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AcademyOne, Inc. v. CollegeSource

December 21, 2009

ACADEMYONE, INC.
v.
COLLEGESOURCE, INC.



The opinion of the court was delivered by: Padova, J.

MEMORANDUM

This is a Lanham Act/Anti-Cybersquatting Consumer Protection Act case involving two companies that both provide college transfer services over the Internet, Plaintiff AcademyOne, Inc. ("AcademyOne") and Defendant CollegeSource, Inc. ("CollegeSource"). AcademyOne asserts three claims against CollegeSource: false advertising, trademark infringement, and cybersquatting. CollegeSource has filed a Motion for Summary Judgment, seeking judgment in its favor on all three of the claims. For the following reasons, we grant CollegeSource's Motion and enter judgment in CollegeSource's favor.

I. BACKGROUND

AcademyOne was founded in 2005. In the middle of that year, it developed two electronic systems: (1) the "National Course Atlas, which provides a catalog of current course information at educational institutions across the country," and (2) the "Course Equivalency Management Center ('CEMC'), which provides an online means for comparing the academic equivalence of courses at different institutions." (See Moldoff Decl. ¶¶ 2, 5.) On November 1, 2006, AcademyOne registered www.collegetransfer.net as a domain name for hosting and offering its products and services over the internet, and it launched that site as well as www.courseatlas.com in March of 2007. (Id. ¶¶ 12, 20.) Together, these systems and websites provide an "Internet-based electronic system that allows college students and administrators to assess the equivalency of courses at different colleges and universities for purposes of transfer." (Id. ¶ 2.) As AcademyOne explains, its "business focus is on improving the efficiency and reducing the cost of the transfer process for both college students and educational institutions." (Id. ¶ 3.)

In December 1971, long before AcademyOne's creation, Career Guidance Foundation ("CGF") was incorporated as a not-for profit entity. (See Karetnick Decl. Ex. A.) CGF collected and archived course catalogs from colleges and universities, put them on microfiche, and offered them to paying subscribers. (See Cooper Dep. at 9-10.) In or about 1992, CGF moved its course catalog content to a CD Rom format and, in 1994 or 1995, it again moved the material, this time onto a web-based system. (Ybarra Dep. at 10-12.) In 1994, it obtained copyrights in its digitized versions of the course catalog materials. (See Moldoff Decl. Ex. S.)

In March 2001, the IRS notified CGF that it was revoking its tax exempt status retroactive to 1996 because CGF had generated profit for its officers. (See Karetnick Decl. Ex. H.) Thereafter, CGF challenged the revocation through a declaratory judgment action but, at the same time, prepared to dissolve and reconstitute as a for-profit entity. (See Karetnick Decl. Ex. K; Separate Statement of Mat. Facts in Supp. of CollegeSource Mot. for Summ. Judg. ("SSMF") ¶ 13; AcademyOne's Resp. to CollegeSource Statement ("Resp. to SSMF") ¶ 13.)

To that end, CGF made plans to transfer its assets to the non-profit San Diego Community Foundation ("SDF"), which would then sell the assets to a for-profit entity owned by CGF's director, i.e., CollegeSource. In May 2004, CGF president Ralph Anders and SDF president/CEO Robert Kelly signed a Donor Agreement, pursuant to which CGF assigned and transferred to SDF "all of its right, title, and interest in and to any and all of the properties and assets of [CGF], both real and personal, tangible and intangible, of every kind and nature." (Anders Decl. ¶¶ 4-5 and Ex. A; Kelly Decl. ¶¶ 3-4.) Immediately thereafter, Anders, now on behalf of CollegeSource, and Kelly signed an Asset Purchase Agreement pursuant to which SDF sold to CollegeSource "all right, title, and interest in and to the properties and assets donated and transferred to [SDF] by [CGF] under the Donor Agreement." (Anders Decl. ¶¶ 6-7 and Ex. B.; Kelly Decl. ¶¶ 5-6.) In that regard, the Purchase Agreement specified as follows:

[T]he Buyer and the Seller agree as follows:

1. Purchase and Sale.

1.1 Acquired Assets. . . . [T]he Seller shall sell, assign, transfer, and deliver to the Buyer, and the Buyer shall purchase, acquire, and take transfer, assignment and delivery of, all right, title, and interest in and to the properties and assets donated and transferred to the Seller by the Donor under the Donor Agreement (collectively the "Acquired Assets"), which shall include, without limitation, the following properties and assets:

(h) Intangibles: . . . all trademarks, service marks, trade names, corporate names, copyrights, designs, patents, licenses, and applications . . . and other intangible assets . . . . (Anders Decl. Ex. B.) CollegeSource has since maintained and updated the library of college and university course catalogs in .pdf format that originally belonged to CGF. It places the following copyright information on its materials:

Copyrights 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005.

College Source, Inc. and Career Guidance Foundation. CollegeSource digital catalogs are derivative works owned and copyrighted by CollegeSource, Inc. and Career Guidance Foundation.

Catalog content is owned and copyrighted by the appropriate school. While College Source, Inc. and Career Guidance Foundation provides information as a service to the public, copyright is retained on all digital catalogs.

