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LLC v. Jackson

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

November 22, 2017

THE LEADER'S INSTITUTE, LLC, and DOUG STANEART, Plaintiffs,
v.
ROBERT JACKSON, and MAGNOVO TRAINING GROUP, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          JANE J. BOYLE, UNITED STATES DISTRICT JUDGE

         This intellectual-property dispute arises between competitors in the team-building industry. Defendant Robert Jackson worked for Plaintiff The Leadership Institute (TLI), but now he works for Defendant Magnovo Training Group (Magnovo). Jackson's departure from TLI triggered this controversy because TLI and its owner, Plaintiff Doug Staneart, believe Jackson absconded with vital trade secrets and that Jackson and Magnovo are using TLI's federally registered trademarks. Jackson and Magnovo respond that Staneart and TLI have abused the legal process, defamed Jackson, and infringed Magnovo's federally registered copyrights, and they ask the Court to cancel TLI's trademarks. Robert Jackson[1] seeks partial summary judgment on the plaintiffs' claims against him, and the plaintiffs seek partial summary judgment on the defendants' equitable defenses and counterclaims. The Court DENIES Jackson's motion for partial summary judgment (Doc. 180) and GRANTS in part and DENIES in part the plaintiffs' motion for partial summary judgment (Doc. 177).

         I. BACKGROUND[2]

         A. Factual Background

         Doug Staneart created TLI, which, since 2002, has been in the business of organizing corporate charity events and conducting corporate-leadership, team-building, and public-speaking seminars. Doc. 30, Fourth Am. Compl., ¶¶ 29-30. For example, TLI conducts build-a-bike events-to which businesses pay to send their employees for the opportunity to work together to build bicycles that are donated to charity. Id. at ¶¶ 30-32. The experience simultaneously promotes team work and charitable giving. Id. at ¶ 31.

         Staneart registered “Build-A-Bike” and “BUILD-A-BIKE” as service marks[3] with the United States Patent and Trademark Office (USPTO) and subsequently assigned the build-a-bike marks to TLI. Id. at ¶¶ 32-34. The USPTO put the marks on the Supplemental Register[4] on November 18, 2008, Doc. 179-2, App'x to Pls.' Mot. Partial Summ. J., Ex. 1, 47, and on the Principal Register[5] on June 3, 2014. Id. at 49. The plaintiffs have attempted to protect their trademark rights by sending cease-and-desist letters, Doc. 179-12, App'x to Pls.' Mot. Partial Summ. J., Ex. 11, 226, 271; Doc. 30, Fourth Am. Compl., ¶ 89, and by recovering internet domain names resembling the build-a-bike marks, Doc. 179-10, App'x to Pls.' Mot. Partial Summ. J., Ex. 9. TLI also filed a lawsuit alleging trademark infringement against a company TLI thought was using the build-a-bike marks. Doc. 186-23, App'x to Defs.' Summ. J. Resp., Ex. W.

         The plaintiffs claim also to have spent substantial time, labor, and money in the development of trade secrets-namely, customer lists. Doc. 30, Fourth Am. Compl., ¶¶ 39-41. On TLI's customer lists are over 400 Fortune 500 companies and contacts at those companies the plaintiffs say are “extremely difficult and costly to identify.” Id. at ¶¶ 42-43. TLI keeps its customer lists secret by storing them on a password-protected internal system. Id. at ¶ 46. Only employees with a specific need can access TLI's customer list, and TLI's employees and independent contractors agree to non-compete clauses prohibiting them from using TLI's customer lists within fifteen months after they leave TLI. Id. at ¶¶ 47-48.

         Robert Jackson began to teach seminars for TLI in December 2006 as an independent contractor. Doc. 30, Fourth Am. Compl., ¶ 52. Between then and January 2009, Jackson conducted public-speaking seminars for TLI and became TLI's Vice President of Instruction. Id. But in January 2009, TLI terminated its relationship with Jackson because it believed Jackson was operating a company called Magnovo[6] in direct competition with TLI. Id. at ¶ 54. Jackson nonetheless returned in September, October, and November 2010, asking to rejoin TLI as an independent contractor. Id. at ¶¶ 55-57. In November 2010, Staneart offered Jackson the opportunity to conduct a TLI seminar. Id. at ¶ 57. Jackson agreed to become an independent contractor, and the plaintiffs allege that he signed an independent-contractor agreement that stated

Any client list developed through advertising or marketing from TLI, the course materials and instructional techniques used, and the goodwill generated by this client list and instruction materials and techniques are the intellectual property of TLI. So by approving to the terms of this agreement, you also agree not to use the client list developed by you while working as an agent of TLI, or client lists developed by other TLI instructors, to compete with TLI for a period of 18 months after the termination of this agreement.

