WickFire, LLC v. TriMax Media, Inc.

Filing 371

ORDER GRANTING Plaintiff's 344 Unoppsed Motion to Dismiss ; GRANTING IN PART AND DENYING IN PART Plaintiff's 363 Motion for Entry of Final Judgment; DENYING Defendants TriMax Media, LLC, WREI, Inc., Josh West, and Laura Woodruff's 364 Motion for Judgment as a Matter of Law. Signed by Judge Sam Sparks. (klw)

I

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

WICKFIRE,LLC,

fl MAR 23

..

'

II:

2

Plaintiff,
CAUSE NO.:
A-14-CA-00034-SS

-vs-

LAURA WOODRUFF, WREI, INC.,
JOSH WEST, and TRIMAX MEDIA,
LLC,
Defendants.

ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,
and specifically Plaintiff Wickfire, LLC's Motion for Entry of Final Judgment [#363],

Defendants TriMax Media, LLC, WREI, Inc., Josh West, and Laura Woodruff's Response
[#367] in opposition, and Wickfire's Reply [#369] in support, as well as Defendants' Motion for

Judgment as a Matter of Law [#364], Wickfire's Response [#368] in opposition, and Defendants'

Reply [#3 70] in support.' Having reviewed the documents, the governing law, and the file as a
whole, the Court now enters the following opinion and orders.

Background
Plaintiff Wickfire and Defendant TriMax are both advertisers competing in the pay-forperformance search engine marketing business. As recounted in the Court's Order of March 25,
2016, merchants in the search engine marketing business partner with advertisers like Wickfire
and TriMax, often through agencies (known as affiliate networks) who manage the merchants'

advertising needs.

See

Order of Mar. 25, 2016 [#198]. Those advertisers then generate ad

The Court also considered Wicklire's Unopposed Motion to Dismiss [#344] its claims for business
disparagement, defamation, and misappropriation with prejudice, which the Court hereby GRANTS.

I

campaigns and pay search engines a fee to place their ads alongside certain search terms. The
advertisers earn money only to the extent their ads are effective in driving customer traffic.

A Google AdWords auction is the platform through which an advertiser pays Google to
place their ads alongside search terms. Advertisers like Wickfire and TriMax bid on keywords
associated with search terms, so when a customer enters the search terms, the advertiser's ad
appears. A new auction is conducted instantly each time a search query is entered. Each

advertiser must specify the highest cost-per-click price it is willing to pay, and Google considers
that price ceiling in determining which ad will be the winning ad. In addition to specifying the
maximum cost-per-click it is willing to pay, an advertiser must submit a "budget" identifying the
maximum amount it is willing to pay Google to display an ad. When this budget is exhausted,
the advertiser's ad campaign is "paused," meaning the ad no longer appears alongside the

selected search terms.
In this case, each party claims the other fraudulently interfered with its business. Wickfire

has sued TriMax Media, LLC, Laura Woodruff, TriMax's owner and CEO, WREI, Inc., and Josh

West, TriMax' s Director of Business Development and WREI' s CEO (collectively, Defendants),
alleging Defendants (1) placed fraudulent advertisements on Google AdWords that falsely

designated Wickfire as their origin in violation of the Lanham Act, and (2) engaged in "click
and placed fraudulent advertisements to intentionally interfere with Wickfire's current

fraud"2

and prospective contractual and business relationships, and they did so as part of a conspiracy to

harm Wickflre. Wickfire contends these fraudulent ads misidentified Wickfire as the source of

Although the witnesses at trial testified to varying definitions of "click fraud," the parties use the term in
their claims to mean the practice where an individual clicks on a competitor's ad to drive up the competitor's cost of
advertising and prematurely exhaust the budget. Once a competitor's ads disappeared, the individual committing
click fraud can then win the bid.
2

