VCOM INTERNATIONAL MULTI-MEDIA CORP. et al v. GLUCK et al

Filing 73

OPINION. Signed by Judge John Michael Vazquez on 03/27/2017. (ek)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

VCOM INTERNATIONAL MULTI-MEDIA
CORP. d/b/a PROJECTORSCREEN.COM,
PROJECTORSCREENSTORE.COM,
ALLTECSTORES.COM. and ALLTEC
STORES,

Civil Action No. 14-3398
OPINION

Plaintiff
v.
BRIAN ROBERT GLUCK alkla BRIAN
GLUCK, PROJECTORSCREEN.COM,
OPTIMIZING, LLC d/b/a,
PROJECTORSCREENCO.COM, JOHN DOES
1-10, and ABC COMPANIES 1-10,

Defendants.

John Michael Vazguez, U.S.D.J.
I.

INTRODUCTION
This matter comes before the Court on Defendant Brian Gluck’s motion for summary

judgment. D.E. 34. Plaintiff Vcom International Multi-Media Corp.’s (“Vcom”) claims primarily
concern various

employment-related causes

of action pertaining to

misappropriation of Vcom’s confidential information.

Gluck’s

alleged

The Court considered the written

submissions of the parties and considered the motion without oral argument pursuant to Federal
Rule of Civil Procedure 78(b) and Local Civil Rule 78.1(b). For the reasons that follow, Gluck’s
motion is granted in part and denied in part.

FACTS AND PROCEDURAL HISTORY

II.

The facts of this matter are derived from the record. They are reviewed in the light most
favorable to the non-moving party, Plaintiff. See Tolan v. Cotton, 134 S. Ct. 1861, 1866 (2014)
(noting that in motion for summary judgment “a court must view the evidence in the light most
favorable to the opposing party” (internal quotation marks omitted)).
Brian Gluck is a former employee of Vcom. Second Amended Complaint

¶9

(D.E. 13).

Before his termination in May 2013, Gluck held the position of manager for Vcom’s Alltec
Division. Id. Vcom operates a number of websites through its Alitec Division, which function
“as an e-commerce center, enabling customers to register for an account, purchase various products
through the online shopping cart merchant feature, and receive direct shipping from door-to-door.”
Id. at

¶ 5.

Through an Alltec website, known as projectorscreenstore.com (“Screen$tore.com”),

Vcorn sells a variety of projector screens, such as “home theater screens, portable screens,
auditorium screens, business screens, and classroom screens.” Id. at

¶ 7.

Vcom generates all of

its e-commerce sales as a result of online keyword searches. Id. at

¶ 8.

For example, an online

search of the words “projector screen” may show Vcom’s website ScreenStore.com as one of the
search engine results. Id. at ¶ 9.
On August 28, 2011, Gluck engaged in a Skype conversation with a third party where he
stated that he may buy a website called projectorscreens.com. D.E. 48, Ex. 1. Gluck said that he
might “use it as leverage in [his] company to get a piece of [his] division, or to go into business..
against [ScreenStore.com].” Id.

Gluck told the third party that he had “all of the screen

connections and all of the sales data, etc.” and that he “could easily replicate [$creenStore.comJ
for [himself].” Id. Gluck said that “it’s a matter of do i [sic] get it rollign [sic] while i [sic] keep
my regular job until its all ofa [sic] sudden #1?” Id.

2

In September 2011, Gluck suggested to Vcorn’s president, Sheldon Goldstein, that Vcorn
should consider purchasing other websites with similar names to ScreenStore.com. Certification
of Brian R. Gluck (“Gluck Cert.”)

