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Springboards to Education, Inc. v. Houston Independent School District

United States Court of Appeals, Fifth Circuit

January 8, 2019

SPRINGBOARDS TO EDUCATION, INCORPORATED, Plaintiff - Appellant
v.
HOUSTON INDEPENDENT SCHOOL DISTRICT, Defendant-Appellee

          Opinion Filed Date -January 9, 2019

          Appeal from the United States District Court for the Southern District of Texas

          Before STEWART, Chief Judge, KING and OWEN, Circuit Judges.

          KING, CIRCUIT JUDGE:

         Springboards to Education, Inc., sued Houston Independent School District under the Lanham Act for using its marks in the course of operating a summer-reading program. The district court disposed of Springboards' claims on summary judgment because it concluded that a reasonable jury could not find that the allegedly infringing use of Springboards' marks was commercial in nature. We AFFIRM, albeit on alternative grounds: as explained herein, a reasonable jury could not find that the allegedly infringing use of the marks created a likelihood of confusion.

         I.

         Plaintiff Springboards to Education, Inc., ("Springboards") is an education-services company that specializes in promoting literacy among low- income and English-as-a-second-language students. In 2005, Springboards launched a program to motivate students to read that it entitled the "Read a Million Words campaign." Under that program, students who reach their goals to read a certain number of books win the "Millionaire Reader award" and are inducted into the "Millionaire's Reading Club." To incentivize students to join the Millionaire's Reading Club, Springboards hosts "red-carpet parties" featuring rented limousines for the successful students.

         Springboards markets products and services to school districts to implement the program. Springboards' products include incentive items for participating students such as certificates, T-shirts, drawstring backpacks, and fake money. Between 2011 and 2013, Springboards successfully registered four trademarks with the United States Patent and Trademark Office in connection with the Read a Million Words campaign: "Read a Million Words," "Million Dollar Reader," "Millionaire Reader," and "Millionaire's Reading Club." It also registered "Read a Million Words" as a service mark. Springboards uses these marks on its incentive items and promotional materials.

         Defendant Houston Independent School District ("HISD") is the largest public school district in Texas, serving more than 200, 000 students. HISD, which is not a Springboards customer, launched its own monetary-themed incentive-based literacy program in 2008 called the "Houston ISD Millionaire Club." The Houston ISD Millionaire Club had a somewhat narrower focus than Springboards' program: it was a summer-reading program aimed at curbing the so-called summer slide, a phenomenon in which students lose progress gained over the academic year during summer vacation. HISD premised the Houston ISD Millionaire Club on research showing that students can prevent the summer slide by reading five books over the summer. HISD officials testified that they developed the millionaire theme because HISD's 200, 000- plus students would read more than one million books over the summer if each student read the requisite five books. These officials insisted that they were not familiar with Springboards or its marks at the time they developed the program.

         Like Springboards, HISD encouraged participation in the program by rewarding students with items including certificates, T-shirts, drawstring backpacks, and fake money-all labeled "Houston ISD Millionaire Club." HISD also distributed informational material referencing the name "Houston ISD Millionaire Club." HISD rebranded its summer-reading program in 2014 to "Every Summer Has a Story" and ceased using the name "Houston ISD Millionaire Club."

         Springboards sued HISD in federal district court. It alleged that HISD's use of "Houston ISD Millionaire Club" on its incentive items and informational material constituted counterfeiting, trademark infringement, false designation of origin, and trademark dilution, all in violation of the Lanham Act.[1] The parties filed cross-motions for summary judgment. The district court determined that Springboards could not prove HISD used its marks in a commercial manner, which, it opined, precluded each of Springboards' Lanham Act claims. The district court did not reach HISD's several alternative arguments, including its argument that Springboards could not show that HISD created a likelihood of confusion by using its marks. Accordingly, the district court granted HISD's motion for summary judgment and denied Springboards' motion. Springboards subsequently filed a motion for reconsideration, which the district court also denied. Springboards appeals.

         II.