2

the ad by (1) including a tracking identifier uniquely assigned to Wickflre3 and directly linking to
a merchant's website, or (2) linking to Wickfire's website TheCoupon.co, which contains

individual webpages for each merchant. Such fraudulent advertisements, Wickfire argues,
violated trademark laws and therefore breached the terms of its contracts with merchants and
affiliate networks.
TriMax, for its part, has counterclaimed against Wickfire and brought third-party claims
against Chet Hall and Jon Brown, co-founders of Wickfire (collectively, Counter-Defendants),

alleging Counter-Defendants employed a computer program called WebCrawler to manipulate
the Google AdWords auction. According to TriMax, this forced TriMax to pay higher costs for a
wil-ming ad and prevented TriMax from promoting its merchants, all in violation

prohibiting intentional interference with existing and prospective business

of Texas laws

relationships.4

TriMax

also alleges Counter-Defendants engaged in "click fraud" and disparaged TriMax throughout the

industry. Both TriMax and Woodruff sued Counter-Defendants for defamation.

A jury trial was held from January 30, 2017, to February 2, 2017. The jury returned a

unanimous verdict in favor of Wickfire, finding Defendants TriMax, Laura Woodruff, WREI,
and Josh West (1) misrepresented Wickfire as the source of advertisements by placing

Advertisers like Wickfire and TriMax are assigned a unique tracking identifier, which is embedded in the
advertisement. When a merchant sale occurs through an advertisement run by Wickfire or TriMax, the merchant
uses the unique tracking identifier to determine which advertiser it owes a commission.
"

Specifically, TriMax claims Wickfire manipulated the Google AdWords auction by engaging in
"predatory bidding." Wickfire allegedly did this by (1) running indirect ads below TriMax's direct ads that linked
customers to a website called WebCrawler.com (eventually Wickfire would begin linking these indirect ads to its
own website, TheCoupon.co, rather than WebCrawler.com), (2) "plac[ing] exorbitantly high bids on its Webcrawler
ads" which caused TriMax's cost-per-click to "skyrocket," and (3) once TriMax's budget was exhausted and its ad
campaign paused, Wickfire placed its own direct ads "which easily won the auctions due to the lack of competition
from TriMax." See Resp. [#246] at 10. Additionally, in support of its unclean hands defense, TriMax claims
Wickfire used tracking identifiers similar to those used by TriMax to make it look like TriMax, not Wickfire, was
the predatory bidder.
According to Wickfire, TriMax's increased costs resulted from its own overbidding, not tortious
interference from Wickfire. As Wickfire explains, TriMax alone controls its bids; TriMax has never been charged
more than it bid, and this bidding strategy was equally open to TriMax. Wickfire therefore maintains this so-called
practice of "predatory bidding" simply constitutes legitimate competition.
3

advertisements containing identifying information distinctive of Wickflre in a maimer that was

likely to cause confusion; (2) intentionally interfered with Wickfire's existing contracts;
(3) tortiously interfered with Wickfire's prospective business relationships; (4) were part of a

conspiracy that damaged Wickfire; and (5) acted with malice or gross negligence. The jury
awarded Wickfire $2,318,000.00 in compensatory damages as a result of Defendants' intentional
interference with Wickfire' s existing contracts and prospective business relationships. The jury

attributed 95% of the responsibility to Laura Woodruff and 5% of the responsibility to Josh
West.
The jury also found Counter-Defendants intentionally interfered with TriMax and Laura

Woodruff's existing contracts, but concluded they had a colorable right to do so. The jury further
found Counter-Defendants were not liable for TriMax's remaining counterclaims of intentional
interference with prospective business relationships, business disparagement, and defamation. As
a result, the jury unanimously found TriMax and Laura Woodruff should take nothing on their

counterclaims and third-party claims.
Defendants promptly filed their renewed motion for judgment as a matter of law under

Federal Rule of Civil Procedure 50(b) or, in the alternative, a new trial under Federal Rule of
Civil Procedure 59, arguing the evidence presented at trial was legally insufficient to support the

Renewed Mot. J. Matter Law [#364]. Wickfire cross-moved for entry of

jury's verdict.

See

judgment.

Mot. Entry J. [#363]. These motions have been fully briefed and are now ripe for

See

the Court's consideration.

ri

Analysis
I.

Renewed Rule 50(b) Motion

A.

Legal Standard
When ruling on a Rule 5 0(b) motion for judgment as a matter of law, "[a] jury verdict

must stand unless there is a lack of substantial evidence, in the light most favorable to the
successful party, to support the verdict." Am. Home Assurance Co.

v.

