Reported / Citable
Background
RHI Magnolia provides hospice and palliative-care services in Texas and Georgia. Since at least 2013, RHI’s predecessor used the “Magnolia Hospice” name at its Round Rock and Pflugerville locations north of Austin. RHI federally registered “Magnolia Hospice” as a trademark in March 2024. RHI opened a San Marcos location (between Austin and San Antonio) in January 2024 and had begun serving patients in surrounding areas before then.
In April 2020, Nosotros Hospice began operating as “Magnolia Hospice Company” in Bexar County (San Antonio) and adjacent counties. By early 2021, RHI received phone calls and faxes from confused patients and healthcare providers meant for Nosotros. RHI sent cease-and-desist letters in March 2021, October 2024, and February 2025. On the same day RHI sent its October 2024 letter, defendants formed “Magnolia Hospice Company, Inc.” as a shell entity (admittedly never conducting business) to block RHI from registering a conflicting Texas business name. Defendants continued using the mark despite the letters.
In March 2026, RHI sued for federal trademark infringement, unfair competition, false designation of origin, and passing off under the Lanham Act, plus state-law trademark claims. RHI moved for a preliminary injunction; Defendants filed a competing motion.
The Court’s Holding
The court granted RHI’s preliminary injunction and denied defendants’ competing motion, prohibiting defendants from using “Magnolia Hospice” pending trial. Applying the four-factor preliminary injunction standard, the court found RHI likely to succeed on the merits. Under the Lanham Act, trademark infringement requires ownership of a protectable mark and a likelihood of customer confusion. Using the eight-factor confusion test, the court found the marks nearly identical (adding “Company” does not reduce confusion), the services identical (both provide hospice and palliative care), and the markets significantly overlapping (both serve Comal County). The court found documented actual confusion—multiple patients, healthcare providers, and employees mistaking one company for the other within months of Nosotros’s launch. Although the “Magnolia Hospice” mark is relatively weak (classified as suggestive, with some third-party use in healthcare), and though healthcare professionals exercise significant care in purchasing decisions, the actual confusion, mark similarity, service identity, and market overlap were determinative.
Defendants raised two affirmative defenses. The Tea Rose-Rectanus doctrine—which allows a junior user to retain rights if it adopted a mark in good faith in a market “wholly remote” from the senior user’s—failed because the markets were not remote. Pflugerville is approximately 80 miles from Bexar County’s edge and 45 miles from Comal County’s edge; hospice services typically operate within a 75-mile radius. RHI had patients in Comal County by 2020 and actively worked to build relationships there starting in February 2020. Evidence of actual confusion within months of Defendants’ adoption of the mark further undermined any “wholly remote” claim. The Dawn Donut defense—requiring the junior user to show the senior user will not enter its territory—also failed because RHI had already entered Defendants’ territory with patients in Comal County. RHI thus established substantial likelihood of success on the merits and a presumption of irreparable harm from trademark infringement.
Key Takeaways
- Adding a generic term like “Company” to a confusingly similar mark does not insulate a defendant from trademark infringement liability.
- The Tea Rose-Rectanus doctrine requires genuinely remote markets; geographic proximity and evidence of a hospice company’s typical service radius defeat the defense.
- Actual confusion—documented instances of customers, providers, and employees confusing the parties—is the strongest evidence of likelihood of confusion and can rapidly establish that markets are not remote.
- A defendant cannot use the Dawn Donut defense once the senior user has already entered the junior user’s geographic territory with actual customers.
Why It Matters
This decision clarifies the application of two well-established trademark defenses to modern service-based businesses operating across overlapping geographic territories. For healthcare and senior-living companies offering regional or multi-state services, the court’s analysis of the “service radius” and ready evidence of actual confusion signals that geographic distance alone is insufficient to establish market remoteness. Defendants’ delay in asserting defenses—coupling their adoption of a confusingly similar mark with formation of a shell company to block trademark registration—suggests courts will scrutinize whether junior users genuinely believed in good-faith rights to a mark.
The ruling also reinforces that preliminary injunctions in trademark cases are available despite substantial delays between initial infringement and suit, where the underlying confusion is documented and the mark strength analysis supports protection. For hospice, elder care, and health-services providers operating across state lines or multiple counties, the decision confirms that trademark rights can extend beyond a company’s initial geographic footprint and that confusion among professional purchasers and patient referral networks constitutes powerful evidence of infringement.