¶ 19 (D.E. 34-12). Gluck explained that purchasing those

websites would “secure [ScreenStore.com’sj spot on top of the search engines.” Id. at Ex. D. In
October 2011, Gluck informed Goldstein that he believed the two best options to purchase were
projectorscreen.com (“Screen.com”) and projectorscreens.com. Id. at Ix. I. Gluck told Goldstein
that the price for each website was S15,000 and S 19,000, respectively. Id. Goldstein asked Gluck
whether the prices of those websites were negotiable. Id. Gluck responded that he had already
been negotiating with the websites’ owners and that he was “[n]ot sure if [Screen.com] will
budge.” Id. The following day Gluck personally purchased Screen.com for $5,500 of his own
money. D.E. 46, Ix. 14.,

¶ 52; D.E. 46, Ex. 17 at 7; Deposition of Sheldon Goldstein (“Goldstein

Dep.”) (D.E. 33-10) at 102:4-13. Gluck purchased Screen.com anonymously and never told
Goldstein that the website was available for $5,500. Declaration of Randall Cole (“Cole Dec.”)
(D.E. 45)

¶ 30.m; Goldstein Dep. at 102:4-13. Gluck did not disclose to anyone at Vcom that he

had purchased Screen.com. D.E. 34-2 at 4.
In November 2011, Gluck began operating Screen.com as a website offering sales as an
affiliate of Amazon.com. Certification of Ross Malaga, Ex. 1 at 7 (D.E. 47). More than a year
later in February 2013, Vcom’s management discovered that Screen.com was competing with
ScreenStore.com, offering the same projector screens and accessories as Vcorn’s ScreenStore.com.
Cole Dec.

¶ 6. On March 20, 2013, Vcorn discovered that ScreenStore.com had hidden text links

embedded within it so that if an online user clicked the link, he or she would be redirected to
$creen.com. Id.

¶ 8.

In late March or early April of 2013, Randall Cole, Vcom’s Vice President of Finance,

3

asked Gluck whether he was aware of Screen.com. Id. at

¶ 9. According to Cole, Gluck denied

having any knowledge of the website. Id. However, in a certification submitted in connection
with this motion, Gluck now claims that he was using Screen.com “to experiment with the affiliate
channel as a potential way to monetize products for which it might not be a sound strategy to
warehouse or drop ship products.” Gluck Deci.

¶ 31. In other words, Gluck claims that while he

was employed by Vcom, “there was no actual competition and [he had] no intent to compete” with
Vcom. Id. at ¶ 32. Gluck claims that the “the only error that [he] made with the [Screen.com] site
is that [he] did not keep track of the commissions that trickled in over time and turn them over to
Vcom.” Id.

Gluck acknowledges that the total amount of commissions he earned through

$creen.com while employed by Vcom was $787. Id.
On May 23, 2013, Vcom terminated Gluck. Id. at

¶ 2. Vcom alleges that after Gluck’s

termination he unlawfully retained and copied numerous documents and files that contained
Vcom’s confidential and proprietary information. Cole Dec. ¶J 16, 20-22. Some examples include
Vcom’s budget information, sales data, wholesale costs, negotiated shipping prices, names of
suppliers, sales forecasts, profit margins, and 14,382 customer names, email addresses, and
residential addresses. Id.
Vcom filed a complaint against Gluck in state court, which Gluck removed to this Court
pursuant to federal question subject matter jurisdiction. D.E. 1. Vcom subsequently filed a Second
Amended Complaint (“SAC”) (D.E.

13)1

alleging the following twenty-two causes of action: (1)

“Breach of the Employment Agreement,” (2) “Breach of Duty of Loyalty,” (3) “Breach of
Fiduciary Duty,” (4) “Conversion,” (5) “Constructive Trust,” (6) “Unjust Enrichment,” (7)

Gluck filed an answer asserting two counterclaims under the New Jersey Law Against
Discrimination. Gluck’s counterclaims are addressed in a separate Opinion.
4

“Tortious Interference with Contractual Relations,” (8) “Tortious Interference with Prospective
Economic Advantage,” (9) “Recoupment/Disgorgement of Salary and Benefits,” (10) “Unfair
Competition & Deceptive Trade Practices Under N.J.S.A. 56:4-1,” (11) “Common Law
Infringement and Unfair Competition,” (12) “Copyright Infringement,”

(13) “Fraud and

Misrepresentation,” (14) “Misappropriation of Confidential Information,” (15) “Competition With
Employer or Principal,” (16) “Disclosure of Domain Registrant Owner and Infonnation,” (17)
“Declaratory Judgment,” (18) “Breach of June 4, 2012 Employment Modification Agreement,”
(19) “Trademark Infringement,” (20) “Digital Millennium Copyright Act Violation,” (21)
“Violations of Computer Related Offenses Act,” (22) “Breach of Website Terms and Conditions.”
Gluck moved for summary judgment on all counts, which Vcom opposed.2
III. LAW AND ANALYSIS
A. Standard of Review

