440 F.Supp.3d 673
W.D. Ky.2020Background
- In Feb. 2014 Dr. Thomas House (Licensor/NPA) granted Players’ Dugout, Inc. (PDI) an exclusive worldwide license to commercialize the PAJTT training method (branded as Velocity Plus); the written Agreement asserted the Program was patented.
- No patent for the PAJTT program ultimately issued; the parties dispute whether the Newtons/PDI knew that when they signed the Agreement.
- PDI used the federally registered NPA trademark and Dr. House’s name in marketing with House’s permission. PDI paid royalties through Aug. 2015, then stopped (claiming failure of consideration) and later escrowed/withheld payments.
- Oct. 2015: Plaintiffs emailed NPA-certified coaches stating PDI’s program had caused injuries and announced termination of affiliation; Defendants say the injury assertions were false and that the email harmed their business.
- Sept. 2016 Plaintiffs sued; both sides moved for partial summary judgment. The Court denied both motions, finding multiple genuine issues of material fact (knowledge about the patent, trademark secondary meaning, truth of injury allegations, and Plaintiffs’ intent/motive).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of license / failure to pay royalties (Count I) | House: Agreement is unambiguous; PDI breached by ceasing royalty payments. | Newtons: Agreement was induced by misrepresentation that PAJTT was patented; no patent = no consideration = no valid contract. | Denied. Material fact dispute whether Defendants knew no patent existed at signing; jury must resolve knowledge/credibility. |
| Trademark infringement / unfair competition (Counts III–X) | House: NPA mark (registered 2007) and House’s name identify source; Defendants’ use causes likelihood of confusion. | Newtons: Registration only covers clothing (not instruction); plaintiffs haven’t shown secondary meaning for mark or House’s name. | Denied. Court finds NPA logo descriptive (not inherently distinctive) and House failed to show secondary meaning; genuine issues remain as to protectability and scope. |
| Defamation / trade libel (Counts IV–V of counterclaim) | Newtons: Oct. 2015 email falsely claimed customers were injured and injured business; produced expert showing lost profits. | House: Statements were true or privileged; testimony/emails create factual dispute about injuries. | Denied. Newtons established a prima facie defamation claim, but falsity is contested by conflicting evidence—fact issue for jury. |
| Tortious interference with contract / prospective advantage (Counts VIII–IX of counterclaim) | Newtons: Oct. 2015 email and related conduct were intended to and did disrupt PDI’s contracts/relationships, causing lost business. | House: PDI had already breached by stopping royalties; recipients had independent relationships and/or left for reasons other than Plaintiffs’ email. | Denied. Material disputes exist about Plaintiffs’ motive, intent, and causation; jury must decide. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting framework)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (assessing evidence and "genuine issue" standard at summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must present specific facts creating genuine issues)
- Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (§ 43(a) protects qualifying unregistered marks)
- Wynn Oil Co. v. American Way Serv. Corp., 943 F.2d 595 (effect of long-registered marks and incontestability)
- DeGidio v. West Group Corp., 355 F.3d 506 (factors for secondary meaning and mark strength)
- Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (secondary-meaning concept for descriptive marks)
- Stringer v. Wal–Mart Stores, Inc., 151 S.W.3d 781 (Ky. 2004) (elements of defamation under Kentucky law)
- Toler v. Sud-Chemie, Inc., 458 S.W.3d 276 (Ky. 2014) (defamation per se when communication alleges unfitness for profession)