United States District Court, D. Colorado
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Christine M. Arguello United States District Judge.
This
case involves a dispute between a corporation and its former
employee over whether the former employee ran afoul of his
legal and contractual duties when he established a competing
business before he left the employ of the corporation and, if
so, the extent to which the corporation was damaged by its
former employee’s actions.
Beginning
on March 5, 2018, the Court presided over a five-day bench
trial on Plaintiff Atlas Biologicals, Inc.’s claims
for: (a) federal trademark infringement, in violation of the
Lanham Act, 15 U.S.C. § 1114; (b) false designation of
origin and federal unfair competition, in violation of the
Lanham Act, 15 U.S.C. § 1125; (c) trademark and trade
name infringement under Colorado common law; (d)
misappropriation of trade secrets, in violation of the
Colorado Uniform Trade Secrets Act, Colo. Rev. Stat.
§§ 7-74-101, et seq.; (e)
“conversion and civil theft” pursuant to Colo.
Rev. Stat. § 18-4-405; (f) deceptive trade practices, in
violation of the Colorado Consumer Protection Act, Colo. Rev.
Stat. § 6-1-105; (g) breach of fiduciary duty; and (h)
breach of contract, see (Doc. # 101), as well as
Defendants Thomas Kutrubes, Peak Serum, Inc., and Peak Serum,
LLC’s affirmative defenses of: (a) successful
mitigation of damages; and (b) the doctrine of unclean hands,
see (Doc. # 103). See (Doc. ##
131–35.) Having heard the evidence presented at trial
and reviewed the parties’ proposed findings of fact and
conclusions of law (Doc. ## 154–55), the Court now
enters its findings of fact and conclusions of law.
I.
FINDINGS OF FACT
A.
THE PARTIES
Plaintiff
Atlas Biologicals, Inc. (“Atlas”) specializes in
the production of bovine serum[1]-based products that are used for
cell culture and research in the medical, veterinary, and
biological sciences. (Doc. # 101 at 4.) Among bovine
serum-based products, fetal bovine serum is in particularly
high demand because it is widely utilizable in scientific
research. (Id.) Fetal bovine serum is, as the name
implies, derived from blood drawn from a bovine fetus.
(Id.) It is a byproduct of the commercial beef
industry, and its price rises and falls as the market for
beef product fluctuates. (Id.) Atlas developed and
sells EquaFETAL, a proprietary product that meets the
specifications of fetal bovine serum but is purportedly more
traceable, consistent in quality, and stable in pricing than
fetal bovine serum. (Id. at 5.) Atlas, which
maintains its principal office in Fort Collins, Colorado,
owns and uses in commerce the registered mark EquaFETAL, in
addition to the following registered or common law marks:
FETAL㲵; PROGENISERUM; FETAL CHOICE; FETAL SELECT; ATLAS;
ATLAS BIOLOGICALS; FETAL RESOURCE; and its logo. (Doc. # 123
at 13–14.) In 2014 and 2015, Richard “Rick”
Paniccia was the president of Atlas and one of its owners
(Paniccia Testimony, Doc. # 137 at 302); Brent Bearden was a
partial owner (Bearden Testimony, Doc. # 139 at 555); and
Michelle Cheever was the company’s Director of Quality
Assurance (Cheever Testimony, Doc. # 136 at 52). Paniccia and
Bearden remain partial owners of Atlas today.
Defendant
Thomas Kutrubes was also a partial owner of Atlas in 2014 and
2015 and continuing through the trial; he had at all relevant
times a 7% ownership interest in Atlas. (Doc. # 101 at 5);
see (Doc. # 103 at 3.) Kutrubes began working for
Atlas as an intern in 2005 and was hired as an employee in
2006, initially serving as a regional sales manager. (Doc. #
101 at 6; Doc. # 11-7 at 1.) In January 2010, Kutrubes became
a shareholder in Atlas, owning 5% of its common stock. (Doc.