United Space All., LLC,

378 F.3d 482, 487 (5th Cir. 2004). Accordingly, the question for this Court "is whether the state

of proof is such that reasonable and impartial minds could reach the conclusion the jury
expressed in its verdict." Id. (internal quotation marks omitted); see also Reeves

v.

Sanderson

Plumbing Prods., Inc., 530 U.S. 133, 151 (2000) ("Thus, although the court should review the
record as a whole, it must disregard all evidence favorable to the moving party that the jury is not

required to believe.")
Generally, a renewed Rule 50(b) motion is filed after a judgment is entered. See FED. R.
Civ. P. 50(b). However, the motion is still timely even if it is filed before the judgment is

entered, because Rule 50(b) sets only the outer filing limits. See Gaia Technologies Inc.

v.

Recycled Prods. Corp., 175 F.3d 365, 374 (5th Cir. 1999) ("Although Rule 50(b) permits a party
to renew its motion as late as ten days after the judgment is entered, it does not proscribe filing a

renewed motion before judgment is entered.").
B.

Application
Defendants argue they are entitled to judgment as a matter of law on Wickfire's claims of

intentional interference with existing contracts, tortious interference with prospective business
relationships, civil conspiracy, and false designation in violation of the Lanham Act. As
explained below, the Court denies Defendants' renewed motion for judgment as a matter of law
on each ground.

Intentional Interference with Wickfire's Existing Contracts

i.

To prove a claim for intentional interference with existing contracts under Texas law, a

plaintiff must establish (1) the existence of a contract; (2) intentional interference; (3) the
interference was a proximate cause of the plaintiff's damages; and (4) actual damages. See

Powell Indus. Inc.

v.

Allen, 985 S.W.2d 455, 456 (Tex. 1998). Defendants contend the evidence

presented at trial was insufficient to support the jury's finding of the existence of a contract and
its award of damages.

As to Defendants' challenge to the existence of a contract, the Court finds Wickfire

offered evidence regarding its merchant and affiliate network contracts and their corresponding

terms and conditions. Afternoon of Jan. 30, 2017 Tr. at 45:25-46:24; Pl.'s Exs. [#361-6] Ex. 122
(Commission Junction Contract); id. [#361-7] Ex. 126 (Rakuten Marketing LLC Contract) at 1553; id. [#361-8] Ex. 127 (Sharesale.com, Inc. Contract) at 1-6. Each affiliate contract contains a

specific provision which prohibited advertisers from infringing on merchant trademarks. For
instance, Section 8.7 of Wickfire' s Rakuten Marketing LLC contract provides, "You may not use
any name, trademark, service mark, domain name, or other Intellectual Property Rights of any
third party.

. .

in any way or for any purpose that infringes or violates any Intellectual Property

Rights or other rights of such third party[.]" Rakuten Marketing LLC Contract at 28. Wickfire's
contracts with other major affiliate networks include similar provisions. See, e.g., Commission

Junction Contract at 6; Pl.'s Exs. [#361-7] Ex. 125 (eBay Enterprise, Inc. Contract) at 1-14;
Sharesale.com, Inc. Contract at 5. Wickfire identified dozens of merchants covered by its major
affiliate contracts. Pl.'s Exs. [#361-4] Ex. 104 (Merchant Violation Notices) at 587-91.

Moreover, Hall testified that an affiliate contract may cover hundreds or thousands of individual
merchant relationships. Afternoon of Jan. 30, 2017 Tr. at 46:21-24. Notwithstanding

Defendants' assertions to the contrary, Wickfire presented evidence of the specific contracts and

particular provisions that support an inference Defendants intentionally interfered with existing
contracts.
Similarly, there is sufficient evidence in the record to support the jury's finding that

Defendants' conduct proximately caused Wickfire damage in the amount of $1,984,000.00.
Wickfire based its lost profits analysis on its inability to produce direct advertising campaigns as
it had historically done under its existing contractual relationships with affiliate networks. At
trial, Hall testified its affiliate contracts serve as "the lifeblood" of Wickfire's advertising

business. Afternoon of Jan. 30, 2017 Tr. at 46:24. Jared Jordan, Wickfire's damages expert,
testified, "there's no doubt based on the historical information and what's happening in the
market that [but for the impersonating ads] Wickfire's.. . net advertising campaigns would have

continued to grow" in accordance with the damages claimed. Afternoon of Jan. 31, 2017 Tr. at