This means you may NOT:

C distribute the digital catalog files to others, C "mirror" or include this material on an Internet (or Intranet) server, or C modify or re-use digital files without the express written consent of CollegeSource, Inc. and Career Guidance Foundation and the appropriate school.

You may:

C print copies of the information for your own personal use, C store the files on your own computer for personal use only, or C reference this material from your own documents. (Moldoff Decl. Ex. S)

In March of 2006, CollegeSource debuted and launched a transfer evaluation system ("TES"), similar to AcademyOne's CEMC, which utilizes course descriptions from its college catalog databases. (Cooper Dep. at 21, 24.) In July 2007, CollegeSource purchased the domain name www.collegetransfer.com from an internet domain name re-seller. (See Karetnick Decl. Ex. X.) Its intent in purchasing that domain name was to direct traffic to www.collegesource.com. (See Holaday Dep. at 49.) Around the same time, CollegeSource also registered the following additional domain names: www.collegetransfers.info, www.collegetransfer.info, www.collegetransfers.net, and www.collegetransfers.org. (See Ybarra Dep. at 31, 33; Karetnick Decl. Ex. Y.) It is undisputed that CollegeSource's "registration and use" of www.collegetransfer.com began on October 8, 2007. (See SSMF ¶ 128; Resp. to SSMF ¶ 128.)

The Complaint in this case, which AcademyOne filed on December 8, 2008, asserts two claims under the Lanham Act and one under the Anti-Cybersquatting Consumer Protection Act ("ACPA"). Count One asserts a claim of false advertising under the Lanham Act, 15 U.S.C. § 1125(a), based on CollegeSource's alleged misrepresentations that it holds copyrights to course catalog materials and that it is affiliated with CGF, a nonprofit. Count Two asserts a claim of trademarkinfringement and false designation under the Lanham Act, 15 U.S.C. § 1125(a), based on CollegeSource's registration and use of www.collegetransfer.com. Count Three asserts a claim of cybersquatting under the ACPA, 15 U.S.C. § 1125(d), based on CollegeSource's alleged bad faith registration of www.collegetransfer.com in conjunction with the launching of a product in competition with AcademyOne's.

II. LEGAL STANDARD

Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). An issue is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "material" if it might affect the outcome of the case under governing law. Id.

"[A] party seeking summary judgment always bears the initial responsibility for informing the district court of the basis for its motion, and identifying those portions of the [record] that it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the movant's initial Celotex burden can be met simply by "pointing out to the district court that there is an absence of evidence to support the non-moving party's case." Id. at 325. After the moving party has met its initial burden, the adverse party's response "must -- by affidavits or otherwise as provided in this rule -- set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). That is, summary judgment is appropriate if the non-moving party fails to rebut by making a factual showing "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "In evaluating the evidence, we take the facts in the light most favorable to the nonmoving party . . . and draw all reasonable inferences in its favor." Morton Int'l, Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669, 680 (3d Cir. 2003) (quotation omitted). "Speculation, conclusory allegations, and mere denials are insufficient to raise genuine issues of material fact." Boykins v. Lucent Techs., Inc., 78 F. Supp. 2d 402, 407 (E.D. Pa. 2000). Indeed, evidence introduced to defeat or support a motion for summary judgment must be capable of being admissible at trial. Callahan v. AEV, Inc., 182 F.3d 237, 252 n.11 (3d Cir. 1999) (citing Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1234 n.9 (3d Cir. 1993)).

III. DISCUSSION

A. Count I -- False Advertising

As explained above, Count I of the Complaint asserts that CollegeSource falsely advertised that it held copyrights to course catalog material that it obtained from CGF.*fn1 As the undisputed record evidence establishes that CollegeSource did hold copyrights to the course catalog material at issue, having obtained the copyrights from CGF, we enter judgment in favor of CollegeSource on this claim.

The cause of action for false advertising is set forth in § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which provides in pertinent part as follows:

(1) Any person who, on or in connection with any goods or services . . . uses in commerce . . . . any false or misleading description of fact, or false or misleading representation of fact, which -- * * *

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 15 U.S.C. § 1125(a). To establish a violation of this provision, "[t]he plaintiff must prove that the commercial message is either literally false or, if not literally false, literally true or ambiguous with the tendency to deceive consumers." Santana Prods., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 136 (3d Cir. 2005) (citing Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co., 290 F.3d 578, 586 (3d Cir. 2002)). A "plaintiff need not prove the challenged advertising misled the public if he can show it was literally false." Facenda v. N.F.L. Films, Inc, 542 F.3d 1007, 1021 (3d Cir. 2008) (quoting Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 472 n.8 (3d Cir. 1994)).

In this case, AcademyOne claims that CollegeSource's advertising was literally false, asserting that CollegeSource advertised that it held copyrights to the course catalog material that it maintains on its website when it does not, in fact, own those copyrights. In its Motion for Summary Judgment, CollegeSource argues, among other things, that the undisputed facts of record establish that it acquired the copyrights from CGF pursuant to the 2004 Donor Agreement and accompanying Asset Purchase Agreement and, thus, its statements that it holds the copyrights at issue are not false. CollegeSource ...


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