Springboards to Educ., Inc. v. Hous. Indep. Sch. Dist.
Opinion
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.
*810 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 *811 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
,
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."
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."
To prove infringement, Springboards must show that HISD's use of "Houston ISD Millionaire Club" "create[d]
*812
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
,
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.
,
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 relevant to the analysis, the focus of the analysis is on whether HISD misappropriated Springboards' marks, not whether HISD misappropriated Springboards' literacy-promotion methods.
Next, we must identify the class of consumers at risk of confusion and the point in the transaction at which the risk of confusion arises.
See
Astra Pharm. Prods., Inc. v. Beckman Instruments, Inc.
,
The relevant risk of confusion is not as clear in this case. Springboards' business model is premised on marketing the Read a Million Words campaign to school districts and selling those districts the products and services needed to implement the campaign. But Springboards does not allege that HISD directly competed with it by marketing the Houston ISD Millionaire Club to outside school districts. Rather, Springboards argues that HISD itself would have purchased Springboards' services were it not infringing on those services. Springboards does not argue-and it would be nonsensical to argue-that HISD confused itself into developing its own literacy program thinking that it was instead purchasing Springboards' program. The archetype therefore does not fit this case. But Springboards alludes to alternative sources of confusion, which we briefly explore.
Springboards suggests HISD's students and their parents might have been confused into thinking that HISD was using Springboards' program instead of its own. Regardless of whether that might have been the case, HISD's students and their parents are not the appropriate focus of the likelihood-of-confusion analysis. Although the ultimate recipients of HISD's services and products, the students and their parents were not purchasers in any ordinary sense.
3
They are better characterized as the "users" of the allegedly infringing products and services.
See
4 McCarthy,
supra
, at § 23:7 (discussing circumstances under which "[c]onfusion of users" may be actionable). User confusion is actionable in some cases, but as the Federal Circuit has cautioned, only confusion in "those users who might influence future purchasers" is actionable.
Elec. Design & Sales
,
Next, Springboards suggests there is a risk that third-party educators were confused. Courts call this genus of confusion postsale confusion.
4
See, e.g.
,
Yellowfin Yachts, Inc. v. Barker Boatworks, LLC
,
Although there is no evidence that scarcity is important to Springboards' business model, there is some risk that if HISD's literacy program were inferior to Springboards' literacy program, then Springboards' potential customers might be deterred from purchasing Springboards' products and services by a mistaken association between HISD and Springboards. This would be actionable. 5 We therefore focus our digits-of-confusion analysis on whether there is a probability that HISD's use of "Houston ISD Millionaire Club" would confuse third-party educators into believing that Springboards is affiliated with Houston's summer-reading program.
1.
The first digit of confusion, the type of the mark, "refers to the strength of the mark."
Elvis Presley Enters.
,
The first factor refers to the five categories of increasing distinctiveness that marks generally fall into: generic, descriptive, suggestive, arbitrary, and fanciful.
See
Xtreme Lashes, LLC v. Xtended Beauty, Inc.
,
Springboards argues that its marks are arbitrary. We disagree. "Read a Million Words" is descriptive. It states the goal of Springboards' campaign in plain English; no imagination is needed to understand what the mark is meant to convey.
*815 Springboards' other three marks-"Millionaire Reader," "Million Dollar Reader," and "Millionaire's Reading Club"-are suggestive. It requires some imagination to equate the traditional concept of a millionaire with a student who has read a million words. But the terms used in the marks are nevertheless related to Springboards' products: items given to students who read one million words in a monetary-themed literacy program.
On the second factor, a reasonable jury could not conclude that Springboards' marks enjoy strong standing in the market. Springboards cites to no evidence in the summary-judgment record showing that its marks are widely recognizable. 6 To the contrary, Springboards' damages expert conveyed that 87 percent of Springboards' revenue comes from a single school district in Edinburg, Texas.
Moreover, HISD presented unrebutted evidence of numerous other literacy programs predating Springboards' "Read a Million Words" campaign that use phrases identical or nearly identical language to Springboards' marks. These programs include an elementary school's initiative called "The Reading Millionaire's Project"; two different public libraries' reading programs called "Who Wants to Be a Million Dollar Reader?"; a Miami high school's contest called "the Million Words Campaign"; the Denver public school district's "Million Word Campaign"; and a Texas public school district's program that honors students as "Millionaire Readers" and inducts them into a "Millionaire's Club." Extensive third-party use of a term throughout the market suggests that consumers will not associate the junior mark's use with the senior mark user.
See
Oreck Corp. v. U.S. Floor Sys., Inc.
