Flowbee International, Inc. et al v. Google, Inc.

Filing 61

JOINT CASE MANAGEMENT STATEMENT filed by Google, Inc.. (Caruso, Margret) (Filed on 6/9/2010)

1 QUINN EMANUEL URQUHART & SULLIVAN, LLP Margret M. Caruso (Bar No. 243473) 2 [e-mail] Cheryl Galvin (Bar No. 252262) 3 [e-mail] Thomas Watson (Bar No. 227264) 4 [e-mail] 555 Twin Dolphin Drive, Fifth Floor 5 Redwood Shores, California 94065-2139 Telephone: [phone] Facsimile: [phone] 7 Attorneys for Defendant WATTS GUERRA CRAFT, L.L.P. 9 David T. Bright (pro hac vice granted) 500 North Water Street, Suite 1200 10 Corpus Christi, Texas 78478 [phone] Telephone [phone] Telecopier 12 SMITH LILLIS PITHA LLP Damien P. Lillis (Bar No. 191258) 13 400 Montgomery Street, Suite 501 San Francisco, California 94104 14 [phone] Telephone [phone] Telecopier 15 Attorneys for Plaintiffs 16 17 18 19 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA § § § § § § § § § § § 8

FLOWBEE INTERNATIONAL, INC. and 20 FLOWBEE HAIRCUTTER LIMITED PARTNERSHIP, 21 Plaintiffs, 22 v. 23 GOOGLE, INC., 24 Defendant. 25 26 27 28
No. C 10-00668-WHA Join Case Management Statement

No. C 10-00668-WHA

JOINT CASE MANAGEMENT STATEMENT

1 1.

Jurisdiction and Service: The basis for the Court's subject matter jurisdiction over

2 plaintiff's claims and defendant's counterclaims, whether any issues exist regarding personal 3 jurisdiction or venue, whether any parties remain to be served, and, if any parties remain to be 4 served, a proposed deadline for service. 5 This action arises in part under the Lanham Act, 15 U.S.C. §§ 1114 and 1125. This

6 Court has federal question jurisdiction over these claims pursuant to 15 U.S.C. § 1121 and 7 28 U.S.C. §§ 1331, 1338(a), and 1338(b). The United States District Court for the Southern 8 District of Texas has ruled that venue is proper in the Northern District of California under 9 28 U.S.C. §1404(a) due to the forum selection clause in the AdWords contract agreed to by 10 the parties. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
No. C 10-00668-WHA Join Case Management Statement

2.

Facts: A brief chronology of the facts and statements of the principal factual issues in

dispute. Plaintiffs: "Flowbee" is a coined, trademarked name owned by Plaintiffs that

refers to a particular patented vacuum haircutting system. While the Flowbee haircutting system has competitors, the competitors are not called Flowbee, nor is Flowbee a generic term. Google, Inc. has sold the Plaintiffs' trademarked name, "Flowbee," to Flowbee's competitor or competitors as a keyword trigger through its "Sponsored Links" program. Thus, when a potential Flowbee customer enters the trademarked term "Flowbee" in a Google search, the search results display Flowbee's competitor or competitors either above or adjacent to the link to Flowbee's website. This has violated Plaintiffs' trademark, has caused Plaintiffs financial damages, and has resulted in an unjust financial benefit to Google, Inc. Google, Inc. has additionally sold the Plaintiffs' trademarked name, Flowbee, to a competitor or competitors as a keyword trigger through Google's AdSense Program. Thus, when a potential Flowbee customer clicks upon the term "Flowbee," they are directed to

2

1 competitors of Flowbee. This has violated Plaintiffs' trademark, has caused Plaintiffs 2 financial damages, and has resulted in an unjust financial benefit to Google, Inc. 3 Plaintiffs have brought suit against Google, Inc. for violations of federal

