not require a plaintiff to establish ownership of a trademark as an element of its cause of action.”

SAS argued that they didn’t do anything to associate their business with Michael, just used the same name and logo they’ve used for years.  A reasonable jury could find otherwise, given that, as early as 2018, the first arbitration award found that only Michael could use the smiley mark in Lubbock County and that there were strict limits on David’s ability to license it. Then, the final arbitration award concluded that David lacked authority to grant second license. “If the jury believes Michael’s account, it could find that the Hylands and SAS misleadingly associated their self-storage business with the original Affordable Storage brand by continuing to use the name and smiley face logo after the parties agreed that they would cease such use at the end of the three-year lease term.” Or it could find otherwise.

And a jury could also find that the signage—“which is somewhat generic and located in areas where Michael does not have Affordable Storage locations”—was unlikely to cause confusion.  

Michael provided enough evidence of confusion to get to a jury: his declaration stated that “[c]onsumers or customers of the Hyland Defendants have called [him] or [his] Affordable Storage businesses confused about who owned the stores in Slaton or Brownfield and complained about the service they have received or their ability to reach someone on the phone to discuss the Hyland Defendants’ services.” SAS packages were sent to one of Michael’s locations, and SAS received an invoice from a gravel company that was intended for one of Michael’s businesses. True, some of the evidence was from 2018, but SAS was using the  Affordable Storage name and logo in 2018, and Michael’s declaration wasn’t temporally limited.

Materiality: This was a closer call, but the evidence of misdirected packages and invoices was “somewhat probative. Drawing all inferences in Michael’s favor, the fact that items meant for one entity were sent to the other suggests that a customer could be equally deceived into thinking that the two Affordable Storage businesses are the same.” Statements of actual confusion were also probative of materiality. (This seems to conflate confusion with materiality, though I suppose one could argue that if consumers were complaining to him the issues mattered to them.)

Also, self-storage was “in commerce” even if it was a local business.  

Injury: “If the jury agrees with Michael’s theory of the case—that the defendants are falsely associating themselves with the Affordable Storage brand by using unauthorized marks or the Affordable Storage name and signage in areas where he has exclusive rights—then it stands to reason that Michael is ‘likely’ to be injured by that conduct.”

The court also allowed a reverse passing off claim to proceed for reasons that are mysterious to me. The court even describes the theory as that “misrepresented themselves as the original Affordable Storage brand in a way that creates a likelihood of consumer confusion.” That’s just … regular old palming off. (The state claims survived too.)

The court also seemed to misunderstand the non-preempted misappropriation claims, focusing on the disputed claim that Michael “created” the mark—a theory that would clearly be preempted by the Copyright Act. (It said “the fact that the Registered Marks were assigned to Postar IP years after they were first used says nothing about who created them.”) The goodwill in the mark is something different. A jury could find that Michael and SAS compete in Lubbock County, plus the disputed existence of confusion also meant that competition was disputed. (I dunno, it could just mean that people don’t pay much attention to locations when they search.)

David might be liable for encouraging the infringement, if any.

The limitations-period/laches defense also required trial. The parties agreed that Texas law sets out a four-year limitations period for the Lanham Act claims. (Again, the court seems a bit confused about the difference between laches and a limitations period.) Michael sued in January 2024. Obviously, he knew about SAS’s use for a long time, even including it in his own ads. But he argued that the federal violations did not occur until the defendants entered into the second license agreement; a jury “could find that at all times before then SAS’s use of the Affordable Storage name and the smiley face logo was with Michael’s consent.” And that was within the limitations period; Michael’s theory was that the first license was just to allow SAS to transition away from the marks. (There seems like a naked licensing problem before the first license.)

For the state law claims, the continuing-tort case law and the appropriate limitations period was “far from clear.”