Zahourek Systems, Inc. v. Balanced Body University, LLC

Filing 143

ORDER granting in part and denying in part 85 Motion for Partial Summary Judgment re: public motion for restricted document 81 ; granting in part and denying in part 119 Motion to Strike Affidavit of Frank Baca. It is ORDERED by Judge Raymond P. Moore on 04/07/2016.(cthom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 13–cv–01812–RM-CBS
ZAHOUREK SYSTEMS, INC., and
JON ZAHOUREK,
Plaintiffs/Counter-Defendants,
v.
BALANCED BODY UNIVERSITY, LLC,
Defendant/Counter-Plaintiff.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter is before the Court on Defendant/Counter-Plaintiff Balanced Body
University, LLC’s (“BBU” or “Defendant”) (1) motion for partial summary judgment (“MSJ”)
(ECF No. 81) and (2) motion to strike (“Motion to Strike”) (ECF No. 119) the affidavit of Frank
Baca (“Baca”) (ECF No. 102). Plaintiffs/Counter-Defendants Zahourek Systems, Inc. (“ZSI”)
and Jon Zahourek (“Zahourek”) (collectively, “Plaintiffs”) filed responses to the respective
motions (ECF Nos. 94; 123) and Defendant filed respective replies (ECF Nos. 117; 129).
At issue in this matter are three trademarks: (1) “Anatomy in Three Dimensions™”
(“Ai3D Mark”); (2) “Anatomy in Three Dimensions an Introduction to Anatomy in Clay™”
(“Introduction Mark”); and (3) “Anatomy in Clay™” (“Clay Mark”). (ECF No. 49 ¶ 17.) At

issue in this matter is a copyright to the Maniken® model1. (ECF No. 49 ¶ 19.) At issue in this
matter with respect to Plaintiffs’ breach of contract claim is a Product License Agreement2
(“PLA”). (ECF No. 49 ¶ 21.) Plaintiffs’ unfair competition (ECF No. 49 ¶¶ 61-82) and
misappropriation (ECF No. 49 ¶¶ 83-90) claims address Defendants’ alleged tortious conduct
related to the trademarks and copyrighted material. Plaintiffs also seek an order directing the
United States Patent and Trademark Office (“USPTO”) to deny Defendant’s notice of opposition
to ZSI’s registration of the Ai3D Mark. (ECF No. 49 ¶¶ 91-94.)
Defendant’s MSJ “seeks dismissal of Plaintiffs’ trademark infringement, breach of
contract, copyright, unfair competition and misappropriation claims, and judgment in favor of
BBU and against Plaintiffs on the First through Ninth Causes of Action in BBU’s Counterclaim.
. . .” (ECF No. 81 at 4.) Because it was unclear to the Court as to how Defendant’s MSJ
addressed each of Plaintiffs’ claims (with its subclaims related to particular trademarks,
copyrighted material, and specific contracts) and advanced support for its Counterclaims, the
Court ordered the parties to appear before the Court to address this confusion. (ECF Nos. 135;
136; 139; 141.) On March 24, 2016, the Court held a hearing at which it made inquiry with
respect to various issues covered by this Order, provided the parties an opportunity to respond to
its inquiries, and advised the parties that a written order would follow. (See ECF No. 142.)
For the reasons stated below, the Court (1) GRANTS, in part, Defendant’s MSJ, (2)
DENIES, in part, Defendant’s MSJ, (3) GRANTS, in part, Defendant’s Motion to Strike; and (4)
DENIES, in part, Defendant’s Motion to Strike.
1

During oral argument, Plaintiffs conceded that its copyright claim (ECF No. 49 ¶¶ 53-60) is limited to the Student
1 Maniken®. (See ECF No. 142, Tr. 4-6.) The Court, for ease of reference, will refer to the Student 1 Maniken® as
“Maniken®”.
2
There are three versions of the PLA. The parties dispute the applicable PLA. Plaintiffs’ state that the breach-ofcontract claim is related to the original PLA. (ECF No. 94 at 11 (“Further, the fact that BBU was under the terms of
the PLA since 2009, Plaintiffs assert that all publication and display of BBU’s photographs from 2009 are
considered a breach of the agreement.”) (emphasis added).); (See also ECF No. 142, Tr. 11).
2

I.

LEGAL STANDARDS
Summary judgment is appropriate only if there is no genuine dispute of material fact and

the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem. Coal Co., Inc., 41 F.3d 567, 56970 (10th Cir. 1994). “A party seeking summary judgment bears the initial responsibility of
informing the district court of the basis for its motion . . . .” Robertson v. Bd. of Cty. Comm’rs of
the Cty. of Morgan, 78 F. Supp. 2d 1142, 1146 (D. Colo. 1999) (citation omitted). Whether there
is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient
disagreement to require submission to a jury or is so one–sided that one party must prevail as a
matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Stone v. Autoliv
ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000). Once the moving party meets its initial burden
of demonstrating an absence of a genuine dispute of material fact, the burden then shifts to the
non-moving party to move beyond the pleadings and to designate evidence which demonstrates
the existence of a genuine dispute of material fact to be resolved at trial. See 1-800-Contacts,
Inc. v. Lens.com, Inc., 722 F.3d 1229, 1242 (10th Cir. 2013) (citation omitted). A fact is
“material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the
evidence is so contradictory that if the matter went to trial, a reasonable jury could return a
verdict for either party. Anderson, 477 U.S. at 248. In considering whether summary judgment
is appropriate, the facts must be considered in a light most favorable to the non-moving party.
Cillo v. City of Greenwood Vill., 739 F.3d 451, 461 (10th Cir. 2013) (citations omitted).
If a movant properly supports a motion for summary judgment, the opposing party may
not rest on the allegations contained in his complaint, but must respond with specific facts
showing a genuine factual issue for trial. Fed. R. Civ. P. 56(e); Scott v. Harris, 550 U.S. 372,

3

380 (2007) (holding that “[t]he mere existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact”) (citation omitted).
The content of evidence must be admissible to be considered when ruling on a motion for
summary judgment. Adams v. Am. Guarantee & Liability Ins. Co., 233 F.3d 1242, 1246 (10th
Cir. 2000); Jaramillo v. Colo. Judicial Dep’t, 427 F.3d 1303, 1314 (10th Cir. 2005) (citation
omitted) (holding that hearsay evidence is not acceptable in opposing a summary judgment
motion); World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th Cir. 1985).
Affidavits must be based on personal knowledge and must set forth facts that would be
admissible evidence at trial. Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995)
(quotations and citation omitted). “Conclusory and self-serving affidavits are not sufficient.” Id.
The Court will not consider statements of fact, or rebuttals thereto, which are not material or are
not supported by competent evidence. Fed. R. Civ. P. 56(c)(1)(A), 56(e)(2), 56(e)(3). “[O]n a
motion for summary judgment, it is the responding party’s burden to ensure that the factual
dispute is portrayed with particularity, without depending on the trial court to conduct its own
search of the record.” Cross v. The Home Depot, 390 F.3d 1283, 1290 (10th Cir. 2004) (internal
quotation and citation omitted). The Court is “not obligated to comb the record in order to make
[Plaintiffs’] arguments for [them].” See Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1199
(10th Cir. 2000). Further, Local Rule 7.1(e) provides that “[e]very citation in a motion, response
or reply shall include the specific page or statutory subsection to which reference is made.” D.C.
Colo. L. Civ. R. 7.1(e).
“In order to survive summary judgment, the content of the evidence that the nonmoving
party points to must be admissible.” Adams, 233 F.3d at 1246 (alteration in original and citation

4

omitted). “The nonmoving party does not have to produce evidence in a form that would be
admissible at trial, but “‘the content or substance of the evidence must be admissible.’” Adams,
233 F.3d at 1246 (citation omitted). “Evidence presented must be based on more than ‘mere
speculation, conjecture, or surmise’ to defeat a motion for summary judgment.” Southway v.
Cent. Bank of Nigeria, 149 F. Supp. 2d 1268, 1274 (D. Colo. 2001) (citations omitted). “Rule 56
expressly prescribes that a summary judgment affidavit must ‘be made on personal knowledge,
set forth facts that would be admissible in evidence, and show that the affiant is competent to
testify on the matters stated.’” Johnson v. Weld Cty., Colo., 594 F.3d 1202, 1210 (10th Cir.
2010) (citation omitted); accord Fed. R. Civ. P. 56(c)(4). “If a party fails to properly support an
assertion of fact or fails to properly address another party’s assertion of fact . . ., the court may:
(1) give an opportunity to properly support or address the fact; (2) consider the fact undisputed
for purposes of the motion; (3) grant summary judgment if the motion and supporting
materials—including the facts considered undisputed—show that the movant is entitled to it; or
(4) issue any other appropriate order.” Fed. R. Civ. P. 56(e).
II.

RELEVANT BACKGROUND
A.

Procedural Background

On July 10, 2013, ZSI filed a petition to compel arbitration against Balanced Body, Inc.
(ECF No. 1.) ZSI’s demand to arbitrate described the nature of the dispute as “[b]reach of
contract; alternatively, trademark infringement; copyright infringement; unfair competition
(multiple bases), misappropriation (multiple bases), deceptive trade practices, misrepresentation,
each under various states’ laws as applicable; business liability and individual liability for
infringement related activities.” (ECF No. 1-2 at 2.)

5

On August 5, 2013, Balanced Body, Inc. filed a motion to dismiss. (ECF No. 10.) On
August 20, 2013, ZSI filed a Verified First Amended Petition to Compel Arbitration against
BBU3. (ECF No. 13.) ZSI’s demand to arbitrate described the nature of the dispute as “[b]reach
of contract; alternatively, trademark infringement; copyright infringement; unfair competition
(multiple bases), misappropriation (multiple bases), deceptive trade practices, misrepresentation,
each under various states’ laws as applicable; business liability and individual liability for
infringement related activities.” (ECF No. 13-15 at 2.) On August 26, 2013, BBU moved to
dismiss the Verified First Amended Petition to Compel Arbitration. (ECF No. 18.) On July 2,
2014, Magistrate Judge Craig B. Shaffer ordered ZSI to file a complaint and move to withdraw
with prejudice the petition for arbitration with all attendant agreements. (ECF No. 41.)
With an extension of time, on August 5, 2014, Plaintiffs filed the at-issue Complaint in
this matter. (ECF Nos. 46; 49.) On August 26, 2014, Defendant filed its answer to the
complaint and its Counterclaims. (ECF No. 50.)
On March 6, 2015, Defendant filed a motion for partial summary judgment as described
previously. (ECF No. 81.) Defendant raises numerous legal and factual arguments with respect
to Plaintiffs’ Complaint. (See ECF No. 81.) The parties briefed Defendant’s MSJ and set forth
the purported undisputed material facts. (ECF Nos. 94; 117; 118.) Defendant also moved to
strike Baca’s affidavit submitted by Plaintiffs in opposition to Defendant’s MSJ. (ECF No. 119.)
The parties briefed Defendant’s Motion to Strike which includes Plaintiffs’ supplemental Baca
affidavit4. (ECF Nos. 123; 123-2; 129.)