4 trademark/service mark infringement under the Lanham Act, 15 USC, §§ 1114, 1125(a); 5 contributory federal trademark/service mark infringement, Lanham Act, 15 USC, §§ 114 6 and 1125(a); vicarious trademark/service mark infringement, Lanham Act, 15 USC, §§ 1114 7 and 1125(a); false representation under the Lanham Act, Lanham Act, 15 USC, § 1125(a); 8 federal trademark dilution, Lanham Act 15, USC § 1125(c); trademark infringement under 9 Texas law; trademark dilution under Texas law, Tex. Bus. & Com Code § 16.29; unfair 10 competition under Texas law; misappropriation under Texas law; and money had and 11 received under Texas law. Plaintiffs' Original Complaint contains a more thorough 12 description of the Plaintiffs' allegations and causes of action. 13 Defendant: Defendant Google is an interactive computer service provider that

14 operates a popular search engine, which is available free of charge to Internet users. In 15 conjunction with this free search engine, Google operates an advertising program called 16 AdWords, which allows hundreds of thousands of people and businesses to promote their 17 products and services through targeted advertising. As part of Google's AdWords program, 18 ads relate to the particular terms and phrases entered by users into Google's search engine 19 may be displayed on the search results page under the heading "Sponsored Links." This 20 program enables users of Google's free search engine to be presented with choices of 21 relevant advertising adjacent to the organic results displayed in response to search queries, 22 which is of particular value to those searching for commercial results. 23 Both Google's organic search results and its revenue-producing AdWords

24 advertisements help Internet users quickly and easily access relevant information. For 25 example, a search for a particular product may yield links to websites of the company 26 offering the product; of retailers or repairers of that product; of competitors who offer 27 information about features of comparable products, including price, that facilitate 28 comparison shopping; maps that show where the product can be found, as well as the
No. C 10-00668-WHA Join Case Management Statement

3

1 location of nearby businesses; videos and images featuring the product; and news, consumer 2 reports, commentary, reviews, and criticism of the product. 3 Plaintiffs' purported claims against Google are based on AdWords advertisements

4 created and paid for by third-party advertisers. These advertisers bid on the opportunity to 5 have their advertisements appear when users of Google's search engine enter certain words 6 or word combinations as search queries. Google believes that truthful advertisements 7 containing links to websites offering competitive and relevant products are helpful to 8 consumers, not confusing as to source or affiliation, and not a violation of Flowbee's rights 9 by Google. Google contends that it has not violated any of Flowbee's rights under the 10 Lanham Act or otherwise. 11 Google's counterclaim for breach of contract arose from Plaintiffs' commencement of

12 this action in a court other than the Northern District of California, which Flowbee had 13 contractually agreed would be the sole place it would file federal actions against Google 14 relating to Google programs, including AdWords. As a result of this breach, Google 15 incurred significant costs enforcing the venue selection provision of the contract and having 16 originally had to litigate in Texas. 17 18 3. Legal Issues: A brief statement, without extended legal argument, of the disputed points

19 of law, including reference to specific statutes and decisions. 20 Plaintiffs: Google's actions have violated Plaintiffs' trademark, has caused

21 Plaintiffs financial damages, and has resulted in an unjust financial benefit to Google, Inc. 22 Plaintiffs have brought suit against Google, Inc. for violations of federal trademark/service 23 mark infringement under the Lanham Act, 15 USC, §§ 1114, 1125(a); contributory federal 24 trademark/service mark infringement, Lanham Act, 15 USC, §§ 114 and 1125(a); vicarious 25 trademark/service mark infringement, Lanham Act, 15 USC, §§ 1114 and 1125(a); false 26 representation under the Lanham Act, Lanham Act, 15 USC, § 1125(a); federal trademark 27 dilution, Lanham Act 15, USC § 1125(c); trademark infringement under Texas law; 28 trademark dilution under Texas law, Tex. Bus. & Com Code § 16.29; unfair competition
No. C 10-00668-WHA Join Case Management Statement

4

1 under Texas law; misappropriation under Texas law; and money had and received under 2 Texas law. Plaintiffs' Original Complaint contains a more thorough description of the 3 Plaintiffs' allegations and causes of action. 4 Defendant: The purpose of trademark law under the Lanham Act, 15 USC §§ 1114

