ROBERT E. BLACKBURN, District Judge.
This matter is before me on the
I have jurisdiction over this case under 28 U.S.C. § 1331 (federal question), 28 U.S.C. § 1332 (diversity), 28 U.S.C. § 1338 (trademark), and 15 U.S.C. § 1121(a) (trademark).
Summary judgment is proper when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
A party who does not have the burden of proof at trial must show the absence of a genuine issue of fact.
In either case, once the motion has been properly supported, the burden shifts to the nonmovant to show by tendering depositions, affidavits, and other competent evidence that summary judgment is not proper.
Previously, I entered an
DSC executed a Dish Network Retailer Agreement which became effective as of December 31, 2010. Exhibit 7 [#100-3] [filed under restriction] (Retailer Agreement). The Retailer Agreement refers to and includes a separate trademark license agreement. Exhibit 7 [#100-3] [filed under restriction], CM/ECF pp. 34-40 (Trademark License Agreement). While the Retailer and Trademark License Agreements were in effect, Dish filed applications to register the mark DISHNET (U.S. Serial Nos. 85576543 and 85576536) (filed on March 22, 2012) and began offering its DISHNET high-speed satellite internet service to consumers later in the year. Dish contacted Ms. King and demanded that she transfer the dishnet.com domain name to Dish as required by the Trademark License Agreement. Ms. King refused to transfer the domain name and elected not to sign a new agreement with Dish when the Retailer Agreement expired on December 31, 2012. See Order [#196], p. 6. The Trademark License Agreement provides that some provisions remain in effect after expiration of the contracts.
On the day the Retailer and Trademark License Agreements expired, Ms. King filed to incorporatie her new company, plaintiff Digital Satellite Connections, LLC (DSC, LLC). She then transferred all of the intellectual property owned by herself and her d/b/a "Digital Satellite Connections" to her new LLC. Motion for summary judgment [#101], Exhibit 30 [#101-31]. The trademarks and domain names transferred include those at issue in this case. Id., CM/ECF p. 4. The next day, DSC, LLC filed a federal application to register "DISHNET" as a trademark, claiming that the company (through its predecessor-in-interest, Kathy King, who claims to be the assignee of the rights held by Catherine King) had used the DISHNET mark in connection with "[a]udio and video broadcasting services over the Internet; Internet access provider services; [and] [p]rovision of access to the internet" since June 1999, which is when Donald King first began using the domain name to host a web page promoting his Digital Satellite Connections business. Motion for summary judgment [#101], Exhibit 31 [#101-32]. DSC, LLC continues to use the trademarks and internet domain names at issue here.
In my earlier order [#196], I found and concluded:
Order [#196], p. 8. As to all of the claims asserted by Ms. King and DSC, LLC against Dish, I granted the motion for summary judgment of Dish.
In the same order, I granted summary judgment to Dish on the first three elements of the breach of contract counterclaim against Ms. King: (1) the existence of a contract; (2) performance by the party claiming breach (Dish); and (3) failure to perform by the other party (Ms. King). Addressing the fourth element of the breach of contract claim, I found that
Order [#196], p. 10.
In its present motion, Dish seeks summary judgment on the fourth element of its breach of contract claim. Specifically, Dish seeks an award requiring specific performance by Kathy King and DSC, LLC of the terms of the 2010 Retailer and Trademark License Agreement, cessation of use of the DISHNET trademark, abandonment of the plaintiffs' federal application to register that mark, cessation of use of the DISH and DISH NETWORK trademarks, and the transfer to Dish Network of all "dish" domain names owned by the plaintiffs, meaning all domain names incorporating a formative of a DISH Network mark, such as "DISH." Dish seeks specific performance in lieu of actual damages and seeks only an award of nominal damages. Motion [#212], p. 14. In addition, Dish seeks summary judgment on the defenses and affirmative defenses Ms. King and DSC, LLC have asserted against the counterclaim of Dish for breach of contract.
Dish has not been granted summary judgment on the fourth element of its breach of contract claim — damages resulting from the breach. As Dish notes, a showing of actual damages is not crucial to this claim. Rather, a breach can be the basis for an award of nominal damages.
The plaintiffs contend there is a disputed issue of material fact concerning whether Dish has suffered damages, nominal or otherwise, as a result of the breaches of the Trademark License Agreement by Ms. King. however, without question, the record demonstrates Dish has suffered damages.
In its counterclaim for breach of contract, Dish seeks relief in the form of specific performance of the Trademark License Agreement. Answer [#5], p. 28, ¶ 39. A suit for specific performance is an equitable action.
To support an award of specific performance, the contract at issue must be reasonably certain.