A moving party is entitled to summary judgment where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
fed. R. Civ. P. 5 6(a). A fact is “material” when a dispute over that fact “might affect the outcome
of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Importantly, “[flactual disputes that are irrelevant or unnecessary will not be counted.” Id. A
material fact raises a “genuine” dispute “if the evidence is such that a reasonable jury could return
a verdict for the non-moving party.” Williams v. Borough of W chester, $91 f.2d 458, 459 (3d
Cir. 1989) (quoting Liberty Lobby, 477 U.S. at 24$). “Where the record taken as a whole could
not lead a reasonable trier of fact to find for the non-moving party, there is no genuine issue for

2

Glucks’s initial brief (D.E. 34-2) will be referred to as “Gluck Br.” and his reply (D.E. 54) as
“Gluck Reply.” Vcom’s opposition brief (D.E. 53) will be referred to as “Vcorn Opp.”
5

trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal
quotation marks omitted). “When analyzing the sufficiency of the evidence, the court must view
the facts and any reasonable inferences drawn therefrom in the light most favorable to the party
opposing summary judgment.” Inter Vest, Inc. v. Bloomberg, L.F., 340 f.3d 144, 159-60 (3d Cir.
2003) (citing Eastman Kodak Co. v. Image Technical Sen’s., Inc., 504 U.S. 451, 456 (1992)).

Summary judgment is appropriate “against a party who fails to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Under those
circumstances, “there can be ‘no genuine issue as to any material fact,’ since a complete failure of
proof concerning an essential element of the nonmoving party’s case necessarily renders all other
facts immaterial.” Id. at 322-23. However, to withstand a motion for summary judgment, the
nomnoving party need only “come forward with evidence which, if believed, would support a
finding in its favor.” In re Bressman, 327 f.3d 229, 237 (3d Cir. 2003).
B. Counts to which Vcom Admits Summary Judgment is Appropriate

In Vcom’s opposition brief, it concedes that “its copyright infringement claim in the
Twelfth Count of [its] Second Amended Complaint is deficient because it did not register its
websites or the images thereon as online works with the United States Copy Office as required by
17 U.S.C.

§ 411.” Vcom Opp. at 41. Therefore, summary judgment is granted as to Count Twelve.

Vcorn also concedes that it is not asserting a claim for trademark infringement in the name
of ScreenStore.com. Vcom Opp. at 44. As such, partial summary judgment is granted as to Count
Nineteen.
C. Lack of Damages

Gluck argues that summary judgment should be granted on many of the counts alleged in

6

the SAC because Vcom failed to set forth any evidence of damages caused by Gluck’s alleged
wrongdoing. Gluck Br. at 17. Gluck notes that the only damages Vcom suffered is the $787 that
he earned as commission by operating Screen.com while employed by Vcorn. Id.; Gluck Dec.

¶

32. The Court agrees.
Here, aside from the $787 that Gluck concedes he should have returned to Vcom. Vcom
presented no evidence as to any damages caused by Gluck’s alleged wrongful conduct. Vcom sets
forth no proof of lost sales, lost contracts, wrongful profits earned by Gluck, or any other evidence
to show that it was damaged. In fact, in its opposition brief, Vcom does not address Gluck’s
argument that Vcom failed to prove damages. Instead, in a letter submitted after briefing of this
motion was complete, Vcom argued that it was damaged due to ScreenStore.com’s decrease in
Google search engine rankings when the words “projector screen” or “projector screens” were
searched. D.E. 63, 64, 65. The reason(s) for this decrease and the amount of damages, if any,
suffered by Vcom is entirely speculative as Vcom has produced no competent evidence to support
its theory. In short, ScreenStore.com’s change in search engine rankings, assuming that the change
in fact occurred, is not supported by any evidence of resulting damages.
Thus, partial summary judgment is granted in favor of Gluck as to Counts One, Six,3 Seven,

