Springboards to Educ., Inc. v. Hous. Indep. Sch. Dist.

• Decision Date: 22 January 2018
• Docket Number: Civil Action No. H–16–2625
• Citation: 285 F.Supp.3d 989
• Parties: SPRINGBOARDS TO EDUCATION, INC., Plaintiff, v. HOUSTON INDEPENDENT SCHOOL DISTRICT, Defendant.
• Court: U.S. District Court — Southern District of Texas

285 F.Supp.3d 989

SPRINGBOARDS TO EDUCATION, INC., Plaintiff,

v.HOUSTON INDEPENDENT SCHOOL DISTRICT, Defendant.

Civil Action No. H–16–2625

United States District Court, S.D. Texas, Houston Division.

Signed January 22, 2018

Brian Casper, Gary R. Sorden, Darin Michael Klemchuk, Mandi M. Phillips, Klemchuk LLP, J. Manuel Torres–Rodriguez, Dallas, TX, Dorys Tijerina, Ruben C. DeLeon, DeLeon Law Group, PC, Valerie Yanaros Wilde, Yanaros Law, P.C., Addison, TX, Russell T. Wong, Blank Rome LLP, Houston, TX, Matthew Alan Homyk, Blank Rome LLP, Philadelphia, PA, for Plaintiff.

Jonathan R. Spivey, Christopher Aaron Shield, LaTasha Mabry Snipes, Lee Andrew Taggart, Bracewell LLP, Houston, TX, Cheyenne Jayne Rogers, Bracewell LLP, Dallas, TX, for Defendant.

ORDER

DAVID HITTNER, United States District Judge

Pending before the Court are Houston Independent School District's Motion for Summary Judgment and Plaintiff Springboards to Education, Inc.'s Motion for Summary Judgment. Having considered the motions, submissions, and applicable law, the Court determines Houston Independent School District's motion for summary judgment should be granted and Springboards to Education Inc.'s motion for summary judgment should be denied.

I. BACKGROUND

This is a trademark infringement case. Plaintiff Springboards to Education Inc. ("Springboard") is a Texas corporation that designs, markets, and sells reading and other education-related products and programs. Springboard owns multiple federally registered trademarks related to its products and programs ("Springboard's Marks"). Defendant Houston Independent School District ("HISD") is a Texas independent school district. From 2008 to 2013, HISD offered a free summer reading program to HISD students called the Houston ISD Millionaire Club (the "Millionaire Club"). Springboard alleges HISD used multiple products and services in connection with the Millionaire Club that infringed on Springboard's Marks.

Based on the foregoing, on August 29, 2016, Springboard filed this lawsuit against HISD¹ alleging trademark infringement, trademark counterfeiting, trademark dilution, unfair competition, and unconstitutional takings under Texas and federal laws. On September 20, 2016, the Court dismissed Springboard's state law claims for trademark dilution, trademark infringement, and unfair competition. Only Springboard's federal Lanham Act claims and state and federal takings claims remain. On October 2, 2017, HISD and Springboard cross-moved for summary judgment on Springboard's federal Lanham Act claims.

II. STANDARD OF REVIEW

Summary judgment is proper when "there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). The court must view the evidence in a light most favorable to the nonmovant. Coleman v. Hous. Indep. Sch. Dist. , 113 F.3d 528, 533 (5th Cir. 1997). Initially, the movant bears the burden of presenting the basis for the motion and the elements of the causes of action upon which the nonmovant will be unable to establish a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant to come forward with specific facts showing there is a genuine dispute for trial. See Fed. R. Civ. P. 56(c) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "A dispute about a material fact is ‘genuine’ if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Bodenheimer v. PPG Indus., Inc. , 5 F.3d 955, 956 (5th Cir. 1993) (citation omitted).

But the nonmoving party's bare allegations, standing alone, are insufficient to create a material dispute of fact and defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Moreover, conclusory allegations unsupported by specific facts will not prevent an award of summary judgment; the plaintiff cannot rest on his allegations to get to a jury without any significant probative evidence tending to support the complaint. Nat'l Ass'n of Gov't Emps. v. City Pub. Serv. Bd. of San Antonio , 40 F.3d 698, 713 (5th Cir. 1994). If a reasonable jury could not return a verdict for the nonmoving party, then summary judgment is appropriate. Liberty Lobby, Inc. , 477 U.S. at 248, 106 S.Ct. 2505. The nonmovant's burden cannot be satisfied by "conclusory allegations, unsubstantiated assertions, or ‘only a scintilla of evidence.’ " Turner v. Baylor Richardson Med. Ctr. , 476 F.3d 337, 343 (5th Cir. 2007) (quoting Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994) ). Furthermore, it is not the function of the court to search the record on the nonmovant's behalf for evidence which may raise a fact issue. Topalian v. Ehrman , 954 F.2d 1125, 1137 n.30 (5th Cir. 1992). Therefore, "[a]lthough we consider the evidence and all reasonable inferences to be drawn therefrom in the light most favorable to the nonmovant, the nonmoving party may not rest on the mere allegations or denials of its pleadings, but must respond by setting forth specific facts indicating a genuine issue for trial." Goodson v. City of Corpus Christi , 202 F.3d 730, 735 (5th Cir. 2000).