5 and 1125(a), is to facilitate reliable consumer identification of a product. Google's 6 advertising programs promote the purpose of trademark law by giving consumers 7 information they need to identify products and gather information. The use of a 8 trademarked term to refer to a product originating from the trademark owner is not 9 actionable. Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924); Smith v. Chanel, 402 F.2d 562 (9th 10 Cir. 1968); 16 C.F.R. 14.15. Consistent with that, Google's AdWords program allows the use 11 of Flowbee's alleged trademark in ad text only when the advertiser actually resells Flowbee's 12 products or offers information regarding Flowbee's products. Further, ads that are 13 triggered to be displayed when a user enters Flowbee's alleged trademark as a search query 14 do not cause user confusion as to the source of the offered goods, which is frequently 15 identified in the advertisement, and therefore do not violate the Lanham Act. Because 16 Flowbee's alleged trademark was not famous in 2004 when Google's alleged infringement 17 began, Flowbee's claims for dilution under 15 USC § 1125(c) also fail. 18 19 4. 20 21 22 23 24 5. Amendment of Pleadings: The extent parties, claims, or defenses are expected to be Motions: All prior and pending motions, their current status, and any anticipated motions. Plaintiffs: Defendant: None at this time. No motions are currently pending. Defendant anticipates filing a

motion for summary judgment.

25 added or dismissed and proposed deadline for amending the pleadings. 26 27 28
No. C 10-00668-WHA Join Case Management Statement

Plaintiff: February 11, 2011 Defendant: February 11, 2011

5

1 6.

Evidence Preservation: Steps taken to preserve evidence relevant to the issues

2 reasonably evidence in this action, including interdiction of any document-destruction program 3 and any ongoing erasures of e-mails, voice mails, and other electronically-recorded material. 4 5 Plaintiffs: Plaintiffs represent that they have instituted reasonable document

6 retention procedures so as to maintain any relevant documents, electronic or otherwise, until 7 this dispute is resolved. 8 Defendant: Defendant represents that it has instituted reasonable document

9 retention procedures so as to maintain any relevant documents, electronic or otherwise, 10 until this dispute is resolved. 11 12 7. Disclosures. Whether there has been full and timely compliance with the initial disclosure

13 requirements of Fed. R. Civ. P. 26 and a description of the disclosures made. 14 Plaintiffs: Plaintiffs filed their Initial Disclosures on September 10, 2009 in the

15 United States District Court for the Southern District of Texas, Corpus Christi Division case. 16 Defendant: Defendant served and filed its Initial Disclosures on September 22, 2009

17 in the United States District Court for the Southern District of Texas, Corpus Christi 18 Division. 19 20 8. Discovery: Discovery taken to date, if any, the scope of anticipated discovery, any

21 proposed limitations or modifications of the discovery rules, and a proposed discovery plan 22 pursuant to Fed. R. Civ. P. 26(f). 23 Plaintiffs: Plaintiffs have served Defendant with their First Set of Interrogatories,

24 Requests for Production, and Requests for Admission. Defendant has answered same. 25 Defendant: Defendant has served Plaintiffs with its First Set of Interrogatories and

26 Requests for Production, and Plaintiffs have served their responses. 27 The parties anticipate completing discovery in the areas raised in Federal Rule 26(f)

28 by February 11, 2011. At this time, neither party is aware of any changes that should be
No. C 10-00668-WHA Join Case Management Statement

6

1 made in the limitations on discovery imposed under the Federal Rules of Civil Procedure or 2 the Local Rules, or of any additional limitations that should be imposed. 3 In addition to the issues set forth herein, the parties will negotiate and submit to the

4 Court a stipulated protective order and ESI protocol. The parties also agree that they need 5 not identify on a privilege log privileged documents created by a lawyer or addressed to a 6 lawyer after the date the complaint was filed. 7 8 9. Class Actions: If a class action, a proposal for how and when the class will be

9 certified. 10 11 12 10. Related Cases: Any related cases or proceedings pending before another judge of Not applicable.

13 this court, or before another court or administrative body. 14 15 16 11. Relief: All relief sought through complaint or counterclaim, including the amount None.

17 of any damages sought and a description of the bases on which damages are calculated. In 18 addition, any party from whom damages are sought must describe the bases on which it contends 19 damages should be calculated if liability is established. 20 Plaintiffs: Plaintiffs request all damages resulting from Defendant's violation of

21 Plaintiffs' trademark, including actual damages, attorney's fees, and costs associated with 22 that breach and this litigation, as well as such other and further relief as the Court may 23 deem just and proper. 24 Defendant: Defendant requests all damages resulting from Plaintiffs' breach of the

25 AdWords contract, including all attorneys' fees and costs associated with its litigation in the 26 Southern District of Texas, as well as such other and further relief as this Court may deem 27 just and proper. 28
No. C 10-00668-WHA Join Case Management Statement

7

1 12.

