Castro v. Entrepreneur Media, Inc.

Filing 38

ANSWER to 4 Amended Complaint with Jury Demand, COUNTERCLAIM against Daniel R. Castro by Entrepreneur Media, Inc..(Barry, Jennifer)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
DANIEL R. CASTRO,
Plaintiff,

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

v.
ENTREPRENEUR MEDIA, INC.,
Defendant.

ENTREPRENEUR MEDIA, INC.,
Counterclaimant,
v.
DANIEL R. CASTRO,
Counterdefendant.

Cause No. 1-10-CV-000695-LY
Hon. Lee Yeakel
DEFENDANT ENTREPRENEUR
MEDIA, INC.’S ANSWER
AND COUNTERCLAIMS

ANSWER
Defendant Entrepreneur Media, Inc. (“Defendant”) hereby responds to the allegations set
forth in Plaintiff Daniel R. Castro’s (“Plaintiff”) First Amended Complaint as follows:
I.

Amendment of Complaint

1.1

Paragraph 1.1 asserts a legal conclusion that does not require a response.

1.2

Paragraph 1.2 does not require a response.
II.

2.1

Jurisdiction and Venue

Defendant admits that Plaintiff has filed a declaratory relief action. However,

Defendant denies any implication that the action has merit or that Plaintiff is entitled to the
declaration of rights he seeks.
2.2

Paragraph 2.2 asserts a legal conclusion that does not require a response.

2.3

Paragraph 2.3 asserts a legal conclusion that does not require a response.

1
SD\778293

III.

Personal Jurisdiction

3.1

Paragraph 3.1 asserts a legal conclusion that does not require a response.

3.2

Defendant admits the allegations of Paragraph 3.2.

3.3

Defendant admits the allegations of Paragraph 3.3.

3.4

Defendant admits that it operates several websites that provide articles and

content to visitors, as well as email addresses and links for customer service problems.
Defendant denies the remaining allegations of Paragraph 3.4.
IV.
4.1

The Parties

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 4.1, and on that basis denies them.
4.2

Defendant admits the allegations of Paragraph 4.2.
V.

5.1

Facts

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.1, and on that basis denies them.
5.2

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.2, and on that basis denies them.
5.3

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.3, and on that basis denies them.
5.4

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.4, and on that basis denies them.
5.5

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.5, and on that basis denies them.
5.6

Defendant admits that Plaintiff filed a federal trademark application on

2
SD\778293

January 16, 2009 for the mark EntrepreNeurology. Defendant lacks knowledge or information
sufficient to form a belief about the truth of the remaining allegation in Paragraph 5.6, and on
that basis denies it.
5.7

Defendant admits the allegations of Paragraph 5.7.

5.8

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.8, and on that basis denies them.
5.9

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.9, and on that basis denies them.
5.10

Paragraph 5.10 asserts a legal conclusion that does not require a response.

5.11

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.11, and on that basis denies them.
5.12

Defendant admits the allegations of Paragraph 5.12.

5.13

Defendant denies the allegations of Paragraph 5.13.

5.14

Defendant denies the allegations of Paragraph 5.14.

5.15

Defendant admits the first sentence of Paragraph 5.15.

Defendant lacks

knowledge or information sufficient to form a belief about the truth of the remaining allegations
in Paragraph 5.15, and on that basis denies them.
5.16

Defendant denies the allegations of Paragraph 5.16.

5.17

Defendant denies the allegations of Paragraph 5.17.

5.18

Defendant denies the allegations of Paragraph 5.18.

5.19

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.19, and on that basis denies them.
5.20

Defendant lacks knowledge or information sufficient to form a belief about the

3
SD\778293

truth of the allegations in Paragraph 5.20, and on that basis denies them.
5.21

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.21, and on that basis denies them.
5.22

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the first sentence in Paragraph 5.22, and on that basis denies it. Defendant admits the
second sentence of Paragraph 5.22.
5.23

Defendant denies the allegations of Paragraph 5.23, and notes that it filed an

Opposition to Plaintiff’s pending trademark application for Entrepreneur.Ology (Serial
No. 77/964153) on December 7, 2010.
5.24

Defendant admits that its counsel sent a letter to Plaintiff on September 7, 2010.

Defendant denies the remaining allegations of Paragraph 5.24.
5.25

Defendant denies the allegations of Paragraph 5.25.

5.26

Defendant denies the allegations of Paragraph 5.26.

5.27

Defendant denies the allegations of Paragraph 5.27.

5.28

Defendant denies the allegations of Paragraph 5.28.

5.29

Defendant admits that its federal registrations for the mark ENTREPRENEUR,

Nos. 1,453,968, 2,263,883, and 2,502,032, are incontestable. Defendant further admits that
Castro has challenged the incontestable status of Defendant’s marks in this lawsuit, but notes that
the Court dismissed that claim on April 28, 2011 (Docket #36).
5.30

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 5.30, and on that basis denies them.
VI.
6.1

Standing

Paragraph 6.1 asserts a legal conclusion that does not require a response.

4
SD\778293

6.2

Paragraph 6.2 asserts a legal conclusion that does not require a response.
VII.

A.

Causes of Action

DECLARATION THAT 15 U.S.C. § 1065 AND 15 U.S.C. § 1115(B) ARE
UNCONSTITUTIONAL
7.1-7.9 The Court dismissed this claim on April 28, 2011 (Docket #36).

B.

DECLARATION THAT EMI’S MARK IS NOT INCONTESTABLE
7.10-7.21 The Court dismissed this claim on April 28, 2011 (Docket #36).

C.