# 11-7 at 1.) Atlas awarded Kutrubes an additional 1% of the
common stock the following year. (Id.) On November
9, 2012, Atlas promoted Kutrubes to be its National Sales
Manager. (Doc. # 101 at 6.) On the date of his promotion,
Kutrubes signed a job description for that position; the
document listed as one of 12 “key
responsibilities” “[u]nderstand[ing] and
adher[ing] to company policies and procedures.” (Doc. #
1-2.) Atlas already had in a place a policy entitled
“Control of Confidentiality/Proprietary
Information” that prohibited all employees from
disclosing without the company’s prior written
authorization any “Confidential and/or Proprietary
Information.” (Doc. # 1-3 at 5.) Kutrubes was
subsequently elected to Atlas’s Board of Directors and,
on January 1, 2013, was awarded an additional 1% of
Atlas’s common stock. (Doc. # 11-7 at 2.)
B.
THE BEGINNINGS OF PEAK SERUM
Unbeknownst
to Atlas, Kutrubes was developing a business plan to compete
with Atlas while he was still in Atlas’s employ.
See (Doc. # 10-2.) The business plan stated that
Kutrubes’s company, Peak Serum, would specialize in
bovine serum-based products and generate market share among
American academic institutions, with a
“secondary” emphasis on exporting products to
“Korea, Japan, China, Italy, and Canada.”
(Id. at 2.) Kutrubues’s business plan
continued, “Prices will be more competitive, and direct
competition [will] be from Atlas to a certain extent due to
SereaTech [sic] sourcing.” (Id. at 6.) On
October 31, 2014, Kutrubes filed articles of organization for
Defendant Peak Serum, LLC with the Colorado Secretary of
State. (Doc. # 11-1.) On December 9, 2014, Kutrubes dissolved
Defendant Peak Serum, LLC and incorporated Defendant Peak
Serum, Inc. (“Peak Serum”) as a for-profit
Colorado corporation. (Doc. # 11-4.)
Beginning
the fall of 2014, at roughly the same time Kutrubes was
establishing Peak Serum and while still employed by Atlas,
Kutrubes “took certain information, documentation, and
data” from Atlas by emailing documents from his
Atlas-provided email account to his personal Gmail account.
(Doc. # 123 at 23; Cheever Testimony, Doc. # 136 at 72.)
These documents included Atlas’s customer contact
lists, a supplier agreement; its quality manual; its
organizational chart; a contract manufacturing statement;
proofs of labels; a marketing brochure; and email exchanges
about Atlas’s products, among others. See
(Doc. ## 7-1–7-5.) Kutrubes also “sent certain
emails to customers of [Atlas]” that contained
Atlas’s trademarks and trade names and “solicited
business for his company, Peak Serum.” (Doc. # 123 at
13.) In these emails, Kutrubes falsely represented to
Atlas’s customers that Atlas and Peak Serum were
“sister companies, ” that Atlas was no longer
conducting international business, and that Peak Serum would
be assuming Atlas’s international customers.
See (Doc. ## 7-8–7-21, 8-1–8-21,
9-1–9-14.) Kutrubes also contacted Atlas’s
suppliers, contract manufacturers, and business partners,
including SeraTec, Central Biomedia, and Rocky Mountain
Biologicals, in attempt to secure product for Peak Serum.
See (Doc. ## 10-12–10-18.) Kutrubes
“admits he breached his duty of loyalty as an employee
[of Atlas] between October 1, 2014, and continuing until his
termination in December of 2014.” (Doc. # 123 at 12.)
C.
THE END OF THE EMPLOYMENT RELATIONSHIP
In
mid-December 2014, Kutrubes informed Paniccia and Bearden
that he was resigning from Atlas in order to independently
sell fetal bovine serum. (Paniccia Testimony, Doc. # 138 at
369; Doc. # 101 at 6.) Kutrubes tendered a formal resignation
letter to Atlas on December 16, 2014, with an effective date
of December 19, 2014. (Doc. # 11-6.) He wrote that he was
resigning “from employment” with Atlas and from
his alleged role as a director of the company, despite his
belief that he “did not perform the duties of a
Director, such as overseeing the activities of the
company” and did not “serve as an officer for the
corporation.” (Id. at 1.) In response to
Paniccia and Bearden’s purported “request and
desire that the company purchase [his] shares, ”
Kutrubes requested a buyout of his shares “upon the
recent appraisal of the company at $3, 200, 000.00” and
thus requested “a lump sum payment in the amount of
$224, 000.00.” (Id.)