,
In sum, although the fact that three of Springboards' marks are suggestive would normally indicate that the marks are strong, the strength of Springboards' marks is substantially undercut by their lack of recognition in the market and widespread third-party use.
See
Sun Banks
,
2.
The second digit is the similarity of the marks. There is no doubt that there are commonalities between the marks, especially between Springboards' "Millionaire Reader Club" and HISD's "Houston ISD Millionaire Club." But "the use of identical dominant words does not automatically equate to similarity between marks."
Sensient Techs. Corp. v. SensoryEffects Flavor Co.
,
3.
The third digit is the similarity of the products or services. There can be little dispute that this digit favors Springboards. Both programs involve monetary-themed incentive-based literacy programs, and they distribute many of the same branded incentive items, including certificates, T-shirts, drawstring backpacks, and fake money. That Springboards' program seeks to encourage students to read during the academic year while HISD's program seeks to encourage students to read during the summer is not a meaningful difference. Accordingly, the third digit suggests a likelihood of confusion.
4.
The fourth digit is the identity of retail outlets and purchasers. This digit is an awkward fit to the facts of the case as HISD did not market the Houston ISD Millionaire Club and therefore had no retail outlets or purchasers. Nevertheless, HISD is a school district, and Springboards markets its products and services to school districts. Because we are focused on the risk that third-party observers will confuse HISD's program with Springboards' program, this overlap suggests some likelihood of confusion-an outside observer could have seen HISD using its own program and believed it purchased the program from Springboards. The fourth digit does not weigh nearly as strongly in Springboards' favor as it would if HISD had marketed the program to third parties, but a jury could attribute to it modest weight nonetheless.
5.
The fifth digit is the identity of the advertising media used. This digit also does not fit neatly into this case because HISD did not market the Houston ISD Millionaire Club and therefore did not advertise. Springboards argues that this digit suggests a likelihood of confusion because "both parties use their marks on printed brochures, branded merchandise, the internet, and materials provided to consumers." Even to the extent this could be considered advertising in some literal sense of the word, it is not relevant to the likelihood-of-confusion analysis. The HISD advertising materials Springboards references were all either informational material distributed to parents and students to encourage participation in the program or incentive items distributed to the students as part of the program. Third-party observers who saw such material would not have erroneously believed HISD was marketing its services to outside school districts. By contrast, Springboards produced marketing material explicitly targeting school districts. This digit suggests no likelihood of confusion.
6.
The sixth digit is intent to confuse. Springboards points to no direct evidence of an intent to confuse, but it argues that the similarity of the parties' marks is circumstantial evidence of intent to confuse. Even assuming arguendo the similarity of marks alone could provide evidence of intent to confuse, the similarity of the marks does not provide such evidence in this case. Uncontradicted testimony from HISD officials established that HISD developed the millionaire theme for its summer reading program because the *817 program's goal was for each of HISD's 200,000-plus students to read five books over the summer-exceeding one million books total. Officials who helped develop the program testified that they had not heard of Springboards or its marks at the time. And as discussed above, millionaire-themed literacy programs were prevalent even before Springboards entered the equation, so it is not surprising that HISD would have developed the idea for the Houston ISD Millionaire Club independently of Springboards. Even when viewing the evidence in the light most favorable to Springboards, this digit weighs against a likelihood of confusion.
7.
The seventh digit is evidence of actual confusion. Springboards presents four declarations from witnesses who saw material from HISD discussing or promoting the Houston ISD Millionaire Club. But only two of those four witnesses identified themselves as educators. And neither of those two testified that he or she has any authority to purchase Springboards' products or services for his or her employer or otherwise influences such purchasing decisions. Further, only one of the educators, Raul Soto, attested that he believed the Houston ISD Millionaire Club was affiliated with Springboards. The other educator, Amy Rocha-Trevino, testified that she saw HISD's " 'copycat' products" and that she saw a "Houston ISD Millionaire Club" night at a Houston Rockets game that "had nothing to do with Springboards." There is thus no direct evidence of any actual confusion by potential Springboards customers. A jury could conclude that Springboards' evidence of actual confusion weighs minimally in favor of finding a likelihood of confusion.
8.
The eighth and final digit is the degree of care exercised by potential purchasers. Under this digit, the greater the care potential purchasers exercise, the less likely it is they will confuse a junior mark user's products or services with the senior mark user's products or services.
See
Streamline Prod.
,
9.
The ultimate question is whether a reasonable jury could conclude that it is likely potential purchasers of Springboards' products would have believed that Springboards was affiliated with HISD's summer-reading program.
See
Scott Fetzer
,
Accordingly, the great weight of the digits suggests there is no likelihood of confusion. Without being able to show a likelihood of confusion, Springboards cannot succeed on its infringement claim, so the district court properly granted summary judgment to HISD on this issue.