3

The Verified First Amended Petition to Compel Arbitration dropped Balanced Body, Inc. as a defendant. (ECF
No. 13.) ZSI did not file a motion to dismiss Balanced Body, Inc. as a defendant. (See generally Dkt.) By
operation of the Court, Balanced Body, Inc. was terminated as a party to this matter and BBU was added. (See Dkt.)
4
Plaintiffs did not move to supplement their response brief in opposition to summary judgment with Baca’s
Supplemental Confidential Affidavit (ECF No. 123-2). (See generally Dkt.) Therefore, in addressing Defendant’s
MSJ, the Court will not consider Baca’s Supplemental Confidential Affidavit which was submitted outside the time
6

The Court, in reviewing the material submitted in support of and in opposition to
Defendant’s MSJ, determined that it lacked specificity as to how Defendant’s MSJ applied to
certain of Plaintiffs’ claims (ECF No. 49) and its Counterclaims (ECF No. 50). Because
Defendant’s MSJ was titled “Partial,” the Court desired clarity as to how its ruling would apply
to the parties’ claims and what, if any, would remain pending for trial. For this and other
reasons, the Court ordered a hearing at which it discussed various aspects of Defendant’s MSJ
and invited argument by the parties as to various matters which would impact the parties’ claims.
(ECF Nos. 135; 136; 139; 141.) After receiving argument and taking the entire matter under
advisement, the Court sets forth this Order.
B.

Factual Background5

The Court sets forth, generally, the undisputed material facts giving rise to the matter.
The Court analyzes the potentially materially disputed facts in greater detail in the Analysis
section, infra.
1.

ZSI and Zahourek

This case relates to a technology and products developed by Plaintiffs. ZSI manufactures
and sells models of the human skeleton which are used to teach anatomy. (See ECF No. 82-1,
BBU Ex. 1: Zahourek Dep. 44:3-9; ECF No. 84-15, BBU Ex. 115: BBU 4359.) ZSI refers to
this model of the human skeleton as Maniken®. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep.
30:1-6; see ECF No. 83-46, BBU Ex. 96: ZSI 5791-6901.) Zahourek “created and developed an
innovative system of anatomy study [and] ZSI is dedicated to sharing the power of the ideas that
led [him] to build Anatomy in Clay™ and all elements of the system.” (ECF No. 83-10, BBU
in which to file a response to Defendant’s MSJ and for which Plaintiffs did not receive an extension of time in which
to file.
5
At times, Defendant fails to properly support an asserted statement of fact and Plaintiffs fail to dispute such fact.
(See ECF No. 118.) Pursuant to Rule 56(e)(2), the Court considers such “fact[s] undisputed for purposes of the
motion.” Fed. R. Civ. P. 56(e)(2).
7

Ex. 60: BBU 3520.) At various times, Zahourek used the term “Anatomy in Clay Learning
System” and he also used the term “Maniken Learning System.” (ECF No. 82-1, BBU Ex. 1:
Zahourek Dep. 49:19-25, 50:1-3.)
a.

The Maniken®

When Zahourek designed the first Maniken®, his intent was to make a three-dimensional
model that would be usable to study on by using clay and strings or other representation of
anatomy. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 31:6-13, 33:17-18, 40:2-16, 47:6-8,
47:24-25, 48:1-6.) Maniken® is an interactive learning tool which requires the user to shape
muscles of clay and attach them to the model. (ECF No. 84-4, BBU Ex. 104: ZSI 0873.) The
Maniken® is a useful model of skeletal ideas whose overriding intention was to provide a
meaningful armature upon which one could explore muscular ideas. (ECF No. 84-7, BBU Ex.
107, ZSI 3194.) Zahourek obtained copyright registrations for the Maniken System® in 1977
and for a revision of the text in 1981. (ECF No. 83-49, BBU Ex. 99: ZSI 4561-62, 3075, 3088.)
The first “manikin” was registered for copyright as a “statue” under the name “Maniken” on July
10, 1981, with a first publication date of June 23, 1981. (ECF No. 83-50, BBU Ex. 100: BBU
3753; ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 45:5-11.) The first Maniken® came in a kit
that included clays and tools, wires for vascular and neural networks and reference tests. (ECF
No. 84-4, BBU Ex. 104: ZSI 0873.) ZSI sells Manikens®, including the Student 1 Maniken®
as part of a kit that includes hardware for assembly, a basic tool set, a package of reusable clay,
and the Anatomy in Clay Learning Activities booklet. (ECF No. 84-10, BBU Ex. 110: ZSI
1668-1693; ECF No. 84-14, BBU Ex. 114: BBU 4357; ECF No. 84-17, BBU Ex. 117: ZSI
1642, 1658.) The Maniken® is 40% of life-size and stands in the standard anatomical pose.
(ECF No. 84-1, BBU Ex. 101: ZSI 1629, 1639, 4357.) The Maniken® is small enough to be

8

used by one person but large enough to accommodate tendons made of clay. (ECF No. 84-5,
BBU Ex. 105: ZSI 0938.) Over the years, Zahourek made changes in the Mainkens® to make
them more life-like and to produce more zoological ideas into them. (ECF No. 82-1, BBU Ex. 1,
Zahourek Dep. 42:11-19, 42:20-24, 192:1-5.)
b.

Certain of the Marks and Zahourek’s Copyright

On October 18, 2011, ZSI’s website did not list the Ai3D or Introduction Mark among
the trademarks claimed by ZSI. (ECF No. 83-44, BBU Ex. 94: BBU 4025.)
Until it filed trademark applications on May 25, 2012, ZSI never claimed in writing to
own the Ai3D or Introduction Mark. (See ECF No. 118 ¶ 59.) Zahourek never communicated to
BBU that he believed that ZSI owned the Ai3D Mark. (ECF No. 82-1, BBU Ex. 1: Zahourek
Dep. 120:25-121:8.)
On May 25, 2012, ZSI filed for registration of the Introduction Mark. (ECF No. 83-32,
BBU Ex. 82: BBU 3629-3636.) In its Introduction Mark application, ZSI declared that the mark
was first used in commerce by “applicant or the applicant’s related company or licensee or
predecessor in interest at least as early as 12/11/2004 . . . and is now in use in such commerce”
for services in International Class 41. (ECF No. 83-32, BBU Ex. 82: BBU 3629.) ZSI further
declared in the Introduction Mark application that the “[u]se of the mark is by a licensee, which
use inures to the benefit of Applicant.” (ECF No. 83-32, BBU Ex. 82: BBU 3630.) When ZSI
declared in the Introduction Mark application that the “use of the mark is by a licensee,” ZSI was
referring to BBU. (ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. 234:7-25, 235:1-25, 236:1-2.)
Further, ZSI declared that the licensee might be adverse. (ECF No. 83-32, BBU Ex. 82: BBU
3630.) The USPTO registered the Introduction Mark on January 22, 2013. (ECF No. 83-32,
BBU Ex. 82: BBU 3615.)

9

On May 25, 2012, ZSI filed for registration of the Ai3D Mark. (ECF No. 83-33, BBU
Ex. 83: BBU 3694-3696.) The Ai3D Mark was filed on the basis of a bona fide intent to use the
mark. (ECF No. 83-33, BBU Ex. 83: BBU 3694.) In its Ai3D Mark application, ZSI declared
that the “[i]nitial use of the mark will be by a licensee, which inures to the benefit of Applicant.”
(ECF No. 83-33, BBU Ex. 83: BBU 3694.) When ZSI declared in the Ai3D Mark application
that the “[i]nitial use of the mark will be by a licensee,” ZSI was referring to BBU. (See ECF
No. 82-2, BBU Ex. 2: V. Zahourek Dep. 234:7-25, 235:1-25, 236:1-2.) Further, ZSI declared
that the licensee might be adverse. (ECF No. 83-33, BBU Ex. 83: BBU 3694.) At the time ZSI
filed its application for the Ai3D Mark, ZSI had no plans or intent to use the Ai3D Mark in any
class of goods or services. (ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. pp. 244-249.)6 ZSI
subsequently amended its Ai3D Mark application. (ECF No. 83-33, BBU Ex. 83: BBU 36673669.) On March 26, 2013, the USPTO registered the Ai3D Mark covering services in Class 41.
(ECF No. 83-33, BBU Ex. 83: BBU 3642.) Zahourek knows of no license agreement between
ZSI and BBU with respect to the Ai3D Mark. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep.
112:9-24, 116:18-22.)
Zahourek is the owner of the Clay Mark and Maniken® copyright. (ECF No. 118 ¶ 122.)
The trademark license between Zahourek and ZSI does not grant ZSI the right to sue third parties
for infringement of the Clay Mark. (ECF No. 84-22, BBU Ex. 122: ZSI 5997-5999.)
2.

BBU

BBU provides educational services in the field of exercise and movement, including
pilates. (See ECF No. 82-13, BBU Ex. 13: BBU 1869-1870.)

6

Plaintiffs attempt to dispute this fact by asserting that “Jon was chomping at the bit to use it.” (See ECF No. 118 ¶
88 (citing ECF No. 123-1, Pls.’ Ex. CC.) Plaintiffs’ Exhibit CC is a sixteen page document. The Court was unable
to locate the statement within it. Further, Zahourek and ZSI are not the same entities. Thus, Plaintiffs fail to raise a
disputed material fact with respect to ZSI’s lack of bona fide intent to use the Ai3D Mark.
10

3.

The Parties’ Relationship

In 2004, BBU decided to hold 2-day workshops using certain of Plaintiffs’ materials
during BBU’s Pilates on Tour program. (ECF No. 82-13, BBU Ex. 13: BBU 1869-1870.)
Thereafter, a BBU representative identified that during these 2-day workshops, BBU would use
ZSI Manikens® and call the workshops “Anatomy in Three Dimensions-An Introduction to
Anatomy with Anatomy in Clay.” (See ECF No. 82-13, BBU Ex. 13: BBU 1869-1870.) In late
2004, after seeking ZSI’s review and approval, BBU began using ZSI’s Clay Mark, Maniken™,
and Introduction Mark. (ECF No. 82-12, BBU Ex. 12: ZSI 0461-0462; ECF No. 82-15, BBU
Ex. 15: ZSI 0089; ECF No. 82-16, BBU Ex. 16: ZSI 0451; ECF No. 82-17, BBU Ex. 17: ZSI
0436-0437; ECF No. 82-18, BBU Ex. 18: ZSI 0063-0064; ECF No. 82-19, BBU Ex. 19: ZSI
0452-0456.) BBU proposed that Zahourek teach a 5-day course for BBU. (ECF No. 82-22,
BBU Ex. 22: ZSI 0439.) When a representative from BBU and Zahourek “first agreed to work
together . . . [they] created a secondary trademark called Anatomy in Three Dimensions
[(“Ai3D”)] and a subtitle of that trademark was An Introduction to Anatomy in Clay.” (ECF No.
82-1, BBU Ex. 1: Zahourek Dep. 106:8-20.) Zahourek and a representative from BBU teamtaught a workshop for a number of years called Anatomy in Three Dimensions: An Introduction
Anatomy in Clay with Zahourek’s permission. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep.
106:8-20.)7
On April 15, 2005, ZSI and BBU entered into an agreement (“AiC Web Store
Agreement”) whereby BBU would establish an internet store that would sell select ZSI products.
(ECF No. 112, Pls.’ Ex. C.) ZSI and BBU did not enter into the AiC Web Store Agreement until
ZSI’s trademarks were correctly identified on BBU’s website and after ZSI requested that BBU
7