In the
days after Kutrubes’s resignation, Atlas discovered
that prior to his resignation, Kutrubes had used his
Atlas-provided email address to send numerous company
documents to his personal Gmail account and to extensively
email Atlas’s customers to solicit business for Peak
Serum. (Cheever Testimony, Doc. # 136 at 67; Paniccia
Testimony, Doc. # 138 at 373.) Cheever, responsible for
preparing the desktop Kutrubes used at Atlas for a future
employee, observed that the desktop was “surprisingly
clean” of files and that “a lot” of
Kutrubes’s email history was “missing.”
(Cheever Testimony, Doc. # 136 at 67–68.) Cheever
restored many of the files and emails that had been deleted
from the desktop and notified Paniccia and Bearden of the
sensitive nature of their content. (Id. at 73.) Upon
advice of its counsel, Atlas then retained an information
technology consultant, Dan Silva, to “run a
restore” and preserve evidence on the desktop.
(Paniccia Testimony, Doc. # 138 at 373; Silva Testimony, Doc.
# 136 at 14.)
In
light of what it discovered on the desktop Kutrubes had used
while an employee, Atlas “decline[d] [Kutrubes’s]
resignation” and “instead terminate[d] his
directorship and employment for cause” on December 27,
2014. (Doc. # 11-7.) In its letter to Kutrubes, Atlas
detailed its findings in the “large volume of
material” Kutrubes had apparently deleted from the
desktop and alleged that Kutrubes had breached his fiduciary
duties as a director and a shareholder and breached his
“employment agreement.” (Id. at 4.) It
demanded that Kutrubes and Peak Serum “immediately
return to Atlas” and cease using all materials obtained
from Atlas, surrender all shares of stock in Atlas, and
“abandon all plans to commence business
operations” similar to those conducted by Atlas.
(Id.)
D.
PROCEDURAL HISTORY
Atlas
initiated this action against Kutrubes and Peak Serum on
February 20, 2015. (Doc. # 1.) Shortly thereafter, Atlas
filed an ex parte motion for immediate injunctive
relief. (Doc. # 5.) On March 3, 3015, the Court entered a
temporary restraining order that enjoined Kutrubes and Peak
Serum from:
a. Using the marks EquaFETAL, FETAL㲵, ATLAS, or ATLAS
BIOLOGICALS in connection with Defendants’ goods or
services;
b. Using any trademark, trade dress, service mark, name,
logo, design or source designation of any kind on or in
connection with Defendant’s goods or services that is a
copy, reproduction, colorable imitation, or simulation of, or
confusingly similar to the trademarks, trade dress, service
marks, names or logos of Atlas Biologicals, Inc.;
c. Using any trademark, trade dress, service mark, logo,
design or source designation of any kind on or in connection
with Defendant’s goods or services that is likely to
cause confusion, mistake, deception, or public
misunderstanding that such goods or services are produced or
provided by Atlas Biologicals, Inc., are sponsored or
authorized by Atlas Biologicals, Inc., or are in any way
connected with, controlled by, or related to Atlas
Biologicals, Inc.
d. Using and further disclosing the proprietary information
and trade secrets of Atlas Biologicals to produce bovine or
equine serum based products, including EquaFETAL or blended
or proprietary products based on Atlas’ proprietary
information and trade secrets;
e. Producing products containing EquaFETAL or EquaFETAL in
combination with other products;
f. Contacting any customer or prospective customer in Atlas
Biologicals, Inc.’s customer list or database; and
g. Deleting, destroying, erasing or otherwise making
unavailable for further proceedings in this matter any Atlas
business information, trade secrets, proprietary information,
tangible or intangible property, and any information
belonging to or relating to any Atlas customer or vendor
which information was improperly obtained by Kutrubes or Peak
Serum during Kutrubes’s employment with Atlas.
