Smartling, Inc. v. Skawa Innovation Ltd.

• Decision Date: 31 January 2019
• Docket Number: Civil Action No. 14-cv-13106-ADB
• Citation: 358 F.Supp.3d 124
• Parties: SMARTLING, INC., Plaintiff, v. SKAWA INNOVATION LTD., Defendant.
• Court: U.S. District Court — District of Massachusetts

358 F.Supp.3d 124

SMARTLING, INC., Plaintiff,
v.
SKAWA INNOVATION LTD., Defendant.

Civil Action No. 14-cv-13106-ADB

United States District Court, D. Massachusetts.

Signed January 31, 2019

358 F.Supp.3d 134

Rebecca LeGrand, LeGrand Law PLLC, Washington, DC, for Plaintiff.

Thomas P. O'Connell, O'Connell Law Office, Arlington, MA, for Defendant.

MEMORANDUM AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT

ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE

Plaintiff Smartling, Inc. ("Smartling") and Defendant Skawa Innovation Ltd. ("Skawa") are both translation technology companies that provide language translation services for mobile and internet-based clients.¹ On November 4, 2015, Smartling filed its First Amended Complaint asserting six causes of action against Skawa for alleged acts of trademark and trade dress infringement, unfair competition, and violations of Massachusetts General Laws Chapter 93A, §§ 2 and 11. [ECF No. 25] (the "Amended Complaint" or "Am. Compl."). Skawa responded with a one-count counterclaim that accused Smartling of filing this lawsuit in bad faith and committing their own violations of Chapter 93A. [ECF No. 33] (the "Counterclaim"). Currently pending before the Court are Skawa's motion for summary judgment or judgment on the pleadings on all claims asserted in the Amended Complaint [ECF No. 77], and Smartling's motion for summary judgment on the Counterclaim. [ECF No. 74]. For the reasons stated herein, Skawa's motion is granted in part and denied in part, and Smartling's motion is granted.

I. BACKGROUND

Except as otherwise noted, the following facts are not in dispute. Smartling is a Delaware corporation with its principal place of business in New York. Am. Compl. ¶ 1. It was founded in 2009 as a provider of website internalization and localization services. [ECF No. 79 at ¶ 1] ("Skawa Facts"); [ECF No. 90 at ¶ 1] ("Smartling Response"). Generally speaking, Smartling's software platform connects users to computers or professionals that translate mobile applications, web

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pages, videogames, and other media into different languages. [ECF No. 25-1 at 2].

Skawa is a Hungarian company with its principal place of business in Budapest, Hungary. Am. Compl. ¶ 2. Since late 2011 when it launched its website, Skawa has marketed a web-based translation tool under the name "Easyling" that directly competes with Smartling. [ECF No. 76 at ¶¶ 2, 6] ("Smartling Facts"); [ECF No. 87 at ¶¶ 2, 3, 6] ("Skawa Response"). Both parties worked directly with website owners to market and advertise their products through websites, magazine advertisements, conference program pages, and conference exhibits. Smartling Facts ¶¶ 7–8; Skawa Response ¶¶ 7–8. They both contracted with translation agencies or language service providers, including Lionbridge Technologies, Inc. ("Lionbridge"). Smartling Facts ¶ 10; Skawa Response ¶ 10. Lionbridge originally contracted with Smartling for its services but also entered into a contract to resell Smartling's product and services to other customers. Skawa Facts ¶ 36. At some point, Lionbridge, and several of Lionbridge's clients who had been using Smartling software, ended their relationship with Smartling. Id. Smartling's CEO, Jack Welde, believed that Lionbridge had begun contracting with Skawa as a new partner to replace Smartling. Id. Lionbridge, however, is not a party to this litigation, and there are no allegations in the Amended Complaint or in the summary judgment record that Lionbridge acted at the direction of Skawa or otherwise committed any wrongful conduct.

On March 18, 2011, Skawa's CEO, Peter Farago, created an online account with Smartling's website. Smartling Facts ¶ 4. The next day, on March 19, 2011, Skawa registered the web domain name "easyling.com," and launched the Easyling website in September or November 2011. Smartling Facts ¶¶ 2, 6; Skawa Response ¶¶ 2, 3, 6; see also Skawa Facts ¶ 11; Smartling Response ¶¶ 9, 11. Skawa appears to have registered the Easyling mark with the United States Patent and Trademark Office sometime in 2014. [ECF No. 78 at 36].

