United States District Court, D. Colorado
LIST INTERACTIVE, LTD. d/b/a Uknight Interactive, Plaintiff,
KNIGHTS OF COLUMBUS, DAVID J. KAUTTER, IN HIS OFFICIAL CAPACITY AS ACTING COMMISSIONER OF THE INTERNAL REVENUE SERVICE, Defendants. KNIGHTS OF COLUMBUS, Counterclaim Plaintiff,
LIST INTERACTIVE, LTD. D/B/A UKNIGHT INTERACTIVE, LEONARD S. LABRIOLA, WEBSINC.COM, INC., STEPHEN S. MICHLIK, JONATHAN S. MICHLIK, AND TERRY A. CLARK, Counterclaim Defendants.
Brooke Jackson, United States District Judge.
matter is before the Court on two motions of defendant
Knights of Columbus: (1) its motion for summary judgment and
permanent injunction on its counterclaim, ECF No. 148, and
(2) its motion for summary judgment on plaintiff's fifth
claim for relief - misappropriation of trade secrets, ECF No.
153. For the reasons discussed herein the first motion, ECF
No. 148, is MOOT and the second motion, ECF No. 153, is
described the factual background of this litigation in prior
orders. See e.g. ECF Nos. 54, 90, 118; List
Interactive, Ltd. v. Knights of Columbus, No.
17-CV-00210-RBJ, 2017 WL 3217817 (D. Colo. July 28, 2017).
Briefly here, plaintiff in this action is List Interactive,
Ltd., d/b/a UKnight Interactive (“UKnight”)-a
Colorado-based web design company. This dispute arises out of
a web system it developed for defendant Knights of Columbus,
a religious and charitable fraternity registered in
Connecticut with subsidiary councils all around the world. As
a 501(c)(8) tax-exempt organization, the Knights of Columbus
must provide life insurance for its members and be organized
under the “lodge system.” See 26 U.S.C.
§ 501(c)(8)(A)-(B). The latter qualification means that
the organization must have a parent organization along with
subordinate branches that are chartered by the parent
organization but nonetheless self-governing. I use the term
“Knights of Columbus” to describe the parent
organization headquartered in New Haven that effectively runs
the fraternity's insurance business in the United States.
I will refer to the broader organization that is comprised of
this parent company, the chartered branches (known as
councils, assemblies or chapters), local members, and
insurance agents as “the Order.”
was created in 2011 by a Knights of Columbus insurance agent,
Steve Michlik, and his son Jonathon Michlik in an effort to
build a website to promote his insurance business and
communicate with other Knights of Columbus members in the
Dallas/Fort Worth area. ECF No. 153-2 at 12. They met with
various entities of the Order - agents, councils, chapters
and assemblies - to further grow and develop their web
platform for these entities.
August 2011, UKnight contacted the Knights of Columbus to
outline a proposal for providing a unified online platform
for purchases of life insurance and management of membership
activities across the Order. ECF No. 167-3. Following a
series of meetings, UKnight alleges that it reached an
agreement with the Knights of Columbus whereby it would
designate UKnight as its web platform vendor for the
fraternity's members-only life insurance business. In the
following year, UKnight made modifications to the platform
incorporating data files sent from the Knights of Columbus.
ECF No. 167-6. However, UKnight asserts that over the next
few years, the Knights of Columbus delayed announcing UKnight
as its exclusive vendor. The relationship ultimately soured
and disintegrated without such an announcement. UKnight
contends that the Knights of Columbus was running its life
insurance business fraudulently and reneged on the deal
because it realized UKnight's web system would expose
this fraud. ECF No. 58-1 at ¶52. The Knights of Columbus
assert that there was never a deal, and that it declined to
do business with UKnight because its web system was
inadequate. ECF Nos. 153 at 4, 153-1 at ¶7.
asserted a number of claims against the Knights of Columbus,
ECF No. 58-1 (Second Amended Complaint), and at issue here is
its claim for misappropriation of trade secrets. It contends
that the Knights of Columbus solicited information about its
web platform under the guise of preparing to implement the
system across the Order, but instead used its trade secrets
to seek out other vendors or replicate the system itself. The
events underlying this alleged misappropriation began in
February 2014 when UKnight partner and technology manager
Terry Clark met with a consultant hired by the Knights of
Columbus, Ian Kinkade, over two days. ECF No. 167 at 5. Based
upon information shared in these meetings, Mr. Kinkade
prepared a series of reports for the Knights of Columbus
describing the web platform and its technological
capabilities and shortcomings. ECF Nos. 167-12, 153-2. The
parties dispute what was shared in these meetings and the
“trade secret” status of the information Mr.
Kinkaid shared with the Knights of Columbus.
early 2015, members of the Knights of Columbus, including
Matt St. John, the Director of Insurance Marketing, and Mr.
Kinkade traveled to Dallas, Texas to meet with Mr. Clark
about the UKnight platform and its roll-out. At the
conclusion of these meetings, Mr. Kinkade stayed behind an
additional day to continue discussions with Mr. Clark. During
that meeting, Mr. Kinkade shared with Mr. Clark an email from
Mr. St. John that directed him to report the functions that
UKnight custom-designed for the Knights of Columbus. Mr. St.
John's email explained that such information could help
the Knights of Columbus seek out another vendor. ECF Nos.
167-15 (169-12 unrestricted version), 167-21 ¶16.
early 2016, the Knights of Columbus informed UKnight that it
would consider other potential vendors, and the parties'
relationship ended. ECF No. 153-1 at ¶8. According to
UKnight, Mr. St. John directed it to cease using the Knights
of Columbus's name in any of its business solicitations.
ECF No. 58-1 at ¶61.
UKnight filed suit, the Knights of Columbus asserted
counterclaims against UKnight and its principals Leonard
Labriola, Stephen Michlik, Jonathan Michlik, and Terry Clark
for UKnight's continued use of the Knights of Columbus
name and trademarks. ECF No. 101 (Answer to Second Amended
Complaint). These “cybersquatting” claims were
also brought against WebsInc.com, Inc., a listed registrant
of several “domain names” that UKnight allegedly
has registered unlawfully. ECF No. 101 at 29. I will refer to
these parties collectively as the “UKnight
issue here are the Knights of Columbus's claims for
trademark infringement, false designation of origin,
cybersquatting and common law trademark infringement. The
Knights of Columbus asserts that the UKnight defendants are
using Knights of Columbus trademarks to promote UKnight's
website business on UKnight's primary website, council
websites, agent sites, and in marketing presentations; and
that UKnight continues to own infringing domain names. ECF
No. 148 at 3-4.
STANDARD OF REVIEW
Court may grant summary judgment if “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party has the burden to show that there is
an absence of evidence to support the nonmoving party's
case. Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). The nonmoving party must “designate specific
facts showing that there is a genuine issue for trial.”
Id. at 324. A fact is material “if under the
substantive law it is essential to the proper disposition of
the claim.” Adler v. Wal-Mart Stores, Inc.,
144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A
material fact is genuine if “the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party.” Anderson, 477 U.S. at 248. The Court
will examine the factual record and make reasonable
inferences therefrom in the light most favorable to the party
opposing summary judgment. Concrete Works of Colo., Inc.
v. City & Cnty. of Denver, 36 F.3d 1513, 1517 (10th