On December 14, Pete Peters created a coffee he called Petes. He specialized in selling premium, dark roast coffee. He sold his coffee in dark brown cups with the word Petes on it. His logo was the letter P with downward point triangles on it. He called his reward program Peet-nicks. In his advertising, he promoted that he solicited the best coffees from farms around the world. He located his coffee shops near Peets coffee location, hoping that coffee drinkers might see his shops first.

Peets Coffee sent Pete Peters a letter to cease and desist using the name, logo, coffee cup and name for his reward program. Peets argued that Pete was liable for trademark infringement. Explain whether Pete is liable for trademark infringement. In your answer, apply the law by defining each of the legal principle(s) first (be sure to include the textbook page number), explaining how the law would be applied and stating your conclusion. If you used outside sources, please include the title, author and URL for electronic sources and the title, author and publisher of any non-electronic sources.