Defendant asserts that there is no documentary evidence supporting Zahourek’s testimony. (See ECF No. 118 ¶¶
14-16.) The Court construes this disputed fact in favor of the non-movants.
11

correct its website to show ZSI’s Clay Mark. (ECF No. 82-25, BBU Ex. 25, ZSI 0043-0044.) In
2005, BBU used various unregistered ZSI “design logos”8 with ZSI’s approval. (ECF No. 118 ¶
23; ECF No. 82-29, BBU Ex. 29: BBU 3406; ECF No. 82-31, BBU Ex. 31: BBU 3395, 3397,
3398, 3399, 3404.)
In 2007, Zahourek handed a BBU representative a proposed licensing agreement (“2007
Proposal”) for the Clay Mark, Maniken™, and Mylogik™ together with trademark and
copyright usage instructions. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 131:11-25, 132:1-24;
ECF No. 83-10, BBU Ex. 60: BBU 3509-3537.) The 2007 Proposal included a letter from
Zahourek in which he provided a list of the “Current trademarks,” both registered and
unregistered, that ZSI protects which does not list the Ai3D Mark. (ECF No. 83-10, BBU Ex.
60: BBU 3520.) BBU did not accept the 2007 Proposal. (ECF No. 82-1, BBU Ex. 1: Zahourek
Dep. 155:1-4.)
In 2009, ZSI contacted BBU to request that certain changes be made to BBU’s use of
ZSI’s Clay Mark and Maniken™ on BBU’s website. (ECF No. 83-11, BBU Ex. 61: ZSI 07680774; ECF No. 83-13, BBU Ex. 63: ZSI 0746.)
After April 2009, ZSI quotes and invoices included notice of a PLA. (ECF No. 99-2, Pls.
Ex. Q: BBU 274, 278, 1182, 3158, 3166.)
Until 2012, BBU publicized the Clay Mark and the Anatomy in Clay Learning System on
its website. (ECF No. 82-40, BBU Ex. 40: BBU 4349; ECF No. 82-4, BBU Ex. 4: St. John
Dep. 63:5-25, 66:1-7, 66:20-23, 67:5-23, 68:7-21; ECF No. 105, Pls.’ Ex. G: ZSI 0007-0010.)
From October 2004 until September 2011, BBU used the Ai3D Mark as the designation for its
courses using Maniken®. (ECF No. 118 ¶ 28.)

8

It is not clear to what “design logos” refers.
12

ZSI does not currently offer in-depth anatomy classes using the Anatomy in Clay™
system. (ECF No. 82-3, BBU Ex. 3: Baca Dep: 74:12-25, 75:1-14, 76:16-25, 77:1-25, 78:1-9.)
In the workshop market, ZSI and BBU are not competitors. (ECF No. 82-3, BBU Ex. 3: Baca
Dep. 88:1-25, 89:1-19, 91:20-25, 92:1-25, 93:1-3.)
a.

The PLAs

BBU purchased and paid for products from ZSI over the phone or by e-mail. (ECF No.
83-35, BBU Ex. 85: ZSI 1388, 1390, 1391; ECF No. 82-5, BBU Ex. 5: Saenz Dep. 18:14-25,
19:1-22.) Between January 1, 2005 and October 9, 2008, ZSI issued 39 invoices to BBU. (ECF
No. 83-36, BBU Ex. 86: ZSI 1434-1436.) ZSI issued zero invoices to BBU in 2009, 6 invoices
in 2010, 3 in 2011, and 3 in 2012. (ECF No. 83-36, BBU Ex. 86: ZSI 1434-1436.) From 2010
through 2013, ZSI’s invoices contained print at the bottom stating that “Zahourek Systems, Inc.
sells products and services only with associated Product License rights. Before you can purchase
the item(s), you must read and accept the terms for the associated Product License found at
www.anatomyinclay.com/licenserights.html. Payment for the item(s) represents that you have
read, understood, and accept the Product License [(“PLA”)] terms.” (ECF No. 118 ¶ 112; ECF
No. 83-38, BBU Ex. 88: ZSI 1376, 1483.)
ZSI implemented the first PLA in April 2009. (ECF No. 82-2, BBU Ex. 2: V. Zahourek
Dep. 59:24-25; ECF No. 83-39, BBU Ex. 89: 4081-4083, 4084-4086, 4087-4089, 4090-4092.)
In September 2011, ZSI posted on its website a revised version of the PLA dated June 1, 2011
(“First Revised PLA”). (ECF No. 118 ¶ 115; ECF No. 83-40, BBU Ex. 90: BBU 4023-4024,
4164-4165.) On or about July 23, 2013, ZSI posted another revised version of the PLA (“Second
Revised PLA”). (ECF No. 118 ¶ 116; ECF No. 83-41, BBU Ex. 91: BBU 4176-4177.)

13

On certain dates from April 2009 until October 18, 2011, the web page referred to in
ZSI’s invoices, licenserights.html, did not show the PLA and did not contain any visible
hyperlink to the PLA. (ECF No. 83-42, BBU Ex. 92: BBU 4093-4096, 4069-4070, 4178; ECF
No. 82-2, BBU Ex. 2: V. Zahourek Dep. 111:21-25, 112:1-8, 112:22-25, 113:1-18, 114:24-25,
115:1-12; ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶ 2.) On certain dates from April 2009 until
June 2011, the web page referred to in ZSI’s invoices, licenserights.html, displayed a table
headed “List of Associated Intellectual Property Under the Produce License Agreement” which
showed the Maniken™ and Clay Mark as “Corollary Trademarks” for “Maniken Models” and
“Maniken Replacement Parts.” (ECF No. 83-42, BBU Ex. 92: BBU 4093-4096, 4069-4070,
4178; ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. 111:21-15, 112:1-8, 112:22-25, 113:1-18,
114:24-25, 115:1-12; ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶ 2.) From approximately June 1,
2011 until September 2011, ZSI’s website was offline with a placeholder stating “Check back
soon as the site is being redesigned.” (ECF No. 118 ¶ 119; ECF No. 83-43, BBU Ex. 93: 40684070.) On certain dates from when ZSI’s website came back online in September 2011 until
October 18, 2011, the web page referred to in ZSI’s invoices, licenserights.html, resolved to a
“404 Error,” i.e., the page was not found and there was no visible reference on that page to the
First Revised PLA. (ECF No. 83-42, BBU Ex. 92: BBU 4178; ECF No. 82-3, BBU Ex. 3:
Baca Dep. 220:4-8; ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶ 2; ECF No. 118-3, BBU Ex. 129:
Baca Dep. pp. 209-220.)
Paragraph 2 of the PLA acknowledges that the purchaser owns the products purchased
from ZSI. (ECF No. 83-39, BBU Ex. 89: BBU 4081, 4087, 4090, 4023, 4164, 4172.)
Paragraph 5 of the PLA states “[i]n consideration of payment of the license fee, which is part of
the purchase price for the Product, [ZSI] grants to You a personal, non-exclusive, non-

14

assignable, worldwide and royalty-free license to use the Associated Intellectual Property on the
terms and conditions explained in this Agreement. These rights are rescindable by [ZSI] without
notice at [ZSI]’s sole discretion.” (ECF No. 83-39, BBU Ex. 89: BBU 4081, 4087, 4090, 4023,
4164, 4172.) In the PLA and First Revised PLA, “Associated Intellectual Property” is defined in
paragraph 4 as “only those specific trademarks and/or copyrights associated with your Product
and which may be used under the terms of this agreement.” (ECF No. 83-39, BBU Ex. 89: BBU
4081, 4087, 4090, 4023, 4164; ECF No. 118 ¶ 127.) Depending on the product, the corollary
rights differed. (ECF No. 83-45, BBU Ex. 95: BBU 4047, 4027.) The phrase “as may be
updated from time to time” in paragraphs 1, 4, 6, and 7 of the PLA gave ZSI the ability to change
the PLA’s terms by adding to the list of claimed trademarks or copyrights or changing ZSI’s
usage policies, thereby purportedly obligating the purchaser to terms that did not exist at the time
of purchase. (ECF No. 83-39, BBU Ex. 89: BBU 4081-4082, 4087-4088, 4090-4091, 4023,
4164.) Paragraph 13 of the PLA, First Revised PLA, and Second Revised PLA, all contain an
assertion that each “supersedes any prior versions.” (ECF No. 83-39, BBU Ex. 89: BBU 4083,
4086, 4089; ECF No. 83-40, BBU Ex. 90: BBU 4024; ECF No. 83-41, BBU Ex. 91: 4177.)
On October 10, 2011, Balanced Body Inc.’s counsel sent ZSI’s counsel a letter
disclaiming all obligations under ZSI’s PLA and stated that Balanced Body, Inc. will no longer
use ZSI’s trademarks. (ECF No. 83-27, BBU Ex. 77: BBU 1217; see ECF No. 118 ¶ 68.)
b.

Product License Negotiations

From 2010 until March 2011, ZSI and BBU attempted to negotiate an agreement by
which ZSI would license to BBU its trademarks (Clay Mark and Mainken™). (ECF No. 83-15,
BBU Ex. 65: BBU 1488; ECF No. 83-16, BBU Ex. 66: BBU 1448-1450; ECF No. 83-17, BBU
Ex. 67: BBU 1393; ECF No. 83-18, BBU Ex. 68: ZSI 0555-0556; ECF No. 83-19, BBU Ex.

15

69: ZSI 0606-0615.) In July 2010, ZSI sent BBU a draft of its proposed “Standard Commercial
License Agreement Level 3” (“2010 Proposed Agreement”) in which it proposed to license the
ZSI trademarks Clay Mark, Maniken™, and Myologik™. (ECF No. 83-20, BBU Ex. 70: ZSI
0511, 0513-0518.) In September 2010, ZSI sent BBU two documents titled (1)
“Acknowledgment by Instructors of Zahourek Intellectual Property Rights” (the
“Acknowledgment”) which was to be signed by all of BBU’s instructors; and (2) “Student
Handout/Zahourek Systems, Inc. Intellectual Property Notice” (“Student Handout”) which was
to be handed out to all of BBU’s students. (ECF No. 83-18, BBU Ex. 68: ZSI 0555-0556; ECF
No. 99, Pls.’ Ex. O: ZSI 0555-0556.) The Acknowledgment and Student Handout list 4
registered and 27 unregistered marks claimed by ZSI but the Ai3D Mark is not among them.
(ECF No. 83-18, BBU Ex. 68: ZSI 0555-0556.) The parties never entered into the 2010
Proposed Agreement. (See ECF No. 118 ¶ 52.)
c.

