Avepoint, Inc. v. Power Tools, Inc.
| Decision Date | 07 November 2013 |
| Docket Number | Civil Action No. 7:13CV00035. |
| Citation | 981 F.Supp.2d 496 |
| Parties | AVEPOINT, INC. and Avepoint Public Sector, Inc., Plaintiffs, v. POWER TOOLS, INC. d/b/a Axceler and Michael X. Burns, Defendants. |
| Court | U.S. District Court — Western District of Virginia |
OPINION TEXT STARTS HERE
Robert Michael Tyler, Spotts Fain, PC, Richmond, VA, Joshua F.P. Long, Joshua Richard Treece, Woods Rogers PLC, Roanoke, VA, for Plaintiffs.
Wyatt B. Durrette, Jr., John Buckley Warden, IV, Durrettecrump, PLC, Brian Aaron Richardson, McCandlish Holton PC, Richmond, VA, John Peter Kristensen, Kristensen Law Group, Los Angeles, CA, for Defendants.
AvePoint, Inc. and AvePoint Public Sector, Inc. (collectively “AvePoint”) filed this action against Power Tools, Inc. d/b/a Axceler (“Axceler”) and Michael X. Burns (“Burns”), asserting claims for defamation; breach of contract; trademark infringement, false association or false endorsement, false designation of source or origin, and false advertising under the Lanham Act; false advertising and unfair competition under Virginia law; and violations of the Virginia Computer Crimes Act. The defendants have moved to dismiss the amended complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the defendants' motions will be denied.
AvePoint, Inc. is an American corporation organized and existing under the laws of Delaware. The corporation is a leading provider of infrastructure management and governance software platforms for Microsoft SharePoint products and technologies. AvePoint, Inc.'s products include DocAve, its “flagship award-winning” SharePoint software platform, and other products including Governance Automation and Compliance Guardian. (Am. Compl. ¶ 2.) On February 26, 2008, the corporation obtained a certificate of registration from the United States Patent and Trademark Office for the word mark “AvePoint.”
AvePoint Public Sector, Inc. is an American corporation organized and existing under the laws of Virginia, with its principal place of business in Virginia. The corporation is a wholly owned subsidiary of AvePoint, Inc., which works extensively with customers in every branch of the United States Armed Forces, federal civilian and intelligence agencies, and state and local governments to provide infrastructure management solutions for Microsoft SharePoint products and technologies.
Defendant Axceler, a Delaware corporation headquartered in Massachusetts, is one of AvePoint's primary competitors. Axceler offers competing software for Microsoft SharePoint products and technologies. Defendant Burns is Axceler's Regional Vice President of Sales for Western North America.
In the instant action, AvePoint alleges that Axceler and its agents, including Burns, have engaged in a campaign of making false, defamatory, and deceptive claims and statements regarding AvePoint and its products and services, both in online networking services such as Twitter,1 and in direct communications with customers and prospective customers. Specifically, AvePoint alleges that Axceler and Burns have attempted to confuse customers into falsely believing: (1) that AvePoint is a Chinese company rather than an American company; (2) that AvePoint's software is not made, developed, or supported in the United States; (3) that AvePoint's software is maintained in India; (4) that Axceler's ControlPoint software is “Microsoft recommended” over AvePoint's DocAve software; (5) that AvePoint's customers are “dumping out of 3 year deals in year 2 to buy Axceler's ControlPoint”; and (6) that Axceler uses its maintenance revenue to improve its customers' existing products, whereas AvePoint uses its maintenance revenue to develop new products to which its customers have no access. (Am. Compl. ¶ 18.) AvePoint alleges that these statements are false, defamatory, deceptive, and likely to confuse consumers, and that they were designed to influence customers to do business with Axceler instead of AvePoint.
AvePoint further alleges that, to perpetuate the false marketing campaign against AvePoint and to create consumer confusion, Axceler and Burns created an account on LinkedIn 2 for a fictitious AvePoint representative named Jim Chung, using AvePoint's registered mark. AvePoint submitted a copy of Jim Chung's LinkedIn profile as an exhibit to the amended complaint. On the profile, Jim Chung is identified as a “Software Engineer at AvePoint” located in “Xinjiang, China,” who has worked for AvePoint from “December 2011—Present.” AvePoint emphasizes that the Linkedln profile encourages viewers to contact Jim Chung for “business deals,” “new ventures,” and “consulting offers.” ( Id.) Because Jim Chung is identified as a current AvePoint representative, the plaintiffs allege that consumers and others in the business community have been deceived into believing that Jim Chung can be contacted regarding business deals with AvePoint, new ventures with AvePoint, and consulting related to AvePoint products and services. The plaintiffs allege that the defendants have profited from the goodwill associated with the AvePoint mark by fielding customer inquiries through the imposter account, and that they have used the account to divert business to Axceler and to otherwise cause competitive harm to AvePoint.