Gluck also moves for summary judgment on Count Six (unjust enrichment) in its entirety arguing
that recovery under a theory of quasi-contract “is impossible when a valid contract governs the
rights of the parties.” Gluck Br. at 24. While it is true that a party may not ultimately recover
under both theories, the question of whether a valid contract governs the parties’ dispute is one
that is best left for the jury and inappropriate to decide at the summary judgment stage.
Accordingly, Vcom’s breach of contract and unjust enrichment claims may both proceed past
summary judgment. See Clean Earth Dredging Techs., Inc. v. SLRD Co. Mullica Hill, LLC, No.
12-1989, 2013 U.S. Dist. LEXIS 63355, at *27 n.8 (D.N.J. May 2, 2013) (noting that Plaintiff may
assert claim for unjust enrichment “at trial as an alternative theory of liability should its breach of
contract claim fail”); Project Dev. Grp., Inc. V. O.H. Materials Corp., 766 F. Supp. 1348, 1355-56
(W.D. Pa. 1991) (permitting breach of contract and unjust enrichment claims to proceed past
summary judgment).
-

7

Eight,4 Ten, Eleven, Thirteen, Fourteen,5 Eighteen, Nineteen, Twenty-One, and Twenty-Two.
Unless otherwise noted, however, these Counts are not dismissed in their entirety, but rather
Vcom’s damages are capped at $787. To be clear, Vcom may not recover $787 on each count, but
rather Vcom’s potential total recovery as to all of the listed counts is limited to $787.
P. Breach of the Duty of Loyaity and fiduciary Duty

As noted above, Gluck argues that his motion for summary judgment should be granted as
to Vcorn’s claims for breach of the duty of loyalty and breach of fiduciary duty because of Vcom’s
failure to present proof of damages. Although the Court agrees with Gluck that actual damages
are limited to $787, Gluck is also subject to potential disgorgement of salary during the period of
his alleged disloyalty.
In Kaye v. Rosefielde, the New Jersey Supreme Court recognized the “principle that a court
may order disgorgernent of an employee’s compensation for his or her breach of the duty of
loyalty.” 223 N.J. 218, 232 (2015). The Court explained that “[t]he remedy [of disgorgement] is
substantially rooted in the notion that compensation during a period in which the employee is
disloyal is, in effect, unearned.” Id. With that principle in mind, the Court held that “an employer

For the reasons stated in Section III.E, infra, summary judgment is granted to Vcom as to Counts
Seven and Eight in their entirety.
In regard to Vcom’s misappropriation claims, it argues that “[t]he Court can and should draw a
reasonable inference that by Gluck’s retention of Vcom’s confidential information postemployment he used it to his advantage.” Vcom Opp. at 5. The Court disagrees. After full
discovery, Vcom must show more than merely a logical inference that Gluck used its proprietary
data based on his possession of the information. The best evidence would, of course, be actual
proof that Gluck used Vcorn’s confidential information. Short of such evidence, Vcorn could
potentially point to subject matter that Gluck actually used and argue that such information was
derived from Vcom’s confidential data and thereby create a genuine issue of material fact. Here,
Vcom has done neither, and the Court finds that Vcorn has failed to demonstrate that there is a
genuine issue of material fact showing that Gluck has in fact used Vcom’s confidential
information. Nonetheless, even if Vcorn had presented evidence that Gluck was using its
confidential information, Vcom must still show damages.
8

may seek disgorgement of a disloyal employee’s compensation as a remedy for the breach of the
duty of loyalty, with or without a finding of economic loss.” Id. at 236.
Here, disgorgement is a viable theory of recovery should Vcom ultimately prevail on its
claims for breach of the duty of loyalty and breach of fiduciary duty.6 In fact, Gluck concedes this
point.

Gluck Reply at 5 (acknowledging that Vcom’s “only possible theory of recovery is

disgorgement of salary”).

Ultimately, the amount of disgorgernent is dependent upon the

following factors: “the employee’s degree of responsibility and level of compensation, the number
of acts of disloyalty, the extent to which those acts placed the employer’s business in jeopardy,
and the degree of planning to undermine the employer that is undertaken by the employee.” Kaye,
223 N.J. at 237. Therefore, on its breach of loyalty and breach of fiduciary duty claims, Vcorn
may seek disgorgement of Gluck’s salary in addition to $787 in actual damages.