         We review the parties' motions for summary judgment de novo, applying the same standard as the district court. Am. Family Life Assurance Co. of Columbus v. Biles, 714 F.3d 887, 895 (5th Cir. 2013) (per curiam). "The court shall grant summary judgment if the movant shows 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). In reviewing the party's cross-motions for summary judgment, we examine "each party's motion independently" and view "the evidence and inferences in the light most favorable to the nonmoving party." JP Morgan Chase Bank, N.A. v. Data Treasury Corp., 823 F.3d 1006, 1011 (5th Cir. 2016) (quoting Morgan v. Plano Indep. Sch. Dist., 589 F.3d 740, 745 (5th Cir. 2009)). "A genuine issue of material fact exists if a reasonable jury could enter a verdict for the non-moving party." Biles, 714 F.3d at 896. "Because our review is de novo, our analysis is not limited to that employed by the district court, and we 'may affirm the district court's decision on any basis presented to the district court.'" Id. (quoting LeMaire v. La. Dep't of Transp. & Dev., 480 F.3d 383, 387 (5th Cir. 2007)).

         The Lanham Act is intended, inter alia, "to protect persons engaged in such commerce against unfair competition[] [and] to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks." 15 U.S.C. § 1127. It does so by "making actionable the deceptive and misleading use of marks" through various causes of action vested in the marks' owners. Id. Springboards seeks to enforce its trademarks and service mark through four such causes of action: trademark infringement, counterfeiting, false designation of origin, and trademark dilution. We address each in turn.

          A.

         A defendant is liable for Lanham Act infringement if the defendant uses "in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114(1)(a). The district court focused on the requirement that the allegedly infringing use be "in connection with the sale, offering for sale, distribution, or advertising" of goods or services. Relying on out-of-circuit precedent, it concluded that this language requires the allegedly infringing use be commercial in nature, and it concluded that no reasonable jury could find HISD used "Houston ISD Millionaire Club" in connection with any commercial exchange. We express no opinion on the correctness of the district court's analysis; instead, we focus on HISD's alternative argument that its use of "Houston ISD Millionaire Club" was not "likely to cause confusion, or to cause mistake, or to deceive." Id.

         To prove infringement, Springboards must show that HISD's use of "Houston ISD Millionaire Club" "create[d] a likelihood of confusion in the minds of potential consumers as to the source, affiliation, or sponsorship" of HISD's products or services. Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 193 (5th Cir. 1998). "Likelihood of confusion is synonymous with a probability of confusion, which is more than a mere possibility of confusion." Id. In other words, Springboards must show that potential consumers, when confronted with "Houston ISD Millionaire Club," would believe Springboards is somehow affiliated with HISD's summer-reading program or the branded incentive items and informational material HISD distributed in connection with its summer-reading program.

         In assessing likelihood of confusion, we examine eight nonexhaustive "digits of confusion":

'(1) the type of mark allegedly infringed, (2) the similarity between the two marks, (3) the similarity of the products or services, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant's intent, . . . (7) any evidence of actual confusion[, ]' . . . [and] (8) the degree of care exercised by potential purchasers.

Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc., 851 F.3d 440, 453 (5th Cir. 2017) (alterations and omissions in original) (quoting Bd. of Supervisors for La. State Univ. Agricultural & Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 478 (5th Cir. 2008)). These digits are flexible: "They do not apply mechanically to every case and can serve only as guides, not as an exact calculus." Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 485 (5th Cir. 2004). Accordingly, must keep in mind two important principles while applying these digits: (1) "we must consider the application of each digit in light of the specific circumstances of the case"; and (2) "we must 'consider the marks in the context that a customer perceives them in the marketplace.'" Id. (quoting Elvis Presley Enters., 141 F.3d at 197).

         We will examine each digit in turn. But given the atypical facts of this case, we first digress to consider the context in which this dispute arises. That context will then help channel our discussion of the eight digits of confusion.

         We begin our detour by stating what is perhaps obvious, though easy to lose sight of when considering some of the parties' arguments: Springboards brings a trademark claim-not a patent claim.[2] Accordingly, Springboards does not challenge HISD's use of a monetary-themed incentive-based literacy program. HISD could have copied the methodologies used in the Read a Million Words campaign step by step, and, whatever other problems that might have engendered, as long as it used clearly distinguishable nomenclature, Springboards would have no argument that HISD violated the Lanham Act in doing so. Thus, although the similarity between the parties' products and services is a digit of confusion ...


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