Id. at ¶¶ 58-60. Jackson claims he never signed this agreement. Doc. 180, Robert Jackson's Mot. Partial Summ. J., ¶ 5.[7]

         The plaintiffs allege that Jackson wronged them in various ways after he signed the agreement but before[8] he left TLI in August 2013-a time period during which Jackson could access TLI's customer lists. Doc. 188-5, App'x to Pls.' Summ. J. Resp., Ex. D, 33-34. While under agreement with TLI, Jackson solicited TLI's customers for business and invoiced them for seminars he would teach in August 2013 after leaving TLI. Doc. 188-6, App'x to Pls.' Summ. J. Resp., Ex. E, 56, 66-69, 82, 88, 90, 92. According to TLI, Jackson even emailed Colette Martin, who also left TLI for Magnovo, a compilation of TLI's customer-contact information. Doc. 188-2, App'x to Pls.' Summ. J. Resp., Ex. A.

         Jackson denies the plaintiffs' allegations. He says he never copied, downloaded, or used TLI's customer or pricing information to compete with TLI while under agreement with TLI. Doc. 151, App'x to Robert Jackson's Mot. Partial Summ. J., 2. Rather, Jackson says Magnovo developed websites and invested in search-engine optimization to gain clients. Id. at 4. Regarding Novartis and Royal Caribbean, Jackson admits to agreeing to do presentations for them while he was still under agreement with TLI but says the companies came to him; he claims not to have actively sought speaking engagements with them while he was with TLI. Id. at 2-4. Jackson claims also that his friend Bert Von Mitendorf introduced him to Larry Pimental, who worked for cruise lines including Royal Caribbean, and that Pimental asked Jackson to provide workshops to the cruise lines. Id. Jackson also complains that statements Staneart made to others, including Colette Martin, regarding Jackson's alleged use of TLI's trade secrets defamed him. Doc. 186-1, App'x to Robert Jackson's Mot. Partial Summ. J., 3-4.

         Magnovo also claims to have some intellectual property of its own and says the plaintiffs have infringed it. Doc. 131, Defs.' First Am. Answer, Defenses, & Countercls., ¶¶ 268-75. Magnovo has registered copyrights pertaining to the Bicycle-Team-Building-Events.com website and “Magnovo Photo 1.” Doc. 186-24, App'x to Defs.' Summ. J. Resp., Ex. X, 254. The defendants allege that the plaintiffs have caused TLI's websites to “frame” Magnovo's Bicycle-Team-Building-Events.com website, which means the plaintiffs caused Magnovo's website to appear within and under the plaintiffs' registered domain names. Id. at 255. The defendants accuse the plaintiffs also of fraudulently applying to register “Magnovo” as a trademark. Doc. 186-16, App'x to Defs.' Summ. J. Resp., Ex. P., 115-16. But after the defendants challenged the plaintiffs' application, the plaintiffs withdrew it. Doc. 186-4, App'x to Defs.' Summ. J. Resp., Ex. D., 59-60.

         B. Procedural History

         In September 2013, the plaintiffs sued the defendants in Texas state court. Doc. 179-16, App'x to Pls.' Mot. Partial Summ. J., Ex. 16, 323-24. But in May 2014, the plaintiffs nonsuited[9] their state-court action. Id. at 335-36. Subsequently, on October 2, 2014, the plaintiffs filed this lawsuit. Doc. 1, Compl. In the plaintiffs' Fourth Amended Complaint, filed on August 8, 2016, the plaintiffs accuse the defendants of 1) infringing a federally registered service mark under 15 U.S.C. § 1114(1); 2) statutory infringement and false designation of origin under 15 U.S.C. § 1125; 3) violating the Anticybersquatting Consumer Protection Act, specifically 15 U.S.C. § 1125(d); 4) unfairly competing with the plaintiffs under 15 U.S.C. § 1125(a); 5)trademark infringement under Texas law; 6) unfair competition under Texas law; 7) unjust enrichment under Texas law; and 8) false advertising under Texas law. Doc. 130, Fourth Am. Compl., ¶¶ 104-94. And the plaintiffs accuse Jackson under Texas law of 1) unfair competition by misappropriation; 2) misappropriating trade secrets; 3) breach of contract; and 4) tortious interference with prospective business relations. Id.

         On April 21, 2017, the defendants filed their First Amended Answer, Defenses, and Counterclaims in which they generally denied the plaintiffs' factual allegations and raised numerous legal and equitable defenses. Doc. 131, Defs.' First Am. Answer, Defenses, & Countercls. The defendants also counterclaimed that the plaintiffs committed 1) abuse of process, 2) tortious interference with business relations, 3) defamation, and 4) federal copyright infringement. Id. at ¶¶ 230-74. The defendants also ask the Court to cancel TLI's federally registered marks and for attorney fees. Id. at ¶¶ 258-67.[10]

         Now, parties on both sides have defensively moved for partial summary judgment. Jackson asks the Court to grant him summary judgment on the plaintiffs' state-law claims against him. Doc. 180, Jackson's Mot. Partial Summ. J. And the plaintiffs ask the Court to grant summary judgement in their favor on the defendants' counterclaims and equitable defenses. Doc. 177, Pls.' Mot. Partial. Summ. J.. The plaintiffs' federal claims against the defendants are not the subject of either of the motions before the Court.