91:3-6. The jury heard evidence that the only reason it was unable to generate this established
trajectory of businesses was because of the time and resources Wickfire had to redirect toward
combatting Defendants' impersonating ads. According to Hall, had Wickfire not focused on
defending against the impersonating ads, it risked losing "a third of [its] business overnight"
from just one of its affiliate networks. Afternoon of Jan. 30, 2017 Tr. at 46:21-23. Jordan further

Wickfire also argues Defendants' waived their challenge to the issues of proximate cause or damages
because they failed to raise a specific challenge to these issues in their oral Rule 50(a) motion. After the close of
Wickfire's case-in-chief, Defendants' counsel stated, "I'd further move based on tortious interference with contract,
the failure to provide evidence to support the elementsthis is tortious interference with existing contracts."
Afternoon of Jan. 31, 2017 Tr. at 114:24-115:5. According to Wickfire, this generic challenge to all of the elements
of intentional interference is insufficient to put either Wickfire or the Court on notice of Defendants' challenge.
However, Defendants moved under Rule 50 on all questions of liability, and "[a]ll forms of damages were inherent
in [the] request" for judgment. Logan v. Burgers Ozark Country Hams Inc., 263 F.3d 447, 457 (5th Cir. 2001).
Indeed, the Fifth Circuit has expressly "decline[d] to adopt an unduly burdensome view of Rule 50 that would
require litigants to detail every aspect of a case where, as in this case, a general, all-encompassing statement will
suffice." Id.
Moreover, it is clear from a review of the record that the Courtwhich directly questioned Wickfire about
its damage calculationsand Wickfirewhich expressly argued why, in its view, the jury heard sufficient evidence
of damages arising from intentional interferencewere on notice of Defendants' challenge to damages.

7

testified that once the impersonating ads began, Wickfire "started losing campaigns at a rate of
average of about seven per month." Afternoon of Jan. 31, 2017 Tr. at 91:7-12.

Contrary to Defendants' representation, Wickflre was not required to enumerate its lost
profits for each individual merchant contract. See Homoki

v.

Conversion Servs., Inc., 717 F.3d

388, 399-400 (5th Cir. 2013). In Homoki, a credit card processing software company sued its

competitor for intentional interference with existing contracts. Id. at 394. The software company
did not sell its products to merchants directly, but rather contracted with intermediary companies

that connected the software company to merchants. Id. at 3 93-94. The Fifth Circuit concluded
the software company produced sufficient evidence to support its lost profits analysis, which was
based entirely on the business the software company would have generated from the underlying

merchants via its contract with an intermediary company. Id. at 399-400. Notably, the Fifth
Circuit did not require the software company to breakdown its lost profits analysis for each
individual merchant contract. See id.

Like the software company in Homoki, Wickfire' s intentional interference claim is

premised on a company's interference with its intermediate, or affiliate, contracts. As in Homoki,
Wickfire could establish its damages by basing its lost profits analysis on the business it would

have generated from the underlying merchants. It was not required to enumerate its lost profits
for each individual merchant contract.
Moreover, Wickfire's proposed damages were not conjured from thin air, but based on

"objective facts, figures, [and] data from which the amount of lost profits can be ascertained."
ERI Consulting Eng 'rs, Inc.

v.

Swinnea, 318 S.W.3d 867, 876 (Tex. 2010). In establishing

Wickfire' s damages, Jordan relied on the same factors the founder of the software company in
Homoki considered in calculating his damages: the company history, duration of merchant
contracts in the industry, and the rate of increase in sales based on historical growth trends. 717
[.j

F.3d at 399-400. Wickflre was not required to produce tax records or other financial records to
establish its lost profits. Swinnea, 318 S.W.3d at 876 (quoting Holt Atherton Indus., Inc.

v.

