IOW, LLC v. Breus, No. CV18-1649-PHX-DGC, 2019 WL 4010737
(D. Ariz. Aug. 26, 2019)
Every time I think I’ve seen it all .... Here, the court decides that Rogers doesn’t apply
if the challenged book title isn’t itself “expressive,” which means something other
than “conveys meaning.” I feel like Old
Luke.
Breus “is a clinical psychologist … who studies how his
patients’ chronobiologies [natural circadian rhythms] effect their treatment.”
He’s written three books and more than eighty blog posts discussing
chronobiology and circadian rhythms.
Breus met Randy Miller, the sole member of plaintiff IOW and the
majority shareholder of plaintiff WEC. Miller told Breus about his business,
WHEN, and shared his ideas for an online counseling platform named “If or When”
or “If not Now When,” “where coaches would help customers achieve their goals
based on the concept of: ‘If I don’t do it now, when will I do it?’” They
entered into a Confidentiality Agreement regarding their discussions, but Breus
provided no services to plaintiffs and was never identified as an associate by
their promotional materials.
This dispute is about Breus’s third book, The Power of When
(initially titled The Overnight Solution), which “posits that an individual can
be healthier and more productive by adjusting when she accomplishes certain
tasks.” In 2015, Breus acquired thepowerofwhen.com to promote the book; it went
live in August 2016. Id. at 5. He also registered thepowerofwhenquiz.com to
publish his Bio-Time Quiz, which went live in July 2016. Plaintiffs claimed
that Breus, in developing the concept for his third book, used and incorporated
information that he discussed with Miller and that was subject to the
Confidentiality Agreement and trade secret protections.
Breach of contract:
WEC argued that Breus “utilize[d] the confidential materials received
from [WEC], which included the confidential proposed trademarks and branding of
WHEN selected by Mr. Miller.” Miller requested his attorney perform a trademark
search on Power of When, and stated that he and his attorney “considered that
phrase to be highly confidential” until it was publicly disclosed in an August
2016 trademark application. But this didn’t show that Breus violated the
agreement, nor did the evidence show that The Power of When or its marketing
materials mimicked the WHEN programs, ideas, and brand models.
As for the origin of the book title, defendants cited
evidence that Breus’s publisher, LB, “conceived the title in a meeting where
Dr. Breus was not present and later suggested the title to him via email.” The
emails in the record didn’t controvert LB’s employee’s sworn testimony that she
and LB conceived the title without input from Breus; indeed, the emails stated
specifically that Breus had different title suggestions. The employee testified
that she disliked the book’s working title; another person came up with The
Science of When, but the publisher found the word “science” too
technical-sounding so she suggested “power.” There was no contrary evidence;
credibility issues couldn’t preclude summary judgment without evidence
undercutting the truthfulness of the email exchange or the participants’ testimony
about it.
WEC argued that even if Breus did not suggest The Power of
When as a book title, he had a duty under the Agreement not to use it, but
didn’t establish the existence of such a duty. Nor was there a breach of the
implied covenant of good faith and fair dealing on this record; plaintiffs
weren’t claiming misuse of confidential information, but “misappropriation of
use of ‘WHEN,’ ‘Power of WHEN,’ and other uses of ‘WHEN’ throughout the book.”
[Ugh.]
Trade secrets: a similar fate. Plaintiff’s principal Miller
testified that the trade secret disclosed in Dr. Breus’s book is “WHEN” and
“Power of WHEN”; that he did not own the trademark Power of WHEN until August
2016 when he filed a public trademark application [pro tip: the application
isn’t “ownership”]; that the information disclosed in Dr. Breus’s book was “not
confidential information”; and that it was no secret that he used “when” in
connection with his business. Nor did anything identified as confidential by
the plaintiffs show up in the book.
And yet the trademark claims survive, the court becoming
entangled in various doctrinal thickets.
Claims based on WEC’s Power of When trademark: Defendants
pointed out that Breus told Miller the title of his book in December 2015, and
the title was conceived, domain names acquired, websites published, promotions
began, and more than 15,000 copies of the book were shipped to retailers, all
before WEC filed its ITU application on August 28, 2016.
Plaintiffs’ argument was to cite cases that “the title of a
single book cannot serve as a source identifier” and that “the publication of a
single book cannot create, as a matter of law, an association between the
book’s title (the alleged mark) and the source of the book.” The court thought
the Ninth Circuit might be more flexible, and that the presence of “several
promotional activities and the shipping of 15,000 books to retailers” might
also matter. However, the court thought
that plaintiffs might be able to establish priority. But priority isn’t the best way to describe
the issue: even after the registration issued (2017), plaintiff shouldn’t be
able to prevent uses that began before the filing date of the ITU. Prior users
shouldn’t need to have “trademark rights” that would enable them to suppress
others’ uses in order to have rights to continue use.
The court reasoned that the trademark application constitutes
“prima facie evidence of the validity of the registered mark” [also not true as
stated; only as of 2017, when the registration issued, did the claims of the
registration—not the application—constitute prima facie evidence of validity]
and so a fact-specific inquiry was required.
“[A]n issue of fact exists regarding whether Defendants’ pre-August 2016
activities rebut Plaintiffs’ presumption of ownership… “A reasonable jury could
weigh the factors and determine that Defendants’ pre-registration activities –
most of which appear to have occurred out of the public eye – were not
sufficiently public to identify the mark in an appropriate segment of the
public mind as Defendants’ mark.” [This
is also an instance of Bill McGeveran’s observation that multiple overlapping
doctrines allowing defenses can actually impair defendants’ chances—a §33(b)
prior user defense might have worked here, subject to the court deciding that
defendants would need to have had a valid mark as opposed to a use; descriptive fair use might also
have worked. But the real problem is that defendants, in apparent good faith,
began using the phrase before plaintiffs filed their ITU. But don't worry; it gets worse.]
