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Neutron Depot, LLC v. Bankrate, Inc.

United States District Court, W.D. Texas, Austin Division

May 1, 2018




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically, Defendant Bankrate's Motion for Partial Summary Judgment [#267], Neutron Depot's Response [#269] in opposition, and Bankrate's Reply [#270] in support.[1] Having reviewed the documents, the relevant law, and the file as a whole, the Court now enters the following opinion and order.


         This is a trademark infringement action. In 1993, CSi Agency Services, Inc. (CSi) began using the phrase "Insurance Depot" (the Mark) to advertise its insurance services, and in 1994, the U.S. Patent and Trademark Office (USTPO) issued a certificate of registration) issued CSi a certificate of registration for use of the term "Insurance Depot" as a service mark in promoting insurance agency services. Mot. Sanctions [#218] Ex. A (Maxwell Decl.) at 31-32.[2]; id. [#218] Ex. A-4 (Certificate of Registration) at 42-44.

         The president and sole owner of CSi is Jim Maxwell. Id. at 30. Maxwell also happens to be the manager and part owner of another company, Neutron Depot. Id. In August 2013, in his capacity as president of CSi, Maxwell licensed the Mark to Neutron Depot.[3] Resp. Mot. Sanctions [#218] Ex. B-3 (License Agreement) at 73-78.

         Defendant Bankrate is a consumer financial services company. One of Bankrate's divisions-the insurance lead division-helps insurance companies find prospective customers. Mot. Summ. J. [#267-2] (Kent Report) at 7-15. To locate these prospective customers, Bankrate uses millions of keywords in ads and web pages to drive traffic to websites through which Bankrate collects the contact information of prospective customers. Id. Bankrate then sells this contact information-the "lead"-to insurance companies. Id.

         Most of the millions of keywords used by Bankrate are generated by algorithm, and at some point in 2010, Bankrate began using the Mark as one of its keywords. Notice Filing [#266-1] Rihtar Dep. Tr. at 70; Kent Report at 22-24 (explaining process of keyword generation). Between 2010 and 2014, Bankrate's use of keywords in ads and web pages generated nearly 7.6 million leads. Rihtar Dep. Tr. at 70. Bankrate's use of the Mark as a keyword was responsible for generating, at most, seventy-three of these leads. Id.

         In May 2014-less than a year after licensing the Mark from CSi-Neutron Depot filed this suit against Bankrate for trademark infringement. Compl. [#1]. After Bankrate learned of the lawsuit, it immediately removed all ads and webpages containing the Mark, and, in December 2015, Bankrate sold off its insurance lead division altogether. Rihtar Dep. Tr. at 119-22; Mot. Transfer [#149-1] Ex. A at 2. Though Neutron Depot alleges it suffered "financial loss and loss of goodwill" as a result of Bankrate's infringement, Neutron Depot has not presented any evidence of lost sales or other financial harm. Resp. Mot. Summ. J. [#269] at 12. In fact, Neutron Depot does not seek actual damages in this action at all-it seeks only to disgorge the profits Bankrate earned by infringing on the Mark during the term of Neutron Depot's license. Id.

         In prior orders, this Court dismissed Neutron Depot's claims under §§32(1) and 43(c) of the Lanham Act as well as its counterfeiting and state dilution claims. Order of Nov. 30, 2017 [#246]; Order of March 12, 2018 [#265]. As a result, Neutron Depot has only a single remaining claim, brought under § 43(a)(1)(A) of the Lanham Act. Bankrate now files a motion for partial summary judgment which is ripe for review. Mot. Summ. J. [#267].


         I. Legal Standard

         Summary judgment shall be rendered when the pleadings, the discovery and disclosure materials on file, and any affidavits show 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); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007). 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 inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. 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 fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. Id. 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 claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). 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.

         "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 ...

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