B.
Springboards next alleges that HISD counterfeited its marks in violation of the Lanham Act. Likelihood of confusion is also an element of counterfeiting.
See
C.
Springboards must also show likelihood of confusion to succeed on its false-designation-of-origin claim.
See
King v. Ames
,
D.
Next, Springboards alleges trademark dilution. To succeed on its dilution claim, Springboards must show that its marks are "famous."
III.
Lastly, we address Springboards' challenges to three procedural rulings the district court issued below. First, Springboards argues that the district court improperly denied its motion to extend the dispositive-motion deadline. Second, Springboards argues the district court improperly denied it leave to amend its motion for summary judgment. Third, Springboards argues the district court improperly
*819
denied it leave to amend its complaint. We review each of these rulings for abuse of discretion.
See
Squyres v. Heico Cos.
,
The district court originally ordered discovery in this case to conclude by September 1, 2017. But Hurricane Harvey hit coastal Texas near the end of August 2017, disrupting multiple eleventh-hour depositions the parties had planned. The district court accordingly granted a series of extensions, eventually extending the discovery deadline to September 25, 2017. Springboards then moved to extend the deadline for dispositive motions from October 1 to October 25. Springboards explained that it would have difficulty complying with the deadline because Hurricane Harvey delayed the end of discovery and left it with little time to finalize its summary-judgment motion. It further argued that HISD had failed to produce certain "key documents." The district court denied that motion. Springboards filed a timely motion for summary judgment, then later moved to amend its motion to add certified deposition transcripts it did not receive until after the dispositive-motion deadline.
A scheduling order "may be modified only for good cause." Fed. R. Civ. P. 16(b)(4). As we have expounded:
There are four relevant factors to consider when determining whether there is good cause under Rule 16(b)(4) : "(1) the explanation for the failure to timely [comply with the scheduling order]; (2) the importance of the [modification]; (3) potential prejudice in allowing the [modification]; and (4) the availability of a continuance to cure such prejudice."
Squyres
,
We also conclude the district court did not abuse its discretion in denying Springboards' motion to amend its complaint. Springboards moved to amend its complaint after the deadline for amended pleadings had passed. Springboards did not seek to add any claims; rather, it sought to drop its state-law trademark claims and "clarify" certain factual matters. The district court denied the motion. On appeal, Springboards argues that the district court should have granted the motion because the amended complaint would not have caused any delay below. But Springboards must show more than a lack of delay; parties must meet Rule 16(b)(4) 's good-cause standard to amend pleadings once the deadline to do so has passed.
See
Filgueira v. U.S. Bank Nat'l Ass'n
,
IV.
For the foregoing reasons, we AFFIRM the judgment of the district court.
Springboards additionally asserted analogous state-law claims, which the district court dismissed for lack of subject-matter jurisdiction. It likewise alleged HISD took its property without just compensation in violation of the Texas and United States constitutions. The district court dismissed those claims on summary judgment. Springboards only raises its Lanham Act claims on appeal.
The record does not indicate whether Springboards holds a utility patent on the methods it uses in its Read a Million Words literacy program. We do not intend to opine on whether such a patent would be available to Springboards.
Nor is there evidence that Springboards directly marketed its products and services to students or parents.
We use the term "postsale confusion" to ground the alleged confusion here within the conceptual framework, although we recognize there was no actual sale involved.
We note that there is some question about whether Springboards must present evidence that HISD's program is inferior to its own to proceed on a theory of likelihood of postsale confusion. The Sixth Circuit has held that when such postsale confusion is at issue, the senior mark user must present evidence that the junior user's product or service is "clearly inferior" to the senior user's; otherwise, postsale confusion would not deter the senior user's potential purchasers.
Gibson Guitar Corp.
,
Citing primarily to evidence of HISD's success with its summer-reading program, Springboards argues that its marks are strong because there is high demand for literacy programs targeted at low-income students. But Springboards cites to no authority, and we therefore express no view, on whether the demand for a generic product has any bearing on the strength of the mark.
Because no reasonable jury could return a verdict for Springboards on any of its claims, it follows a fortiori that a reasonable jury could return a verdict for HISD. Accordingly, the district court properly denied Springboards' summary-judgment motion. Likewise, because we conclude de novo that HISD is entitled to summary judgment, we also conclude that the district court properly denied Springboards' motion for reconsideration.
Reference
- Full Case Name
- SPRINGBOARDS TO EDUCATION, INCORPORATED, Plaintiff - Appellant v. HOUSTON INDEPENDENT SCHOOL DISTRICT, Defendant - Appellee
- Cited By
- 79 cases
- Status
- Published