DECLARATION OF INVALIDITY AND REQUEST FOR CANCELLATION
7.22

EMI admits that 15 U.S.C. § 1064(3) provides that a petition to cancel a

registration of a mark may be filed “[a]t any time if the registered mark becomes the generic
name for the goods or services, or a portion thereof, for which it is registered . . .” The
remainder of this paragraph does not require a response.
7.23

Paragraph 7.23 asserts a legal conclusion that does not require a response.

7.24

Defendant denies the allegations of Paragraph 7.24.

7.25

Defendant denies the allegations of Paragraph 7.25.

7.26

Defendant denies the allegations of Paragraph 7.26, and notes that the Court

dismissed Plaintiff’s claim for antitrust violations on April 28, 2011 (Docket #36).
7.27
7.28
D.

Defendant denies the allegations of Paragraph 7.27.
Paragraph 7.28 asserts a legal conclusion that does not require a response.

DECLARATION OF NON-INFRINGEMENT AND/OR ALLOWABLE USE
7.29-7.41 The Court dismissed this claim on April 28, 2011 (Docket #36).

E.

ESTOPPEL AND ACQUIESCENCE
7.42-7.44 The Court dismissed these claims on April 28, 2011 (Docket #36).

F.

DECLARATION THAT CASTRO’S MARKS DO NOT CONSTITUTE UNFAIR
COMPETITION UNDER 15 U.S.C. § 1125
5

SD\778293

7.45-7.46 The Court dismissed this claim on April 28, 2011 (Docket #36).
G.

VIOLATION OF ANTITRUST LAWS
7.47-7.53 The Court dismissed this claim on April 28, 2011 (Docket #36).

H.

MISUSE OF TRADEMARK AND UNCLEAN HANDS
7.54 The Court dismissed this claim on April 28, 2011 (Docket #36).
VIII. Suspension of TTAB Proceeding
8.1-8.4

The Court dismissed this section on April 28, 2011 (Docket #35).
IX.

Declaration of Rights Under the Anticybersquatting Act

9.1

Defendant restates its responses to all preceding paragraphs above.

9.2

Defendant denies the allegations of Paragraph 9.2.

9.3

Defendant admits that Plaintiff is seeking a judicial declaration, and denies the

remaining allegations of Paragraph 9.3.
9.4

Defendant admits that Plaintiff owns a federal registration for the mark

EntrepreNeurology (No. 3,663,282).

Defendant denies the remaining allegations of

Paragraph 9.4.
9.5

Defendant denies the allegations of Paragraph 9.5.

9.6

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the first sentence in Paragraph 9.6, and on that basis denies it. Defendant admits the
second sentence of Paragraph 9.6.
9.7

Defendant lacks knowledge or information sufficient to form a belief about the

truth of Plaintiff’s allegations regarding his common law rights, and on that basis denies that
allegation.

Defendant admits that Plaintiff owns a federal registration for the mark

EntrepreNeurology (No. 3,663,282).
9.8

Defendant denies the allegations of Paragraph 9.8.
6

SD\778293

9.9

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.9, and on that basis denies them.
9.10

Defendant denies the allegations of Paragraph 9.10.

9.11

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.11, and on that basis denies them.
9.12

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.12, and on that basis denies them.
9.13

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.13, and on that basis denies them.
9.14

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.14, and on that basis denies them.
9.15

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.15, and on that basis denies them.
9.16

Defendant lacks knowledge or information sufficient to form a belief about the

truth of the allegations in Paragraph 9.16, and on that basis denies them.
9.17

Defendant denies the allegations of Paragraph 9.17.
X.

Reverse Domain Name Hijacking

10.1-10.18 The Court dismissed this claim on April 28, 2011 (Docket #36).
The remaining paragraphs in the Complaint constitute Plaintiff’s request for remedies and
prayer for relief to which no answer in required. To the extent that these sections purport to state
any factual allegations, Defendant denies them.
All allegations in the Complaint that Defendant has not expressly admitted are denied.
Defendant denies that Plaintiff is entitled to any of the relief that he requests.

7
SD\778293

AFFIRMATIVE DEFENSES
Defendant expressly reserves the right to plead additional affirmative and other defenses
should any such defenses be revealed by any discovery in this case.
First Affirmative Defense
(Failure to State a Claim)
1.

Plaintiff’s Complaint fails to state facts sufficient to constitute claims upon which

relief can be granted against Defendant.
Second Affirmative Defense
(Unclean Hands)
2.

Plaintiff’s purported claims for relief are barred in whole or in part by the doctrine

of unclean hands, based on Plaintiff’s acts of infringement and unfair competition. The details of
these acts are contained in Defendant’s Counterclaims below, and are incorporated by reference.
WHEREFORE, Defendant prays that Plaintiff takes nothing by way of his Complaint and
that Defendant be awarded its costs of suit herein.
COUNTERCLAIMS
For its Counterclaims pursuant to Rule 13 of the Federal Rules of Civil Procedure against
Daniel R. Castro, an individual (“Castro”), Entrepreneur Media, Inc. (“EMI”) alleges as follows:
Jurisdiction and Venue
1.

EMI brings this action for injunctive and monetary relief for federal trademark

infringement, false designation of origin and unfair competition under the Lanham Act,
15 U.S.C. § 1501 et seq.; trademark dilution under Chapter 16 of the Texas Business and
Commerce Code; trademark infringement and misappropriation/unfair competition under the
common law of Texas; unjust enrichment; cancellation of a federal trademark registration under

8
SD\778293

15 U.S.C. § 1064 and 15 U.S.C. § 1119; and declaratory relief under the Declaratory Judgment
Act, 28 U.S.C. § 2201. This Court has subject matter jurisdiction over the federal question
claims pursuant to 28 U.S.C. §§ 1331 and 1338(a). This Court has supplemental jurisdiction
over the state law claims pursuant to 28 U.S.C. §§ 1338(b) and 1367(a).
2.

