Leigh Ann Jackson v. Eileen A. Gaspar
2:19-cv-10450
| C.D. Cal. | Nov 17, 2021Background
- Jackson and Gaspar were 50/50 shareholders of Professional Pension Administrators, Inc. (PPA I), which in 2006 purchased the Original PPA’s assets (trade name, trademark "PPA," domain, client lists).
- After disputes beginning in 2017, Gaspar formed a new corporation using the same trade name (PPA II) and registered the domain PPA401K.com (August 2018); PPA II began using a similar logo and website in 2019.
- Gaspar removed servers, files, phone service access, and other resources from PPA I during the dissolution process; about 90% of clients ultimately selected Gaspar/PPA II over Jackson.
- Jackson filed a derivative suit on behalf of PPA I alleging trademark infringement, unfair competition, cybersquatting, and breach of fiduciary duties; the Court granted summary judgment for Jackson on liability and conducted a bench trial on remedies.
- Remedies awarded: PPA I awarded $45,725 (including $25,000 royalty for IP, $5,000 for cybersquatting, $15,725 for withheld payments/rent reimbursement); Jackson individually awarded $60,000 for breach of fiduciary duty; permanent injunction bars Gaspar/PPA II from using PPA I’s intellectual property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lanham Act / trademark infringement | PPA I owned the mark; PPA II’s use of the same name/logo caused consumer confusion and usurped PPA I’s goodwill | Gaspar/PPA II argued PPA I was defunct so no cognizable injury and customer choices reflected relationships/proximity, not trademark use | Liability found; PPA I awarded $25,000 as reasonable royalty; no disgorgement of PPA II profits; permanent injunction granted |
| Unfair competition / false advertising | PPA II website used PPA I’s marks and implied continuity since 1982, deceiving customers | Defendants argued PPA I suffered no business injury while defunct | Court found misleading use but declined additional damages beyond IP compensation (royalty) because PPA I had no active business |
| ACPA (cybersquatting) re domain PPA401K.com | Domain is confusingly similar to PPA mark and registered in bad-faith to profit from goodwill | Gaspar argued fair use / lack of bad faith | Plaintiff prevailed; statutory damages awarded at low end ($5,000) given single registration and mixed discovery conduct |
| Breach of fiduciary duty to PPA I | Gaspar misused PPA I IP/goodwill, withheld payments, and double-counted rent reimbursements | Defendants stressed limited tangible injury to defunct PPA I and prior compensation for IP loss | Breach found; PPA I awarded $15,725 (repayment of $5,525 plus $10,200 rent reimbursement) |
| Breach of fiduciary duty to Jackson (individual) | Gaspar froze Jackson out (cut access to software, phones, files), causing client loss and income harm | Gaspar and evidence showed Jackson also failed to respond to clients and relocated business, contributing to losses | Court found freeze-out breach caused harm; awarded Jackson $60,000 (50% of estimated $120,000 one-year income loss due to shared fault) |
Key Cases Cited
- Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190 (9th Cir. 2012) (Lanham Act ownership and confusion principles)
- S. Cal. Darts Ass'n v. Zaffina, 762 F.3d 921 (9th Cir. 2014) (protection for unregistered marks under §1125(a))
- Comm. for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814 (9th Cir. 1996) (corporate officers can be personally liable for corporate torts including trademark infringement)
- Playboy Enterprises, Inc. v. Baccarat Clothing Co., 692 F.2d 1272 (9th Cir. 1982) (court should aim to make Lanham Act violations unprofitable)
- Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132 (9th Cir. 1986) (injunction appropriate where defendant continued willful infringement)
- Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004) (do not consider top-level domains when assessing domain-name confusion)
- Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004) (compare domain name to mark for likelihood of confusion in ACPA cases)
- Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc., 758 F.3d 1069 (9th Cir. 2014) (elements of false-advertising/§43 claim)
- Charnay v. Cobert, 145 Cal. App. 4th 170 (Cal. Ct. App. 2006) (elements for California breach of fiduciary duty)
- Rogers v. Davis, 28 Cal. App. 4th 1215 (Cal. Ct. App. 1994) (plaintiff cannot recover duplicative remedies for same harm)