Summary

judgment is granted in favor of Gluck to the extent that Vcom seeks additional damages on these
claims.
Gluck further argues that Vcom has not set forth sufficient evidence to demonstrate that he

6

As discussed below, an employee can breach a duty of loyalty by usurping a corporate
opportunity. See Torsiello v. Strobeck, 955 F. Supp. 2d 300, 311—12 (D.N.J. 2013); Cameco, Inc.
v. Gedicke, 157 N.J. 504, 521-22 (1999). Although New Jersey courts have not explicitlyheld that
usurpation of a corporate opportunity warrants disgorgement of the disloyal employee’s
compensation, case law suggests that disgorgement is an available remedy. Cameco, 157 N.J. at
519 (noting generally that “an employer may seek forfeiture of its employee’s compensation.
[in] breach-of-duty cases”); Parker v. Parker, 2016 N.J. Super. Unpub. LEXIS 2720, *9697 (Ch.
Div. Dec. 22, 2016) (noting that a court “may order disgorgement of an employee’s compensation
as a remedy for a breach of loyalty” while conducting analysis of usurpation of corporate
opportunity (internal quotation marks omitted)). Here, the parties did not explicitly address this
issue, but for purposes of summary judgment, the Court will assume that Vcom may recover
disgorgement of Gluck’s salary should it prevail on its claim for usurpation of a corporate
opportunity. The Court is not precluding the parties from raising this issue at a later date once
they have had to opportunity to perform greater research on the subject. However, the Court notes
that it can find no discemable basis why the remedy of disgorgement would be available for a
breach of the duty of loyalty and not for usurpation of a corporate opportunity, which is a type of
breach of the duty of loyalty.
9

breached his duty of loyalty or fiduciary duty to Vcom by usurping a corporate opportunity. Gluck
Br. at 22. Gluck maintains that this claim fails because (1) Vcorn rejected the opportunity to
purchase $creen.com and (2) Vcorn did not have a legitimate interest in pursuing the opportunity.
The Court finds neither of these arguments persuasive.
New Jersey considers four factors when determining whether an employer breached the
duty of loyalty to his or her employer: “1) the ‘existence of contractual provisions’ relevant to the
employee’s actions; 2) the employer’s knowledge of or agreement to, the employee’s actions; 3)
the ‘status of the employee and his or her relationship to the employer,’ e.g., corporate officer or
director versus production line worker; and 4) the ‘nature of the employee’s conduct and its effect
on the employer.” Kaye, 223 N.J. at 230 (quoting Cameco, Inc. v. Gedicke, 157 N.J. 504, 52 1-22
(1999). In essence, the Court “considers the parties’ expectations of the services that the employee
will perform in return for his or her compensation, as well as the ‘egregiousness’ of the misconduct
that leads to the claim.” Id.
One way an employee may breach the duty of loyalty is by usurping a corporate
opportunity from his or her employer. A claim under the corporate opportunity doctrine requires
proof of the following five elements:
(1) that there is presented to a corporate officer a business
opportunity; (2) that the corporation is financially able to undertake
that opportunity; (3) that the opportunity is, by its nature, in the line
of the corporation’s business and is of practical advantage to it; (4)
that the opportunity is one in which the corporation has an interest
or a reasonable expectancy; and (5) that by embracing the
opportunity, the self-interests of the officer will be brought into
conflict with the interests of the corporation.
Torsiello v. Strobeck, 955 F. Supp. 2d 300, 311—12 (D.N.J. 2013) (internal quotation marks

omitted).
Here, the record indicates that in October 2011 Gluck presented Vcom with the opportunity
10

