Zahourek Sys., Inc. v. Balanced Body Univ., LLC

• Decision Date: 07 April 2016
• Docket Number: Civil Action No. 13-cv-01812-RM-CBS
• Parties: ZAHOUREK SYSTEMS, INC., and JON ZAHOUREK, Plaintiffs/Counter-Defendants, v. BALANCED BODY UNIVERSITY, LLC, Defendant/Counter-Plaintiff.
• Court: U.S. District Court — District of Colorado

ZAHOUREK SYSTEMS, INC.,and JON ZAHOUREK, Plaintiffs/Counter-Defendants, v. BALANCED BODY UNIVERSITY, LLC, Defendant/Counter-Plaintiff.

Civil Action No. 13-cv-01812-RM-CBS

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

April 7, 2016

Judge Raymond P. Moore

ORDER

This matter is before the Court on Defendant/Counter-Plaintiff Balanced Body University, LLC's ("BBU" or "Defendant") (1) motion for partial summary judgment ("MSJ") (ECF No. 81) and (2) motion to strike ("Motion to Strike") (ECF No. 119) the affidavit of Frank Baca ("Baca") (ECF No. 102). Plaintiffs/Counter-Defendants Zahourek Systems, Inc. ("ZSI") and Jon Zahourek ("Zahourek") (collectively, "Plaintiffs") filed responses to the respective motions (ECF Nos. 94; 123) and Defendant filed respective replies (ECF Nos. 117; 129).

At issue in this matter are three trademarks: (1) "Anatomy in Three Dimensions™" ("Ai3D Mark"); (2) "Anatomy in Three Dimensions an Introduction to Anatomy in Clay™" ("Introduction Mark"); and (3) "Anatomy in Clay™" ("Clay Mark"). (ECF No. 49 ¶ 17.) At issue in this matter is a copyright to the Maniken® model¹. (ECF No. 49 ¶ 19.) At issue in this matter with respect to Plaintiffs' breach of contract claim is a Product License Agreement² ("PLA"). (ECF No. 49 ¶ 21.) Plaintiffs' unfair competition (ECF No. 49 ¶¶ 61-82) and misappropriation (ECF No. 49 ¶¶ 83-90) claims address Defendants' alleged tortious conduct related to the trademarks and copyrighted material. Plaintiffs also seek an order directing the United States Patent and Trademark Office ("USPTO") to deny Defendant's notice of opposition to ZSI's registration of the Ai3D Mark. (ECF No. 49 ¶¶ 91-94.)

Defendant's MSJ "seeks dismissal of Plaintiffs' trademark infringement, breach of contract, copyright, unfair competition and misappropriation claims, and judgment in favor of BBU and against Plaintiffs on the First through Ninth Causes of Action in BBU's Counterclaim. . . ." (ECF No. 81 at 4.) Because it was unclear to the Court as to how Defendant's MSJ addressed each of Plaintiffs' claims (with its subclaims related to particular trademarks, copyrighted material, and specific contracts) and advanced support for its Counterclaims, the Court ordered the parties to appear before the Court to address this confusion. (ECF Nos. 135; 136; 139; 141.) On March 24, 2016, the Court held a hearing at which it made inquiry with respect to various issues covered by this Order, provided the parties an opportunity to respond to its inquiries, and advised the parties that a written order would follow. (See ECF No. 142.)

For the reasons stated below, the Court (1) GRANTS, in part, Defendant's MSJ, (2) DENIES, in part, Defendant's MSJ, (3) GRANTS, in part, Defendant's Motion to Strike; and (4) DENIES, in part, Defendant's Motion to Strike.

I. LEGAL STANDARDS

Summary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem. Coal Co., Inc., 41 F.3d 567, 569-70 (10th Cir. 1994). "A party seeking summary judgment bears the initial responsibility of informing the district court of the basis for its motion . . . ." Robertson v. Bd. of Cty. Comm'rs of the Cty. of Morgan, 78 F. Supp. 2d 1142, 1146 (D. Colo. 1999) (citation omitted). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000). Once the moving party meets its initial burden of demonstrating an absence of a genuine dispute of material fact, the burden then shifts to the non-moving party to move beyond the pleadings and to designate evidence which demonstrates the existence of a genuine dispute of material fact to be resolved at trial. See 1-800-Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1242 (10th Cir. 2013) (citation omitted). A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable jury could return a verdict for either party. Anderson, 477 U.S. at 248. In considering whether summary judgment is appropriate, the facts must be considered in a light most favorable to the non-moving party. Cillo v. City of Greenwood Vill., 739 F.3d 451, 461 (10th Cir. 2013) (citations omitted).