(Doc. # 17.) The temporary restraining order was set to
expire on March 23, 2015. (Doc. # 38.)
The
parties then stipulated to a partial entry of a preliminary
injunction. (Doc. # 26.) The parties did not agree on whether
it was permissible for Kutrubes and Peak Serum to contact any
customer or prospective customer in Atlas’s customer
list or database, nor did they agree on the extent to which
Kutrubes and Peak Serum could be ordered to return documents
and information Kutrubes obtained from Atlas in the course of
his employment. (Id. at 3.) The Court heard argument
and received evidence on Atlas’s request for a
preliminary injunction on March 23, 2015. (Doc. # 43.) It
ruled from the bench that, in the absence of a
non-solicitation and non-compete agreement between Atlas and
Kutrubes, it did not have the authority to enjoin Kutrubes
and Peak Serum from contacting all customers and potential
customers in Atlas’s customer database. (Id.)
The
Court entered a preliminary injunction on March 25, 2015,
enjoining Kutrubes and Peak Serum from:
a. Using the marks EquaFETAL, FETAL㲵, ATLAS, or ATLAS
BIOLOGICALS in connection with Defendants’ goods or
services;
b. Using any trademark, trade dress, service mark, name,
logo, design or source designation of any kind on or in
connection with Defendant’s goods or services that is a
copy, reproduction, colorable imitation, or simulation of, or
confusingly similar to the trademarks, trade dress, service
marks, names or logos of Atlas Biologicals, Inc.;
c. Using any trademark, trade dress, service mark, logo,
design or source designation of any kind on or in connection
with Defendant’s goods or services that is likely to
cause confusion, mistake, deception, or public
misunderstanding that such goods or services are produced or
provided by Atlas Biologicals, Inc., are sponsored or
authorized by Atlas Biologicals, Inc., or are in any way
connected with, controlled by, or related to Atlas
Biologicals, Inc.
d. Using and further disclosing the proprietary information
and trade secrets of Atlas Biologicals to produce bovine or
equine serum based products, including EquaFETAL or blended
or proprietary products based on Atlas’ proprietary
information and trade secrets;
e. Producing products containing EquaFETAL or EquaFETAL in
combination with other products; and
f. Deleting, destroying, erasing or otherwise making
unavailable for further proceedings in this matter any Atlas
business information, trade secrets, proprietary information,
tangible or intangible property, and any information
belonging to or relating to any Atlas customer or vendor
which information was improperly obtained by Kutrubes or Peak
Serum during Kutrubes’s employment with Atlas.
(Doc. # 46 at 2–3.) The Court also ordered that,
pursuant to the agreement the parties reached at the hearing,
Kutrubes and Peak Serum were to permit Silva to obtain
forensic copies of all drives and media. (Id. at 3.)
Finally, the Court ordered Kutrubes and Peak Serum to return
to Atlas “all information, documents, and things”
Kutrubes took from Atlas. (Id.)
After
more than a year of discovery, Atlas filed an Amended
Complaint on November 14, 2016, asserting claims against
Kutrubes and Peak Serum for: (a) federal trademark
infringement, in violation of the Lanham Act, 15 U.S.C.
§ 1114; (b) false designation of origin and federal
unfair competition, in violation of the Lanham Act, 15 U.S.C.
§ 1125; (c) trademark and trade name infringement under
Colorado common law; (d) misappropriation of trade secrets,
in violation of the Colorado Uniform Trade Secrets Act, Colo.
Rev. Stat. §§ 7-74-101, et seq.; (e)
“conversion and civil theft” pursuant to Colo.
Rev. Stat. § 18-4-405; (f) deceptive trade practices, in
violation of the Colorado Consumer Protection Act, Colo. Rev.
Stat. § 6-1-105; (g) breach of fiduciary duty; (h)
breach of contract; (i) unfair competition under Colorado
common law; (j) copyright infringement pursuant to the
federal Copyright Act, 17 U.S.C. § 504(b); and (k)
attorneys’ fees. (Doc. # 101.) Atlas subsequently
withdrew its claims for unfair competition under Colorado
common law and for federal copyright infringement.