to purchase Screen.com for $15,000. Goldstein asked Gluck whether the price was negotiable,
and Gluck replied that he was “tn]ot sure if [Screen.com] will budge.” The next day Gluck
purchased Screen.com for $5,500 without disclosing the lower price to Vcom. In short, Vcorn
never rejected purchasing Screen.com for $5,500 because it was not presented with the opportunity
to buy the website at that price. And Vcom specifically asked if a lower price could be had.
Moreover, there is a genuine issue of material fact as to whether Vcom was interested in purchasing
Screen.corn. Goldstein’s questions to Gluck regarding whether Screen.com’s price of $15,000
was negotiable indicate that Vcorn may have been interested in the website had it been available
at a lower price. Therefore, Gluck’s motion for summary judgment on Vcom’s claim for usurping
a corporate opportunity is denied.
Additionally, there is a genuine material issue of fact as to whether Gluck breached his
fiduciary duty and duty of loyalty to Vcom. Gluck argues that he was not competing with Vcom
during his employment and that his use of “affiliate links on an otherwise ‘dead’ site as research.
was well within [his] discretion.” Gluck Br. at 23. Vcom counters that Gluck was engaging in
“secret competition with Vcom during his employment” by operating Screen.com. Vcom

Opp. at

32. The Court finds that there is a genuine material issue of fact regarding whether Gluck was

competing against Vcom through Screen.com or whether he was operating the website as an
experiment without any intention to make a profit. Accordingly, Gluck’s motion for summary
judgment on Vcom’s breach of the duty of loyalty and fiduciary duty is denied.
f. Conversion
Vcom argues that summary judgnient is inappropriate on its claim for conversion because
Gluck used Vcorn’s data that was stored on his company iPad to develop his competing website.
Vcom Opp. at 49. Gluck acknowledges that some of Vcorn’s proprietary information may have

11

been stored on his personal computer, but he maintains that he never copied or used that data.
Gluck Dec. 43.

“The elements of conversion are: (1) ‘the property and right to immediate

possession thereof belong to the plaintiff and (2) ‘the wrongful act of interference with that right
by the defendant.” Lately. Cicenia, No. A-5747-13T2, 2015 WL 10458543, at *5 (N.J. Super.
Ct. App. Div. Mar. 14, 2016) (quoting First Nat’l Bank v. N. Jersey Trust Co., 18 N.J. Misc. 449,
452 (Sup. Ct. 1940)). Here, Vcom has shown a genuine issue of material fact by presenting

evidence that Gluck copied Vcom’s confidential and propriety information onto an external
computer storage device and uploaded documents on a cloud server after he was terminated. Cole
Dec.

¶ 16, 20-22. Some examples of Vcom’s confidential information that Gluck retained post-

employment include Vcorn’s budget information, sales data, wholesale costs, negotiated shipping
prices, names of suppliers, sales forecasts, profit margins, and 14,382 customer names, email
addresses, and residential addresses. Id. This evidence creates a genuine issue of material fact as
to whether Gluck unlawfully kept Vcorn’s confidential and proprietary information after he was
terminated. Accordingly, Gluck’s motion for summary judgement on Vcom’s conversion claim
is denied.7
F. Tortious Interference with Contractual
Prospective Economic Advantage

Relations

and

In order to prove a claim of tortious interference with contractual relations and a
prospective economic advantage, a plaintiff must show: “(1) a protected interest

--

either a

prospective economic or contractual relationship; (2) malice, i.e., intentional interference without
justification; (3) a reasonable likelihood that the interference caused the loss of the (prospective

‘

Should Vcom ultimately prevail on its conversion claim, it is entitled to the return of all
confidential, proprietary, and trade secret information (as well as any and all copies thereof) in
Gluck’s possession.
12

economic or contractual) gain; and (4) resulting damages.” Baxter Healthcare Corp. v. HQ
Specialty Pharma Corp., 157 F. Supp. 3d 407, 420 (D.N.J. 2016) (internal quotation marks and
footnotes omitted). The only difference between a claim for interference with contractual relations
and a prospective economic advantage is that interference with contractual relations requires the
additional element of an existing contract. Id. at 420 n.39.
Here, Vcorn argues that Gluck is liable for tortious interference because “before his
employment ended Gluck completed and submitted merchant applications to two of Vcorn’s
largest suppliers.” Vcom

Opp.

at 50. Vcom does not, however, identify any contracts with its

suppliers that were interfered with as a result of Gluck contacting them. Additionally, Vcom
presented no evidence that it was damaged or suffered a loss of prospective economic or
contractual gain as a result of Gluck contacting Vcom’s suppliers. For those reasons, summary
judgment is granted in favor of Gluck as to Vcom’s claims for tortious interference with
contractual relations and a prospective economic advantage.
G. Digital Millennium Copyright Act

Vcom argues that Gluck violated 17 U.S.C.

