Terry v. Hinds

47 F. Supp. 3d 1265, 2014 U.S. Dist. LEXIS 131670, 2014 WL 4656234
CourtDistrict Court, D. Utah
DecidedSeptember 17, 2014
DocketCase No. 2:12-cv-00166-RJS
StatusPublished
Cited by2 cases

This text of 47 F. Supp. 3d 1265 (Terry v. Hinds) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Terry v. Hinds, 47 F. Supp. 3d 1265, 2014 U.S. Dist. LEXIS 131670, 2014 WL 4656234 (D. Utah 2014).

Opinion

MEMORANDUM DECISION AND ORDER

ROBERT J. SHELBY, District Judge.

Plaintiff Douglas C. Terry is the founder and owner of Plaintiff World Be Free, which does business as BodyGym. Defendant Robert S. Hinds is the founder and president of Defendants Lifeline International and Lifeline USA (collectively Lifeline). BodyGym and Lifeline both market personal fitness exercise devices. In February 2013, Plaintiffs filed the operative Complaint in this action (Dkt. 76) alleging four causes of action arising from a Release and Settlement Agreement (RSA) entered into between Mr. Terry and Mr. Hinds in May 2007. Plaintiffs contend that:

1. Defendants breached the terms of the RSA by manufacturing, marketing, and selling the Lifeline Cable Bar product;
2. Defendants breached the covenant of good faith and fair dealing;
3. Plaintiffs are entitled to the entry of an order requiring Defendants to cease and desist from manufacturing, marketing, and selling the Lifeline Cable Bar. In addition, Plaintiffs are entitled to the entry of an order' that existing Lifeline Cable Bar products be seized and destroyed; and
4. Defendants engaged in unfair competition under the statutory and common law of the State of Utah, including at least Utah Code Ann. § 13-5a-101 et seq. (2011).

The parties filed cross motions seeking summary determinations on all four causes of action. (Dkt. Nos. 85, 89.) After careful consideration and for the reasons stated below, the court GRANTS IN PART and DENIES IN PART both Plaintiffs’ and Defendants’ motions for summary judgment.

BACKGROUND

I. Facts Preceding the Lawsuit

In 2005, Mr. Terry sued Mr. Hinds in a prior action involving a dispute unrelated to the one here presented. Mr. Terry and Mr. Hinds ultimately settled that dispute and in May 2007 entered into the RSA. (RSA, Exh. B, Dkt. 86-1; Third Amended Complaint at ¶ 13, Dkt. 76.)

In the RSA, Mr. Terry and Mr. Hinds agreed, in relevant part, to the following:

(1) Mr. Terry agreed to dismiss with prejudice all claims brought by him [1268]*1268in that action against Mr. Hinds (RSA at ¶ 1);
(2) Mr. Hinds and Mr. Terry agreed to execute and be bound by the terms and conditions of a “Patent Assignment and License Agreement” (PALA) — which will be discussed in more detail below (RSA at ¶ 2);
(3) Mr. Hinds and Mr. Terry agreed to be named as co-inventors of U.S. Patent No. 6,988,978 (RSA at ¶ 3);
(4) Mr. Hinds and Mr. Terry agreed to be named as co-inventors of U.S. Patent No. 6,860,842 (RSA at ¶ 4);
(5) Mr. Hinds and Mr. Terry agreed to be named as co-inventors of U.S. Patent Application No. 10/602,928; and
(6) Mr. Terry agreed to purchase certain products from Lifeline for a total amount of $209,008 (RSA at ¶ 6).

Paragraph 10 of the RSA further provided that:

The parties understand and agree pursuant to the terms and conditions of the Patent and License Agreement attached hereto as Exhibit A and incorporated herein, by reference, that Hinds and Lifeline on the one hand and Terry on the other shall be marketing and selling products that are similar in appearance and function. To reduce that inherent risk of confusion which shall result from such similarity, Hinds and Lifeline agree that their product shall be marketing [sic ] in the form similar to that as presently shown in Exhibit C, except that such product shall not be black in color and shall not contain on its surface any appliques, decals or other forms of illustrations or pictures depicting exercises, exercise positions, instructions or similar information, and said bar shall exclude a product that has ends that are designed to permit plugged cables to attach directly to the lifting bar or a package including slidable foot straps as shown in Exhibit D attached hereto. Said bar as shown in Exhibit C shall have ends that are designed to permit rigid handles to attach directly to the lifting bar ... The parties expressly agree that the bar used by Terry shall be black or white in color and that Terry may affix to the bar by means of applique, decal or other means any illustrations, pictures, or similar depictions of exercises, exercise positions, instructions or similar information. Said bar as shown in Exhibit D excludes a product that has ends that are designed to permit rigid handles to attach directly to the lifting bar. Said bar as shown in Exhibit D has ends that are designed to permit plugged cables to attach directly to the lifting bar.

(RSA at ¶ 10.)

Exhibits C and D referenced in Paragraph 10 show a bar with a so-called “pipe bowl” design. This design has an opening shaped like a “pipe bowl” on either side of the bar where handles or plugged cables can be inserted.

II. Patent Assignment and License Agreement (PALA)

In accordance with Paragraphs 2 and 10 of the RSA, Mr. Terry and Mr. Hinds executed the PALA at around approximately the same time as they entered into the RSA. (Dkt. 85 at ¶ 16.) Under the PALA, Mr. Hinds assigned to Mr. Terry U.S. Patent No. 6,988,978 and U.S. Patent Application No. 10/602,928. (PALA at Exh. A, Dkt. 86-1.) Mr. Terry licensed to Mr. Hinds U.S. Patent No. 6,979,286. (PALA at Exh. B.) In addition, Mr. Terry also licensed back to Mr. Hinds U.S. Patent No. 6,988,978 and U.S. Patent Application No. 10/602,928. Id.

On one hand, Mr. Hinds agreed “to assign, convey, sell, grant and transfer to [1269]*1269[Mr. Terry the] rights, title and interest of every kind and character throughout the world, including moral rights, in and to the Assigned Patents to the full extent of its ownership or interest therein.” (PALA at ¶ 2.1.) Mr. Hinds’s assignment to Mr. Terry included

all existing future domestic and foreign patent applications and registrations therefor (and all patents that issue therefrom and all divisions, continuations, continuations-in-part, reexaminations, substitutions, reissues, extensions, and renewals of such applications, registrations and patents, and the right to apply for any of the foregoing); all goodwill associated therewith; all rights to causes of action and remedies related thereto (including ... the right to sue for past, present or future infringement, misappropriation or violation of rights related to the foregoing); and any and all other rights and interests arising out of, in connection with or in relation to the Assigned Patents.

(Id.)

On the other hand, Mr. Teyry granted to Mr. Hinds “a worldwide, royalty-free, fully paid up, non-exclusive, non-transferable license.” (PALA at ¶ 3.1.) But, the parties agreed that “[t]he License Grant ... is limited to a field of use that excludes a product that has ends that are designed to permit plugged cables to attach directly to the lifting bar and excludes a lifting bar, or a portion of the lifting bar, manufactured in a black color.” (PALA at ¶ 3.2.) In addition, under the PALA, Mr.

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47 F. Supp. 3d 1265, 2014 U.S. Dist. LEXIS 131670, 2014 WL 4656234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/terry-v-hinds-utd-2014.