See (Doc. # 130.) Kutrubes and Peak Serum filed an
Answer to the Amended Complaint on December 5, 2016. (Doc. #
103.) Kutrubes and Peak Serum denied all of Atlas’s
claims against them and asserted affirmative defenses of
“the doctrine of unclean hands” and Atlas’s
“successful mitigation of damages, ” among
others. (Id. at 11–12.)
In
advance of trial, the parties stipulated to the following
facts:
1. Defendant Thomas James Kutrubes admits he breached his
duty of loyalty as an employee between October 1, 2014 and
continuing until his termination in December of 2014.
[Defendant Kutrubes does not admit an earlier breach of
loyalty, but Plaintiff reserves the right to contend and put
on evidence that Defendant Kutrubes breached his duty of
loyalty beginning in 2013].
2. Defendant Thomas James Kutrubes admits that prior to his
separation from employment with Plaintiff he sent certain
emails to customers of Plaintiff and solicited business for
his company, Peak Serum. Defendant Kutrubes admits that
certain emails in which he solicited business for Peak Serum
contained Plaintiff’s trademarks and/or tradenames.
3. Defendant Thomas James Kutrubes admits that prior to his
separation from employment, he took certain information,
documentation, and data from Plaintiff. The parties, however,
have not stipulated that such information, documentation, and
data constitute information, documentation, and data which is
proprietary or trade secret to Plaintiff.
4. Defendants stipulate that a permanent injunction should be
issued restraining Defendants from infringing upon the
website FAQ which Plaintiff alleges [D]efendants infringed,
and in exchange for that stipulation Plaintiff waives a claim
for attorney fees and damages with respect to the copyright
infringement claim only.
5. The parties stipulate that the following trade marks were
owned by Plaintiff, were in use in commerce, and are valid
registered or common law marks at
all
relevant dates to this litigation:
a. EQUAFETAL (U.S. Reg. No. 3, 307, 832)
b. FETAL㲵 (U.S. Reg. No. 4, 086, 021)
c. PROGENISERUM (U.S. Reg. No. 4, 354, 970).
d. FETAL CHOICE (U.S. Application serial no. 86/372, 131)
e. FETAL SELECT (U.S. Application serial no. 86/502, 135)
f. ATLAS (common law, as relates to the bovine serum
industry)
g. ATLAS BIOLOGICALS (common law, as relates to the bovine
serum industry).
h. FETAL RESERVE (common law, as relates to the bovine serum
industry).
i. The Atlas Biologicals’ Logo depicting a carton
figure of the mythical character Atlas holding a round bottom
flask (common law, as relates to the bovine serum industry).
(Doc. # 123 at 12–14.)
The
Court presided over a five-day bench trial between March 5,
2018, and March 9, 2018. See (Doc. ## 131–35.)
Pursuant to the Court’s direction on the last day of
trial, the parties submitted proposed findings of fact and
conclusions of law on May 17, 2018.[2] (Doc. ## 154–55.)
Approximately
one month after trial, Atlas filed an Emergency Ex
Parte Motion for Pre-Judgment Attachment and Injunctive
Relief Against Further Conveyances of Assets by Kutrubes.
(Doc. # 142.) Atlas alleged therein that on April 4, 2018,
Kutrubes “purported to transfer all of his stock in
[Atlas] to Biowest, LLC, a Missouri limited liability
company, whose president and CEO is Wendell Leinweber.”
(Id. at 2.) However, Atlas continued, this transfer
was unsuccessful (i.e., not completed) because “no
endorsed share certificate ha[d] been tendered nor a request
for a transfer on the books and records of Atlas . . . ha[d]
been made.” (Id.) The appropriate remedy,
according to Atlas, was prejudgment attachment of
Kutrubes’s shares of its stocks pursuant to Colorado
Rule of Civil Procedure 102(c). (Id. at 6–7.)