§ 1202 of the Digital Millennium Copyright

Act (“DMCA”) by (1) distributing false copyright management inforniation and (2) removing
and/or altering copyright management information. Gluck Br. at 25-26.
Section 1202(a) of the DMCA provides in relevant part that “[njo person shall knowingly
and with the intent to induce, enable, facilitate, or conceal infringement” provide or distribute
copyright management information that is “false.” Section 1202(b) of the DMCA prohibits the
removal and/or alteration of copyright management information. Section 1202(b) specifically
states that
[nb person shall, without the authority of the copyright owner or
the law (1) intentionally remove or alter any copyright management
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information, (2) distribute or import for distribution copyright
management information knowing that the copyright management
information has been removed or altered without authority of the
copyright owner or the law, or (3) distribute, import for distribution,
or publicly perform works, copies of works, or phonorecords,
knowing that copyright management information has been removed
or altered without authority of the copyright owner or the law,
knowing, or, with respect to civil remedies under section 1203,
having reasonable grounds to know, that it will induce, enable,
facilitate, or conceal an infringement of any right under this title.
17 U.S.C. 1202(b). Copyright management information is defined by Section 1202(c) in relevant

part as
any of the following information conveyed in connection with copies or
phonorecords of a work or performances or displays of a work, including in
digital form

(1)
The title and other information identifying the work, including the
information set forth on a notice of copyright.
(2) The name of, and other identifying information about, the author of a
work.
(3) The name of, and other identifying information about, the copyright
owner of the work, including the information set forth in a notice of
copyright.

(6) Terms and conditions for use of the work.
17 U.S.C. 1202(c).

In this case, Vcom argues that Gluck violated Section 1202(a) of the DMCA by knowingly
reproducing several screenshots of Vcom’s websites on his personal website, Briangluck.com.
without displaying Vcom’s copyright notice that appears on its webpages. Vcom Opp. at 43.
Vcom contends that Gluck included language on his personal webpage falsely indicating that he
authored those websites and that Vcom had retained Gluck as an outside consultant to perform
14

marketing services for Vcom. Id. Finally, Vcom maintains that Gluck violated Section 1202(b)
by intentionally removing and/or altering Vcom’s logos and copyright notices and then
reproducing the altered copyright management information on his personal website. Id.
Vcom provides no competent evidence as to how its copyright management information
was falsified, removed, or altered. It is not clear to the Court which Vcom websites were allegedly
modified or how they appeared before and after modification. In other words, Vcom failed to
produce evidence of its websites in their original form and the modified screenshots of those
websites as they appeared on Gluck’s personal webpage. Instead, Vcom submitted a screenshot
of Screen.com, but not a screenshot of any of its websites displaying the copyright management
information in its original fonm Declaration of Robert Carroll, Ex. 2 (D.E. 46-2). Without
presenting a screenshot (or some other visual depiction or description) of the copyright
management inforniation as it appears on Vcom’s websites, the Court is unable to ascertain
whether Vcom’s copyright management information was falsified, altered, or removed in violation
of the DMCA. As a result, Vcom has not met its burden in demonstrating a violation of the DMCA.
The Court notes that Vcom submitted evidence of source code8 from Screen.com, which it
claims indicates certain images were unlawfully removed from one of Vcom’s websites and
displayed on Screen.com. Id. at

¶J 7, Ex. 2 & 3. Vcom, however, did not submit any expert

testimony to explain the significance and meaning of the source code. The absence of expert
testimony precludes the Court from considering this technical and unexplained information. See
F.R.E. 702. The Court is not in a position to review the source code and draw the logical inferences
argued for by Vcorn.

