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Springboards to Education Inc v. Demco Inc.

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

December 5, 2017

SPRINGBOARDS TO EDUCATION, INC., Plaintiff-counterdefendant,
v.
DEMCO, INC., Defendant-counterplaintiff, and W.W. GRAINGER, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A FITZWATER, UNITED STATES DISTRICT JUDGE.

         Plaintiff-counterplaintiff Springboards to Education (“Springboards”) sues defendant-counterplaintiff Demco, Inc. (“Demco”) and defendants W. W. Grainger, Inc. (“Grainger”) and Collaborative Summer Library Program (“CSLP”) to recover on federal- and state-law trademark and related claims. Grainger moves to dismiss Springboards' third amended complaint (“complaint”) for failure to state a claim on which relief can be granted. For the reasons that follow, the court denies the motion.

         I

         Springboards sells products and programs for use by educators to incentivize children to read. One product-the Read a Million Words Campaign-is a customizable campaign that encourages students to read one million words by the end of the school year. Springboards secured several trademarks to protect its product, including “Read a Million Words, ” “Millionaire Reader, ” “Millionaire's Reading Club, ” “Million Dollar Reader, ” and “Feel Like a Million Bucks.”

         This lawsuit is based on allegedly infringing products sold by Demco, a competitor of Springboards, and Grainger, a business-to-business distributor of maintenance products. Springboards asserts that Demco and Grainger, through the Upstart brand that they each owned at different points in time, sold products that copied the Read a Million Words program. These products include a “Bank on Books!” Activity Guide (“Activity Guide”) that contains a large million dollar bill with a cutout in the center for a child's face, and the Million Dollar Reader trademark, as well as a million dollar bill bookmark (“Bookmark”) that Springboards alleges contains trademarks infringing on Springboards' Million Dollar Reader trademark. Springboards also alleges that Upstart's catalogue contains other products, including bags, that copy Springboards' Million Dollar Reader trademark. Springboards asserts that these products were distributed under Upstart and Edupress brands by Lab Safety Supply, Inc. (“LSS”) and Highsmith. Grainger acquired LSS and Highsmith at an unspecified point in time. Demco later acquired from Grainger the assets of Highsmith, including the Upstart brand.[1]

         Springboards brought this lawsuit against Demco alleging seven claims of trademark infringement. It later amended its complaint to include Grainger and CSLP as defendants. In the current complaint, [2] Springboards alleges seven claims for trademark infringement against Grainger, Demco, and CSLP.[3] It maintains that Grainger is liable for selling infringing products under the Upstart and Edupress brands during the period spanning from its acquisition of LSS and Highsmith to when it sold Highsmith to Demco. It alleges, in pertinent part:

[o]n information and belief, Grainger and later, Demco distributed a million dollar bill bookmark for educators to use in connection with a “Million Word Challenge.” On information and belief, the bookmark contained trademarks identical to or confusingly similar to Springboards to Education's Million Dollar Reader® Trademark.

3d Am. Compl. 15, ¶ 53.

The Infringing Activity Guide also has been disseminated under the Upstart, Highsmith, and/or Lab Safety Supply, Inc. name or Brands by Grainger and, later, by Demco through the Upstart, Highsmith, and/or Lab Safety Supply, Inc. name or Brands.

Id. at 15-16, ¶ 54.

         Springboards also asserts that Grainger continued to be jointly responsible with Demco for the sale of allegedly infringing products:[4]

On information and belief, by virtue of its merger/acquisition of Lab Safety Supply, Inc. and Highsmith to claim a copyright on the Infringing Activity Guide, Grainger continued to be jointly responsible for the continued publication and dissemination of the Infringing Activity Guide after Demco acquired the assets of Highsmith from Demco.

Id. at 16, ¶ 57.

         Grainger now moves to dismiss under Fed.R.Civ.P. 12(b)(6), contending that Springboards has failed to state a claim on which relief ...


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