Alleged Infringing Conduct

The “Anatomy in Three Dimensions Build Manual and Resource Guide” (“Build
Manual”), first published by BBU in 2012, consists of 85 pages, with approximately 100
photographs taken by BBU on 40 pages that show the application of clay to the Student 1
Maniken® that BBU purchased in 2005 or 2006. (ECF No. 118 ¶ 200; ECF No. 84-26, BBU Ex.
126: ZSI 2553-2638; ECF No. 82-4, BBU Ex. 4, St. John Dep. 24:6-15, 158:4-7.) The Build
Manual depicts a limited number of body parts of the Maniken® and illustrates the application of
a limited number of clay “muscles.” (ECF No. 84-26, BBU Ex. 126: ZSI 2553-2638.) The
Build Manual is used in BBU’s Anatomy in Three Dimensions courses for students to refer to
and sometimes the Build Manual is given to students to take home. (ECF No. 82-4, BBU Ex. 4:
St. John Dep. 21:19-25, 22:1-8, 120:19-25, 121:1-7.) The Build Manual was created by a BBU

16

employee to show students how to build the muscles on the Maniken®. (ECF No. 82-4, BBU
Ex. 4: St. John. Dep. 40:12-16.) Zahourek had a requirement that required BBU to refrain from
using photos of the Maniken® in the Build Manual. (ECF No. 82-4, BBU Ex. 4: St. John. Dep.
40:9-25, 41:1-3.)
III.

ANALYSIS9
The Court first proceeds with analyzing Defendant’s Motion to Strike (ECF No. 119)

because if certain facts set forth in Baca’s Affidavit (ECF No. 102, Pls.’ Ex. AA) are admissible
in adjudicating Defendant’s MSJ, then those facts could create a disputed material fact sufficient
to deny Defendant’s MSJ.
A.

Defendant’s Motion to Strike Baca’s Affidavit

Baca is the current “COO” and “president” of ZSI. (ECF No. 102, Pls.’ Ex. AA: Baca.
Aff. ¶ 1.) Defendant moves to strike Baca’s Affidavit (ECF No. 102, Pls.’ Ex. AA) on the bases
that it “(1) does not set forth facts that would be admissible in evidence, but rather contains
hearsay, conclusory allegations, improper opinion, legal arguments, statements that could not
plausibly be premised on personal knowledge, and statements that are too vague and unsupported
to be useful; (2) contradicts [Baca’s] sworn deposition testimony; and (3) contradicts the
testimony of [ZSI’s] Rule 30(b)(6) corporate designees and other witnesses.” (ECF No. 119 at
2.) Plaintiffs respond that Baca’s Affidavit is “made on the personal knowledge of the

9

The Court notes several deficiencies in Plaintiffs’ filings. First, Plaintiffs’ filings, with respect to exhibits
submitted in opposition to Defendant’s MSJ, are not in an organized fashion. (See generally ECF Nos. 95-112.)
Second, Plaintiffs’ response brief to Defendant’s MSJ does not cite to the statement of facts as instructed under the
Court’s Civil Practice Standards but rather cites to the underlying exhibits. (See ECF No. 94.) Third, Plaintiffs’
response brief’s cites to the exhibits are often without pinpoint citation as required under the Court’s Civil Practice
Standards and Local Rules of Civil Procedure. These deficiencies have made the Court’s review of the record
exceedingly difficult. It is not the Court’s obligation to identify factual support or construct legal arguments for
Plaintiffs. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1325 (10th Cir. 1987) (citations
omitted) (holding that “[o]nce a party moving for summary judgment has met his initial burden, the party resisting
the motion cannot rest on his pleadings” but rather the party opposing the motion must inform the trial judge of the
reasons, legal or factual, why summary judgment should not be entered).
17

corporation of which he is the designated spokesman, sets out facts that would be admissible in
evidence, and shows that [Baca] is competent to testify on behalf of the corporation relative to
the matters stated.” (ECF No. 123 at 2.) The Court grants, in part, and denies, in part,
Defendant’s Motion to Strike as set forth below.
As stated previously, affidavits must be based on personal knowledge and must set forth
facts that would be admissible evidence at trial. Murray, 45 F.3d at 1422 (quotations and
citation omitted). Baca’s affidavit states that the facts set forth in the affidavit “are true and
correct to the best of [his] knowledge and belief. . . .” (ECF No. 102 at 2.) Thus, contrary to
Defendant’s assertion, Baca’s affidavit is based upon his personal “knowledge” with respect to
certain statements.
Baca’s affidavit sets forth that he has been a ZSI employee for 22 years and is familiar
with its business during those years, including that at issue in this matter. (See ECF No. 102 at 2,
Pls.’ Ex. AA: Baca Aff. ¶ 1.) Although not set forth in the affidavit, it is clear that Baca was
responsible for the corporate website from 1996 until March 2012. (ECF No. 119-2, BBU Ex.
132: Baca Dep. 49:7-25.) Thus, contrary to Defendant’s argument, the statements in Baca’s
affidavit with respect to ZSI’s corporate website (ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶¶ 2-3),
including the webpage http://anatomyinclay.com/licenserights.html, are based upon personal
knowledge and he is competent to testify as to such matters. Further, although these statements
may contradict the deposition testimony of V. Zahourek, Defendant fails to show how these
statements contradict in all respects Baca’s deposition testimony because the deposition
testimony refers to select dates (ECF No. 129-4, BBU Ex. 138: Baca Dep. 208:21-25, pp. 209220) while the affidavit refers to the period “around 2010 to present” at “all times relevant
herein” (ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶ 2). Thus, the Court construes Baca’s affidavit

18

as consistent with those dates other than as identified in his deposition testimony. With respect
to Defendant’s argument that ZSI’s website was offline (ECF No. 119 at 5), Defendant fails to be
specific with regard to the particular webpage identified in Baca’s affidavit (ECF No. 102, Pls.’
Ex. AA: Baca Aff. ¶ 2). The Court agrees that the attachments (ECF No. 102 at 5-11, Pls.’ Ex.
AA) do contradict Baca’s deposition testimony (ECF No. 129-4, Baca Dep. 208:21-25, pp. 209220), thus the Court disregards those attachments in its analysis.
Defendant’s argument (ECF No. 119 at 6-8) that Plaintiffs’ reliance on the remaining
statements in Baca’s affidavit (ECF No. 123 at 3 (citing ECF No. 102, Pls.’ Ex. AA: Baca Aff.
¶¶ 4-12)) as being without sufficient personal knowledge is well-taken. Baca’s statement with
respect to Judge Babcock’s order (ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶ 4) is a legal
conclusion. Baca’s statement with respect to the verbal license agreement (ECF No. 102, Pls.’
Ex. AA: Baca Aff. ¶ 5) is without sufficient evidentiary support to indicate how he has such
personal knowledge. Plaintiffs’ citation to Baca’s deposition testimony (ECF No. 119-2, BBU
Ex. 132: Baca. Dep. 49:7-25; ECF No. 123-3, Pls.’ Ex. EE: Baca Dep. 32:17-23) fails to
provide support as to when and to what extent Baca’s job duties expanded to include knowledge
of licensing agreements. Similarly, Baca’s remaining statements (ECF No. 102, Pls.’ Ex. AA:
Baca Aff. ¶¶ 6-12) are without sufficient evidentiary support to indicate how he has personal
knowledge as to the statements attested. Other than in a conclusory fashion, Plaintiffs fail to
explain what duties are parts of Baca’s “COO” title. Further, Baca’s statements as to ZSI’s
market performance are speculative. (ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶¶ 7-12.)
For these reasons, the Court strikes statements four through twelve of Baca’s affidavit
(ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶¶ 4-12). The Court does not strike statements one

19

through three of Baca’s affidavit (ECF No. 102, Pls.’ Ex. AA: Baca Aff. ¶¶ 1-3) but disregards
the attachments.
B.

Defendant’s Motion for Partial Summary Judgment

The Court considers arguments Defendant raises in its MSJ (ECF No. 81). Because of
the oblique manner in which Plaintiffs’ Complaint raises their claims, the Court, at times, has to
decide which party is permitted to bring certain claims, and how the claims apply to certain of
Plaintiffs’ trademarks or copyright materials.
1.

Trademark Claim

For the following reasons, the Court grants judgment to (1) Defendant as to Plaintiffs’
trademark claim with respect to the Ai3D Mark; and (2) Defendant as to Plaintiff ZSI’s
trademark claim with respect to the Clay Mark. The Court denies judgment to (1) Defendant as
to Plaintiffs’ trademark claim with respect to the Introduction Mark; and (2) Defendant as to
Zahourek’s trademark claim with respect to the Clay Mark.
a.

Anatomy in Three Dimensions
(1)

Whether ZSI’s Registration of the Ai3D Mark is Void
Ab Initio Because of a Lack of Intent to Use the Mark

“The registration of a mark that does not meet the use requirement is void ab initio.”
Aycock Eng’g, Inc. v. Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009) (citations omitted); see
15 U.S.C. §§ 1051(a)(1), 1127. Defendant argues that ZSI’s registration of the Ai3D Mark is
void ab initio because ZSI did not have a bona fide intent to use the Ai3D Mark when it filed its
application. (ECF No. 81 at 7-8.) Defendant argues that ZSI had no plan or intent to use the
Ai3D Mark when it submitted its application. (ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep.
244:22-25, pp. 245-249.) Plaintiffs argue that ZSI had licensed the Ai3D Mark to BBU;

20

however, Plaintiffs fail to cite to specific evidence in the record10. (See ECF No. 94 at 3, 5
(citing ECF No. 101-3, Pls.’ Ex. Z).) Specifically, the statement “Anatomy in Three
Dimensions: The Next Step! From Zahourek Systems” does not evidence a license of the Ai3D
Mark from ZSI to BBU. Further, Plaintiffs’ citation is to an internal e-mail (ECF No. 101-3,
Pls.’ Ex. Z: BBU 1047), thus it is not clear whether the Ai3D Mark was intended to be used in
commerce. And Plaintiffs’ additional citations to the record purporting to show that ZSI had
intent to use the Ai3D Mark, at the time it filed its registration, are without pinpoint citation.
(ECF No. 94 at 5 (citing ECF No. 101-2, Pls.’ Ex. Y (a 6 page exhibit) and ECF No. 83-44, BBU
Ex. 94: BBU 4183 and ECF No. 82-2, BBU Ex. 2 (a 50 page exhibit); ECF No. 84-26, BBU Ex.
12611).) Further, Plaintiffs’ argument (without pinpoint record citation) that Zahourek was
“chomping at the bit” to use the Ai3D Mark (ECF No. 94 at 5) does not identify that the
registrant of the Ai3D Mark, i.e., ZSI, was going to use the Ai3D Mark.
“[A]bsence of any documentary evidence on the part of an applicant regarding [a bona
fide intent to use the mark] constitutes objective proof sufficient to prove that the applicant lacks
a bona fide intention to use its mark in commerce.” Boston Red Sox Baseball Club LP v.
Sherman, 88 USPQ2D 1581, *6 (TTAB 2008).
The Court agrees that ZSI lacked a bona fide intent to use the Ai3D Mark.

10

Plaintiffs simply ask the Court to “see disputes to the Statements of Facts.” (ECF No. 94 at 3.) This is a recurring
theme throughout Plaintiffs’ brief and response to statement of facts. The Court is not going to comb through the
record to identify factual support for Plaintiffs’ position. See Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 672
(10th Cir. 1998) (citations omitted). It is not the responsibility of the Court to behave “like pigs, hunting for truffles
buried in briefs.” See United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991).
11
The Build Manual states that it is copyrighted in 2012. Plaintiffs fail to adduce evidence that show that it filed the
Ai3D Mark application prior to BBU’s publication of the Build Manual.
21

b.