It is fundamental that to enable the court to decree specific performance, the terms of the contract must be clear, definite, certain, and complete.
With regard to the trademarks and internet domains of Dish, the Trademark License Agreement is very specific. The Trademark License Agreement defines the term "Identifying Communication Information" as
Agreement, p. 34, ¶ 1(c)((I).
Paragraph six of the agreement provides, in part:
Trademark License Agreement, [#100-3] [filed under restriction], CM/ECF p. 36, ¶ 6 (bold emphasis added; original in all capitals).
Paragraph 7 of the Trademark License Agreement includes the following terms:
Id., CM/ECF pp. 36-37, ¶ 7 (bold emphasis added).
Id., CM/ECF p. 37, ¶ 8.
These terms of the Trademark Agreement identify the precise acts to be done by the retailer, Ms. King, the party in breach; those terms are clear, definite, certain, and complete. The trademarks and domain names in question involve unique subject matter that is uniquely valuable to Dish. As Dish notes, damages caused by the improper use of a trademark are inherently difficult to calculate.
The plaintiffs claim there is no evidence that the defendants made a proper request to the Ms. King or DSC for transfer of the DISHNET trademark, as required by the agreements. The plaintiffs seek to apply the notice provision of the Retailer Agreement, paragraph 17.10.2. Retailer Agreement [#100-3] [filed under restriction], CM/ECF pp. 30-31, ¶ 17.10.2. However, the terms of the Trademark License Agreement control here. The Trademark License Agreement provides that a retailer "shall immediately upon the request of DISH, Assign to Dish or its designated affiliate" any trademark rights subject to the agreement. See, e.g., Trademark License Agreement [#100-3] [filed under restriction], CM/ECF p. 36, ¶ 6. The undisputed facts in the record show that Dish has made repeated requests to Ms. King and DSC for transfer of the trademarks and internet domain names at issue here. Under the terms of the Trademark License Agreement, those request are sufficient.
The plaintiffs contend the Trademark License Agreement is not enforceable after it expired. They ignore the specific terms in the agreement which remain enforceable after expiration. Trademark License Agreement, Exhibit 7 [#100-3] [filed under restriction], CM/ECF pp. 36-37, ¶¶ 6, 7, 12. These are the same paragraphs at issue in the present motion for summary judgment. This argument of the plaintiffs fails.
The plaintiffs contend DSC was first to use the term Dishnet in trade and, as a result, that trademark is not subject to the terms of the Trademark License Agreement. Previously, I concluded otherwise:
Order [#196], p. 8. In its response [#214] and in its motion for reconsideration [#221] of my summary judgment ruling, the plaintiffs produce no valid basis to reconsider this ruling.
Next, the plaintiffs cite a portion of paragraph seven of the Trademark License Agreement.
Trademark License Agreement, [#100-3] [filed under restriction], CM/ECF p. 36-37, ¶ 7. The plaintiffs contend "DISH Vice President Steve McElroy expressly agreed to in advance in a writing that Kathy King could use DISHNET." Response [#214], p. 12. The document cited by the plaintiffs is a Standardized Structure Change Checklist [#97-17], dated January 7, 2009, an exhibit to the motion for partial summary judgment [#97] of the plaintiffs. This form permits a new retailer, Kathy Kind dba Digital Satellite Connections, to be substituted as a retailer for Donald King dba Digital Satellite Connections. Standardized Structure Change Checklist [#97-17], p.1. This was done when EchoStar Satellite LLC, the predecessor of Dish, was operating the business. The form indicates it was approved by EchoStar Vice President Steve McElroy.
An e-mail attached to the form asks Mr. McElroy to "(p)lease approve this SC. This retailer is changing the primary owner due to the death of the current owner. Fyi . . . This is the retailer you were trying to get dishnet.com from." Id., CM/ECF p. 2. On the form, the e-mail address for the new retailer is shown as "feedback@dishnet.com" or "info@dishnet.com." The terms of this form and the associated e-mails make clear the form is an approval of the structural change of a retailer. The fact that "dishnet.com" is mentioned three times does not make this form an approval by EchoStar of the use by Ms. King of dishnet.com. Such an interpretation of these documents is strained to the breaking point. At most, these forms show EchoStar knew of Ms. King's use of "dishnet.com."
Equally important, the form shows approval by Vice President Steve McElroy, not by an Executive Vice President. Paragraph seven, quoted above, requires approval by an Executive Vice President of DISH (or his or her designee). There is no evidence that Mr. McElroy was an Executive Vice President or a designee of such a person.
The plaintiffs contend Dish waived its right to enforce the Trademark License Agreement because Dish knew of its trademark rights and knew that Kathy King was using DISHNET as early as 2001. It is important to note that waiver is accomplished by intent, while forfeiture comes about through neglect.
