Jacobs v. Fareportal, Inc.

IAN V. JACOBS, Plaintiff, v. FAREPORTAL, INC., Defendant.

8:17CV362

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

May 15, 2019

ORDER

This matter is before the court on Plaintiff's motion to compel issuance of subpoenas (Filing No. 151), and the parties' motions which are reflected in the attached emails.

Plaintiff seeks permission to serve subpoenas on Google, LLC ("Google"), Microsoft Corporation ("Microsoft"), Yahoo! Inc. ("Yahoo"), and Commission Junction ("Commission)" seeking documents and communications relating to Defendant Fareportal, Inc.'s ("Fareportal") purchases of "Cheapo" as a search engine keyword, in addition to further documents and non-privileged communications outlined below. (Filing No. 151).

In addition, Defendant renews its motion for permission to compel third-party Secret Penguin to produce outstanding documents.

For the reasons stated below, Plaintiff's motions will be granted in part and denied in part and Defendant's motion to compel will be granted.

I. FACTUAL BACKGROUND

In 1998, Jacobs purchased the domain "www.cheapo.com" for his current website. In September 2007, Plaintiff filed U.S. Registration Number 3,430,489 for the CHEAPO mark with the Patent and Trademark Office ("PTO"). In June 2013, the PTO accepted Plaintiff's Declaration of Use in Commerce and Incontestability under Sections 8 and 15. Plaintiff states he has used the cheapo.com website to sell a variety of services. Currently, Plaintiff maintains an affiliate advertising agreement with travel services website Pricline.com ("Priceline"), where users provide their desired travel data, and it is transmitted to Priceline which generates proposals and ultimately completes the transaction. Plaintiff is compensated by Priceline for completed sales, and he has allegedly generated over $7.9 million in travel-related purchases by consumers.

Fareportal is a technology company that develops computer software used to power travel-related websites, including www.cheapoair.com. CheapoAir does approximately $4 billion in global airline ticket sales annually, and Fareportal earns revenue from these sales. Fareportal also owns a federally registered, incontestable trademark—CHEAPOAIR—(No. 3,576,166) which has served as the travel website's business name since July 1, 2005.

On November 21, 2018, the court ordered staged discovery, finding it the most suitable means to achieve proportionality and efficiently and effectively dispose of the issues of the case given the challenges facing the parties. Liability discovery was ordered as the first phase with damages discovery to commence only after liability is established against either party. (See Filing No. 116). On November 7, 2018, Jacobs filed notices of subpoena to Google, Microsoft, andYahoo pursuant to FRCP 45 and NECivR. 45.1. The subpoenas commanded production of:

All documents and communications relating to any Google AdWords activity by Fareportal, Inc. from 2009 through the present that involves the search keyword "cheapo" or any search phrase involving the keyword "cheapo", including but not limited to (1) analytics reports, (2) correspondence, and (3) information relating to costs, pricing, and revenues.

(Filing No. 106; Filing No. 107; Filing No. 108).

In addition, on November 16, 2018, Plaintiff filed a notice of subpoena seeking "all communications between Commission Junction and Fareportal, Inc. [sic] referencing Cheapo.com from 2006 to the present." (Filing No. 110).

On November 21, 2018, Defendant filed objections to each of the above subpoenas (Filing No. 114). On February 26, 2019, a telephonic hearing was held with the undersigned to address the dispute. (See Filing No. 140). It was not immediately resolved. Instead, Plaintiff was directed to complete the scheduled depositions, and if the information he wanted was not obtained, to again request to serve the subpoenas.

On March 22, 2019, Plaintiff moved to compel issuance of the contested subpoenas to complete liability discovery, citing his inability to obtain the requested information through depositions. (Filing Nos. 106-08; Filing No. 110).

In addition, on April 23, 2019, a conference was held with the parties, with oral argument presented as to various other discovery disputes. (Filing No. 177, audio file). The court's ruling and analysis as to each of these motions is discussed below.

II. ANALYSIS

The Federal Rules of Civil Procedure allow for discovery of "any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case." Fed. R. Civ. P. 26(b)(1) (emphasis added). Relevancy, for the purposes of discovery, includes "any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). The proportionality analysis then requires the court to weigh "the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit." Fed. R. Civ. P. 26(b)(1).

Plaintiff's Motion to Compel Issuance of Subpoenas on Google, Microsoft, Yahoo, and Commission (Filing No. 151).