This Court has personal jurisdiction over Castro because Castro resides in the

State of Texas.
3.

Venue in this Court exists under 28 U.S.C. § 1391(b)(1), as Castro resides in this

District.
The Parties
4.

EMI is a California corporation, having its principal place of business at 2445

McCabe Way, Irvine, California 92614.
5.

Castro is an individual who, on information and belief, resides in Austin, Texas.
Facts Common to All Claims for Relief
EMI and Its Successful ENTREPRENEUR® Brand

6.

For over 30 years, EMI (together with its predecessor companies) has published

magazines and books which provide editorial content and other information, as well as offer
products and services, related or of interest to businesses, business owners, and prospective
business owners.
7.

EMI’s longstanding marketing and sales efforts have been conducted primarily

under the mark ENTREPRENEUR® (the “ENTREPRENEUR® Mark”).
8.

EMI is the publisher of ENTREPRENEUR® magazine and other publications

incorporating the ENTREPRENEUR® name in their titles. ENTREPRENEUR® magazine is
published monthly with a current paid circulation, including both subscriptions and newsstand

9
SD\778293

sales, of more than 600,000. ENTREPRENEUR® magazine is also sold and distributed in over
100 foreign countries.
9.

ENTREPRENEUR® magazine routinely features articles and interviews of some

of the biggest names in the business community, including Richard Branson, skateboarding
icon Tony Hawk, quarterback Drew Brees, and hip hop mogul Russell Simmons:

10.

ENTREPRENEUR® magazine also annually publishes, and has continuously

published for over thirty years, the highly anticipated Franchise 500® ranking of America’s top
franchises using EMI’s top-secret formula:

11.

EMI also publishes over 200 book titles under the ENTREPRENEUR® name

and ENTREPRENEUR PRESS® imprint:

10
SD\778293

12.

EMI has recently launched many of its most successful titles as e-books:

13.

EMI also conducts seminars, workshops and other educational services geared

towards how to successfully start and operate businesses. These events have included the Sales
Success Secrets/Business Success Secrets® Breakfasts sponsored by State Farm Insurance; the
Women in Charge Conferences sponsored by OPEN—American Express; the Business Success
Secrets® Breakfast Seminars sponsored by Deluxe Corporation and Sprint; the Winning
Strategies for Business Conference sponsored by Verizon; and Entrepreneur® Magazine’s
Growth 2.0 Conferences presented by The UPS Store®:

11
SD\778293

14.
and

EMI operates a number of websites to further disseminate and market its content
services,

including

entrepreneur.com,

YoungEntrepreneur.com,

EntrepreneurEnEspanol.com and EntrepreneurPress.com:

15.

The website at entrepreneur.com has averaged over 6 million unique visitors and

over 52.6 million page views per month, and is ranked in the top 1,100 sites in the United States
by Alexa.
16.

EMI has also launched apps for iPhones/iPads, Android and Blackberry:

12
SD\778293

17.

EMI’s fame and high-quality content and services have resulted in numerous co-

branding business relationships with some of the top names in news and business. These cobranding relationships have included MSNBC, Reuters, PerfectBusiness.com, Princeton
Review (ranking top entrepreneurial schools), Great Place to Work® (annual Best Small &
Medium Workplaces rankings), and Palo Alto Software (Entrepreneur® magazine’s Business
Plan Pro® software):

18.

Through careful cultivation of its various products and services, EMI has

developed an outstanding reputation as an innovator in the field of business start-up and
strategy and has established an extremely loyal customer following.
19.

EMI has received a tremendous amount of public recognition and acclaim for the

products sold and services offered under its ENTREPRENEUR® brand.

Through EMI’s

widespread and continuous use of the ENTREPRENEUR® Mark, the mark has acquired
extensive goodwill, has developed a high degree of distinctiveness, and has become famous,
well-known and recognized as identifying goods and services that originate from EMI.
20.

The

fame

and

quality

of

the

products

and

services

bearing

the

ENTREPRENEUR® Mark have been widely recognized through industry awards and

13
SD\778293

commendations. ENTREPRENEUR® magazine was a finalist in two categories in Folio’s 2010
Eddie & Ozzie magazine awards, has been named one of the top performing magazines for four
years in “Capell’s Circulation Report,” and has been honored for its content by receipt of the
prestigious Maggie awards in both 2009 and 2010 from the Western Publishing Association.
EMI’s website at entrepreneur.com has been awarded “Outstanding Achievement in Web
Development” by the Web Marketing Association, and its Entrepreneur Connect was voted the
#1 “Top 10 Social Networks for Entrepreneurs” by Mashable.com. EMI has also received
multiple Integrated Marketing Awards from Min Online for its magazine and website. In
addition, both ENTREPRENEUR® magazine and the entrepreneur.com website have been
named to BtoB magazine’s 2010 and 2011 lists of the top 50 media outlets for business-tobusiness advertising.
EMI’s Trademark Rights
21.