Next, the plaintiffs claim Dish is estopped from asserting its rights to the Dishnet trademark. The elements of estoppel are "(1) The party to be estopped must know the facts; (2) He must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) The latter must be ignorant of the true facts; and (4) He must rely on the former's conduct to his injury."
Ms. King relies on an alleged misstatement of fact rather than a promise. Ms. King claims Dish approved of advertisements using DISHNET as early as 2001. Response, Exhibit 2 (King Affidavit), ¶ 9. She contends a Dish Southeast Regional Manager, Tim Kohl, told her in 2004 "not to worry" about the previously expressed interest of Dish in acquiring Dishnet. Id., ¶ 11. She says Mr. Kohl withdrew a previous request of an Echostar representative in which Ms. King was asked if she "would be willing to sign the dishnet.com domain over the Echostar." Id. Relying on that assurance, she says, she continued to increase her promotion of the DISHNET mark. Ms. King says she was not aware of the fact that Dish claimed to own the Dishnet mark.
The statements of Mr. Kohl to Ms. King are not actionable misstatements of fact. Mr. Kohl withdrew the previous request of an Echostar employee for the transfer of dishnet.com and told Ms. King "not to worry." In the context of the fact of this case, those statements are not misstatements of fact. In addition, Ms. King claims she reasonably relied on these statements to operate under the presumption that she owned Dishnet. Given the terms of the 2010 agreement, particularly the Trademark License Agreement, such reliance cannot be seen as reasonable.
To rehearse, Digital Satellite Connections, LLC (DSC, LLC) was formed just after the 2010 Retailer and Trademark License Agreements expired. Kathy King and Digital Satellite Connections (DSC), the name of her sole proprietorship, are parties to those agreements. However, DSC, LLC is not a party to those agreements. The record indicates Ms. King transferred all of the intellectual property owned by herself and DSC, to DSC, LLC shortly after DSC, LLC was formed.
The plaintiffs contend specific performance may not be ordered against an entity that is not a party to the contract under which performance is sought. As a general matter, this is true, but there are exceptions. Dish notes that "specific performance may be granted against a subsequent purchaser who is not a bona fide purchaser for value."
The fact that DSC, LLC owns the trademarks and domain names at issue may or may not indicate that Ms. King no longer has the ability to perform her continuing obligations under the Trademark License Agreement. On the current record, it is unclear if Ms. King has control of DSC, LLC or not. However, given the circumstances detailed in this order, it is appropriate to order Ms. King to perform her contractual obligations to the extent she has the legal ability to do so.
As to plaintiff and counterclaim defendant Kathy King, Dish has shown it is entitled to summary judgment on its counterclaim for breach of contract. In addition, Dish has shown that it is entitled to an award of specific performance against Ms. King concerning her obligations under the Retailer and Trademark License Agreements, including her obligation to transfer to Dish Networks, LLC the trademarks and domain names at issue here. The defenses and affirmative defenses of Ms. King are without merit, and, thus, Dish is entitled to summary judgment on those defenses and affirmative defenses.
Counterclaim defendant Digital Satellite Connections, LLC is not a party to the Retailer Agreement and Trademark License Agreement under which Dish seeks specific performance. Dish has not shown that it is entitled to specific performance by an entity that is not a party to the relevant contracts. Therefore, as to Digital Satellite Connections, LLC, summary judgment is denied as to the claim of Dish for summary judgment on its counterclaim for breach of contract and the corresponding request for specific performance by Digital Satellite Connections, LLC.
In its motion [#212] and an earlier filing [#201], Dish said it would dismiss its remaining counterclaims, trademark infringement, unfair competition, and false advertising, without prejudice if its motion for summary judgment and request for an order of specific performance against both plaintiffs is granted. Because that contingency is not satisfied by this order, those other counterclaims remain pending.
1. That the
2. That as to plaintiff and counterclaim defendant Kathy King, summary judgment is granted on the counterclaim for breach of contract of Dish Network, LLC;
3. That summary judgment is granted in favor of Dish Network, LLC as to the defenses and affirmative defenses asserted by Kathy King in response to the counterclaim for breach of contract of Dish;
4. That as partial relief on the counterclaim for breach of contract, Dish Network, LLC is entitled to an order of specific performance of the Retailer Agreement and Trademark License Agreement between Kathy King dba Digital Satellite Connections and Dish Network, LLC, as specified below;
5. That Kathy King dba Digital Satellite Connections shall specifically perform their obligations under the 2010 Retailer Agreement and Trademark License Agreement, to the extent they have the legal ability to do so, including:
6. That otherwise, the