Plaintiff's complaint asserts various claims against Defendant. For purposes of this motion, however, Jacobs focuses on his trademark infringement claim under the Lanham Act. (Filing No. 153, at CM/ECF p. 16, n. 64). To prevail on this claim, Jacobs must establish that (1) he owns a valid, protectable mark, (2) Defendant has used the mark in commerce without Plaintiff's consent; and (3) there is a likelihood of confusion between Plaintiff's mark and Defendant's mark. 15 U.S.C. § 1114(1); B & B Hardware, Inc. v. Hargis Indus., Inc., 569 F.3d 383, 389 (8th Cir.2009); JDR Industries, Inc. v. McDowell, 121 F.Supp.3d 872, 882 (2015).

Here, the central issue is whether Plaintiff's third-party subpoenas seek documents relevant to establishing the "likelihood of confusion" element of his Lanham Act claim. The Eighth Circuit has prescribed the following six factors (hereafter "SquirtCo factors") for the court to examine in assessing whether there is a likelihood of confusion:

(1) the strength of the owner's mark;

(2) the similarity of the owner's mark and the alleged infringer's mark;

(3) the degree to which the products compete with each other;

(4) the alleged infringer's intent to "pass off" its goods as those of the trademark owner;

(5) incidents of actual confusion; and

(6) the type of product, its costs and conditions of purchase.

Kemp v. Bumble Bee Seafoods, Inc. 398 F.3d 1049, 1054 (8th Cir. 2005). "[N]o one factor controls, and because the inquiry is inherently case-specific, different factors may be entitled to more weight in different cases. Kemp, 398 F.3d at 1054 (citing SquirtCo v. Seven-Up Co., 628 F.2d 1086 (8th Cir. 1980)).

Jacobs argues the pursued information is necessary, claiming that factors such as the timing, pattern, and the extent to which Fareportal engaged in keyword bidding on Plaintiff's trademark lie at the heart of establishing liability.

Although Fareportal has acknowledged that it purchased "cheapo" as a keyword, it has not explained the number and pattern of those purchases and has resisted further document production. Plaintiff anticipates that Fareportal's purchases were not consistent, but rose and fell in conjunction with its efforts to purchase Plaintiff's Website, further bolstering Plaintiff's claims.

. . .Fareportal has testified that it communicated with Commission Junction regarding a list of potential affiliates that was reviewed by Fareportal to ensure that the recipients would be relevant to the travel industry. Plaintiff has requested such documents from Fareportal, but they have not been produced.

(Filing No. 153, at CM/ECF p. 31-2).

Jacobs argues that because information sought in the subpoenas with respect to keyword bidding on "Cheapo" was not provided in depositions, the court should grant Plaintiff's motion to compel issuance of the subpoenas. Plaintiff contends this information is necessary to further develop the facts relevant to liability and to supplement Defendant's incomplete responses to party discovery. (Filing No. 153, at CM/ECF p. 2-3). In sum, Plaintiff argues that its need for the analytics surrounding Defendant's keyword bidding on Plaintiff's trademark is entirely relevant and proportional to the needs of the case.

Fareportal counters that the third-party subpoenas bear no relevance on liability and are disproportionate to the needs of the case. Defendant argues there is no material issue of fact in dispute because it has, at all stages, admitted to having regularly bid on the keyword term "Cheapo." Fareportal contends Jacobs has failed to show how the third-party subpoenaed documents would add to Defendant's admission or assist in establishing liability. Further, Defendant argues Jacobs subpoenas are disproportionate "because they request, inter alia, all documents and communications relating to keyword bidding by Fareportal on search phrases involving the keyword "cheapo"—part of its registered trademark—for a decade." (Filing No. 165, at CM/ECF p. 12-13).

Having reviewed the parties' briefs, oral arguments, and the record at length, the court will grant Plaintiff's motion to compel issuance of subpoenas (Filing No. 151). Plaintiff has sufficiently demonstrated that the nonprivileged keyword-biddingdata is relevant to his Lanham Act Claim and proportional to the needs of the case. See, Fed. R. Civ. P. 26(b)(1). Specifically, the court agrees that the pattern, timing, and extent to which Fareportal bid on the "cheapo" keyword could bear on, or reasonably could lead to other matters that could bear on, Fareportal's trademark-infringement liability to Jacobs. Oppenheimer Fund, Inc. v. Sanders, 437 U.S....