BillFloat Inc. v. Collins Cash Inc.

District Court, N.D. California·Decided March 1, 2023·No. 3:20-cv-09325·Unknown

Opinion

BILLFLOAT INC., Case No. 20-cv-09325-EMC

Plaintiff, ORDER DENYING PLAINTIFF’S MOTION AND RENEWED MOTION v. FOR JUDGMENT AS A MATTER OF LAW AND FOR NEW TRIAL, AND COLLINS CASH INC., et al., GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION Defendants. FOR ATTORNEYS’ FEES

Docket Nos. 137, 138, 141

The plaintiff BillFloat Inc. (“BillFloat”) sued the defendants Collins Cash Inc. (“Collins Cash”) and its owner Abraham Cohen (collectively, “Defendants”) for, inter alia, trademark infringement and breach of contract. After a four-day trial solely on the trademark infringement claim, the jury found in favor of Defendants. Now pending before this Court are (1) BillFloat’s renewed motion for judgment as a matter of law (JMOL) under Rule 50(b), or alternatively, for a new trial under Rule 59(a) of the Federal Rules of Civil Procedure, and (2) Defendants’ motion for attorneys’ fees and costs. For the following reasons, the Court denies the former and grants in part and denies in part the latter. A. Relevant Factual Background BillFloat, the number one Small Business Administration-backed loan (“SBA loan”) facilitator in the United States, has been offering business financing services using “SmartBiz” as (“JI”)) No. 7 (Stipulations of Fact).) It obtained a federal registration for that mark in 2014. (Id.) A few years later, BillFloat obtained federal trademark registrations for the marks “SmartBiz Loans” and “SmartBiz Advisor” as well. (Id.) Collins Cash also offers financial services to small businesses. Abraham Cohen, an individual residing in Florida, is its owner, sole shareholder, and sole employee. (JI No. 7.) It adopted the “Smart Business Funding” mark in December 2014. (Trial Exhibit (“TX”) 128.) The parties entered into a partnership agreement (the “Agreement”) in 2018. (JI No. 7; TX 150.) Between 2018 and 2020, Collins Cash referred hundreds of its customers to BillFloat under the Agreement, resulting in one deal. (TX 128; TT 231:9-232:25, 398:12-14.) After BillFloat’s CEO learned from his father about the Smart Business Funding mark, BillFloat sent Collins Cash its first cease-and-desist (“C&D”) letter on April 14, 2020, demanding that Collins Cash stop using the Smart Business Funding mark. (TX 126.) On May 2, Collins Cash applied to register its mark with the United States Patent and Trademark Office (“PTO”). (JI No. 7.) It did not otherwise respond to the C&D letter. Later that month, BillFloat sent a second C&D letter, warning that a lawsuit would follow if Collins Cash persisted using its mark. (TX 127.) Collins Cash responded through counsel in June. (TX 128.) In the response letter, it highlighted the parties then-existing partnership and explained its position that the parties’ marks were not similar or confusing. (Id.) BillFloat sent its final C&D letter on September 8, 2020 and filed suit in December that year. (TX 129; Docket No. 1.) BillFloat terminated its partnership with Collins Cash in April the following year. (TX 237.) B. Procedural History BillFloat filed this action on December 23, 2020, alleging trademark infringement under federal and state law, unfair competition, and breach of contract. The Court granted Defendants’ motion for summary judgment on the breach of contract claim, but denied summary judgment on the remaining claims and on the affirmative defense of laches. (Docket No. 65 (“Order”) at 9.) BillFloat voluntarily dismissed the surviving claims, except for trademark infringement under the Lanham Act, before trial. (Docket No. 94 at 1 n.1.) The Court also denied BillFloat’s Daubert outright that there is no likelihood of confusion.” (Order at 15.) During the four-day trial, BillFloat moved for a directed verdict under Rule 50 after the parties had presented the evidence. The Court took that motion under submission. The jury subsequently returned a verdict that neither Collins Cash nor Abraham Cohen had infringed BillFloat’s SmartBiz trademarks. III. BILLFLOAT’S RENEWED MOTION FOR JMOL OR FOR A NEW TRIAL BillFloat renews its JMOL, and moves for a new trial in the alternative, on the same grounds: that (1) the Court erroneously allowed the jury to consider Keegan’s survey, and (2) the jury might have drawn a negative inference from BillFloat’s failure to conduct a survey. (Docket No. 137 (“BF Mot.”) at 1–2; (Docket No. 149 (“BF Reply”) at 1–2, 14.) The Court denies both motions. A. The Court Denies BillFloat’s Renewed JMOL Under Rule 50(b), courts determine “whether the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to that of the jury.” Huizar v. City of Anaheim (Estate of Diaz), 840 F.3d 592, 604 (9th Cir. 2016) (internal quotation marks and citations omitted). Courts “may not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). As discussed below, the Court properly admitted the evidence and attorney arguments made at trial. Further, the evidence presented at trial, construed in the light most favorable to Defendants, supports the jury’s verdict. 1. The Court Properly Allowed the Jury to Consider Defendants’ Market Survey BillFloat recycles several arguments raised in its Daubert motion. First, it argues that Keegan’s control stimuli were improper. Specifically, Keegan admitted at trial that a proper control stimulus “should share as many characteristics with the [accused mark’s webpage] as possible, with the key exception of the [words of the accused mark].” (TT 536:17–538:10, 599:10–600:13.) But his control webpage differed from that of the accused in many aspects, including the layout and color scheme. (TX 213 at 15–16.) Worse still, BillFloat argues, the of confusion in Keegan’s survey. Second, BillFloat contends that Keegan used a flawed survey design. Although purporting to be a “Squirt” survey, he did not use a control group and instead showed the same group of respondents an array of four different webpages. While a survey may, under certain circumstances, use a control question as opposed to a control group, Keegan failed to include a control question. Third, Keegan’s survey universe was both under- and over-inclusive. Defendants respond that Keegan used proper natural controls to approximate real-world viewing conditions. And the flaws in a survey’s universe were subjects for cross-examination. The Court declines to revisit its prior holding that each of BillFloat’s critiques of Keegan’s survey goes to the weight, rather than the admissibility, of his testimony. (See Order at 13–14.) During trial, BillFloat cross-examined Keegan on each point vigorously. It concedes that, at trial, its survey expert “explained what a proper survey should look like multiple times,” “gave examples of proper questions,” “identifie[d] a proper control and proper universe,” and “explained how the sum total of each of the aforementioned flaws in Mr. Keegan’s survey rendered the survey wholly unreliable for testing likely confusion, and that the survey was actually designed to result in a predetermined outcome.” (P’s Reply at 7–8 (citing TT 596:8-598:2, 589:24-590:3, 569:2-3, 588:6, 599:15-18, 603:16-605:5).) The jury had sufficient information to properly evaluate the weight of Keegan’s testimony. The cross-examination was thorough, and it could have well decided to give no weight to the survey. The Court did not err by allowing the jury to consider it. 2. The Court Properly Allowed Defendants’ Counsel to Argue about BillFloat’s Lack of Survey Evidence BillFloat next contends that multiple factors likely led the jury to draw a negative inference from its

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BillFloat Inc. v. Collins Cash Inc., (N.D. Cal. 2023).

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