Settlement and ADR: Prospects for settlement, ADR efforts to date, and a specific ADR

2 plan for the case, including compliance with ADR L.R. 3-5 and a description of key discovery or 3 motions necessary to position the parties to negotiate a resolution. 4 5 6 13. Consent to Magistrate Judge for All Purposes: Whether all parties will consent to have The parties have filed a Notice of Need for ADR Phone Conference with the Court.

7 a magistrate judge, or the Judicial Panel on Multidistrict Litigation. 8 9 10 14. Other References: Whether the case is suitable for reference to binding arbitration, a The parties cannot agree to try this case before a magistrate judge.

11 special master, or the Judicial Panel on Multidistrict Litigation. 12 This case is not suitable for reference to binding arbitration, a special master, or the

13 Judicial Panel on Multidistrict Litigation. 14 15 15. Narrowing of Issues: Issues that can be narrowed by agreement or by motion,

16 suggestions to expedite the presentation of evidence at trial (e.g. through summaries or stipulated 17 facts), and any request to bifurcate issues, claims or defenses. 18 At this time, the parties do not foresee bifurcating any issues, claims, or defenses.

19 Subject to the progression of discovery, the parties may be open to narrowing certain issues 20 via stipulated facts. 21 22 16. Expedited Schedule: Whether this is the type of case that can be handled on an expedited

23 basis with streamlined procedures. 24 25 26 17. Scheduling: Proposed dates for designation of experts, discovery cutoff, hearing of The parties do not believe that this case is appropriate for an expedited schedule.

27 dispositive motions, pretrial conferences, and trial. 28 Deadline for Fact Witness Depositions:
No. C 10-00668-WHA Join Case Management Statement

October 29, 2010

8

1 2 3 4 5 6 7 8 18. 9 trial. 10 11 12 19.

Plaintiffs' Designation of Experts, with reports: Defendant's Designation of Experts, with reports: Deadline for Discovery: Deadline for Dispositive Motions: Deadline for Pretrial Conferences: Trial:

December 17, 2010 February 11, 2011 February 25, 2011 March 10, 2011 June 6, 2011 June 13, 2011

Trial: Whether the case will be tried to a jury or to the court and the expected length of

The trial will be tried to a jury. The expected length of trial is 45 hours.

Disclosure of Non-Party Interested Entities or Persons: Whether each party has filed

13 the "Certification of Interested Entities or Persons" required by Civil Local Rule 3-16. In 14 addition, each party must restate in the case management statement the contents of its 15 certifications by identifying any persons, firms, partnerships, corporation (including parent 16 corporations) or other entitles known by the party to have either: (i) a financial interest in the 17 subject matter in controversy or in a party to the proceeding; or (ii) any other kind of interest that 18 could be substantially affected by the outcome of the proceeding. 19 Plaintiffs: Plaintiffs filed their Certification of Interested Entities or Persons on

20 May 21, 2010. Plaintiffs did file their Certificate of Interested Parties in the United States 21 District Court for the Southern District of Texas on August 28, 2009, and a amended one on 22 September 10, 2009, before the case was transferred to this Court. 23 Defendant: Defendant filed its Certification of Interested Entities or Persons on

24 May 13, 2010. Defendant also filed a Certificate of Interested Parties in the United States 25 District Court for the Southern District of Texas on September 9, 2009, before the case was 26 transferred to this Court. 27 28
No. C 10-00668-WHA Join Case Management Statement

9

1 20. 2 matter. 3

Such other matters as may facilitate the just, speedy and inexpensive disposition of this

The parties are aware of the Court's guidelines concerning discovery as set forth in the

4 Court's November 20, 2008 order (Docket No. 49). In view of the parties' assessment of their 5 needs in this action, the parties jointly propose the following modifications pursuant to Paragraph 6 11 of that Order. 7 a. Privilege log requirements. As discovery has just begun, the parties contemplate