If a movant properly supports a motion for summary judgment, the opposing party may not rest on the allegations contained in his complaint, but must respond with specific facts showing a genuine factual issue for trial. Fed. R. Civ. P. 56(e); Scott v. Harris, 550 U.S. 372,380 (2007) (holding that "[t]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact") (citation omitted).

The content of evidence must be admissible to be considered when ruling on a motion for summary judgment. Adams v. Am. Guarantee & Liability Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000); Jaramillo v. Colo. Judicial Dep't, 427 F.3d 1303, 1314 (10th Cir. 2005) (citation omitted) (holding that hearsay evidence is not acceptable in opposing a summary judgment motion); World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th Cir. 1985). Affidavits must be based on personal knowledge and must set forth facts that would be admissible evidence at trial. Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995) (quotations and citation omitted). "Conclusory and self-serving affidavits are not sufficient." Id. The Court will not consider statements of fact, or rebuttals thereto, which are not material or are not supported by competent evidence. Fed. R. Civ. P. 56(c)(1)(A), 56(e)(2), 56(e)(3). "[O]n a motion for summary judgment, it is the responding party's burden to ensure that the factual dispute is portrayed with particularity, without depending on the trial court to conduct its own search of the record." Cross v. The Home Depot, 390 F.3d 1283, 1290 (10th Cir. 2004) (internal quotation and citation omitted). The Court is "not obligated to comb the record in order to make [Plaintiffs'] arguments for [them]." See Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1199 (10th Cir. 2000). Further, Local Rule 7.1(e) provides that "[e]very citation in a motion, response or reply shall include the specific page or statutory subsection to which reference is made." D.C. Colo. L. Civ. R. 7.1(e).

"In order to survive summary judgment, the content of the evidence that the nonmoving party points to must be admissible." Adams, 233 F.3d at 1246 (alteration in original and citationomitted). "The nonmoving party does not have to produce evidence in a form that would be admissible at trial, but "'the content or substance of the evidence must be admissible.'" Adams, 233 F.3d at 1246 (citation omitted). "Evidence presented must be based on more than 'mere speculation, conjecture, or surmise' to defeat a motion for summary judgment." Southway v. Cent. Bank of Nigeria, 149 F. Supp. 2d 1268, 1274 (D. Colo. 2001) (citations omitted). "Rule 56 expressly prescribes that a summary judgment affidavit must 'be made on personal knowledge, set forth facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated.'" Johnson v. Weld Cty., Colo., 594 F.3d 1202, 1210 (10th Cir. 2010) (citation omitted); accord Fed. R. Civ. P. 56(c)(4). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact . . ., the court may: (1) give an opportunity to properly support or address the fact; (2) consider the fact undisputed for purposes of the motion; (3) grant summary judgment if the motion and supporting materials—including the facts considered undisputed—show that the movant is entitled to it; or (4) issue any other appropriate order." Fed. R. Civ. P. 56(e).

II. RELEVANT BACKGROUND

A. Procedural Background

On July 10, 2013, ZSI filed a petition to compel arbitration against Balanced Body, Inc. (ECF No. 1.) ZSI's demand to arbitrate described the nature of the dispute as "[b]reach of contract; alternatively, trademark infringement; copyright infringement; unfair competition (multiple bases), misappropriation (multiple bases), deceptive trade practices, misrepresentation, each under various states' laws as applicable; business liability and individual liability for infringement related activities." (ECF No. 1-2 at 2.)

On August 5, 2013, Balanced Body, Inc. filed a motion to dismiss. (ECF No. 10.) On August 20, 2013, ZSI filed a Verified First Amended Petition to Compel Arbitration against BBU³. (ECF No. 13.) ZSI's demand to arbitrate described the nature of the dispute as "[b]reach of contract; alternatively, trademark infringement; copyright infringement; unfair competition (multiple bases), misappropriation (multiple bases), deceptive trade practices, misrepresentation, each under various states' laws as applicable; business liability and individual liability for infringement related activities." (ECF No. 13-15 at 2.) On August 26, 2013, BBU moved to dismiss the Verified First Amended Petition to Compel Arbitration. (ECF No. 18.) On July 2, 2014, Magistrate Judge Craig B. Shaffer ordered ZSI to file a complaint and move to withdraw with prejudice the petition for arbitration with all attendant agreements. (ECF No. 41.)

With an extension of time, on August 5, 2014, Plaintiffs filed the at-issue Complaint in this matter. (ECF Nos. 46; 49.) On August 26, 2014, Defendant filed its answer to the complaint and its Counterclaims. (ECF No. 50.)

On March 6,...