EMI owns, and has obtained United States federal registrations for, the

ENTREPRENEUR® Mark, as well as a family of related marks incorporating the term
ENTREPRENEUR, including:
TRADEMARK
ENTREPRENEUR

CLASS: GOODS/SERVICES
16: Paper goods and printed matter; namely magazines,
books and published reports pertaining to business
opportunities

REG. NO.
REG. DATE
1,453,968
August 25, 1987
First Use in
Commerce:
May 2, 1978

ENTREPRENEUR

35: Advertising and business services, namely, arranging for
the promotion of the goods and services of others by means of
a global computer network and other computer online services
providers; providing business information for the use of
customers in the field of starting and operating small
businesses and permitting customers to obtain information via
a global computer network and other computer online service
providers and; web advertising services, namely, providing
active links to the websites of others

14
SD\778293

2,263,883
July 27, 1999
First Use in
Commerce:
July 1992

ENTREPRENEUR

35: Arranging and conducting trade show exhibitions in the
field of entrepreneurial activities, namely the start-up and
operation of small business enterprises
41: Educational services, namely, conducting seminars on the
development and operation of businesses, and conducting
work shops on computer technology, telecommunications,
marketing, financing options, real estate management, tax
planning and insurance

ENTREPRENEUR.COM

9: Downloadable podcasts in the field of business, current
events, lifestyle issues, and developments in science and
technology
35: Providing business information and advice via a web site
on a global computer network
38: Broadcasting programs via a global computer network;
and streaming of audio and video material via the Internet;
telecommunications services, namely, transmission of
podcasts

ENTREPRENEUR
CONNECT

ENTREPRENEUR
ENESPANOL.COM

ENTREPRENEUR
PRESS

42: Online business networking services in the nature of
creating and hosting a community for registered users to
create professional profiles, to participate in group
discussions, to make business contacts, and to upload onto the
website materials promoting their businesses, products and
services
35: Advertising and business services, namely, arranging for
the promotion of goods and services of others by means of a
global computer network and other computer online service
providers; providing business information for the use of
customers in the field of starting and operating businesses and
permitting customers to obtain information via a global
computer network and other computer online service
providers; internet advertising services, namely, promoting
the goods and services of others by providing a web site with
active links to their websites featuring their goods and
services
16: Paper goods and printed matter, namely, books, manuals,
prepared reports, work books, study guides, legal and
business forms, and newsletters concerning advice and
information relating to the subjects of starting, running and
operating a business, and individuals who succeeded in
business, which subjects are of interest to entrepreneurs, new
and existing businesses and members of the general public
35: On-line ordering services featuring printed and
electronically downloadable publications, namely, books,
study guides, legal and business forms, and newsletters,
concerning advice and information relating to the subjects of
starting, running and operating a business and individuals
who succeeded in business, which subjects are of interest to
entrepreneurs, new and existing businesses and members of
the general public

15
SD\778293

2,502,032
October 30, 2001
First Use in
Commerce:
Oct. 18, 1991

3,519,022
October 21, 2008
First Use in
Commerce:
Sept. 2002

3,652,950
July 14, 2009
First Use in
Commerce:
April 26, 2008
3,266,532
July 17, 2007
First Use in
Commerce:
Oct. 13, 2006

3,470,064
July 22, 2008
First Use in
Commerce:
April 1999

ENTREPRENEUR’S
STARTUPS

ENTREPRENEUR
ASSIST

16: Paper goods and printed matter; namely, magazines,
books, booklets and published reports pertaining to business
opportunities

38: Providing online facilities for real-time interaction
between website visitors concerning topics of general interest
to entrepreneurs, new and existing businesses and members of
the general public
42: Providing website visitors with online non-downloadable
software applications in the field of business planning and
productivity for bookmarking, filing and tabbing articles
found on websites for quicker retrieval, for creating text
documents, spreadsheets and presentations, for customizing
business forms and templates, for selecting and downloading
a selection of business books, for scheduling event deadlines
and appointments with email reminders, and for assisting in
the creation of business plans

22.

3,204,899
February 6, 2007
First Use in
Commerce:
Jan. 27, 2006
3,924,374
March 1, 2011
First Use in
Commerce:
June 15, 2007

The above marks, including the ENTREPRENEUR® Mark, are collectively

referred to as the “EMI Marks.” The above registrations are collectively referred to as the
“EMI Registrations.”
23.

EMI’s registration numbers 1,453,968, 2,263,883, and 2,502,032 for

ENTREPRENEUR® are incontestable pursuant to 15 U.S.C. § 1065.
24.

The EMI Registrations constitute prima facie evidence that the marks are valid

and that EMI is entitled to the exclusive use of the marks in commerce throughout the United
States on the goods and services listed in the registrations.
25.

EMI also has extensive common law rights in the ENTREPRENEUR® Mark,

based on its use of that mark over the last three decades.
26.

Through

extensive

use,

marketing,

branding

and

promotion,

the

ENTREPRENEUR® Mark is well-known and famous, enjoying substantial recognition,
goodwill and association with EMI. The public distinguishes EMI’s goods and services from
those of other publishers and providers of educational services on the basis of the
16
SD\778293

ENTREPRENEUR® Mark. The ENTREPRENEUR® Mark is distinctive and has acquired
secondary meaning in the United States.
27.

Indeed, the U.S. District Court for the Central District of California held that:
•

“The extensive advertising and public recognition over the past 25 years

have established [the ENTREPRENEUR® Mark] as a strong mark in the industry.”
•

The ENTREPRENEUR® Mark “is a strong distinctive mark, deserving of

significant protection.”
•

The ENTREPRENEUR® Mark “has acquired secondary meaning.”

Entrepreneur Media, Inc. v. Smith, No. CV 98-3607 FMC (CTx), 2004 U.S. Dist. LEXIS 24078,
at *9-10, 13 (C.D. Cal. June 23, 2004).
28.

The Ninth Circuit reviewed the District Court’s findings and affirmed them on

appeal. Entrepreneur Media, Inc. v. Smith, 101 Fed. Appx. 212, 2004 U.S. App. LEXIS 11567
(9th Cir. 2004).
Castro and His Unauthorized Use of the EMI Marks
29.

Castro purports to be an author and professional keynote speaker and seminar

leader, as well as a small business owner in Austin, Texas.
30.

Castro claims to have begun using the mark “EntrepreNeurology” in 2009.

