Scquare International, Ltd. v. Bbdo Atlanta, Inc.

• Decision Date: 22 September 2006
• Docket Number: No. 1:04-CV-0641-JEC.,1:04-CV-0641-JEC.
• Citation: 455 F.Supp.2d 1347
• Parties: SCQUARE INTERNATIONAL, LTD., Plaintiff, v. BBDO ATLANTA, INC., Defendant.
• Court: U.S. District Court — Northern District of Georgia

455 F.Supp.2d 1347

SCQUARE INTERNATIONAL, LTD., Plaintiff, v. BBDO ATLANTA, INC., Defendant.

No. 1:04-CV-0641-JEC.

United States District Court, N.D. Georgia, Atlanta Division.

September 22, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Blakely Holloway Frye, Steven G. Hill, Hill Kertscher & Wharton, Atlanta, GA, Christopher M. Faucett, Edward W. Goldstein, Katherine L. Sunstrom, Goldstein Faucett & Prebeg, LLP, Houston, TX, for Plaintiff.

Andrew Holmes Stuart, Gary Richard Kessler, Irvin Stanford & Kessler, Atlanta, GA, for Defendant.

ORDER & OPINION

CARNES, District Judge.

This case is presently before the Court on defendant's Renewed Motion for Summary Judgment [65], plaintiffs Motion for Summary Judgment on Infringement and Breach of Contract Claims [67], and plaintiff's Motion to Dismiss or for Summary Judgment on Defendant's Counterclaims [68]. The Court has reviewed the record and the arguments of the parties and, for the reasons set out below, concludes that defendant's Renewed Motion for Summary Judgment [65] should be GRANTED in part and DENIED in part, plaintiffs Motion for Summary Judgment on Infringement and Breach of Contract Claims [67] should be GRANTED in part and DENIED in part, and plaintiff's Motion to Dismiss or for Summary Judgment on Defendant's Counterclaims [68] should be DENIED.

BACKGROUND

Plaintiff SCQuARE International Limited ("SCQuARE") is a U.K. company that operates training programs to teach problem solving and communication skills. (Pl.'s Statement of Material Facts ("PSMF") [67] at ¶ 1.) SCQuARE is named after the mnemonic the company created to teach its program. (Id. at ¶ 2.) Each letter of the mnemonic coincides with a step in the SCQuARE program to identify, analyze, and solve business problems. (Id.)

Plaintiff has developed materials that it uses to teach the SCQuARE program, including a training manual titled SCQuARE Total Business Thinking Programme Manual (the "SCQuARE Manual"). (PSMF [67] at ¶ 3.) Plaintiff has registered the SCQuARE Manual with the Copyright Office, and owns registration No. TX 5-927-792, which covers the Manual.¹ (Id.)

Defendant BBDO Atlanta is an advertising and marketing agency. (Def.'s Statement of Material Facts ("DSMF") [48] at ¶ 1.) In the fall of 1999, defendant hired plaintiff to train sixteen of defendant's mid- and upper-level employees in the SCQuARE method. (PSMF [67] at ¶ 4; DSMF at 4.) The training was well-received, and defendant hired plaintiff to conduct additional SCQuARE training classes between 1999 and 2000. (PSMF at ¶ 5.) Ross Lovelock, the creator of SCQuARE, conducted the classes. (Id.) Richard Bell, a BBDO consultant and former director of SCQuARE's U.S. operations, assisted Lovelock. (Id. at ¶¶ 5-7.) The training consisted of six hours of lecture on the basics of the SCQuARE concept and two additional days of group training. (Id. at ¶ 9.) Each person at the training received a copy of the SCQuARE Manual. (Id. at ¶ 10.)

At some point during the ongoing training, plaintiff sent defendant a contract relating to the SCQuARE program. (DSMF [48] at ¶ 33.) The contract contained a Copyright section, which provided:

All rights are reserved. All the SCQuARE course materials, the concept, logos, know-how and the mnemonic are the copyright of Magnolia House² and SCQuARE International Ltd., and may not be reproduced, stored, communicated, taught or transmitted in any form, or by any means, electronically, mechanically or otherwise, in whole or in part, without the prior written permission of the copyright holder. Client Companies and delegates agree not to copy such materials and the Client Company is responsible for ensuring that delegates are aware of the rights vested in these items.

(Id. at ¶ 34; PSMF [67] ¶ 19.) Debbie Lindner, defendant's director of Human Resources, signed and returned the contract on March 10, 2000. (Id.)

Plaintiff conducted its last training program for defendant in April, 2000. (DSMF [48] at ¶ 18.) After plaintiff completed its training sessions, defendant engaged in at least three actions that plaintiff claims breached the parties' contract and infringed plaintiffs copyright in the SCQuARE training manual. (PSMF [67] at ¶¶ 6, 10-15; DSMF at ¶¶ 18-32.)