Kutrubes responded in opposition, arguing that he had
successfully transferred his stock to Biowest, LLC and
requesting “an injunction preventing Atlas and its
shareholders [and] officers . . . from holding any
shareholder meetings, amending corporate bylaws, or otherwise
taking actions that would impact any minority shareholder
until such time as the dispute with respect to ownership of
shares is resolved.” (Doc. # 145 at 8.) The Court
issued a Writ of Attachment on April 24, 2018, that ordered
the Sheriff of Larimer County, Colorado, to “attach and
safely keep any stock of [Atlas] owned by [Kutrubes].”
(Doc. # 147.) The parties are litigating ownership of the
shares in another matter, Atlas Biologicals, Inc. v.
Thomas James Kutrubes and Biowest, LLC,
18-cv-00969-CMA-MEH. The status of the shares has no bearing
on Atlas’s claims and Kutrubes’s and Peak
Serum’s affirmative defenses in this matter.
II.
CONCLUSIONS OF LAW
A.
ATLAS’S CLAIM FOR FEDERAL TRADEMARK INFRINGEMENT AND
CLAIM FOR COLORADO COMMON LAW TRADEMARK AND TRADE NAME
INFRINGEMENT
The
Court addresses Atlas’s claim for federal trademark
infringement and its claim for Colorado common law trademark
and trade name infringement together because the claims are
comprised of nearly identical elements.
With
regard to the federal claim, under the Lanham Act, a party
infringes another’s trademark when it uses a similar
mark in commerce and “such use is likely to cause
confusion.” 15 U.S.C. § 1114(1)(a); Team Tires
Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831,
832–33 (10th Cir. 2005). Section 32 of the Lanham Act
allows the owner of a registered mark to bring a civil action
for infringement against any person who “use[s] in
commerce any reproduction, counterfeit, copy, or colorable
imitation of [the] registered mark in connection with the
sale, offering for sale, distribution, or advertising of any
goods or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to
deceive.” Id.; 1-800 Contacts, Inc. v.
Lens.com, Inc., 722 F.3d 1229, 1238 (10th Cir. 2013). To
establish a trademark infringement claim, the mark owner must
prove that: (1) the mark is valid and protectable; (2) the
defendant used the mark in commerce without consent; and (3)
the defendant’s use of the mark is likely to cause
confusion. KMMentor, LLC v. Knowledge Mgmt. Prof’l
Soc’y, Inc., 712 F.Supp.2d 1222, 1241 (D. Kan.
2010) (citing Utah Lighthouse Ministry v. Found. for
Apologetic Info. & Research, 527 F.3d 1045,
1050–57 (10th Cir. 2008)).
As to
the Colorado common law claim, the Colorado Supreme Court
“has consistently recognized and followed a policy of
protecting established trade names and preventing public
confusion, and the tendency has been to widen the scope of
that protection.” Wood v. Wood’s Homes,
Inc., 519 P.2d 1212, 1215–16 (Colo.App. 1974). The
elements of common law trademark infringement in Colorado are
virtually indistinguishable from those required to provide
trademark infringement under the Lanham Act. Donchez v.
Coors Brewing Co., 392 F.3d 1211, 1219 (10th Cir. 2004).
“[A] plaintiff must establish a protectable interest in
its mark, the defendant’s use of that mark in commerce,
and the likelihood of consumer confusion.” Id.
Similar to federal trademark law, “[t]he test in
Colorado is whether the public is likely to be
deceived.” Wood, 519 P.2d at 1216 (citing
Swart v. Mid-Continent Refrigerator Co., 360 P.2d
440 (Colo. 1961)).
The
third element of these claims-the likelihood of confusion-is
the key inquiry. Team Tires Plus, 394 F.3d at 833.
The Court of Appeals for the Tenth Circuit has identified six
factors that aid in determining whether a likelihood of
confusion exists between two marks: (a) the degree of
similarity between the marks; (b) the intent of the alleged
infringer in adopting its mark; (c) evidence of actual
confusion; (d) the relation in use and the manner of marking
between the goods or services marketed by the competing
parties; (e) the degree of care likely to be exercised by
purchasers; and (f) the strength or weakness of the marks.