Anatomy in Three Dimensions an Introduction to Anatomy in Clay
(1)

Whether ZSI’s Registration of the Introduction Mark is
Void Ab Initio Because It was Not in Use at the Time It
was Filed

Defendant argues that ZSI’s registration of the Introduction Mark is void ab initio
because it was not in use at the time ZSI filed the Introduction Mark application. (ECF No. 81 at
6-7.) Defendant argues that ZSI knew that BBU had ceased using the Introduction Mark at the
time ZSI filed its Introduction Mark application. (ECF No. 81 at 7.)
“The registration of a mark that does not meet the use requirement is void ab initio.”
Aycock Eng’g,, 560 F.3d at 1357 (citations omitted); see 15 U.S.C. §§ 1051(a)(1), 1127. Here,
there exists an identifiable, genuine factual dispute as to ZSI’s knowledge as to whether BBU
was still using the Introduction Mark. Defendant’s citations to the record (ECF No. 82-2, BBU
Ex 2: V. Zahourek Dep. 134:15-17, 241:6-18; ECF No. 83-27, BBU Ex. 77: BBU 1217) are
insufficient to establish that V. Zahourek (as ZSI’s representative) knew that BBU had ceased
using the Introduction Mark. That is, V. Zahourek understood that BBU was “going to” cease all
use of the Introduction Mark. (ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. 241:6-18.) The
letter does not evidence that ZSI knew that BBU had in fact (as opposed to its plan) ceased using
the Introduction Mark at the time of the application. (See generally ECF No. 83-27, BBU Ex.
77: BBU 1217.)
The Court leaves to the jury as to whether ZSI’s registration of the Introduction Mark is
void ab initio because of a lack of use.
(2)

Whether ZSI Procured Registration of the Introduction
Mark by Fraud

Defendant argues that ZSI’s registration of the Introduction Mark was procured by fraud
and as such is subject to use by it, 15 U.S.C. § 1115(b)(1). (ECF No. 81 at 8-10.) Fraud in
22

procuring a trademark registration occurs when the applicant knowingly makes inaccurate
statements with the intent to mislead the USPTO into issuing a trademark registration. In re
Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009). And determining whether the alleged fraud
was committed with scienter depends on evaluating the credibility of evidence which makes it
normally a question of fact for which resolution at summary judgment is not generally
appropriate. See Copelands’ Enters., Inc. v. CNV, Inc., 945 F.2d 1563, 1567 (Fed. Cir. 1991)
(citations omitted).
Here, there exists a genuine factual dispute as to ZSI’s knowledge as to whether BBU
was using the Introduction Mark. Defendant’s citations to the record (ECF No. 82-2, BBU Ex
2: V. Zahourek Dep. 134:15-17, 241:6-18; ECF No. 83-27, BBU Ex. 77: BBU 1217) are
insufficient to establish that V. Zahourek (as ZSI’s representative) knew that BBU had ceased
using the Introduction Mark. That is, V. Zahourek understood that BBU was “going to” cease all
use of the Introduction Mark. (ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. 241:6-18.) The
letter does not evidence that ZSI knew that BBU had in fact (as opposed to its plan) ceased using
the Introduction Mark at the time ZSI filed the application. (See generally ECF No. 83-27, BBU
Ex. 77: BBU 1217.)
The Court leaves the factual determination for a jury as to whether ZSI engaged in fraud
in procuring the Introduction Mark registration.
(3)

Whether Plaintiffs are Equitably Estopped from Asserting
Defendant Engaged in Unauthorized Use of the
Introduction Mark

Defendant argues that from “2004 until approximately September 2011” ZSI did not
complain of any unauthorized use with respect to the Introduction Mark and Plaintiffs are
estopped from arguing trademark infringement pursuant to 15 U.S.C. § 1115(b)(9). (ECF No. 81

23

at 10.) Plaintiffs fail to respond to Defendant’s estoppel argument. (See generally ECF No. 94.)
Equitable estoppel “prevents a trademark owner from bringing an infringement action when the
owner has acted or failed to act in such a manner and under such circumstances that indicated it
was not going to enforce its rights with respect to the trademark.” Prince Lionheart, Inc. v. Halo
Innovations, Inc., Case No. 06-CV-00324-WDM-KLM, 2008 WL 878985, at *5 (D. Colo. Mar.
28, 2008) (citations omitted). Defendant’s cited factual support (ECF No. 82-25, BBU Ex. 25:
ZSI 0044; ECF No. 83-9, BBU Ex. 59; ECF No. 82-2, BBU Ex. 2: V. Zahourek Dep. 129:1025, 131:1-10), however, demonstrates that Plaintiffs did complain about certain BBU usage of
the Introduction Mark.
The Court denies Defendant’s MSJ to the extent it seeks judgment against Plaintiffs’
trademark infringement claim under an estoppel theory as to the Introduction Mark.
c.

Anatomy in Clay

First, Zahourek is the registrant of the Clay Mark and, by contract, has the sole right to
bring an action for infringement of the Clay Mark (ECF No. 84-22, BBU Ex. 122: ZSI 59975999). Therefore, the Court grants Defendant’s MSJ to the extent it seeks to bar ZSI from
asserting a trademark infringement claim as to the Clay Mark.
(1)

Whether Nominative Fair Use Permits BBU to Use the
Clay Mark

Defendant moves for judgment on Plaintiffs’ trademark infringement claim with respect
to the Clay Mark on the ground that its use of this mark, as a matter of law, is a nominative fair
use permitted by the Lanham Act, 15 U.S.C. § 1115(b)(4). (ECF No. 81 at 10.)
The Lanham Act prohibits the unauthorized use or misleading representation of “any
word, term, name, symbol, or device” in a way that “is likely to cause confusion, or to cause
mistake, or to deceive” in connection with any good or service. 15 U.S.C. § 1125(a)(1)(A).
24

“Confusion occurs when consumers make an incorrect mental association between the involved
commercial products or their producers” or “when a mark is likely to deceive purchasers or users
as to the source, endorsement, affiliation, or sponsorship of a product.” John Allan Co. v. Craig
Allen Co. L.L.C., 540 F.3d 1133, 1138 (10th Cir. 2008) (internal quotation and citation omitted).
Whether the use of a mark will result in likelihood of confusion within the meaning of the
Lanham Act is a question of fact. Id. To determine whether a likelihood of confusion exists in a
trademark infringement case, the Court engages in a multi-factor analysis. Health Grades, Inc.
v. Robert Wood Johnson Univ. Hosp., Inc., 634 F. Supp. 2d 1226, 1239 (D. Colo. 2009). In the
Tenth Circuit, the following non-exhaustive factors are considered: “(1) the degree of similarity
between the marks; (2) the intent of the alleged infringer in adopting the mark; (3) evidence of
actual confusion; (4) similarity of products and manner of marketing; (5) the degree of care
likely to be exercised by purchasers; and (6) the strength or weakness of the marks.” John Allan,
540 F.3d at 1138 (quoting Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964, 972 (10th Cir.
2002)). “No one of these factors is dispositive, and ‘the final determination of likelihood of
confusion must be based on consideration of all relevant factors.’” Health Grades, 634 F. Supp.
2d at 1239 (citing John Allan, 540 F.3d at 1138). In all cases, “[t]he party alleging infringement
has the burden of proving likelihood of confusion.” John Allan, 540 F.3d at 1138; see KP
Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004). The District
of Colorado has previously held that “[t]he defendant does not bear the burden of proving
nominative fair use, and nominative use of a mark is not an affirmative defense to liability.”
Health Grades, 634 F. Supp. 2d at 1242.
Under the Tenth Circuit’s law, whether Defendant’s use of ZSI’s Clay Mark is likely to
confuse the public is a question of fact. See John Allan, 540 F.3d at 1138. Nominative fair use

25

can be decided as a matter of law on a motion for summary judgment. See Health Grades, 634
F. Supp. 2d at 1242 (citing Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801-02 (9th Cir. 2002)
and New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 309 (9th Cir. 1992)).
Plaintiffs do not engage in the non-exhaustive multifactor analysis. (See generally ECF
No. 94.) Plaintiffs bear the burden of proving consumer confusion. See KP Permanent MakeUp, 543 U.S. at 118. Confusingly, Plaintiffs concede that “[t]he exact uses by BBU of the [Clay]
Mark . . . [is] not being asserted as trademark infringement as those uses were under license from
ZSI.” (ECF No. 94 at 6.) At one point, however, Plaintiffs do assert that “consumers confuse
offerings through the Plaintiffs with those offered by B[B]U. . . .” (ECF No. 94 at 23.) Plaintiffs
cite to a nine page exhibit without pinpoint citation. (ECF No. 94 at 23 (citing ECF No. 98, Pls.’
Ex. L).) However, evidence of actual confusion is but one factor. Plaintiffs fail to address the
remaining non-exhaustive list of factors (see generally ECF No. 94) and it is not the Court’s
obligation to create legal arguments for them. Defendants, likewise, fail to address Plaintiffs’
response arguing consumer confusion. (See generally ECF No. 117.)
At this point, although Plaintiffs haphazardly address and produce a modicum of
evidence of actual consumer confusion as to the Clay Mark (ECF No. 98, Pls.’ Ex. L: ZSI 734737), Defendant fails to rebut Plaintiffs’ argument, and thus, the Court leaves for the jury the
issue as to whether Defendant’s use of the Clay Mark constitutes nominative fair use.
(2)

Whether Plaintiffs are Equitably Estopped from Asserting
Defendant Engaged in Unauthorized Use of the
Clay Mark

Defendant argues that from “2004 until approximately September 2011” ZSI did not
complain of any unauthorized use with respect to the Clay Mark and Plaintiffs are estopped from
arguing trademark infringement pursuant to 15 U.S.C. § 1115(b)(9). (ECF No. 81 at 10.)

26

Plaintiffs fail to respond to Defendant’s estoppel argument. (See generally ECF No. 94.)
Equitable estoppel “prevents a trademark owner from bringing an infringement action when the
owner has acted or failed to act in such a manner and under such circumstances that indicated it
was not going to enforce its rights with respect to the trademark.” Prince Lionheart, Case No.
06-CV-00324-WDM-KLM, 2008 WL 878985, at *5 (citations omitted). Defendant’s cited
factual support (ECF No. 82-25, BBU Ex. 25: ZSI 0044; ECF No. 83-9, BBU Ex. 59; ECF No.
82-2, BBU Ex. 2: V. Zahourek Dep. 129:10-25, 131:1-10), however, demonstrates that Plaintiffs
did complain about certain BBU usage of the Clay Mark.
The Court denies Defendant’s MSJ to the extent it seeks judgment against Zahourek’s
trademark infringement claim under an estoppel theory as to the Clay Mark.
2.