Castro filed a federal trademark application on January 16, 2009, for this mark in Class 41 for
“conducting workshops and seminars in innovation and strategic planning,” claiming a first use
in commerce date of January 2009. A registration issued on August 4, 2009 (No. 3,663,282)
(the “Castro Registration”). EMI has filed a cancellation proceeding against this registration
concurrently with these Counterclaims (the “Cancellation Proceeding”).
31.

Castro then filed a federal trademark application on March 20, 2010, for the

17
SD\778293

mark “Entrepreneur.Ology” (Serial No. 77/964153) in Class 41 for “conducting workshops and
seminars in entrepreneurship,” claiming a first use in commerce February 2010. EMI filed an
opposition to that application on December 7, 2010.
32.

Castro also filed a federal trademark application on September 29, 2010, for the

mark “EntrepreneurOlogy” (Serial No. 85/141548) in Class 41 for “conducting workshops and
seminars in the field of entrepreneurship,” claiming a first-use-in-commerce date of February
2010 (together with the application described in Paragraph 31, the “Castro Applications”). EMI
filed an opposition to that application on April 14, 2011 (together with the opposition described
in Paragraph 31, the “Oppositions”).
33.

The above marks are collectively referred to as the “Castro Marks.”

34.

Castro operates a website at the domain name entrepreneurology.com where he

claims to provide an “online network,” “customized boot camps,” and “workshops for
executives” (“Castro’s Services”). The only version of the Castro Marks that appears to be
used on the website is “Entrepreneur.Ology.”
35.

EMI is very concerned that consumers will be confused into believing that the

services offered under the confusingly similar “Entrepreneur.Ology” mark (and similar marks)
are related to the educational services, workshops and seminars offered by EMI. EMI is further
concerned that such consumers will see the poor quality of Castro’s website and services and
believe that EMI is offering low-quality services, thus tarnishing EMI’s reputation and
adversely affecting its goodwill.
36.

On September 7, 2010, EMI sent a letter to Castro notifying Castro of EMI’s

concerns regarding the Castro Marks. Rather than respond to this letter, Castro filed the present
action.

18
SD\778293

Continuing Infringement and Unlawful Conduct
37.

Castro’s continued use of the Castro Marks in commerce in violation of EMI’s

valuable intellectual property rights in the EMI Marks is knowing, intentional and willful, and
is causing damage to EMI.
38.

Due to Castro’s willful continuing infringement and unlawful conduct, EMI is

now forced to bring these counterclaims to protect its valuable and longstanding intellectual
property rights. EMI had to retain counsel and incur substantial fees and costs (and continues
to incur those fees and costs) to defend this suit and pursue its counterclaims.
39.

Castro’s activities have caused and will cause irreparable harm to EMI for which

it has no adequate remedy at law, as Castro’s conduct interferes with EMI’s goodwill and
customer relationships and will substantially harm EMI’s reputation as a source of high-quality
products, as well as dilute the substantial value of EMI’s name and trademarks.
40.

EMI’s interest in protecting its intellectual property rights and products and

services from customer confusion outweighs any potential harm to Castro. The public interest
is best served by granting the requested relief to EMI against Castro in this case.
FIRST CLAIM FOR RELIEF
Lanham Act - Federal Trademark Infringement - 15 U.S.C. § 1114
41.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
42.

EMI owns the EMI Marks, including the ENTREPRENEUR® Mark, and the

EMI Registrations. The trademarks reflected in the EMI Registrations are strong and
distinctive, designating EMI as the source of all products and services advertised, marketed,
sold or used in connection with the EMI Marks. In particular, the ENTREPRENEUR® Mark

19
SD\778293

has been used for over 30 years, and has been recognized by a federal district court as a strong
and distinctive mark.
43.

EMI is the senior user of the EMI Marks, as it began use of those Marks in

interstate commerce prior to Castro’s first use of the Castro Marks.
44.

The Castro Marks are confusingly similar to the EMI Marks and in particular the

ENTREPRENEUR® Mark, which Castro does not have authorization, license or permission to
reproduce, display or otherwise use. In addition, Castro’s Services marketed, offered for sale
and sold under the Castro Marks are closely related to the particular products and services with
which the EMI Marks, and in particular the ENTREPRENEUR® Mark, have come to be
associated.
45.

At the time of his claimed first use of the Castro Marks, Castro was aware of the

EMI Marks, and in particular the ENTREPRENEUR® Mark, as Castro was on constructive
notice based on EMI’s longstanding federal registrations. In addition, Castro was put on actual
notice concerning the EMI Marks, including the ENTREPRENEUR® Mark, at least as early as
September 7, 2010, the date of EMI’s letter to Castro.
46.

On information and belief, Castro’s use of the Castro Marks was intended to

confuse consumers into believing that Castro’s Services were authentic and authorized EMI
products and services. Thus, Castro’s unauthorized use of the Castro Marks was, and continues
to be, knowing, intentional and willful.
47.

On information and belief, Castro’s use of the Castro Marks is likely to cause

confusion or mistake, or to deceive as to source, origin, affiliation or sponsorship of Castro’s
Services offered for sale, marketed and sold by Castro.
48.

As a direct and proximate result of Castro’s wrongful conduct, EMI has been

20
SD\778293

and will continue to be damaged.
49.

Castro’s actions thus constitute trademark infringement.

50.

Unless an injunction is issued enjoining any continuing or future use of the

Castro Marks by Castro, such continuing or future use is likely to continue to cause confusion,
mistake or to deceive as to source, origin, affiliation or sponsorship, and thereby to damage
EMI irreparably.
51.