AvePoint claims that evidence of actual confusion as to AvePoint's affiliation, connection, or association with Jim Chung and the fictitious account, and as to the origin or source of commercial activities offered through the account, is reflected in Jim Chung's connection list. AvePoint alleges that because Axceler used AvePoint's mark in the profile, “AvePoint's current customers, including Nintex and Aetna[,] have been misled and deceived into believing that this is a legitimate AvePoint account.” (Am. Compl. ¶ 48.) Likewise, “numerous AvePoint employees have been misled and deceived into believing that Jim Chung [is] an AvePoint colleague, and have connected to this account.” ( Id.)
AvePoint further alleges that Burns was directly involved in Axceler's efforts to create the fictitious Linkedin profile, and that he has been involved in publicizing the profile. In November of 2012, after the profile was created, Burns posted several tweets about Jim Chung on Twitter. For instance, on November 9, 2012, Burns tweeted: “# Axceler and Jim Chung are gonna rock Vegas!” (Am. Compl. ¶ 51.) On November 14, 2012, during the SharePoint conference in Las Vegas, Burns tweeted: “Just ran into jim chung from avePoint Good guy.” (Id.) In response to Burns' November 9, 2012 Twitter post, Christian Buckley, Axceler's Director of Product Evangelism, tweeted: ( Id.)
AvePoint claims that Axceler's deceptive practices reached “new heights (or lows)” on December 18, 2012, “when Axceler created a fictitious email account and profile to obtain a trial copy of AvePoint's most recent version of DocAve, DocAve 6.” (Am. Compl. ¶ 54.) At 16:10:44 on that day, AvePoint received a request for a trial download of DocAve 6 from IP address 64.17.251.102, which contained the following information:
Products:
1. DocAve v6 for SharePoint 2010
Your Name:
Jill Wagner
Company:
Kohl*'s Food Stores
Email:
Jill RWagner@ dayrep. com
Country:
United States
Phone:
435–[* * *-* * * *]
Environment:
2010
Personalized Demo:
No, I don't!
Send Marketing Materials:
DO NOT SEND
AvePoint alleges that IP address 64.17.251.102 is not registered to “Jill Wagner” or to “Kohl's Food Stores.” Instead, “[t]he address is registered to Defendant ” (Am. Compl. ¶ 55.) Additionally, AvePoint alleges that the email extension “@dayrep. com” is not real, and that the email address was created using Fake Mail Generatort. ( Id.)
AvePoint claims that Axceler acquired a trial copy of DocAve 6 under false pretenses so that it could examine AvePoint's software for competitive, commercial purposes. AvePoint further alleges that Axceler's use of the trial version of the software was in violation of AvePoint's Website Terms and Conditions, which provide, in pertinent part, as follows:
By accessing, viewing, or using this Site, you, the User, indicate that you understand and intend these Terms and Conditions and Privacy Policy to be the legal equivalent of a signed, written contract and equally binding, and that you agree to such Terms and Conditions and Privacy Policy.
...
1. Grant of License. This Agreement provides you, the User, with a personal, revocable, nonexclusive, nontransferable license to use this Site conditioned on your continued compliance with the Terms and Conditions of this Agreement. Users may access, print and download materials and information on this Site solely for personal and noncommercial use, provided that all hard copies contain all copyright and other applicable notices contained in such materials and information.... To seek permission to use materials and information (including screenshots of this Site or posting any content from this Site) beyond the scope of the foregoing license, please contact AvePoint via postal mail, e-mail or telephone as indicated below. Any rights not expressly granted herein are reserved.
...
11. Governing Law. This Agreement will be governed by the laws of the Commonwealth of Virginia, without regard to conflict of law rules, and the exclusive jurisdiction and venue for any dispute shall be the Commonwealth of Virginia.
AvePoint filed the instant action against the defendants on January 24, 2013. After the defendants moved to dismiss the original complaint, AvePoint was granted leave to file an amended complaint. In the amended complaint, AvePoint asserts the following claims: defamation (Count I); breach of contract (Count II); trademark infringement (Count III); false association or false endorsement (Count IV); false...
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