Windsor v. Olson
3:16-cv-00934
| N.D. Tex. | May 10, 2019Background
- Windsor (plaintiff) helped develop Nerium beginning in 2009, became its first president, and was terminated in March 2016; he claims oral promises of (a) a top-tier commission position, (b) 15% royalties on subscription fees, and (c) 5% equity with distributions.
- Windsor asserted federal copyright infringement (initially ten works, later attempted to drop eight) and state claims (breach of contract, fraudulent inducement, promissory estoppel, unjust enrichment); Nerium and Olson asserted counterclaims including DTSA/TUTSA trade-secret misappropriation, breach of fiduciary duty/duty of loyalty, conversion, and declaratory relief about copyrights.
- Defendants moved for partial summary judgment on Windsor’s federal and state claims; Windsor moved for summary judgment on Nerium’s counterclaims.
- Court ruled for Defendants on Windsor’s copyright claim as to the Compensation Plan and Roadmap to Success and dismissed Windsor’s other eight unregistered works; court also granted summary judgment for Defendants on Windsor’s state claims (breach of contract, fraud/fraudulent inducement, promissory estoppel, unjust enrichment, and duplicative declaratory relief).
- The court denied Windsor’s motion on Nerium’s counterclaims for DTSA/TUTSA trade-secret misappropriation, breach of fiduciary duty/duty of loyalty, and conversion, and denied summary judgment on Nerium’s declaratory counterclaims of no infringement/invalidity/implied license; it granted Windsor summary judgment that Nerium does not own the disputed copyrights.
- Remaining claims for trial: Nerium’s counterclaims under DTSA and TUTSA, breach of fiduciary duty/duty of loyalty, and conversion; court kept supplemental jurisdiction over state claims because case was mature and trial was imminent.
Issues
| Issue | Plaintiff's Argument (Windsor) | Defendant's Argument (Nerium/Olson) | Held |
|---|---|---|---|
| Copyrightability of "Compensation Plan" | Windsor claims original selection/arrangement and holds a registration | Defendants: registration untimely (no prima facie validity); work is functional, contains fragmentary phrases and unoriginal spreadsheet data | Court: Not copyrightable; Windsor failed to prove originality; summary judgment for Defs on this work |
| Copyrightability of "Roadmap to Success" | Windsor asserts registration and originality for the roadmap | Defs: title/pleading mismatch, alleged fraudulent deposit/reconstruction, elements are uncopyrightable ideas/short phrases | Court: Windsor abandoned defense; elements are unprotectable; summary judgment for Defs on this work |
| Copyright claims in the remaining eight works | Windsor sought to drop them (lack of registrations) | Defs: no registrations = cannot sue | Court: Summary judgment for Defs; Windsor cannot maintain infringement claims without registration |
| Breach of oral contract | Windsor: oral promises of commission, royalties, equity; performed by building company | Defs: oral agreement indefinite, lacking essential terms; unenforceable | Court: Agreement too indefinite (no ascertainable obligations); summary judgment for Defs on breach claim |
| Fraud / Fraudulent inducement and Promissory estoppel | Windsor: relied on promises, seeks benefit-of-the-bargain damages | Defs: no enforceable agreement; fraud limited to out-of-pocket reliance; no evidence of reliance damages or intent | Court: Claims fail—no contract formation for inducement; Windsor cannot recover expectancy damages on fraud/promissory estoppel; summary judgment for Defs |
| Trade-secret misappropriation (DTSA/TUTSA) and related fiduciary duty / conversion claims (Nerium counterclaims) | Windsor: denies improper acquisition/disclosure; says no NDA or prohibition and returned property per Preservation Agreement | Nerium: Windsor made backups after deleting laptop data, retained brand-partner/compensation reports, potentially disclosed to Jeunesse; Nerium incurred forensic and recovery costs | Court: Genuine disputes of material fact exist as to acquisition, disclosure, and injury; denied Windsor’s summary judgment on these counterclaims; issues remain for trial |
| Declaratory counterclaims (ownership, no-infringement, invalidity, implied license) | Windsor: seeks declaration of ownership and no infringement | Nerium: seeks work-for-hire ownership, or alternative declarations of no-infringement/invalidity/implied license | Court: Grants summary judgment to Windsor that Nerium does not own the copyrights (works not copyrightable); denies summary judgment on Nerium’s requests for declarations of no-infringement/invalidity/implied license (live factual disputes remain) |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (establishes summary judgment burden-shifting framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (standard for genuine dispute and summary judgment evidence)
- Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (originality requirement for copyright and limits on facts/compilations)
- Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574 (nonmovant must show sufficient evidence to create genuine issue)
- Fontenot v. Upjohn Co., 780 F.2d 1190 (movant bearing burden must prove claim elements beyond peradventure)
- General Universal Sys. v. Lee, 379 F.3d 131 (copyright registration presumptions)
- Positive Black Talk, Inc. v. Cash Money Records, Inc., 394 F.3d 357 (elements of copyright infringement)
- Bridgmon v. Array Sys. Corp., 325 F.3d 572 (factual copying and substantial similarity elements)
- Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527 (protectable vs. unprotectable elements and substantial similarity analysis)
- CMM Cable Rep., Inc. v. Ocean Coast Props., Inc., 97 F.3d 1504 (fragmentary words/short phrases and functional expressions are not copyrightable)
- Kodadek v. MTV Networks, 152 F.3d 1209 (deposit requirement; reconstructions and registration validity)
- Seiler v. Lucasfilm, Ltd., 808 F.2d 1316 (registrations based on reconstructions may be invalid)