Castro’s activities have caused and will cause irreparable harm to EMI, for

which it has no adequate remedy at law, in that: (i) the EMI Marks, and in particular the
ENTREPRENEUR® Mark, comprise unique and valuable property rights that have no readilydeterminable market value; (ii) Castro’s infringement constitutes an interference with EMI’s
goodwill and customer relationships and will substantially harm EMI’s reputation as a source of
high-quality goods and services as well as dilute the substantial value of EMI’s name and
trademark; and (iii) Castro’s wrongful conduct, and the damages resulting to EMI, are
continuing. Accordingly, EMI is entitled to injunctive relief pursuant to 15 U.S.C. § 1116(a).
52.

Pursuant to 15 U.S.C. §1117(a), EMI is entitled to an order: (a) requiring Castro

to account to EMI for any and all profits derived by Castro from his actions, to be increased in
accordance with the applicable provisions of law; and (b) awarding all damages sustained by
EMI caused by Castro’s conduct.
53.

Castro’s conduct was intentional and without foundation in law, and, pursuant to

15 U.S.C. § 1117(a), EMI is as a result entitled to an award of treble damages against Castro.
54.

Castro’s acts make this an exceptional case under 15 U.S.C. § 1117(a), and EMI

is thus entitled to an award of attorneys’ fees and costs.

21
SD\778293

SECOND CLAIM FOR RELIEF
Lanham Act - Unfair Competition and False Designation of Origin - 15 U.S.C. § 1125(a)
55.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
56.

The EMI Marks, and in particular the ENTREPRENEUR® Mark, are strong and

distinctive, designating EMI as the source of all goods and services advertised, marketed, sold
or used in connection with those marks. In addition, by virtue of EMI’s decades-long use of the
ENTREPRENEUR® Mark in connection with its products and services, and its extensive
marketing, advertising, promotion and sale of its products and services under that mark, the
EMI Marks, and in particular the ENTREPRENEUR® Mark, have acquired secondary meaning,
whereby the consuming public of this District, the State of Texas and throughout the United
States, associates the EMI Marks with a single source of products and/or services.
57.

EMI is the senior user of the EMI Marks, as it began use of the marks in

interstate commerce prior to Castro’s first use of the Castro Marks.
58.

Castro was aware of the EMI Marks, including the ENTREPRENEUR® Mark,

as Castro was on constructive notice based on EMI’s longstanding federal registrations, and
was put on actual notice at least as early as September 7, 2010, the date of EMI’s letter to
Castro.
59.

On information and belief, through his use of the confusingly similar Castro

Marks, Castro intended to, and did in fact, confuse and mislead consumers, and did
misrepresent and create the false impression that EMI somehow authorized, originated,
sponsored, approved, licensed or participated in Castro’s use of the confusingly similar Castro
Marks.

22
SD\778293

60.

In fact, there is no connection, association or licensing relationship between EMI

and Castro, nor has EMI ever authorized, licensed or given permission to Castro to use the EMI
Marks in any manner whatsoever.
61.

On information and belief, Castro’s use of the Castro Marks is likely to cause

confusion as to the origin and authenticity of Castro’s Services and related products and is
likely to cause others to believe that there is a relationship between Castro and EMI.
62.

As a direct and proximate result of Castro’s wrongful conduct, EMI has been,

and will continue to be, damaged.
63.

Castro’s actions thus constitute false designation of origin and unfair

competition.
64.

Castro’s activities have caused and will cause irreparable harm to EMI for which

it has no adequate remedy at law, in that:

(i) the EMI Marks, and in particular the

ENTREPRENEUR® Mark, comprise unique and valuable property rights that have no readilydeterminable market value; (ii) Castro’s infringement constitutes an interference with EMI’s
goodwill and customer relationships and will substantially harm EMI’s reputation as a source of
high-quality goods and services as well as dilute the substantial value of EMI’s name and
trademark; and (iii) Castro’s wrongful conduct, and the damages resulting to EMI, are
continuing. Accordingly, EMI is entitled to injunctive relief pursuant to 15 U.S.C. § 1116(a).
65.

Pursuant to 15 U.S.C. §1117(a), EMI is entitled to an order: (a) requiring Castro

to account to EMI for any and all profits derived by Castro from his actions, to be increased in
accordance with the applicable provisions of law; and (b) awarding all damages sustained by
EMI and caused by Castro’s conduct.
66.

Castro’s conduct was intentional and without foundation in law, and pursuant to

23
SD\778293

15 U.S.C. § 1117(a), EMI is as a result entitled to an award of treble damages against Castro.
67.

Castro’s acts make this an exceptional case under 15 U.S.C. § 1117(a), and EMI

is thus entitled to an award of attorneys’ fees and costs.
THIRD CLAIM FOR RELIEF
Common Law Trademark Infringement
68.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
69.

The EMI Marks, and in particular the ENTREPRENEUR® Mark, are strong and

distinctive, designating EMI as the source of all goods and services advertised, marketed, sold
or used in connection with those marks. In addition, by virtue of EMI’s decades-long use of the
ENTREPRENEUR® Mark in connection with its products and services, and its extensive
marketing, advertising, promotion and sale of its products and services under that mark, the
EMI Marks, and in particular the ENTREPRENEUR® Mark, have acquired secondary meaning,
whereby the consuming public of this District, the State of Texas and throughout the United
States, associates the EMI Marks with a single source of products and/or services.
70.

On information and belief, Castro’s use of the Castro Marks is likely to cause

confusion as to the source, origin and authenticity of Castro’s Services and related products and
is likely to cause others to believe that there is a relationship between Castro and EMI.
71.

Castro’s unauthorized use of a mark confusingly similar to the EMI Marks in the

manner described above removes from EMI the ability to control the nature and quality of
goods and services provided under its marks, and places the valuable reputation and goodwill of
EMI in the hands of Castro, over whom EMI has absolutely no control.
72.

Castro’s conduct accordingly constitutes trademark infringement in violation of

24
SD\778293

the common law of Texas.
73.