Heine, 935 S.W.2d 80, 84 (Tex. 1992)) ("Although supporting documents may affect the weight

of the evidence, it is not necessary to produce in court the documents supporting the opinions or
estimates.")
In a final attempt to show the deficiency of evidence supporting Wickfire's lost profits

analysis, Defendants contend "Texas law prohibits the finding of lost profits based on time lost

from not focusing on one's business." Renewed Mot. J. Matter Law [#364] at 14.
this contention, Defendants relies solely on Home Pro Constr. Co., Inc.

Tn

v.

support of

Hoelscher

Weatherstrip Mfg. Co., Inc., where the Southern District of Texas noted "expenses incurred in

prosecuting or defending a suit are not recoverable as costs or damages unless recovery of those
items is expressly provided by statute, is available under equitable principles,

. . .

or is expressly

provided by contract." No. H-11-4440, 2013 WL 6491189, at *8 (S.D. Tex. Dec. 10, 2013)
(quoting Shenandoah Assocs.

v.

J & K Props., Inc.,

741 S.W.2d 470, 486 (Tex.

App.Dallas

1987, writ denied)). However, Wickflre' s damage request does not include its litigation expenses

or costs, and Home Pro Construction Company does not address whether a party may recover

profits lost from mitigating the business impacts of unlawful conduct. Defendants have therefore
failed to convince the Court of Home Pro Construction Company's applicability in the instant

Accordingly, based on the evidence presented at trial, it was reasonable for the

jury

to

award $1,984,000.00 in damages caused by Defendants' intentional interference with Wickfire's

existing contracts. Defendants' request for judgment as a matter of law on this ground is
DENIED.

ii.

Tortious Interference with Wickfire's Prospective Business Relationships

To prove a claim for tortious interference with prospective business relationships under

Texas law, a plaintiff must establish (1) a reasonable probability the plaintiff would have entered
into a business relationship; (2) an independently unlawful act; (3) the defendant acted with a

desire to prevent the relationship from occurring or the defendant knew the interference was at
least substantially certain to occur as a result of the conduct; and (4) the plaintiff suffered actual

harm as a result. Matter of Dali. Roadster, Ltd., 846 F.3d 112, 123-24 (5th Cir. 2017).

Defendants contend the evidence presented at trial was insufficient to support the jury's finding

of the existence of prospective relationships, an unlawful act, and damages.
In response to Defendants' challenge that Wickfire failed to identify any prospective

relationships, Wickfire highlights several facts in support of its contention that it would have
entered into merchant relationships vis-à-vis TheCoupon.co in early 2013. In 2012, before the
click fraud began, Wickfire was developing TheCoupon.co to provide couponing services to

merchants. Afiernoon of Jan. 30, 2017 Tr. at 30:25-31:23. The jury heard evidence that Wickfire

was attempting to expand its relationships with direct advertising merchants, so that its directsearch customers like Freshology and eFoodsDirects constituted prospective indirect-search
customers for TheCoupon.co. Id. at 16:2-5; Defs.' Exs. [#361-21] Ex. 62 (Email from Chet Hall
to Freshology Representative) at 1843 (discussing development of TheCoupon.co services for

Freshology). The record further shows that many of Wickfire's customers for TheCoupon.co
were, in fact, its existing customers who previously retained Wickfire's direct-search services.
See, e.g., Defs.' Exs. [#361-21] Ex. 57 at 59-1842. Given this evidence, the jury could have

concluded there was a reasonable probability Wickfire would have provided TheCoupon.co
services to its direct clients by March 2013 had it not been for Defendants' conduct.

10

Defendants also contend "Wickfire offered no evidence of an independently tortious or
unlawful act[.]" Renewed Mot. J. Matter Law [#364] at 17. However, the jury heard evidence
Defendants clicked on Wickfire's online advertisements for 12 to 14 hours a day over a period of

months for the sole purpose of forcing Wickfire to pay for the clicks, and this clicking, which
ultimately resulted in 4,080 clicks, could have run Wickfire out of business. See Afternoon of
Jan. 30, 2017 Tr. at 34:18-35:2, 38:15-39:6; Morning of Jan. 31, 2017 at 57:9-24 (testimony

from Dr. Bernard Jansen, Wickfire's expert). Moreover, Wickfire has provided sufficient support
for the proposition that click fraud is unlawful. See, e.g., Find What Inv'r Grp.

v.