Copyright Claim12,13

Zahourek claims that Defendant has infringed his “copyrighted anatomy models and
rights through the unauthorized display of such models and derivative works made therefrom on
a website.” (ECF No. 49 ¶ 3.) Zahourek is referring to the Student 1 Maniken® for which he
has received a copyright14. (ECF No. 94 at 14.) To prevail on his copyright infringement claim,
Zahourek must establish that he (1) possesses a valid copyright; and (2) Defendant copied
protectable elements of the work. See Country Kids ‘N City Slicks, Inc. v. Sheen, 77 F.3d 1280,
1284 (10th Cir. 1996) (citations omitted). Defendant argues that Zahourek cannot establish
either element. (ECF No. 81 at 19.) Because the Court determines that Zahourek does not
12

Because Zahourek is the owner of the copyright (ECF No. 118 ¶ 122), he has standing to bring the copyright
claim (ECF No. 49 ¶¶ 53-60). The parties do not brief whether ZSI is a beneficial owner with standing to sue. See,
e.g., Righthaven LLC v. Wolf, 813 F. Supp. 2d 1265, 1271 (D. Colo. 2011).
13
Defendant argues that Maniken® is a “system” to which copyright protection does not extend pursuant to 17
U.S.C. § 102(b). (ECF No. 81 at 19.) The Court does not reach this issue because it is the Maniken® model which
is at issue in Zahourek’s claim and not the Anatomy in Clay Learning System®. (ECF No. 94 at 14)
14
At the hearing, Plaintiffs suggested that parts of the Student 1 Maniken® remained the same across subsequent
models bearing their own copyrights. To the extent that the suggestion is that photographs of Student 1 Mainken®
containing these “cross model” parts infringe all copyrights of models containing such parts, the argument is without
authority and rejected.
27

possess a valid copyright, the Court does not reach the issue as to whether Defendant copied
protectable elements of the Maniken®. The Court finds Defendant is entitled to judgment in its
favor and against Zahourek on Zahourek’s copyright claim (ECF No. 49 ¶¶ 53-60).
a.

Whether Zahourek Possesses a Valid Copyright

The central issue as to whether Zahourek possesses a valid copyright is whether the
Maniken® is subject to copyright protection. Two provisions contained in 17 U.S.C. § 101 are
at issue. The description of pictorial, graphic, and sculptural works provides:
“Pictorial, graphic, and sculptural works” include two-dimensional and threedimensional works of fine, graphic, and applied art, photographs, prints and art
reproductions, amps, globes, charts, diagrams, models, and technical drawings,
including architectural plans. Such works shall include works of artistic
craftsmanship insofar as their form but not their mechanical or utilitarian aspects
are concerned; the design of a useful article, as defined in this section, shall be
considered a pictorial, graphic, or sculptural work only if, and only to the extent
that, such design incorporates pictorial, graphic, or sculptural features that can
be identified separately from, and are capable of existing independently of, the
utilitarian aspects of the article.
The definition section further provides that “[a] ‘useful article’ is an article having an intrinsic
utilitarian function that is not merely to portray the appearance of the article or to convey
information. An article that is normally a part of a useful article is considered a ‘useful article.’”
17 U.S.C. § 101.
(1)

Usefulness

When Zahourek designed the first Maniken®, his intent was to make a three-dimensional
model that would be usable to study on by using clay and strings or other representation of
anatomy. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 31:6-13, 33:17-18, 40:2-16, 47:6-8,
47:24-25, 48:1-6.) Maniken® is an interactive learning tool which requires the user to shape
muscles of clay and attach them to the model. (ECF No. 84-4, BBU Ex. 104: ZSI 0873.) The
Maniken® is a useful model of skeletal ideas whose overriding intention was to provide a
28

meaningful armature upon which one could explore muscular ideas. (ECF No. 84-7, BBU Ex.
107, ZSI 3194.) ZSI sells Manikens®, including the Student 1 Maniken® as part of a kit that
includes hardware for assembly, a basic tool set, a package of reusable clay, and the Anatomy in
Clay Learning Activities booklet. (ECF No. 84-10, BBU Ex. 110: ZSI 1668-1693; ECF No. 8414, BBU Ex. 114: BBU 4357; ECF No. 84-17, BBU Ex. 117: ZSI 1642, 1658.) The Maniken®
is 40% of life-size and stands in the standard anatomical pose. (ECF No. 84-1, BBU Ex. 101:
ZSI 1629, 1639, 4357.) Over the years, Zahourek made changes in the Mainken® to make it
more life-like, to produce more zoological ideas into it and to make a model that was more lifelike. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 42:11-19, 42:20-24, 192:1-5.)
Zahourek responds that the Maniken® is art because it has been displayed as such. (ECF
No. 94 at 15 (citing ECF No. 98-2, Pls.’ Ex. N).) In Superior Form Builders, Inc. v. Dan Chase
Taxidermy Supply Co., 74 F.3d 488 (4th Cir. 1996), the court explained “an animal sculpture,
even if realistic, is copyrightable as long as the work represents the author’s creative effort.” Id.
at 492 (citation omitted and emphasis added). In this matter, the undisputed material facts show
that Zahourek created the Maniken® for its utilitarian features. Zahourek’s after-the-fact attempt
to recast his Maniken® as an artistic endeavor finds no support in his contemporaneous creation.
The Maniken® serves utilitarian ends. The Maniken® has an intrinsic utilitarian function that is
merely to portray the appearance of a life-like form. Further, this case is distinguishable from
Superior Form Builders, 74 F.3d at 493, because in this matter Zahourek has failed to adduce
evidence that he formed his Maniken® sculptures “from scratch” and therefore there is no
originality in each Maniken®. Rather, this case is more similar to the mannequins at issue in
Carol Barnhart Inc. v. Economy Cover Corp., 773 F.2d 411, 414-15 (2d Cir. 1985), whose forms

29

were “concededly useful articles.” The evidence presented would not permit a reasonable jury to
conclude that Maniken® has no utilitarian value for learning anatomy.
(2)

Separability

A useful article falls within the definition of pictorial, graphic, or sculptural works “only
if, and only to the extent that such design incorporates pictorial, graphic, or sculptural features
that can be identified separately from, and are capable of existing independently of, the utilitarian
aspects of the article.”15 17 U.S.C. § 101. The goal of this language is to distinguish creative
works that enjoy copyright protection from industrial design that do not. Pivot Point Int’l, Inc. v.
Charlene Prods., Inc., 372 F.3d 913, 921 (7th Cir. 2004) (citation omitted). The Seventh Circuit
Court of Appeals, in Pivot Point Int’l, 372 F.3d at 920-32, engaged in a thorough statutory
analysis of the separability issue—including analyzing other Circuit Court of Appeals’ decisions.
The Court agrees with the Seventh Circuit’s analysis and incorporates it here. Specifically, the
Court agrees that Congress intended the two operative phrases—“can be identified separately
from” and “are capable of existing independently of”— to state a “single, integrated standard to
determine when there is sufficient separateness between the utilitarian and artistic aspects of a
work to justify copyright protection.” Pivot Point Int’l, 372 F.3d at 921. As the Seventh Circuit
15

The Seventh Circuit Court of Appeals has noted that “prior to the addition of this language in the 1976 Act,
Congress had not explicitly authorized the Copyright Office to register ‘useful articles.’ Indeed, when Congress first
extended copyright protection to three-dimensional works of art in 1870, copyright protection was limited to objects
of fine art; objects of applied art still were not protected. See Paul Goldstein, 1 Copyright § 2.5.3 at 2:58 (2d ed.
2004). This changed with the adoption of the Copyright Act of 1909 (“1909 Act”); Professor Goldstein explains:
The 1909 Act, which continued protection for three-dimensional works of art, dropped the
requirement that constitute fine art and thus opened the door to protection of useful works of art.
In 1948, the Copyright Office broadened the scope of protection for three-dimensional works of
art to cover “works of artistic craftsmanship insofar as their form but not their utilitarian aspects
are concerned.” The United States Supreme Court upheld this interpretation in Mazer v. Stein,
[347 U.S. 201, 213 (1954)], holding that the fact that statuettes in issue were intended for use in
articles of manufacture—electric lamp bases—did not bar them from copyright. Five years later,
in 1959, the Copyright Office promulgated a rule that if “the sole intrinsic function of an article is
its utility, the fact that the work is unique and attractively shaped will not qualify it as a work of
art.” The regulation did, however, permit registration of features of a utilitarian article that “can
be identified separately and are capable of existing independently as a work of art.”
Id. (quoting 37 C.F.R. § 207.8(a) (1949) and 37 C.F.R. § 202.10(c) (1959); footnotes omitted).
Pivot Point Int’l, 372 F.3d at 920 n.6.
30

noted, “[i]t seems to be common ground . . . among the courts and commentators, that the
protection of the copyright statute also can be secured when a conceptual separability exists
between the material sought to be copyrighted and the utilitarian design which that material is
incorporated.” Pivot Point Int’l, 372 F.3d at 922. The Seventh Circuit held that “[c]onceptual
separability exists . . . when the artistic aspects of an article can be ‘conceptualized as existing
independently of their utilitarian function.’” Pivot Point Int’l, 372 F.3d at 931 (quoting Carol
Barnhart, 773 F.2d at 418). “This independence is necessarily informed by ‘whether the design
elements can be identified as reflecting the designer’s artistic judgment exercised independently
of functional influences.’” Pivot Point Int’l, 372 F.3d at 931 (quoting Brandir Int’l, Inc. v.
Cascade Pac. Lumber Co., 834 F.2d 1142, 1145 (2d Cir. 1987)). “If the elements do reflect the
independent, artistic judgment of the designer, conceptual separability exists.” Pivot Point Int’l,
372 F.3d at 931. “Conversely, when the design of a useful article is ‘as much the result of
utilitarian pressures as aesthetic choices,’ the useful and aesthetic elements are not conceptually
separable.” Pivot Point Int’l, 372 F.3d at 931 (quoting Brandir Int’l, 834 F.3d at 1147).
In Pivot Point Int’l, the Seventh Circuit found that the “Mara” mannequin is entitled to
copyright protection because it was “not difficult to conceptualize a human face, independent of
all of Mara’s specific facial features, i.e., the shape of the eye, the upturned nose, the angular
cheek and jaw structure, that would serve the utilitarian functions of a hair stand and, if proven,
of a makeup model.” 372 F.3d at 931. The Seventh Circuit found that Mara “can be
conceptualized as existing independent from its use in hair display or make-up training because it
is the product of [the designer’s] artistic judgment.” Pivot Point Int’l, 372 F.3d at 931.
Specifically, when the designer was approached “about creating the Mara sculpture, [he was not
provided] with specific dimensions or measurements; indeed, there is no evidence that [the

31

designer’s] artistic judgment was constrained by functional considerations.” Pivot Point Int’l,
372 F.3d at 931. In contrast, in Carol Barnhart, the Second Circuit determined that “[a]ll the
forms, which are otherwise life-like and anatomically accurate, have hollow backs designed to
hold excess fabric when the garment is fitted onto the form” were included in the design for
purely functional reasons and thus, inseparable. 773 F.2d at 412, 418.
The facts of this case are more similar to the facts in Carol Barnhart than those at issue in
Pivot Point Int’l. In this matter, Zahourek fails to create a dispute with respect to the material
facts that the Maniken® was designed for anatomically-functional reasons not independent from
his artistic judgment. (ECF No. 82-1, BBU Ex. 1: Zahourek Dep. 34:3-12; 34:22-25; 35:1,
42:11-19, 42:20-24, 44:3-9, 49:1-4, 192:1-5; ECF No. 84-1, BBU Ex. 101: ZSI 1629, 1639,
4357; ECF No. 84-4, BBU Ex. 104: ZSI 0873; ECF No. 84-5, BBU Ex. 105: ZSI 0938; ECF
No. 84-6, BBU Ex. 106: ZSI 0940; ECF No. 84-7, BBU Ex. 107: ZSI 3193, 3194, 3198, 3195
3196, 3197; ECF No. 84-11, BBU Ex. 111: ZSI 5028-5029; ECF No. 84-12, BBU Ex. 112: ZSI
5152-5153; ECF No. 84-13, BBU Ex. 113: ZSI 4886; ECF No. 118-5, BBU Ex. 131: ZSI 4894;
ECF No. 82-4, BBU Ex. 4: St. John Dep. 158:8-17; ECF No. 84-15, BBU Ex. 115: BBU 4358;
ECF No. 84-14: BBU Ex. 114: BBU 4356; ECF No. 84-17, BBU Ex. 117: ZSI 1625.)16

16

Plaintiffs argue that the “nose, ears, eyes, shape of the skull, and many more” constitute “design elements” that
“reflect the artistic judgment [Zahourek] exercised independently of functional influences.” (ECF No. 94 at 16.)
Plaintiffs argument is not supported the factual record as the testimony cited shows that “having an ear [] as opposed
to just a hole . . . is going to make it easier to know where the rest of the muscles are supposed to go. That’s the
function of that.” (ECF No. 98-2, Pls.’ Ex. N.: Zahourek Dep. 160:12-22.)
32

3.