As a direct and proximate result of Castro’s wrongful conduct, EMI has been,

and will continue to be, damaged. EMI is thus entitled to its damages suffered as a result of
Castro’s infringement.
74.

Unless an injunction is issued enjoining Castro’s infringing conduct, EMI will

continue to be damaged irreparably. EMI has no adequate remedy at law.
FOURTH CLAIM FOR RELIEF
Common Law Misappropriation/Unfair Competition
75.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
76.

EMI has expended extensive time, labor and expense in developing the EMI

Marks, and in particular the ENTREPRENEUR® Mark, and the high-quality products and
services it markets, sells and distributes under those marks. The EMI Marks, including the
ENTREPRENEUR® Mark, have been very successful and have developed a substantial
reputation and goodwill in the marketplace.
77.

Through his actions as described above, Castro has misappropriated EMI’s

efforts and is exploiting the EMI Marks, including the ENTREPRENEUR® Mark, and EMI’s
reputation, in order to market and sell his products and services in competition with EMI under
the confusingly similar Castro Marks.
78.

Castro’s unauthorized use of a mark confusingly similar to the EMI Marks, and

in particular the ENTREPRENEUR® Mark, gives Castro an unfair advantage over EMI,
because Castro has not had to expend the time, labor and expense that EMI has expended in
developing the EMI Marks, and in particular the ENTREPRENEUR® Mark.

25
SD\778293

79.

The acts of Castro complained of herein constitute misappropriation and unfair

competition in violation of the common law of Texas.
80.

As a direct and proximate result of Castro’s wrongful conduct, EMI has been,

and will continue to be, damaged. EMI is thus entitled to its damages suffered as a result of
Castro’s misappropriation and unfair competition.
81.

Unless an injunction is issued enjoining Castro’s unfairly competitive conduct,

EMI will continue to be damaged irreparably. EMI has no adequate remedy at law.
82.

On information and belief, Castro engaged in this conduct knowingly,

intentionally, willfully and without justification, so EMI is entitled to exemplary damages.
FIFTH CLAIM FOR RELIEF
Dilution Under Texas Law - TEX. BUS. & COM. CODE § 16.29
83.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
84.

The acts of Castro complained of herein are likely to injure EMI’s business

reputation and dilute the distinctive quality of the EMI Marks, and in particular the
ENTREPRENEUR® Mark, and thus constitute trademark dilution in violation of the Texas
Anti-Dilution Statute, TEX. BUS. & COM. CODE § 16.29.
85.

Unless an injunction is issued enjoining Castro’s unlawful conduct, EMI will

continue to be damaged irreparably. EMI has no adequate remedy at law.
SIXTH CLAIM FOR RELIEF
Unjust Enrichment
86.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.

26
SD\778293

87.

Castro has been, and continues to be, unjustly enriched by a benefit obtained

from EMI through his unauthorized use of marks confusingly similar to the EMI Marks.
88.

Castro has been and continues to be unjustly enriched by obtaining a benefit

from EMI by taking undue advantage of EMI and its goodwill. Specifically, Castro has taken
undue advantage of EMI by trading on, and profiting from, the goodwill associated with the
EMI Marks, and in particular the ENTREPRENEUR® Mark, as developed and owned by EMI,
resulting in Castro wrongfully obtaining a monetary and reputational benefit for his own
business and services.
89.

The acts of Castro complained of herein constitute unjust enrichment of Castro

at EMI’s expense.
SEVENTH CLAIM FOR RELIEF
Cancellation of Federal Registration Under 15 U.S.C. § 1064 and 15 U.S.C. § 1119
90.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
91.

Castro owns a federal trademark registration for the mark “EntrepreNeurology”

(No. 3,663,282). The Castro Registration issued on August 4, 2009.
92.

EMI is being damaged by the Castro Registration, as this mark infringes and

dilutes the EMI Marks.
93.

As described above, Castro is using this registered mark so as to misrepresent

the source of Castro’s Services.
94.

Accordingly, the Castro Registration should be cancelled pursuant to 15 U.S.C.

§ 1064 and 15 U.S.C. § 1119.

27
SD\778293

EIGHTH CLAIM FOR RELIEF
Declaratory Relief
1.

EMI incorporates by reference the factual allegations set forth in Paragraphs 6-

40 above.
2.

An actual and justiciable controversy has arisen and now exists between EMI

and Castro, in that EMI contends that:

(a) Castro’s use of the Castro Marks constitutes

trademark infringement, false designation of origin, unfair competition and dilution under the
Lanham Act and state law; and (b) the Castro Marks should not be registered by the Patent and
Trademark Office. Castro contends that his marks are not infringing, and that the Castro
Registration is valid and the Castro Applications should be accepted by the Patent and
Trademark Office.
3.

EMI desires a judicial determination and declaration of Castro’s rights with

respect to the Castro Marks, the Castro Registration and the Castro Applications.
4.

A judicial determination is necessary and appropriate at this time under the

circumstances to provide a complete and final adjudication of all of the issues in this action, in
the interests of judicial efficiency and finality, and to ensure consistency in the rulings of this
Court and the Patent and Trademark Office.
5.

EMI therefore requests a judicial declaration that: (a) the Castro Marks infringe

and dilute the EMI Marks, and create a false designation of origin; (b) Castro is unfairly
competing with EMI; (c) the Castro Registration be cancelled; (d) the Patent and Trademark
Office be ordered to sustain the Oppositions for the Applications in favor of EMI and against
Castro; and (e) Castro be prohibited from filing any future applications for the Castro Marks or
any marks likely to cause confusion with, or dilute the distinctive quality of, the EMI Marks.

28
SD\778293

PRAYER
WHEREFORE, EMI prays for the following relief:
A.