King of the Mountain Sports, Inc. v. Chrysler Corp.,
185 F.3d 1084, 1089–90 (10th Cir. 1999) (internal
citation omitted). “No one factor is dispositive, and
the final determination of likelihood of confusion must be
based on consideration of all relevant factors.”
Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d
550, 554 (10th Cir. 1998) (internal citation omitted).
Atlas
alleges that Kutrubes infringed on its trademarks and trade
names by “sen[ding] existing and prospective Atlas
customers numerous emails” containing Atlas’s
marks and names in an effort to promote Peak Serum’s
products and by “displaying prominently” on Peak
Serum’s Google webpage[3] Atlas’s marks and names.
(Doc. # 101 at 11.) Atlas asserts that Kutrubes’s and
Peak Serum’s use of their trademarks and trade names
was “knowing, intentional, [and] willful” and was
“carried out with clear intent to trade on the
reputation and goodwill associated with Atlas” and to
“divert and harm Atlas’[s] business.”
(Id. at 11–12.)
1.
Factual findings specific to the claims
The
parties stipulated to the first and second elements of the
trademark infringement claims. See (Doc. # 154 at
2.) As to the first element, they agreed that Atlas owned and
used in commerce valid registered or common law marks and
names, including EQUAFETAL, ATLAS, and Atlas’s logo at
all relevant times. (Doc. # 123 at 13–14.) With respect
to the second element, Kutrubes admitted that “certain
emails in which he solicited business for Peak Serum
contained [Atlas’s] trademarks and/or trade
names.” (Id. at 13.) He also acknowledged at
trial that for a time in 2015, the Google page for Peak
Serum contained “all of the information” and
“all of the testimonials” from Atlas’s
Google page. (Kutrubes Testimony, Doc. # 140 at 796.) The
Court thus only makes findings of fact relevant to the third
element, that Kutrubes’s and Peak Serum’s use of
Atlas’s marks was likely to cause confusion.
In the
emails that Kutrubes sent from his Atlas-provided account to
Atlas’s customers and prospective customers, Kutrubes
explicitly referred to Atlas’s products and included
his email signature, which identified him as the National
Sales Manager of Atlas and contained Atlas’s contact
information and logo. For example, in an email dated November
5, 2014, to Yunjeong Lee of Daemyung Science Co., Ltd.,
Kutrubes wrote that he was in the process of “trying to
obtain a . . . [fetal bovine serum] source (separate from
Atlas)” and was “going to form a new company in
2015 to help provide international customers the option of
[fetal bovine serum] since Atlas has discontinued
supply.” (Trial Ex. 67 at 4.) He suggested to Lee that
Daemyung could buy fetal bovine serum from his new company,
put its “own serum label on the bottle[s], ” and
“sell Daemyung brand [fetal bovine serum], ”
which “would be easier than EquaFETAL.”
(Id.) At the bottom of the email, Kutrubes included
his signature with Atlas’s name, logo, and contact
information. (Id.); see (Cheever Testimony,
Doc. # 136 at 162; Trial Exs. 69, 70, 316, 369, 413, 421.)
Atlas’s
customers and potential customers were confused by
Kutrubes’s use of Atlas’s marks and names in
these promotional emails. Returning to the example of
Kutrubes’s email exchange with Lee of Daemyung, in
response to Kutrubes’s statement that he was going to
form a new company separate and apart from Atlas because
Atlas was discontinuing its supply of fetal bovine serum, Lee
asked on behalf of Daemyung’s chief executive officer,
“Are you going to leave Atlas . . . and make a new
company? Will Atlas . . . stop supplying all [fetal bovine
serum] products from [sic] 2015? Can’t we have
FetalPlus or EquaFETAL since [sic] 2015?” (Trial Ex. 67
at 1.) Cheever accurately characterized Lee’s
questions: “That is confusion.” (Cheever
Testimony, Doc. # 136 at 163); see also (Paniccia
Testimony, Doc. # 138 at 403–10.) Paniccia testified
that as a ...