Aristotle International, Inc. v. NGP Software, Inc.

714 F. Supp. 2d 1, 2010 U.S. Dist. LEXIS 51823, 2010 WL 2134285
CourtDistrict Court, District of Columbia
DecidedMarch 10, 2010
DocketCivil 05-1700 (TFH)
StatusPublished
Cited by25 cases

This text of 714 F. Supp. 2d 1 (Aristotle International, Inc. v. NGP Software, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aristotle International, Inc. v. NGP Software, Inc., 714 F. Supp. 2d 1, 2010 U.S. Dist. LEXIS 51823, 2010 WL 2134285 (D.D.C. 2010).

Opinion

UNDER SEAL

THOMAS F. HOGAN, District Judge.

MEMORANDUM OPINION

Pending before the Court are Plaintiff Aristotle International, Ine.’s (“Aristotle”) and Defendant NGP Software, Inc.’s (“NGP”) cross-motions for summary judgment, NGP’s Motion for Leave to File a Supplemental Memorandum of Law in Support of Its Motions for Summary Judgment, Aristotle’s “Motion for Leave to Treat Certain Facts as Non-Confidential,” Capitol Advantage LLC’s Motion for Leave to Intervene, Aison Gregor’s Motion for Leave to Intervene and Unseal Certain Documents Filed With Summary Judgment Pleadings, and NGP’s Motion to Take Deposition From Aison Gregor. Aristotle brings this action, claiming that NGP engaged in, and continues to engage in, false and misleading advertising, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (2006), by marketing itself as a campaign software provider working only with Democrats and their allies when, through an agreement with Capitol Advantage, NGP sells its software to heavily Republican-leaning entities. NGP counterclaims that Aistotle violated the Lanham Act by publishing false and misleading comparative advertisements aimed directly at persuading consumers to *4 choose Aristotle’s software over NGP’s. After careful consideration of the parties’ briefs, oral arguments, and the entire record herein, the Court will deny the summary judgment motions, as well as Ms. Gregor’s Motion to Intervene and NGP’s Motion to Depose Ms. Gregor. The Court will hold in abeyance NGP’s Motion for Leave to File a Supplemental Memorandum.

BACKGROUND

In 1983, brothers John Aristotle Phillips and Dean Aristotle Phillips created Aristotle International, Inc. (“Aristotle”), a company that sells campaign fundraising and compliance software to federal and state political candidates, party committees, and other organizations. Aristotle is non-partisan in that it has historically sold its software and products to both Democratic and Republican entities.

In 1997, Nathaniel Pearlman founded NGP Software, Inc. (“NGP”), a direct competitor of Aristotle in the political software market. Unlike Aristotle, NGP has always marketed itself as a partisan firm, stating on its website that “NGP seeks to be a responsible, dedicated partner to our clients, working toward our common goal: Victorious Democrats,” PL’s Summ. J. Mot. Ex. 18 (dated Aug. 24, 2007) (emphasis in original), and that “People use NGP because ... they TRUST us — we are PARTISAN and work only with Democrats and their allies,” PL’s Summ. J. Mot. Ex. 3 (dated Aug. 24, 2007) (emphases in original); see also PL’s Mot. Ex. 3 at 18 (“Trevelyan Dep.”). NGP has never sold its products directly to a Republican federal or state candidate or party committee. Def.’s Stat. of Facts ¶ 4.

In 2004, representatives from Capitol Advantage, a non-partisan campaign firm looking to enter the software market, approached NGP about either buying NGP or entering into some form of resale agreement. Pearlman did not want to sell NGP, and the companies entered into a “PAC Partnership Agreement” (“PAC Agreement” or “Reseller Agreement”) on May 25, 2004. NGP App. 16. Under this agreement, NGP agreed to license its political software to Capitol Advantage and to give Capitol Advantage the exclusive right to sell the software under its own private label, PACBuilder, “to corporations, trade associations, and right-leaning 527 nonprofit organizations.” 1 PAC Agreement at 2. This licensing agreement also provides NGP with a degree of approval authority over Capitol Advantage’s contracts with prospective PACBuilder purchasers or sub-licensees. Specifically, the agreement states that “[a]ny license or agreement for the ... software entered into between [Capitol Advantage] and a customer shall be reasonably acceptable to NGP.” PAC Agreement at 2. The agreement also states that PACBuilder customers were “exclusive customers” of Capitol Advantage, PAC Agreement at 2, and that Capitol Advantage “will manage customer service for all of its clients,” PAC Agreement at 4. Under the agreement, NGP receives a royalty payment on a per customer basis, which is the “higher of $200 per month or 20% of the monthly license fee that [Capitol Advantage] charges each customer that has executed a license or other agreement” for the software. PAC Agreement at 1. According to NGP, the royalties it receives pursuant to the PAC *5 Agreement represent 1 to 2 percent of NGP’s revenue. Trevelyan Dep. at 45-46.

In late 2005, Aristotle brought this lawsuit against NGP, alleging that NGP engaged in and continues to engage in false and misleading advertising, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (2006), by claiming to work only with Democrats and their allies when, through its agreement with Capitol Advantage, NGP sells its software to Republican-leaning entities. Aristotle asserts that NGP published misleading or false statements and advertisements on NGP’s website as well as in various marketing documents. 2 Although Aristotle initially requested that the Court award it NGP’s profits on a theory of unjust enrichment, Aristotle filed a second amended complaint in January 2007, seeking instead a permanent injunction prohibiting NGP from continuing its partisan advertising and a corrective statement. In April 2007, NGP, with leave of Court, filed a counterclaim alleging that Aristotle engaged in false and misleading advertising in violation section 43(a) of the Lanham Act. In its counterclaim, NGP seeks a permanent injunction prohibiting Aristotle from making false or misleading representations with regard to NGP’s products and services and requiring Aristotle to take corrective action for any false or misleading representations it has made. Both parties now seek summary judgment.

DISCUSSION

1. CROSS MOTIONS FOR SUMMARY JUDGMENT

A. Legal Standards

1. Summary Judgment

Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). While the movant bears the initial burden of demonstrating that there are no genuine issues of material fact and that the court should render judgment on the legal issues in its favor, see Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), an adverse or nonmoving party may oppose a properly supported summary judgment motion by “[setting] forth specific facts showing that there is a genuine issue for trial,” Celotex, 477 U.S. at 323, 106 S.Ct. 2548; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct.

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714 F. Supp. 2d 1, 2010 U.S. Dist. LEXIS 51823, 2010 WL 2134285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aristotle-international-inc-v-ngp-software-inc-dcd-2010.