Find What.com,

658 F.3d 1282, 1292 (11th Cir. 2011) (describing the "illicit practice[]" of click fraud where the

clicking "result[s] in lower sales conversion rates for advertisers because the leads are

false

they do not come from actual buyers interested in purchasing the advertised products");

Menagerie Prods.

v.

Citysearch, No. CV 08-4263 CAS, 2009 WL 3770668, at *19 (C.D. Cal.

Nov. 9, 2009) (concluding click fraud could serve as the basis for a civil lawsuit against an

online advertiser).
Defendants finally argue there is legally insufficient evidence supporting the jury's award

of damages resulting from their allegedly tortious interference with prospective business
relationships. However, Hall testified that Wickfire began developing TheCoupon.co in 2012 and

would have launched this new advertising campaign had it not been for Defendants' click fraud.
Afternoon of Jan. 30, 2017 Tr. at 30:25-3 1:23, 34:4-13. Hall further testified, "all that [he] did
for months" during this time period was address the harms being caused by click fraud. Id. at

24:25-25:2. Hall's testimony provides a reasonable basis by which the jury could have
concluded Defendants' actions precluded Wickfire from securing prospective business
relationships with existing merchants.

11

Moreover, based on Hall's testimony, Jordan calculated Wickfire's lost profits for the

six-month delay caused by the click fraud. Afternoon of Jan. 31, 2017 Tr. at 88:2-90:5. In his
calculations, Jordan considered the resources Wickfire expended combatting click fraud in

addition to the business and revenue TheCoupon.co eventually generated. Id. As explained
above, the Court finds Jordan's lost profits analysis comports with Fifth Circuit precedent. See

supra Section I.B .i. There was sufficient evidence presented at trial to support the jury's award of
$334,000.00 in damages for tortious interference with prospective business relations.

Defendants' motion for judgment as a matter of law on this ground is DENIED.
Alternatively, Defendants request "remittitur to reduce the damages amount and, if not
accepted by Wickfire, a separate trial on damages." Renewed Mot. J. Matter Law [#364] at 16. A

party's alternative request for remittitur, rather than a new trial, may be granted where the
damage award was "merely excessive or so large as to appear contrary to right reason."

Brunnemann v. Terra Intern, Inc., 975 F.2d 175, 178 (5th Cir. 1992). "A verdict is excessive as
a matter of law

if shown to exceed 'any rational appraisal or estimate of the damages that could

be based upon the evidence before the jury." Brunnemann

v.

Terra Intern., Inc., 975 F.2d 175,

178 (5th Cir. 1992) (quoting Kolb v. Goidring, Inc., 694 F.2d 869, 871 (1st Cir. 1982)). Based on

the evidence presented at trial, the Court finds Wickfire's damages were not excessive as a
matter of law and therefore Defendants' request for remittitur or a separate trial on damages is
DENIED.
iii.

Civil Conspiracy

To establish a civil conspiracy under Texas law, a plaintiff must establish the following

elements: "(1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds

on the object or course of action; (4) one or more unlawful, overt actions; and (5) damages as a

proximate result." Wackman

v.

Rubsamen, 602 F.3d 391, 408 (5th Cir. 2010) (quoting Tn
12

v.

ITT.,

162 S.W.3d 552, 556 (Tex. 2005)). To satisfy the "meeting of the minds" elements, a

plaintiff must allege the defendant had the specific intent to agree "to accomplish an unlawful
purpose or to accomplish a lawful purpose by unlawful means." Id. at 408 (quoting Juhi

v.

Airington, 936 S.W.2d 640, 644 (Tex. 1996)). Defendants contend the evidence at trial was
legally insufficient to support the jury's finding of either unlawful, overt acts taken in
furtherance of a common design or a meeting of the minds.