Breach of Contract Claim17,18

Between January 1, 2005 and October 9, 2008, ZSI issued 39 invoices to BBU. (ECF
No. 83-36, BBU Ex. 86: ZSI 1434-1436.) ZSI issued zero invoices to BBU in 2009, 6 invoices
in 2010, 3 in 2011, and 3 in 2012. (ECF No. 83-36, BBU Ex. 86: ZSI 1434-1436.) From 2010
through 2013, ZSI’s invoices contained print at the bottom stating that “Zahourek Systems, Inc.
sells products and services only with associated Product License rights. Before you can purchase
the item(s), you must read and accept the terms for the associated Product License found at
www.anatomyinclay.com/licenserights.html. Payment for the item(s) represents that you have
read, understood, and accept the Product License [(“PLA”)] terms.” (ECF No. 83-38, BBU Ex.
88: ZSI 1376, 1483.)
ZSI implemented the first PLA in April 2009. (ECF No. 83-2, BBU Ex. 2: V. Zahourek
Dep. 59:24-25; ECF No. 83-39, BBU Ex. 89: 4081-4083, 4084-4086, 4087-4089, 4090-4092.)
In September 2011, ZSI posted on its website a revised version of the PLA dated June 1, 2011
(“First Revised PLA”). (ECF No. 118 ¶ 115; ECF No. 83-40, BBU Ex. 90: BBU 4023-4024,
4164-4165.) On or about July 23, 2013, ZSI posted another revised version of the PLA (“Second
Revised PLA”). (ECF No. 118 ¶ 116; ECF No. 83-41, BBU Ex. 91: BBU 4176-4177.)
For the following reasons, the Court denies Defendant’s MSJ as it relates to ZSI’s breach
of contract claim (ECF No. 49 ¶¶ 35-43).

17

Because the PLA is between ZSI and Defendant, Zahourek has no breach of contract claim. To the extent
Zahourek claims relief for breach of contract, Defendant is entitled to judgment against Zahourek. See Kowalski v.
Tesmer, 543 U.S. 125, 129 (2004) (“[A] party ‘generally must assert his own legal rights and interests, and cannot
rest his claim to relief on the legal rights or interests of third parties.’”)
18
The parties do not argue what state law applies to Plaintiffs’ breach of contract claim (ECF No. 49 ¶¶ 35-43). The
PLA provides that it is to be construed in accordance with Colorado law. (ECF No. 83-39, BBU Ex. 89: BBU
4083.) Therefore, the Court uses Colorado law.
33

a.

Whether the PLA is an Illusory Contract

Defendant argues that the PLA is an illusory contract and therefore unenforceable. (ECF
No. 81 at 11-12.) Defendant argues that the only right granted to it via the PLA is the right to
use certain trademarks. (ECF No. 81 at 11 (citation omitted).) But this right is “rescindable” by
ZSI without notice at ZSI’s sole discretion. (ECF No. 81 at 11 (citation omitted).) Plaintiffs
respond that there was mutual consideration by both parties, therefore, the PLA is not illusory.
(ECF No. 94 at 8.)
“[A] contract requires a bargained for benefit or detriment, ‘words of promise which by
their terms make performance entirely optional with the ‘promisor’” cannot serve as
consideration for an enforceable agreement, and any purported ‘agreement’ would be illusory.”
Vernon v. Qwest Commc’ns Int’l, Inc., 857 F. Supp. 2d 1135, 1153-54 (D. Colo. 2012) (applying
Colorado law). In Colorado, however, “every contractual obligation need not be mutual as long
as each party has provided some consideration to the contract.” Vernon, 857 F. Supp. 2d at 1154
(citing Rains v. Found. Health Sys. Life & Health, 23 P.3d 1249, 1255 (Colo. App. 2001)). A
contract provision can be enforceable even if that particular clause lacks mutuality. Vernon, 857
F. Supp. 2d at 1155.
A reasonable jury could find the parties each provided some consideration to the PLA.
Specifically, from 2010 through 2013, ZSI informed BBU that it sold its products and services
“only with associated Product License rights. [And that] [b]efore [BBU could] purchase the
item(s), [it] must read and accept the terms for the associated Product License found at
www.anatomyinclay.com/licenserights.html. Payment for the item(s) represent[ed] that [BBU
had] read, understood, and accept[ed] the Product License terms.” (ECF No. 83-38, BBU Ex.
88: ZSI 1376, 1483; ECF No. 83-39: BBU Ex. 89: BBU 4081, 4083, 4084-4086, 4087-4089,

34

4090-4092; ECF No. 83-40, BBU Ex. 90: BBU 4023-4024, 4164-4165; ECF No. 83-42, BBU
Ex. 92: BBU 4093, 4094, 4095, 4096, 4069, 4070, 4178; ECF No. 102, Pls.’ Ex. AA: Baca Aff.
¶ 2; ECF No. 83-42, BBU Ex. 92: BBU 4093-4096, 4069-4070.) Further, paragraph 2 of the
PLA acknowledges that BBU owns the products purchased from ZSI. (ECF No. 83-39, BBU
Ex. 89: BBU 4081.) That is ZSI transferred ownership of the product pursuant to the PLA. In
return, BBU paid for the product. (ECF No. 83-38, BBU Ex. 88: ZSI 1376, 1483; ECF No.8343, BBU Ex. 93: ZSI 1476-1482, 1484-1486.) Therefore, a reasonable jury could conclude that
both parties gave consideration to the PLA.
b.

Whether there was a Meeting of the Minds with Respect to the PLA

Defendant argues notice of the PLA was ineffective and thus, it did not assent to the
terms of the PLA. (ECF No. 81 at 13.) Plaintiffs respond that notice was effective and
Defendant assented to the PLA’s terms. (ECF No. 94 at 9-10.)
As stated previously, ZSI provided notice of the PLA to BBU via its invoices19
subsequent to BBU’s purchases of ZSI products. A reasonable jury could find that BBU
assented to the PLA’s terms by retaining possession of the purchased product subsequent to
notice of the PLA in the invoice. (See ECF No. 83-39, BBU Ex. 89: BBU 4081 (“By
purchasing or using any of Zahourek’s products and services, you accept the terms of [the PLA]
as a legally binding document without any other conditions or declarations. If you do not agree
with these terms, You cannot purchase or use the products and your purchase price will be
refunded less repackaging costs.”).)

19

The Court recognizes Defendant’s argument that ZSI’s website did not function properly during parts of the
relevant time period to provide adequate notice of the PLA. (See ECF No. 81 at 13.) Again, there are disputed
material facts, as stated previously, with respect to whether on all dates relevant that ZSI’s website did not function
properly to provide notice of the PLA.
35

c.

Whether the PLA Applies Retroactively to Manikens®

Defendant argues that because Balanced Body, Inc.20 disclaimed the First Revised PLA
(ECF No. 117 at 6-7 (citing ECF No. 83-27, BBU Ex. 77: BBU 1217)) in October 2011, its
subsequent ZSI product purchases are not subject to any of the PLA (ECF No. 81 at 1; ECF No.
117 at 6-7). Plaintiffs argue that Defendant’s purchases are subject to the original PLA and
Balanced Body, Inc.’s disclaimer has no effect. (ECF No. 94 at 10-11.) The Court finds that
resolution of this argument is not appropriate for summary judgment. Defendant purchased ZSI
products when the First Revised PLA was in effect, which contains a statement that it supersedes
prior versions. (ECF No. 83-38, BBU Ex. 88: ZSI: 1364, 1367, 1368, 1371, 1372, 1374, 1376
1378, 1380, 1383, 1388, 1483, 1393, 1399, 1403, 1407; ECF No. 83-40, BBU Ex. 90: BBU
4023-4024.) There are genuine material factual disputes as to Balanced Body Inc.’s disclaimer
and the retroactive application of the First Revised PLA. The Court finds that a reasonable jury
could conclude that ZSI gave consideration to Defendant with respect to selling a product and
that BBU gave consideration to Defendant with respect to paying for the product such that the
parties entered into a new PLA which supersedes the prior PLA.
d.

Whether the Copyright Act Preempts Part of ZSI’s Breach of
Contract Claims

Defendant argues that the Copyright Act preempts ZSI’s contract claim related to
Defendant’s creation and display of photographs (ECF No. 49 ¶ 42). (ECF No. 81 at 15-16.)
ZSI owns no copyright in the Maniken®. (See ECF No. 118 ¶ 122.) 17 U.S.C. § 204(a) requires
the grant of exclusive rights in copyrights to be in writing. Defendant fails to provide the Court
with a pinpoint citation to support its argument that ZSI “has only an oral license from
[Zahourek].” (ECF No. 117 at 7.) Equivalently, Plaintiffs state, without pinpoint record citation,
20

BBU is the party to this lawsuit. It is not clear how a non-party to the PLA, Balanced Body Inc., could waive
BBU’s obligations.
36

that “[Zahourek] has licensed to ZSI rights to use and sublicense [Zahourek’s] copyrights.”
(ECF No. 94 at 12.) Because Defendant has failed to provide the Court with a record cite
indicating that ZSI does not have standing to assert a copyright claim on the basis of a written
license, the Court cannot determine whether the Copyright Act preempts ZSI’s breach of contract
claim.
e.

Whether the PLA Applies to Defendant’s Use of the Ai3D Mark

Defendant argues that to “construe any PLA as extinguishing [Defendant’s] lawful right
to the [Ai3D] Mark would be unconscionable.” (ECF No. 81 at 17.) Defendant does not provide
authority that justifies it is entitled to judgment as a matter of law on ZSI’s breach of contract
claim. (See generally ECF No. 81.) Specifically, the PLA, by its terms, gave ZSI the right to
change the PLA’s terms by adding to the list of claimed trademarks. (ECF No. 83-39, BBU Ex.
89: BBU 4081-4082.) As stated previously, the Court finds that a reasonable jury could
conclude, under the PLA, that ZSI gave consideration to Defendant with respect to selling a
product and that BBU gave consideration to Defendant with respect to paying for the product.
Therefore, because of the existence of factual disputes, whether the PLA applies to Defendant’s
use of the Ai3D Mark is a question for a jury.
f.