Now, on to Rogers.
The court characterized the test as follows: “Under Rogers, a
defendant must first ‘make a threshold legal showing that its allegedly
infringing use is part of an expressive work protected by the First Amendment.’
Gordon v. Drape Creative, Inc., 909 F.3d 257, 264 (9th Cir. 2018).”
Defendants, completely correctly, argued that using a phrase
as the title of a book satisfies that threshold showing because it’s the title
of a book, which is an expressive work. Appallingly, the court disagreed
because the book is a nonfiction book. Although the word “artistic” appears
many times in Rogers cases, the First Amendment concerns about using
trademark to suppress speech are no different for nonfiction. In addition, and
in contradiction to Empire, the governing law of the circuit (cited
several times in this opinion and yet somehow completely ignored on this
point), the court required that defendants show that the phrase had “cultural
significance or meaning beyond its source-identifying function” in order to
invoke Rogers. [And by the way, even if you did require that, the descriptive
meaning of the phrase is clearly meaning “beyond its source-identifying
function”—when the title was chosen, there was no source-identifying
function because even the ITU was not yet filed.]
Thus: “The Court must determine therefore whether
Plaintiffs’ mark, Power of When, has assumed cultural significance such that
Defendants’ use of the mark in Dr. Breus’s book title is expressive, rather
than simply commercial use or advertising for his non-fiction work.” Defendants, again completely correctly,
pointed out that the book was a creative work with a lot of expression. “But this evidence addresses the book’s
contents, not whether the book’s title is expressive or artistic.” But of
course that’s not even close to the test: the test is whether the putative
infringer is using the claimed mark as part of a work; a title is part of a
book just as it is part of a movie for First Amendment purposes. The court cites Rogers’ statement that
purchasers have the right not to be misled about the source of books without
noting, as Rogers does, that titles [like other components of expressive
works that aren’t the publisher’s imprint] don’t usually indicate source, which
is why we have a special test.
And defendants didn’t show that the Power of When mark has
“transcend[ed] [its] identifying purpose,” “enter[ed] public discourse and
become an integral part of our vocabulary,” “assume[d] [ ] cultural
significance,” been imbued “with a meaning beyond its source-identifying
function,” or “evinces an intent to convey a particularized message” that “would
[likely] be understood by those who viewed it.” [Cue endless screaming.] Thus, “no evidence shows that Dr. Breus’s
allegedly infringing use of The Power of When as a title is an expressive,
creative, or artistic choice, rather than ordinary commercial speech that
describes the content of his non-fiction self-help book.” [Endless screaming continues; the court said
it right there: the phrase describes the content of his book! That is a particularized message!]
Thus, the use of The Power of When implicated ordinary
trademark concerns, not the First Amendment.
Rogers didn’t apply.
Defendants sought to cancel WEC’s fourteen registered marks
covering “personal growth and motivation consulting services,” all filed as
ITUs with subsequent statements of use. However, the claimed use dates seemed
creaky (most were in 2016; a few in early 2017), while “members of a beta test
that presumably used services related to the marks did not complete surveys
until 2017 and 2018. WEC produced a WHEN member status page showing no activity
earlier than June 30, 2017, and produced communications with members of the
beta test group in 2017.” The court
noted the authority holdign that uses that are sufficient to establish priority
are not necessarily good enough to merit registration, which requires actual
use and not analogous use. However, the Ninth Circuit still applies a totality
of circumstances test to determine “whether a service has actually been
‘rendered in commerce.’”
WEC argued that it had “genuine, commercial, pre-sales
activities before it launched its business, including presenting its service
offerings to 10-15 prospective customers in Powerpoint presentations and in
online and in-person meetings; creating branded apparel and websites; creating
and distributing sales materials; creating and using training manuals and
customer tools, including health journals; creating and marketing various
service levels; raising investor capital; getting evaluations of trainings,
performing beta tests and compiling surveys; and issuing press releases.” Query
whether any of that would have had any chance of satisfying the PTO had it
known that was what WEC called “use.”
The PTO requires the services to be actually rendered in commerce, and
none of that sounds like rendering services.
Also query whether it makes any sense to think that this company was
using fourteen marks—is it really plausible that there were fourteen
symbols serving to designate the source of these services?
But anyway, there was evidence that on December 14, 2016,
WEC conducted an online interactive team meeting with a prospective client
using a document that bore the Power of When mark; that WHEN Advisors were
trained in Fall 2016; and that WEC used the marks in actual sales after its
launch. “WEC’s training schedule from September 2016 repeatedly includes the
WHEN mark, and the 2016 Training Manual includes Find Your When. WEC’s other
cited evidence, which appears to include internal documents and promotional
materials, contains references to the other registered marks, including
WHENness, WHEN Advisor, WHEN Way of Life, WHEN is Now, MyWHEN, and FYW.”
Because the Ninth Circuit test “specifically instructs the
Court to consider pre-sales activities in determining whether a trademark owner
uses its marks in connection with services rendered in commerce,” there were
issues of fact about whether WEC’s activities “distinguished the marked
services and were a commercially reasonable attempt to market their services.”
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