III. LAW & ANALYSIS

Springboard brings federal Lanham Act claims and state and federal constitutional takings claims against HISD. HISD and Springboard cross-move for summary judgment on Springboard's federal Lanham Act claims. HISD additionally moves for summary judgment on Springboard's state and federal constitutional takings claims. The Court first addresses Springboard's federal Lanham Act claims and then turns to Springboard's constitutional takings claims.

A. Federal Lanham Act Claims

Springboard brings claims against HISD under the federal Lanham Act for (1) trademark counterfeiting; (2) trademark infringement; (3) false designations; and (4) trademark dilution. HISD and Springboard cross-move for summary judgment on Springboard's federal Lanham Act claims. HISD contends summary judgment is proper on Springboard's federal Lanham Act claims because Springboard cannot prove HISD engaged in commercial use of Springboard's Marks. Springboard contends it can show HISD engaged in commercial use of Springboard's Marks.

As to Springboard's trademark dilution claim, the Lanham Act specifically excludes "[a]ny noncommercial use of a mark." 15 U.S.C. § 1125(c)(3). As to Springboard's trademark counterfeiting, trademark infringement, and false designations claims, the statutory requirement that the plaintiff's mark be used "in connection with the sale, offering for sale, distribution, or advertising of any goods or services" requires commercial use of the plaintiff's mark. 15 U.S.C. §§ 1114, 1125 ; see Bosley Med. Inst. v. Kremer , 403 F.3d 672, 676–77 (9th Cir. 2005). Thus, commercial use is required for all of Springboard's claims brought pursuant to the Lanham Act.

The commercial use requirement is rooted in Congress's ability to regulate commercial speech. Therefore, the United States Supreme Court's commercial speech doctrine and the purpose of the Lanham Act are relevant to the Court's inquiry as to what constitutes commercial use. See Procter & Gamble Co. v. Amway Corp. , 242 F.3d 539, 547–52 (5th Cir. 2001), abrogated on other grounds by Lexmark Int'l, Inc., v. Static Control Components, Inc. , ––– U.S. ––––, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) ; Radiance Found., Inc. v. N.A.A.C.P. , 786 F.3d 316, 323 (4th Cir. 2015). When all of the following three factors are present, there is strong support that the speech is commercial: "(i) the communication is an advertisement, (ii) the communication refers to a specific product or service, and (iii) the speaker has an economic motivation for the speech." Procter & Gamble , 242 F.3d at 552 (citing Bolger v. Youngs Drug Prods. Corp. , 463 U.S. 60, 67, 103 S.Ct. 2875, 77 L.Ed.2d 469 (1983) ). Moreover, the purpose of the Lanham Act is "to protect the ability of consumers to distinguish among competing products." Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 774, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (quoting Park 'N Fly, Inc. v. Dollar Park and Fly, Inc. , 469 U.S. 189, 198, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985) ).

Springboard contends it can show HISD engaged in commercial use of Springboard's Marks because: (1) HISD sold and distributed products containing Springboard's Marks; (2) HISD's print shop made a profit by printing flyers and reading logs containing Springboard's Marks; and (3) HISD used Springboard's Marks to promote its reputation and attract more students to HISD. The Court addresses each of Springboard's contentions in turn.

1. Sale and Distribution of Products

Springboard alleges HISD created, sold, and distributed thousands of products bearing Springboard's Marks, such as t-shirts, reading logs, brochures, and bumper stickers, in connection with the Millionaire Club. HISD contends: (1) there is no evidence that HISD sold or offered for sale any items containing Springboard's Marks; and (2) that distributing items free of cost to students in HISD does not constitute commercial use.

As to Springboard's allegation that HISD sold infringing products, it is undisputed that HISD sold t-shirts in connection with its "Name That Book" contest, a separate and independent program from the Millionaire Club. It is further undisputed that the t-shirts in connection with the "Name That Book" contest did not contain Springboard's Marks. The Court finds that the summary judgment record cited by both parties supports HISD's allegations that: (1) the products in connection with the Millionaire Club, such as reading logs, flyers, and bracelets, were distributed free of charge to students as an incentive to participate in the Millionaire Club; and (2) HISD did not sell or offer for sale any items in connection with the Millionaire Club or containing...