Whether the PLA Applies to Defendant’s Use of the Introduction
Mark

Defendant argues that it is entitled to judgment as a matter of law on ZSI’s breach of
contract claim related to the Introduction Mark because it used the Introduction Mark in an
approved manner; that the revised PLAs cannot apply retroactively; and that it did not use the
Introduction Mark in connection with a product. (ECF No. 81 at 17-18.) Plaintiffs respond,
without record citation, in much the same fashion that it has to Defendant’s prior contract
arguments. (See ECF No. 94 at 13-14.) For reasons articulated previously, i.e., because genuine
37

factual disputes exist as to BBU’s purchases under the revised PLAs, the Court finds a
reasonable jury could return a verdict for either party.
4.

Unfair Competition and Misappropriation21,22

Defendant argues that “[i]t is impossible for [it] to respond to the universe of possible
claims given [Plaintiffs’] intentionally vague allegations [in the Complaint (ECF No. 49)], but
summary judgment is appropriate on at least some of Plaintiffs’ possible claims.” (ECF No. 81
at 27-28.) Therefore, unless addressed otherwise below, the Court denies Defendant’s MSJ to
the extent it seeks judgment in its favor and against Plaintiffs on their unfair competition and
misappropriation claims (ECF No. 49 ¶¶ 61-90).
The Supreme Court has held that states “may protect business in the use of their
trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by
imitating such markings, from misleading purchasers as to the source of the goods.” Sears,
Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 232 (1964). Under Colorado law, “the tort of unfair
competition requires, first, that the defendant has copied the plaintiff’s products or services or
misappropriated plaintiff’s name or operations in some regard, and second, that this conduct is
likely to deceive or confuse the public because of the difficulties in distinguishing between the
plaintiff’s and defendant’s products and services.” NetQuote, Inc. v. Byrd, 504 F. Supp. 2d 1126,
1131 (D. Colo. 2007). The tort of unfair competition “prohibit[s] unfair misappropriation of a
competitor’s business values,” Am. Television and Commc’n Corp. v. Manning, 651 P.2d 440,
21

Plaintiffs’ response to Defendant’s MSJ with respect to the unfair competition and misappropriation claims (ECF
No. 94 at 19-21) is confusing. Plaintiffs argue for the Court to extend the “economic loss rule.” (ECF No. 94 at 19.)
Plaintiffs, however, fail to show how the economic loss rule applies to this matter. (See generally ECF No. 94.)
Plaintiffs argue that Defendant has committed the “tort of [b]usiness [p]ractice.” (ECF No. 94 at 20.) Again,
Plaintiff fails to show how the tort of business practice applies to this matter. (Compare ECF No. 94 with ECF No.
49.) The Court will not invent legal arguments for Plaintiffs nor cite to applicable parts of the record for them. See
Cross, 390 F.3d at 1290; see also Mitchell, 218 F.3d at 1199; see also Dayton Hudson, 812 F.2d at 1325.
22
Despite this ruling, Orders entered at the hearing in this matter require Plaintiffs to bring specificity to their unfair
competition and misrepresentation claims which are currently akin to amorphous blobs. And Defendant has been
permitted to file a second summary judgment motion upon receipt of such specificity.
38

445 (Colo. App. 1982), but the prohibition on misappropriating business values does not “expand
unfair competition to cover every instance in which an individual capitalizes upon the skill and
efforts of another.” Powell Prods., Inc. v. Marks, 948 F. Supp. 1469, 1476 (D. Colo. 1996).
a.

ZSI’s Claims

Because Zahourek is the owner of the Clay Mark (see ECF No. 118 ¶ 122) and his license
agreement with ZSI expressly reserves his right to bring an unfair competition claim related to
the Clay Mark (ECF No. 84-22, BBU Ex. 122: ZSI 5998), Defendant is entitled to judgment in
its favor and against ZSI as it relates to an unfair competition claim related to the Clay Mark.
See Kowalski v. Tesmer, 543 U.S. 125, 129 (2004). The Court does not understand how the
Introduction Mark includes the Clay Mark (see ECF No. 81 at 28), and thus denies Defendant’s
request for judgment in its favor and against ZSI as it relates to an unfair competition related to
the Introduction Mark.
Because Zahourek is the owner of the alleged Maniken® copyright (see ECF No. 118 ¶
122), ZSI does not have any claim for unfair competition or misappropriation based on
Defendant’s creation and use of photographs of the Maniken®. See Kowalski, 543 U.S. at 129.
To prevail on an unfair competition claim under Section 43(a) of the Lanham Act, 15
U.S.C. § 1125(a), “a plaintiff must establish that (1) [his] mark is protectable and (2) the
defendant’s use of [an identical or similar] mark is likely to cause confusion among consumers.”
Donchez v. Coors Brewing Co., 392 F.3d 1211, 1215 (10th Cir. 2004) (citations omitted).
Because ZSI does not have a valid Ai3D Mark (see supra Section III.B.1.a), Defendant is
entitled to judgment in its favor and against ZSI with respect to unfair competition as it relates to
the Ai3D Mark.

39

b.

Zahourek’s Claims

As stated previously, to prevail on an unfair competition claim under Section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a), “a plaintiff must establish that (1) [his] mark is protectable
and (2) the defendant’s use of [an identical or similar] mark is likely to cause confusion among
consumers.” Donchez, 392 F.3d at 1215 (citations omitted). Because Zahourek does not have a
valid Ai3D Mark (see supra Section III.B.1.a) and is not the registrant of the Ai3D Mark (ECF
No. 83-33, BBU Ex. 83: BBU 3694-3696), Defendant is entitled to judgment in its favor and
against Zahourek with respect to unfair competition as it relates to the Ai3D Mark.
Defendant is not entitled to judgment on Zahourek’s unfair competition and
misappropriation claims based upon Defendant’s creation and use of photographs showing
Maniken®. Genuine disputes of material fact exist with respect to whether Defendant
misappropriated Zahourek’s Maniken® model in creating its Build Manual (ECF No. 118 ¶ 200;
ECF No. 84-26, BBU Ex. 126: ZSI 2553-2638; ECF No. 82-4, BBU Ex. 4, St. John Dep. 24:615, 158:4-7, 21:19-25, 22:1-8, 120:19-25, 121:1-7) and use of the Clay Mark as well as Plaintiffs
have introduced evidence of consumer confusion with respect to the Clay Mark learning system
during which the Maniken® model is used (see ECF No. 94 at 23 (citing ECF No. 98, Pls.’ Ex.
L)).
5.

Damages
a.

Whether Theoretical Damages Entitle Defendant to Judgment as a
Matter of Law

Defendant argues that “Plaintiffs’ damages theories are [] based on ‘theoretical
calculations’ and ‘guesses.’” (ECF No. 81 at 28.) Defendant, however, fails to provide the
Court with any applicable legal authority that it is entitled to judgment as a matter of law with

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respect to Plaintiffs’ damages claims. (See generally ECF No. 81.) Therefore, the Court denies
judgment in Defendant’s favor as to its theoretical damages argument (ECF No. 81 at 29-31).
b.

Whether Zahourek’s Copyright Claim is Limited by the Applicable
Statute of Limitations

Defendant argues that Zahourek’s copyright infringement claim is governed by a threeyear statute of limitations. (ECF No. 81 at 31.) The Court agrees. 17 U.S.C. § 507(b). The
parties dispute, however, whether Defendant can assert this affirmative defense or whether it was
waived by the parties’ prior agreement. (ECF No. 94 at 24.) Regardless, because the Court has
found that Zahourek does not have a valid copyright in Maniken® (see supra Section III.B.2), he
cannot recover any damages under his copyright claim.
IV.

CONCLUSION
Based on the foregoing, the Court:
(1)

GRANTS, in part, Defendant’s MSJ (ECF No. 81), to wit, the Court:
(i)

GRANTS Defendant judgment on Plaintiffs’ trademark infringement

claim (ECF No. 49 ¶¶ 44-52) as it pertains to the Ai3D Mark;
(ii)

GRANTS Defendant judgment on Plaintiff ZSI’s trademark infringement

claim (ECF No. 49 ¶¶ 44-52) as it pertains to the Clay Mark;
(iii)

GRANTS Defendant judgment on Plaintiffs’ copyright infringement claim

(ECF No. 49 ¶¶ 53-60);
(iv)

GRANTS Defendant judgment on Plaintiff Zahourek’s breach of contract

claim (ECF No. 49 ¶¶ 35-43);
(v)

GRANTS Defendant judgment on Plaintiff ZSI’s unfair competition claim

(ECF No. 49 ¶¶ 61-82) as it pertains to the Clay Mark;
(vi)

GRANTS Defendant judgment on Plaintiff ZSI’s unfair competition claim
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(ECF No. 49 ¶¶ 61-82) as it pertains to the Maniken®;
(vii)

GRANTS Defendant judgment on Plaintiff ZSI’s misappropriation claim

(ECF No. 49 ¶¶ 83-90) as it pertains to the Maniken®;
(viii) GRANTS Defendant judgment on Plaintiffs’ unfair competition claim
(ECF No. 49 ¶¶ 61-82) as it pertains to the Ai3D Mark;
(2)

DENIES, in part, Defendant’s MSJ (ECF No. 81), to wit, the Court:
(i)

DENIES Defendant judgment on Plaintiff ZSI’s breach of contract claim

(ECF No. 49 ¶¶ 35-43);
(ii)

DENIES Defendant judgment on Plaintiffs’ trademark infringement claim

(ECF No. 49 ¶¶ 44-52) as it pertains to the Introduction Mark;
(iii)

DENIES Defendant judgment on Plaintiff Zahourek’s trademark

infringement claim (ECF No. 49 ¶¶ 44-52) as it pertains to the Clay Mark;
(iv)

DENIES Defendant judgment on Plaintiff ZSI’s unfair competition claim

(ECF No. 49 ¶¶ 61-82) as it pertains to the Introduction Mark;
(v)

DENIES Defendant judgment on Plaintiff Zahourek’s unfair competition

claim (ECF No. 49 ¶¶ 61-82) as it pertains to the Maniken®;
(vi)

DENIES Defendant judgment on Plaintiff Zahourek’s misappropriation

claim (ECF No. 49 ¶¶ 83-90) as it pertains to the Maniken®;
(vii)

DENIES Defendant’s motion for summary judgment (ECF No. 81) in all

other respects as not addressed in this Order;
(3)

GRANTS, in part, Defendant’s Motion to Strike (ECF No. 119), to wit, the Court:
(i)

STRIKES from Baca’s Affidavit paragraphs (ECF No. 102 ¶¶ 4-12) as

well as the attachments labeled 1 and 2 (ECF No. 102 at 5-11); and

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(4)

DENIES, in part, Defendant’s Motion to Strike (ECF No. 119), to wit, the Court:
(i)

DOES NOT STRIKE from Baca’s Affidavit paragraphs (ECF No. 102 ¶¶

1-3).
DATED this 7th day of April, 2016.
BY THE COURT:

____________________________________
RAYMOND P. MOORE
United States District Judge

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