Netjets Inc. v. Intellijet Group, LLC

138 F. Supp. 3d 929, 117 U.S.P.Q. 2d (BNA) 1292, 2015 U.S. Dist. LEXIS 139137, 2015 WL 5935826
CourtDistrict Court, S.D. Ohio
DecidedOctober 13, 2015
DocketCase. No. 2:12-cv-00059
StatusPublished

This text of 138 F. Supp. 3d 929 (Netjets Inc. v. Intellijet Group, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Netjets Inc. v. Intellijet Group, LLC, 138 F. Supp. 3d 929, 117 U.S.P.Q. 2d (BNA) 1292, 2015 U.S. Dist. LEXIS 139137, 2015 WL 5935826 (S.D. Ohio 2015).

Opinion

OPINION AND ORDER

- GREGORY L. FROST, UNITED STATES DISTRICT JUDGE

This matter is before the Court on remand from‘the Sixth Circuit Court of Ap[934]*934peals to address several arguments raised in Defendant’s motion .for summary judgment (ECF Nos. 48 & .51). To address those arguments, the Court considers Defendant’s supplemental memorandum in support of its motion for summary judgment (ECF Nos, 97 & 98), NetJets’ response in opposition to Defendant’s supplemental memorandum (ECF Nos. 101 and 102), and Defendant’s reply in support of its supplemental memorandum (ECF No. 103).

For the reasons that follow, the Court GRANTS summary judgment in Defendant’s favor on each of NetJets’ claims and on Defendant’s counterclaim.

I. BACKGROUND

A. Facts

The facts of this case are set forth in more detail in the Court’s December 19, 2013 Opinion and Order granting Defendants motion for summary judgment. (ECF No. 85.) For ease of reference, the relevant section of that Opinion and Order is reproduced below.

1. NetJets’ Business

Plaintiff NetJets is a private aviation company headquartered in Columbus, Ohio. NetJets’ predecessor, Executive Jet Aviation, originated in Columbus in 1964 as a private business jet charter and aircraft management company. Today, NetJets markets itself as a full service private aviation solution provider, offering among other things fractional ownership of jet aircraft, jet lease management, and jet charter services. NetJets’ most widely known' service is fractional jet ownership, which allows for either the purchase ‘or lease of a “share” of an aircraft for a certain number of hours of usage each year. (For example, an owner of a l/16th share has 50 hours annually for the specific aircraft type' for which the share is purchased or leased.) NetJets’ fractional ownership clients are therefore able to buy a share of a private jet at a fraction of the cost of owning a whole aircraft.

In addition to fractional aircraft ownership, NetJets offers aircraft leasing through Marquis Jet Partners, Inc. (“Marquis”), a company that NetJets acquired in 2010. Marquis offers the “Marquis Jet Card,” which is a sublease of an aircraft in the NetJets program for a set number of hours. The Marquis Jet Card program allows customers to access aircraft from NetJets’ fleet without having to purchase or lease a fractional share. Before NetJets bought Marquis in 2010, Marquis was NetJets’ largest customer for fractional shares, which Marquis would then resell under its card program. In addition to the NetJets’ fractional share business and the Marquis business, NetJets manages .fleet operations internationally through an entity known as NetJets Europe. Overall, NetJets provides more than 300,000 flights throughout 170 countries' for its customers.

2. The IntelliJet Software

In order to help manage its operations, NetJets began in the 1990s to develop its own customized and proprietary software program, which it called “IntelliJet.” NetJets began developing the software internally in 1994. Approximately six employees worked on the software’s development, including the writing of the source code and the software’s debugging. This first iteration of the IntelliJet software included modules for contracts and accounts, reservations,' flight following, crew management, airport management, billing, and crew communications. NetJets did not license the'IntelliJet software program to any third party. Though there was some interest from third parties to acquire a license to use the software, NetJets chose not to do so in order to maintain a competitive advantage in its business. From 1995 through 2000, no one other than certain employees of NetJets and NetJets’ related [935]*935companies had access to the IntelliJet software.

In the years following the development of the first version of the IntelliJet software, NetJets’ employees worked on improvements and refinements to the soft-, ware. NetJets eventually launched an upgraded version of the software, which it dubbed “IntelliJet II.” The latter software program- performs the .same functions as IntelliJet I, but, according to NetJets, is greatly enhanced to provide additional features for NetJets owners.

According to testimony in the record, approximately 220 employees in NetJets’ IT department support the IntelliJet system. NetJets invests a. 'considerable amount of money to maintain and develop upgrades to the software; the upgrade from “IntelliJet I” to “IntelliJet II,” for example, cost NetJets approximately $20 million to' implement. The IntelliJet software has been and continues'to be located on servers in Columbus, Ohio.

Under previous versions of the IntelliJet software, NetJets’ customer's (or “owners” as NetJets calls them) did not have direct access to the IntelliJet software. With In-telliJet II, however,"there is now an “owner’s portal” that allows owners to access the system from the internet and perform such tasks as changing their preferences or making flight reservations. When owners log into the website, the INTELLI-JET name is displayed on the screen. The owner’s portal went “live” for NetJets owners in January 2013. While NetJets’ owners can now see the INTELLIJET name when they log in to their NetJets’ accounts, there is no evidence or testimony to indicate that the INTELLIJET name is displayed to non-NetJets owners who access the NetJets website over the internet.

3. NetJets’ Touting of the IntelliJet Software

NetJets. considers the IntelliJet software to be proprietary and a trade secret. NetJets also considers the IntelliJet software to be a vital, part of its business and a point of emphasis when discussing NetJets’ operation with customers and potential customers. Over the years, NetJets has included discussion- of the IntelliJet software’s functionality in newsletters to owners and in literature provided to passengers on NetJets’ airplanes. NetJets’ brochures for both its fractional share business and the Marquis Jet Card business have also mentioned the IntelliJet software. NetJets consistently refers to the software as “IntelliJet®” to show that it has a registered trademark in the - software’s name. ■

NetJets also uses IntelliJet in tours of NetJets’ facility in Columbus, Ohio given to customers and potential customers. During these tours, NetJets shows off some of the features of the IntelliJet software. NetJets has also offered into evidence several magazine articles about NetJets that have mentioned the IntelliJet software.

4. Defendant IntelliJet Group LLC

Defendant IntelliJet Group LLC is a Florida, limited liability company that has operated under the name “IntelliJet International” since 2005.,IntelliJet International. is in the business of providing aircraft brokerage services, helping clients-either sell or acquire jet .aircraft. The company deals primarily in Gulfstream, Bombardier, and Dassault jet aircraft ranging in price from $10 million' to $60 million. In recent years, IntelliJet International has also provided aircraft leasing services through a division of the company and has expanded its business into the area of aircraft management-.

Gary Spivack is the founder and 50 percent owner of IntelliJet Group.

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138 F. Supp. 3d 929, 117 U.S.P.Q. 2d (BNA) 1292, 2015 U.S. Dist. LEXIS 139137, 2015 WL 5935826, Counsel Stack Legal Research, https://law.counselstack.com/opinion/netjets-inc-v-intellijet-group-llc-ohsd-2015.