An injunction ordering that Castro, his agents, servants, employees, and attorneys,

and all other persons acting in concert or participating with them, who receive actual notice of
the injunction order by personal or other service:
(1) cease all use and never use the Castro Marks, the EMI Marks, or any other
mark likely to cause confusion with, or likely to dilute the distinctive quality of, the EMI Marks,
in connection with the promotion, advertising, offering for sale, or sale, of any products or
services;
(2) never use any false designation of origin, false representation, or any false or
misleading description of fact, that can, or is likely to, lead the consuming public or individual
members thereof, to believe that any products or services produced, offered, promoted,
marketed, advertised, provided or sold by Castro are in any manner associated or connected with
EMI, or are licensed, approved or authorized in any way by EMI;
(3) never represent, suggest in any fashion to any third party, or perform any act
that may give rise to the belief that Castro, or any of his goods or services, are related to,
authorized or sponsored by EMI;
(4) cease all use of the domain name entrepreneurology.com and any similar
domain names, and never register any domain names that contain any of the EMI Marks, or any
domain names confusingly similar to the EMI Marks;
(5) never unfairly compete with EMI in any manner whatsoever, or engage in any
unfair, fraudulent or deceptive business practices that relate in any way to the production,
distribution, marketing, and/or sale of products and services bearing the EMI Marks;

29
SD\778293

(6) withdraw all pending federal and state trademark applications for the Castro
Marks, and never apply for, or seek to register, any mark that is likely to cause confusion with
the EMI Marks.
B.

An order pursuant to 15 U.S.C. § 1116(a) directing Castro to file with this Court

and to serve upon EMI’s counsel, within thirty (30) days after the entry and service on Castro of
an injunction, a report in writing and under oath setting forth in detail the manner and form in
which Castro has complied with the injunction.
C.

An order transferring to EMI the domain name entrepreneurology.com and any

other domain names Castro owns that include “entrepreneur” or are otherwise confusingly
similar to the EMI Marks.
D.

An order finding that, by the acts complained of above, Castro has infringed

EMI’s federally registered trademarks in violation of 15 U.S.C. § 1114.
E.

An order finding that, by the acts complained of above, Castro has created a false

designation of origin and/or a false representation of association, in violation of 15 U.S.C.
§ 1125(a).
F.

An order finding that, by the acts complained of above, Castro has engaged in acts

of dilution in violation of the Texas Anti-Dilution Statute, TEX. BUS. & COM. CODE § 16.29.
G.

An order finding that, by the acts complained of above, Castro has engaged in

common law trademark infringement.
H.

An order finding that, by the acts complained of above, Castro has engaged in

common law misappropriation/unfair competition.
I.

An order finding that, by the acts complained of above, Castro has been unjustly

enriched at the expense of EMI.

30
SD\778293

J.

An order cancelling Castro’s federal trademark registration number 3,663,282,

and a certification of such order to the Director of the United States Patent and Trademark
Office, so that the appropriate entry will be made upon the records of that office.
K.

An order declaring that: (a) the Castro Marks infringe and dilute the EMI Marks,

and create a false designation of origin; (b) Castro is unfairly competing with EMI; (c) the Castro
Registration be cancelled; (d) the Patent and Trademark Office be ordered to sustain the
Oppositions in EMI’s favor and against Castro; and (e) Castro be prohibited from filing any
future applications for the Castro Marks or any marks likely to cause confusion with, or dilute
the distinctive quality of, the EMI Marks.
L.

An order pursuant to 15 U.S.C. § 1117(a), compelling Castro to account to EMI

for any and all profits derived by him from his unlawful and infringing conduct.
M.

An order awarding EMI damages as follows:
(1) pursuant to 15 U.S.C. § 1117(a), EMI’s actual damages, as well as all of

Castro’s profits or gains of any kind from his acts of trademark infringement, false designation of
origin, and unfair competition, including a trebling of those damages;
(2) exemplary damages based on Castro’s willful and knowing infringement
under Texas common law;
(3) exemplary damages based on Castro’s misappropriation and unfair
competition under Texas common law.
N.

An order pursuant to 15 U.S.C. § 1117(a), finding that this is an exceptional case

and awarding EMI its reasonable attorneys’ fees.
O.

An order awarding EMI all of its costs, disbursements and other expenses

incurred due to Castro’s unlawful conduct, pursuant to 15 U.S.C. § 1117(a).

31
SD\778293

P.

An order awarding EMI interest.

Q.

An order awarding EMI such other relief as the Court may deem appropriate.
JURY DEMAND

Pursuant to Fed. R. Civ. P. 38(b), EMI demands a trial by jury on all issues triable of
right by a jury.
Dated: May 26, 2011

Respectfully submitted,
By: /s/ Jennifer L. Barry
William G. Barber
Texas Bar No. 01713050
PIRKEY BARBER LLP
600 Congress Avenue, Suite 2120
Austin, TX 78701
[phone] / [phone] Fax
Perry J. Viscounty (Admitted Pro Hac Vice)
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
[phone] / [phone] Fax
Jennifer L. Barry (Admitted Pro Hac Vice)
Latham & Watkins LLP
600 West Broadway, Suite 1800
San Diego, CA 92101
[phone] / [phone] Fax
Attorneys for Defendant/Counterclaimant
ENTREPRENEUR MEDIA, INC.

32
SD\778293

CERTIFICATE OF SERVICE
I hereby certify that on May 26, 2011, I electronically filed the foregoing with the Clerk
of Court using the CM/ECF system which will send notification of such filing to the following:
Daniel R. Castro
CASTRO & BAKER, LLP
7800 Shoal Creek Blvd., Suite 100N
Austin, TX 78757
/s/ Jennifer L. Barry
Jennifer L. Barry

33
SD\778293