Exhibits showing the Smartling and Easyling marks on the parties' respective websites have been submitted into the record. Smartling has produced nine representative samples showing the different versions of its website between January 2010 and late 2015. [ECF No. 78-4 at 4–5]; [ECF No. 78-5]. The February 2011 version of its website, see [ECF No. 25-1 at 6]; [ECF No. 78-5 at 5], was active for approximately eight months until it launched a new iteration of its website in October 2011. Easyling Facts ¶ 9; Smartling Response ¶ 9.² Smartling asserts that Skawa copied its February 2011 website when it created the original Easyling website, which launched in September or November 2011 and remained in use until at least mid-2012. Smartling Facts ¶ 3; Skawa Facts ¶ 11; Smartling Response ¶¶ 9, 11.³ As discussed further below, Smartling

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claims that the Easyling website mimicked the orange and blue color scheme used for Smartling's website, displayed the Easyling mark in the same color and similar font as Smartling's mark, and used a speech bubble as part of the Easyling logo which was also part of Smartling's logo. Smartling Facts ¶ 11–12. Moreover, Smartling asserts that Skawa displayed buttons on the Easyling website in a layout similar to that used by Smartling, copied aspects of Smartling's promotional video which was displayed on its website, and copied verbatim the terms and conditions language from Smartling's website. Id.

II. LEGAL STANDARD

Summary judgment is appropriate where the moving party can show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "[A]n issue is ‘genuine’ if it ‘may reasonably be resolved in favor of either party.’ " Robinson v. Cook, 863 F.Supp.2d 49, 60 (D. Mass. 2012) (quoting Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) ). "A fact is material if its resolution might affect the outcome of the case under the controlling law." Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st Cir. 2003) (citation omitted). Thus, "[a] genuine issue exists as to such a fact if there is evidence from which a reasonable trier could decide the fact either way." Id. (citation omitted). By invoking summary judgment, "the moving party in effect declares that the evidence is insufficient to support the nonmoving party's case." United States v. One Parcel of Real Prop. (Great Harbor Neck, New Shoreham, R.I.), 960 F.2d 200, 204 (1st Cir. 1992) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). "To succeed in showing that there is no genuine dispute of material fact," the moving party must " ‘affirmatively produce evidence that negates an essential element of the non-moving party's claim,’ or, using ‘evidentiary materials already on file ... demonstrate that the non-moving party will be unable to carry its burden of persuasion at trial.’ " Ocasio-Hernández v. Fortuño-Burset, 777 F.3d 1, 4–5 (1st Cir. 2015) (quoting Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000) ).

Conversely, "[t]o defeat a properly supported motion for summary judgment, the nonmoving party must establish a trial-worthy issue by presenting enough competent evidence to enable a finding favorable to the nonmoving party." ATC Realty, LLC v. Town of Kingston, N.H., 303 F.3d 91, 94 (1st Cir. 2002) (internal quotations and citation omitted). That is, the nonmoving party must set forth specific, material facts showing that there is a genuine disagreement as to some material fact. One Parcel of Real Prop., 960 F.2d at 204 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256–57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

In reviewing the record, the Court "must take the evidence in the light most flattering to the party opposing summary judgment, indulging all reasonable inferences in that party's favor." Cochran, 328 F.3d at 6 (citation omitted). The First Circuit has noted that this review "is favorable to the nonmoving party, but it does not give him a free pass to trial." Hannon v. Beard, 645 F.3d 45, 48 (1st Cir. 2011). "The factual conflicts upon which he relies must be both genuine and material[,]" Gomez v. Stop & Shop Supermarket Co., 670 F.3d 395, 396–97 (1st Cir. 2012), and the Court may discount "conclusory allegations, improbable inferences, and unsupported

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speculation." Cochran, 328 F.3d at 6 (quoting Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) ).⁴

III. SKAWA'S MOTION FOR SUMMARY JUDGMENT

Skawa moves for summary judgment on all counts asserted in the Amended Complaint including: "Federal Unfair Competition, False Designation of Origin and Passing Off" (Count I); "Trade Dress Infringement" (Count II); "Infringement of the Smartling Mark" (Count III); "Cancellation of the Easyling Mark" (Count IV); "Violation of [Chapter 93A]" (Count V); and "Common Law Unfair Competition" (Count VI).

A. Trademark Infringement, Cancellation, and Unfair Competition

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