First, Richard Bell conducted a follow-up SCQuARE course for defendant's employees in November, 2000. (PSMF [67] at ¶ 7; DSMF [48] at ¶¶ 18-24.) The parties dispute whether the course was a "refresher" class or a class for new employees. (PSMF at ¶ 7; DSMF at ¶ 18.) Regardless, plaintiff contends that the course was unauthorized. (Compl. [1] at ¶ 18.) Plaintiff also suggests that defendant coerced Bell into giving the presentation, by offering to pay him $4,000 to provide the training shortly after informing him that he was being laid off from BBDO. (Pl.'s Resp. to DSMF [54] at ¶ 20-22; Pl.'s Resp. to Def.'s Mot. for Summ. J. [51] at Ex. 22.)

Then, in February, 2003, BBDO Executive Vice President and Strategy Director, Jeff Upshaw, created a Power Point presentation titled SCQuARE and the Continuous Promise. (PSMF [67] at ¶ 13.) Upshaw presented SCQuARE and the Continuous Promise to a group of new employees, at an orientation designed to familiarize new hires with SCQuARE and another theory utilized by defendant in its business, "The Continuous Promise." (DSMF [48] at ¶ 29.) Plaintiff contends that defendant copied several of the slides in this presentation directly from the SCQuARE manual, violating the parties' contract and infringing plaintiffs copyrights in the SCQuARE Manual. (PSMF at ¶ 13.)

Later in 2003, defendant implemented a new client relations program titled 10/10. In conjunction with this program, BBDO Senior Vice President Pat Moslow created SCQuARE for Dummies, a condensed version of the SCQuARE Manual. (PSMF [67] at ¶ 14; DSMF [48] at ¶ 27.) According to defendant, SCQuARE for Dummies was intended to familiarize untrained employees with the SCQuARE method, so that employees could then apply the method to their implementation of the 10/10 program. (DSMF at ¶ 27.) Defendant printed and distributed at least 20 copies of SCQuARE for Dummies at the 10/10 training session.³ (Id.) Plaintiff claims that SCQuARE for Dummies, which contains verbatim excerpts from the SCQuARE Manual, further breached the parties' contract and violated copyright law. (PSMF [67] at ¶ 11.)

In the fall of 2003, Richard Bell met another former BBDO employee, Ben Mack, at a company where Bell and Mack were both working. (PSMF [67] at ¶ 17.) Mack, who associated Bell's name with the SCQuARE program, informed Bell that defendant was teaching SCQuARE internally, and provided Bell with a copy of the SCQuARE for Dummies manual. (Id.) Bell sent a copy of the manual to SCQuARE, notified Lovelock of defendant's internal teaching, and confessed that he had also taught SCQuARE internally while employed by defendant. (Id. at ¶ 18.)

Plaintiff subsequently filed the present action for breach of contract and copyright infringement. (Compl.[1].) Plaintiff also asserted claims for trademark infringement, unfair competition, violation of Georgia's Deceptive Trade Practices Act, violation of Georgia's Computer Systems Protection Act, Punitive Damages, and attorney's fees and litigation expenses under the Copyright Act and O.C.G.A. 13-6-11. (Id.)

During its initial investigation into the case, defendant discovered that plaintiff had used BBDO's name and a favorable employee quote on the SCQuARE website. (Counterclaim [59] at 17.) Shortly thereafter, defendant filed counterclaims against plaintiff for false endorsement and unjust enrichment, based on plaintiffs unauthorized use of the BBDO name. (Id. at 18-19.)

Both parties have filed motions, which are presently before the Court. Defendant has filed a motion for summary judgment on all of plaintiffs claims. (Def.'s Mot. for Summ. J. [65].) Plaintiff has filed a motion for summary judgment on its breach of contract and copyright infringement claims. (Pl.'s Mot. for Summ. J. [67].) Plaintiff has also filed a motion for summary judgment on defendant's counterclaims. (Pl.'s Mot. for Summ. J. [68].)

DISCUSSION

I. Summary Judgment Standard

Summary judgment is appropriate when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' '" FED. R. Civ. P. 56(c). A fact's materiality is determined by the controlling substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id. at 249-50, 106 S.Ct. 2505.

Summary judgment is not properly viewed as a device that the trial court may, in its discretion, implement in lieu of a trial on the merits. Instead, Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of every element essential to that party's case on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In such a situation, there can be no genuine issue as to any material fact, as a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial. Id. at 322-23, 106 S.Ct. 2548 (quoting FED. R. Civ. P. 56(c)).

The movant bears the initial responsibility of asserting the basis for his motion. Id. at 323, 106 S.Ct. 2548. However, the movant is not required to negate his opponent's claim. The movant may discharge his burden by merely "`showing'—that is, pointing out to the district court—that there is an absence of...