         II. LEGAL STANDARD

         Courts must grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute “is ‘genuine' if the evidence is sufficient for a reasonable jury to return a verdict for the non-moving party.” Burrell v. Dr. Pepper/Seven Up Bottling Grp., 482 F.3d 408, 411 (5th Cir. 2007). And a fact “is ‘material' if its resolution could affect the outcome of the action.” Id.

         The summary-judgment movant bears the burden of proving that no genuine issue of material fact exists. Latimer v. Smithkline & French Labs., 919 F.2d 301, 303 (5th Cir. 1990). So the movant must identify “those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). Once the movant has produced evidence on an element or claim or alleged the non- movant has no evidence, the non-movant must “identify specific evidence in the record” and “articulate the precise manner in which that evidence supports [its] claim” to show that a fact issue exists. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). And although the Court views evidence in the light most favorable to the non-movant when determining whether a genuine issue exists, Munoz v. Orr, 200 F.3d 291, 302 (5th Cir. 2000), mere “metaphysical doubt as to material facts, ” “conclusory allegations, ” “unsubstantiated assertions, ” or a mere “scintilla of evidence” will not save a non-movant from summary judgment, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (per curiam)(internal citations and quotation marks omitted).

         III. ANALYSIS

         A. Robert Jackson's Motion for Partial Summary Judgment on the Plaintiffs' State-Law Claims Against Him

         The plaintiffs claim that by using TLI's customer lists and pricing information to compete with TLI, Jackson committed

1. Unfair competition by misappropriation;
2. Misappropriation of trade secrets;
3. Breach of contract; and
4. Tortious interference with prospective business relations.[11]

Doc. 130, Fourth Am. Compl., ¶¶ 138-82.

         But in his motion for summary judgment, Jackson claims the plaintiffs have failed to present evidence that Jackson used TLI's customer list, Doc. 182, Jackson's Mot. Partial Summ J. Br., ¶¶ 26-36, and he presents as summary-judgment evidence his own sworn declaration in which he denies that he used TLI's customer lists and claims to have developed Magnovo's business with TLI's clients via personal relationships, websites, and search engine optimization.[12] Doc. 181, App'x to Jackson's Mot. Partial Summ. J., ¶¶ 6-12.

         For their part, the plaintiffs respond with summary-judgment evidence that they claim creates a fact issue regarding whether Jackson used TLI's customer list. The plaintiffs have attached to their motion evidence that

• Colette Martin, a Magnovo colleague of Jackson's who also left TLI, testified that, while Jackson was a TLI independent contractor, he had access to TLI's customer list, customer-contact information, pricing list, training materials, and other confidential information, Doc. 188-5, App'x to Pls.' Summ. J. Resp., Ex. D, 33-34;
• while Jackson was a TLI independent contractor, Jackson arranged to conduct seminars for at least three of TLI's customers-Novartis Consumer health, Inc., Royal Caribbean Cruise Line, and StatOil Gulf Services-after leaving TLI, Doc. 188-6, App'x to Pls.' Summ. J. Resp., Ex. E, 45, 56-62, 66-69, 88-90, 92;
• two of the customers to which Jackson presented seminars shortly after leaving TLI are on TLI's customer-list excerpt, Doc. 188-14, App'x to Pls.' Summ. J. Resp., Ex. M, 310;
• after leaving TLI, Jackson emailed Colette Martin a list of his contacts, Doc. 188-2, App'x to Pls.' Summ. J. Resp., Ex., A, all of which are on TLI's customer list, Doc. 188-14, App'x to Pls.' Summ. J. Resp., Ex. M;
• all of the customer contacts on the disclosed excerpt of TLI's list, Doc. 188-13, App'x to Pls.' Summ. J. Resp., Ex. L, appear also on Magnovo's customer list, Doc. 188-14, App'x to Pls.' Summ. J. Resp., Ex. M'
• on both TLI's and Magnovo's customer lists, one customer entry lists the individual contact only as Rachel, and on both TLI's list, Doc. 188-13, App'x to Pls.' Summ. J. Resp., Ex. L, 293, and Magnovo's list, Doc. 188-14, App'x to Pls.' Summ. J. Resp., Ex. M., 309, the entry lacks a last name for Rachel; and
• proposals Jackson produced, Doc. 188-12, App'x to Pls.' Summ. J. Resp., Ex. K, reveal that Jackson sent 500 proposals to over 200 companies on the plaintiffs' customer list, Doc. 188- ...

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