8 that they may offer a stipulation to the Court regarding the logging of privilege communications in 9 place of the terms of Paragraph 16 of the November 20, 2008 Order. At this time, the parties 10 agree that all privilege logs must be served by October 1, 2010 and that the parties need not 11 affirmatively identify the steps taken to ensure the confidentiality of the allegedly-protected 12 communication, including affirmation that no unauthorized persons have received the 13 communication. 14 b. Scope of Discovery. The parties agree that they need not search voicemails or

15 recordings of phone conversations. Without prejudice to any party's ability to seek discovery 16 relating to the document collection process in the event there is good cause to believe that an 17 incomplete search was made, the parties further agree that they need not affirmatively identify the 18 information relating to the document search and collection process specified in Paragraph 13 of 19 the November 20, 2008 Order. 20 c. Communications with counsel during depositions. The parties agree that the phrase

21 "in the course of examination" on page 6, line 8 of the November 20, 2008 Order shall be 22 construed for purposes of this action to mean while the witness is in the deposition room. For 23 example, witnesses may confer privately with counsel during lunch. 24 d. Documents used to refresh witness recollections. The parties agree that a witness

25 may be questioned as to whether any documents refreshed his or her recollection on a topic 26 examined upon, and if any are identified, such document(s) will be made available to deposing 27 counsel in a reasonably prompt fashion. The parties agree that they need not produce documents 28
No. C 10-00668-WHA Join Case Management Statement

10

1 to deposing counsel at the outset of a deposition pursuant to Paragraph 20 of the November 20, 2 2008 Order. 3 e. Drafts of expert reports and communications with experts. The parties agree that

4 testifying experts shall not be subject to discovery on any draft of their reports in this case and 5 such draft reports, notes, outlines, or any other writings leading up to an issued report(s) in this 6 litigation are exempt from discovery. In addition, all communications to and from a testifying 7 expert, and all materials generated by a testifying expert with respect to that person's work, are 8 exempt from discovery unless relied upon by the expert in forming any opinions in this litigation. 9 Notwithstanding the foregoing, information relating to the design, preparation, conducting, and/or 10 performance of any consumer survey, including drafts of the survey and communications relating 11 to the wording and performance of the survey, shall be subject to discovery. 12 f. FRCP 30(b)(6) depositions. The parties agree that witnesses deposed pursuant to

13 Rule 30(b)(6) may be deposed at the same time in their individual capacity provided that the 14 record is clear as to which questions are being asked exclusively in their 30(b)(6) capacity. The 15 parties agree that such testimony will be counted as set forth in Paragraph 23(b) of the November 16 20, 2008 Order, but that the testimony need not be separately transcribed, bound, or separated into 17 two parts of the day. 18 19 /s/ David T. Bright 20 David T. Bright (pro hac vice granted) WATTS GUERRA CRAFT, L.L.P. 21 500 North Water Street, Suite 1200 Corpus Christi, Texas 78478 22 [phone] Telephone [phone] Telecopier 23 /s/ Damien P. Lillis 24 Damien P. Lillis State Bar No. 191258 25 SMITH LILLIS PITHA LLP 400 Montgomery Street, Suite 501 26 San Francisco, California 94104 [phone] Telephone [phone] Telecopier 28 Counsel for Plaintiffs
No. C 10-00668-WHA Join Case Management Statement

6/9/10 Date

11

1 2 /s/ Margret M. Caruso 3 Margret M. Caruso Date California State Bar No. 243473 4 Cheryl Galvin California State Bar No. 252262 5 Thomas Watson California State Bar No. 227264 6 QUINN EMANUEL URQUHART & SULLIVAN, LLP 555 Twin Dolphin Drive, Fifth Floor 7 Redwood Shores, California 94065 [phone] Telephone [phone] Facsimile 9 Counsel for Defendant 10 Filer's attestation: Pursuant to General Order No. 45, Section X(B) regarding signatures, I 11 attest under penalty of perjury that concurrence in the filing of this document has been obtained from David Bright and Damien Lillis. 12 DATED: June 9, 2010 By: /s/ Margret M. Caruso 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
No. C 10-00668-WHA Join Case Management Statement

6/9/10

12