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

• Decision Date: 16 September 2016
• Docket Number: Civil Action No. 3:16-CV-1651-L
• Parties: 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.
• Court: U.S. District Court — Northern District of Texas

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

Civil Action No. 3:16-CV-1651-L

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

September 16, 2016

MEMORANDUM OPINION AND ORDER

Before the court is Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction ("Motion") (Doc. 7), filed June 21, 2016; Defendants Trademark Custom Homes, Inc. and Eric Emil Johnson' Motion to Dismiss Pursuant to Rule 12(b)(1) and 12(b)(6) (Doc. 19), filed July 19, 2016; Plaintiff's request for a hearing on its Motion for Preliminary Injunction and request to consolidate the hearing with the trial on the merits under Rule 65(a)(2) (Docs. 25, 28), filed July 26, 2016;¹ Defendants Cash McWhorter's and Kimberly McWhorter's (collectively "the McWhorters") Motion to Strike Plaintiff's Reply Brief and Appendix to its Reply to McWhorters' Response in Opposition to Request for Temporary Restraining Order and Preliminary Injunction and, alternatively, Motion for Leave to File Surreply ("Motion to Strike") (Doc. 31), filed August 5, 2016; and Plaintiff's Motion for Hearing (Doc. 41), filed September 8, 2016.

After considering the motions, briefs, evidence, and applicable law, the court denies Defendants Trademark Custom Homes, Inc. and Eric Emil Johnson' Motion to Dismiss Pursuant to Rule 12(b)(1) and 12(b)(6) (Doc. 19); denies Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction (Doc. 7); denies as moot Plaintiff's request for a hearing on its Motion for Preliminary Injunction and request to consolidate the hearing on the Motion for Preliminary Injunction with the trial on the merits before Defendants have had the opportunity to conduct discovery (Docs. 25, 28); denies as moot Defendants Cash McWhorter's and Kimberly McWhorter's Motion to Strike Plaintiff's Reply Brief and Appendix to its Reply to McWhorters' Response in Opposition to Request for Temporary Restraining Order and Preliminary Injunction and, alternatively, Motion for Leave to File Surreply (Doc. 31); and denies as moot Plaintiff's Motion for Hearing (Doc. 41).

I. Factual and Procedural 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 Custom Homes, Inc. ("Trademark"), Trademark's principal Eric Emil Johnson ("Johnson"), and homeowners Cash McWhorter and Kimberly McWhorter (collectively, "the McWhorters"). The court refers to all Defendants collectively as "Defendants" when appropriate. According to Plaintiff's Complaint, JP Homes designs and builds custom homes and has done so for approximately eight years in North Texas. Plaintiff alleges 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. Pl.'s Compl. ¶¶ 9, 35, 36. 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 that is currently being built by Trademark. Plaintiff contends that the McWhorters, without JP Homes's permission, provided JP Homes's copyrighted architectural plan for The Martinique to Trademark and Johnson, and Trademark is using the copyrighted plan, or a plan that is substantially similar, to build the McWhorters' house. Plaintiff alleges that Trademark has misled 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.² In addition to damages, Plaintiff seeks to halt the construction of the McWhorters' house and enjoin the McWhorters from further acts of direct, contributory, and vicarious infringement. Plaintiff contends 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. In its Complaint, Plaintiff requests entry of a temporary restraining order ("TRO") and preliminary injunction that would preclude Trademark and Johnson from infringing JP Homes' registered copyrights and copyrighted architectural plans and drawings in the future as follows:

This injunctive relief includes, but is not limited to, an order that Defendants, and all those acting in concert with them, cease using all infringing plans, that all infringing copies be destroyed[,] that the sale of all in bringing work he enjoined in the absence of consent from JP Homes, and that the structure built using the infringing plans either be torn down and removed or modified sufficiently so as not to infringe upon JP Homes' copyright.

Pl.'s Compl. ¶ 41. Plaintiff's copyright infringement claim is based on Defendants' conduct in building the McWhorters' house using an allegedly infringing copy of The Martinique plans, whereas, the foregoing requested injunctive relief in Plaintiff's Complaint appears to extend beyond JP Homes's plans for The Martinique. The injunctive relief specified in Plaintiff's Motion appears to similarly extend beyond the McWhorters' house and the allegedly infringing plans being used to build that house, although Plaintiff's Motion is based solely on its copyright claim, which focuses on JP Homes's "The Martinique" plan and the McWhorters' house.³ See Pl.'s Mot. 2.

In support of its Motion, Plaintiff submitted the Declaration of Joseph Vastano ("Vastano"), JP Homes's president. Attached to Vastano's declaration are the following eight exhibits:

(1) Copyright Application No. 1-3092398029, dated February 2, 2016, for The Martinique;

(2) architectural plans for The Martinique;

(3) an automated e-mail, dated February 2, 2016, from the United States Copyright office acknowledging receipt of the application and application fee for The Martinique; (4) June 7, 2016 Copyright Assignment in which Vastano assigns the copyright, registration, and application for The Martinque, Manchester Plan, The Remington, and The Felton, which are listed in "Schedule A To Copyright Assignment";⁴

(5) a photograph of the architectural plans for the "McWhorters' Residence" that reference Johnson and DC Texas Designs;

(6) April 7, 2016 cease and desist letter from Plaintiff's counsel to the McWhorters asserting misapprpropriation and infringement of JP Homes's intellectual property rights in the architectural design of the custom home created by JP Homes for the McWhorters;

(7) April 7, 2016 cease and desist letter from Plaintiff's counsel to Johnson asserting misapprpropriation and infringement of JP Homes's intellectual property rights in the architectural designs of homes created by JP Homes for the McWhorters and Mr. and Mrs. James McAnally; and

(8) April 7 and 8, 2016 e-mails from Johnson responding to Plaintiff's cease and desist letter and disputing JP Homes's claim to intellectual property rights in the plans for the McWhorters' and McAnnallys' homes.

See Pl.'s Mot. App. 4-47 (Doc. 9). JP Homes clarifies that it is not seeking ex parte relief but instead is requesting that the court enter a TRO to enjoin Defendants' allegedly infringing activity as soon as they have been served and have a reasonable opportunity to respond to its Motion. By order dated June 22, 2016, the court advised that it would set a deadline for Defendants to respond to Plaintiff's Motion after all summons were served by Plaintiff and Plaintiff informed the court in writing when service had been effected. Plaintiff never informed the court in writing when service of process was effected as to each Defendant. The court, therefore, did not enter a briefing schedule expediting the deadlines for Defendants to respond to Plaintiff's Motion for injunctive relief. Instead, Trademark and Johnson filed their Answer to the Complaint and response to Plaintiff's Motion for injunctiverelief on July 19, 2016, in accordance with an agreed motion that was granted by the court. Trademark and Johnson also 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 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.

The McWhorters filed their Answer to Plaintiff's Complaint on July 13, 2016, followed by a response to Plaintiff's Motion for injunctive relief on July 20, 2016. On July 26 and 27, 2016, Plaintiff filed separate reply and reply briefs to Defendants' responses to Plaintiff's Motion for injunctive relief. In support of both replies, JP Homes submitted a supplemental declaration from Vastano, to which six additional exhibits are attached. In addition, Plaintiff submitted declarations from Leslie Owens ("Owens"), a JP Homes sales representative, and Michelle Vastano, Vastano's wife; and corresponding exhibits in support of its reply to the McWhorters' response.

A court must always address a motion to dismiss for lack jurisdiction before considering other challenges or reaching the merits of any case...