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The Joseph Paul Corp. v. Trademark Custom Homes Inc.

United States District Court, N.D. Texas, Dallas Division

November 15, 2017

THE JOSEPH PAUL CORPORATION d/b/a JOSEPH PAUL HOMES, Plaintiff,
v.
TRADEMARK CUSTOM HOMES, INC.; ERIC EMIL JOHNSON; CASH MCWHORTER; AND KIMBERLY MCWHORTER, Defendants.

          MEMORANDUM OPINION AND ORDER

          SAM A. LINDSAY, UNITED STATES DISTRICT JUDGE.

         Before the court is Plaintiff The Joseph Paul Corporation d/b/a Joseph Paul Homes' Motion for Partial Summary Judgment (Doc. 73), filed August 18, 2017. Plaintiff moves for summary judgment on its copyright infringement claims (direct, contributory, and vicarious), as well as Defendants Trademark Custom Homes, Inc.'s (“Trademark”) and Defendant Eric Emil Johnson's (“Johnson”) affirmative defenses of failure to state a claim; lack of standing; laches; unclean hands; estoppel and waiver; authorized use; misuse of copyright; license, consent, and acquiescence; and innocent intent. After carefully considering the motion, response, reply, briefs, evidence, record, and applicable law, the court denies Plaintiff The Joseph Paul Corporation d/b/a Joseph Paul Homes' Motion for Partial Summary Judgment (Doc. 73). The court previously denied Trademark's and Johnson's motion to dismiss based on their defenses of lack of standing and failure to state a claim, and a genuine dispute of material fact exists regarding the elements of the parties' remaining claims and defenses.

         I. Background

         On June 20, 2016, Plaintiff The Joseph Paul Corporation d/b/a The Joseph Paul Homes (“JP Homes” or “Plaintiff”) filed this action against Defendants Trademark, Trademark's principal Johnson, and homeowners Cash McWhorter and Kimberly McWhorter (collectively, “the McWhorters”). The court refers to all Defendants collectively as “Defendants” when appropriate. JP Homes designs and builds custom homes in North Texas. Plaintiff contends that it owns the copyright to the architectural plans, drawings, and work for the house design known as “The Martinique, ” and that Defendants copied and improperly appropriated original elements of JP Homes's copyrighted work in The Martinique. JP Homes asserts claims against all Defendants for copyright infringement, contributory copyright infringement, and vicarious copyright infringement. Plaintiff also asserts a claim of false advertising and unfair competition in violation of the Lanham Act against Trademark, and a common law fraud claim against the McWhorters. Plaintiff seeks actual damages, consequential damages, statutory damages, punitive damages, attorney's fees, costs of court, as well as preliminary and permanent injunctive relief against Defendants.

         On June 21, 2016, Plaintiff filed a separate Motion for Temporary Restraining Order and Preliminary Injunction to enjoin the construction of the McWhorters' house being built by Trademark, contending that the McWhorters, without JP Homes's permission, provided JP Homes's copyrighted architectural plan for The Martinique to Trademark and Johnson, and Trademark was using the copyrighted plan, or a plan that is substantially similar, to build the McWhorters' house. Plaintiff contended in its motion that Trademark was misleading consumers by using photographs of a house designed by JP Homes in advertising its own products in D Home Magazine, Facebook, Houzz, Twitter, Pinterest, Land and Home Magazine, and Trademark's website. In addition to damages, Plaintiff sought to halt the construction of the McWhorters' house and enjoin the McWhorters from further acts of direct, contributory, and vicarious infringement, contending that Defendants should either be required to alter the McWhorters' house, so it will not infringe Plaintiff's copyright, or they should be required to remove the structure.

         On July 19, 2016, Defendants Trademark and Johnson filed a joint motion to dismiss in which Trademark moved under Federal Rule of Civil Procedure 12(b)(1) to dismiss Plaintiff's Lanham Act claim for lack of subject matter jurisdiction based on lack of standing, and Trademark and Johnson both moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff's copyright infringement claims and Lanham Act claims for failure to state a claim upon which relief can be granted.

         On September 16, 2016, the court denied Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction and Defendants Trademark Custom Homes, Inc. and Eric Emil Johnson's Motion to Dismiss Pursuant to Rule 12(b)(1) and 12(b)(6). On July 19, 2016, Trademark and Johnson filed their Original Answer, in which they assert the following affirmative defenses: failure to state a claim; lack of standing; laches; unclean hands; estoppel and waiver; authorized use; misuse of copyright; license, consent, and acquiescence; and innocent intent. On June 9, 2017, Plaintiff and the McWhorters filed a Joint Stipulation of Dismissal and Motion to Dismiss with Prejudice their claims against each other, which the court granted on June 12, 2017.

         On August 18, 2017, Plaintiff filed its motion for partial summary judgment against Trademark and Johnson. As noted, Plaintiff moves for summary judgment with respect to its copyright infringement claims (direct, contributory, and vicarious) and Trademark and Johnson's affirmative defenses of failure to state a claim; lack of standing; laches; unclean hands; estoppel and waiver; authorized use; misuse of copyright; license, consent, and acquiescence; and innocent intent.

         II. Summary Judgment Standard

         Summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine dispute of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). On the other hand, “if the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (emphasis in original). “[When] the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine [dispute] for trial.'” Matsushita, 475 U.S. at 587. (citation omitted). Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994).

         The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his or her claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to “sift through the record in search of evidence” to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992). “Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues that are “irrelevant and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

         III. Analysis

         A. Copyright Infringement Claims ...


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