8

“Source code” is defined as “[a] set of instructions, written in programming language, that usually
must be translated to machine instructions before the program can be run on a computer.” Harry
Newton, Nevton ‘S Telecom Dictionary 1174 (Steve Schoen et al. eds., 30th ed. 2016).
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For those reasons, Gluck’s motion for summary judgment as to Count Twenty is granted.
H. Trademark Infringement

Gluck moves for summary judgment on Vcom’s trademark claims arguing that his display
of Vcom’s marks on his personal website was nominative fair use. The Court considers the
following three factors to determine whether a defendant has met its burden in proving the
affirmative defense9 of nominative fair use:
1. Is the use of plaintiffs mark necessary to describe (1) plaintiffs
product or service and (2) defendant’s product or service?
2. Is only so much of the plaintiffs mark used as is necessary to
describe plaintiffs products or services?
3. Does the defendant’s conduct or language reflect the true and
accurate relationship between plaintiff and defendant’s products or
services?
Centtuy 2] Real Estate Corp. v. Lendingtree, Inc., 425 F.3d 211, 228 (3d Cir. 2005).

Here, Gluck has presented insufficient evidence to create a genuine issue of material fact
regarding nominative fair use. Gluck makes no argument as to the application of the three factors
outlined by the Third Circuit in Centiny 21 Real Estate.

Moreover, Gluck’s statement of

undisputed material facts is silent as to any pertinent facts necessary for the Court to conduct a
nominative fair use analysis. Gluck does not state which of Vcom’s marks he used, why it was
necessary for him to use those marks, and/or the context of how those marks appeared on his

9Norrnally the Court would not address the fair use defense until after making a determination that
the plaintiff met its burden in showing a likelihood of confusion. See Century 2] Real Estate Corp.
v. Lendingtree, Inc., 425 F.3d 211, 222 (3d Cir. 2005) (“Once plaintiff has met its burden of
proving that confusion is likely, the burden then shifts to defendant to show that its nominative use
of plaintiffs mark is nonetheless fair.”). Here, Gluck does not contest whether Vcom has met its
burden in demonstrating a likelihood of confusion. Gluck only argues that its use of Vcom’s marks
was nominative and fair. Gluck Br. at 18-19. Therefore, in order to reach Gluck’s nominative fair
use argument, the Court will assume (without deciding) that Vcom met its burden in showing a
likelihood of confusion.
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website. Gluck’s motion for summary judgment as to Vcom’s claims for trademark infringement
is therefore denied. As noted in Section III.B infra, however, Vcom’s potential recovery on these
Counts is limited to $787 in actual damages.

Plaintiff may not recover statutory and treble

damages under the Lanharn Act because it did not plead, or provide any evidence of, knowing
counterfeit infringement. Plaintiff does not appear to make any allegations concerning counterfeit
marks. See Coach, Inc. v. fashion Paradise, LLC, No. 10-4888, 2012 WL 194092, at *3 (D.N.J.
Jan. 20, 2012) (explaining that in order for a court to award treble or statutory damages in
trademark action the “plaintiff must show that the defendant intentionally used the plaintiffs
trademark, knowing that it was a counterfeit” (internal quotation marks omitted)); Pennzoil
Quaker State Co. v. Smith, No. 05-1505, 2008 WL 4107159, at *33 (W.D. Pa. Sept. 2, 2008)
(concluding that because “Plaintiff has failed to establish a claim for federal trademark
counterfeiting, statutory damages are not available”).
I.

Attorneys’ Fees

Gluck also moves for summary judgment as to Vcorn’s request for attorneys’ fees because
Vcom “fails to identify any contact, statute or rule on which such an award may be based.” Gluck
Br. at 27. In response, Vcom points to multiple Counts in the SAC that permit the recovery of
attorneys’ fees for the prevailing party. Vcom

Opp. at 54-55.

At this stage in the proceedings,

there has not been an adjudication on the merits of Vcom’s claims. Accordingly, a decision
awarding or denying attorneys’ fees to Vcom is premature at this time. See Swietlowich v. Bucks
Ctv., 620 f.2d 33, 35 (3d Cir. 1980) (“In order to recover attorneys’ fees and costs, plaintiff must
show at least some success on the merits.”); Granelli v. Oil. Title Ins. Co., No. 10-2582, 2012 WL
2072648, at *12 (D.N.J. June 8, 2012). As a result, Gluck’s motion for summary judgment on this
point is denied.

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IV.

CONCLUSION
For the reasons set forth above, Gluck’s motion for summary judgment is granted in part

and denied in part. An appropriate Order accompanies this Opinion.

Dated: March 27, 2017

V

Joirn Michael Vaz LS.D.J.

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