Wickfire offered evidence at trial that Defendants committed overt, unlawful acts by

managing phony AdWords accounts in the names of Wickfire's founders and publishing
impersonating ads from those accounts. Pl.'s Exs. [#361-3] Ex. 27 (Laura Woodruff's Phony

AdWords Account), Ex. 28 (Josh West's Phony AdWords Accounts). Wickfire also offered
evidence that Defendants committed click fraud against Wickfire by using devices tied to

TriMax's IP addresses. Afternoon of Jan. 30, 2017 Tr. at 19:5-7, 22:14-23:19, 34:14-35:2;
Morning of Jan. 31, 2017 Tr. at 30:20-31:16; see also Pl.'s Exs. [#361-5] Ex. 121 (Fraudulent
Click Log).

There is also evidence in the record to support Wickfire' s argument that Defendants
coordinated their conduct to engage in a conspiracy against Wickfire. An agreement to engage in
a conspiracy "need not be formal." Kirby

v.

Cruce, 688 S.W.2d 161, 164 (Tex.

App.Dallas

1985, writ ref'd n.r.e.). Rather, "the understanding may be a tacit one and it is not essential that

each conspirator have knowledge of the details of the conspiracy." Id. As noted above, the jury
heard evidence that both Woodruff and West, using accounts and IP addresses associated with
TriMax and WREI, accessed phony AdWords accounts from which the impersonating ads were

published. See Laura Woodruff's Phony AdWords Account; Josh West's Phony AdWords
Accounts.

13

Wickfire produced further evidence of an "interlocking relationship of all Defendants
[that] enabled their conspiracy." See Pl.'s Resp. [#368] at 18. On December 12, 2013, Wickfire

sent a cease-and-desist letter to TriMax and Woodruff. Pl.'s Exs. [#361-8] Ex. 136 (Cease and

Desist Letter) at 19-23. The jury heard evidence that within hours of receiving the letter,

Woodruff transferred TriMax's 935 AdWords account to West's WREI. See, e.g., Pl.'s Exs.
[#361-10] Ex. 281 (Excerpt from Change History); Afternoon of Jan. 31, 2017 Tr. at 38:2339:17. Although Woodruff insisted at trial that she did not transfer or delete TriMax's 935

account, the jury was not required to accept this testimony as true, and it is not the Court's

prerogative to question the jury's credibility determinations. See Logan, 263 F.3d at 455 (in
considering a renewed motion for judgment as a matter of law, courts do not "weigh evidence,

judge witness credibility, or challenge the factual conclusions of the jury").
This evidence is sufficient to show a "concert of action" from which the "natural

inference arises that the unlawful, overt acts were committed in furtherance

Int'l Bankers Lfe Ins.
v.

of'

a conspiracy.

Co. v. Holloway, 368 S.W.2d 567, 581 (Tex. 1963); see also Westergren

Jennings, 441 S.W.3d 670, 683-84 (Tex. App.Houston [1st Dist.] 2014, no pet.) (stating

that even when "no one piece of [] evidence (and perhaps not even the totality of it) shows a

conspiracy," circumstantial evidence "and the potential inferences arising therefrom [can]
provide a sufficient factual basis"). Because the jury had a reasonable basis to support its finding

of civil conspiracy, Defendants' renewed motion for judgment as a matter of law on this ground
is DENIED.

iv.

Lanham Act Claim
1.

Jury's Finding of Liability

The sole basis of Defendants' challenge to the jury's finding of liability under Section

43(a) of the Lanham Act is their claim that the words and symbols the impersonating ads used to
14

designate Wickfire as the source of the ads were insufficiently "distinctive" to satisfy Section
43(a).

Section 43(a) of the Lanham Act creates a cause of action against a person who, in
connection with goods or services,
uses in commerce any word, term, name, symbol, or device, or any combination
thereof, or any false designation of origin, false or misleading description of fact,
or false or misleading representation of fact, which . . . is likely to cause
confusion, or to cause mistake, or to deceive as to the affiliation, connection, or
association of such person with another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities by another
person[.]
15 U.S.C.

§

1125(a)(1)(A). Section 43(a) "extends beyond mere trademark protection."

Schlotzsky 's, Ltd.

v.

Sterling Purchasing and Nat. Distribution Co., Inc., 520 F.3d 393, 399 (5th

Cir. 2008). Thus, a mark is protectable under Section 43(a) as long as it has acquired

distinctiveness, which turns on whether the words or symbols used "cause confusion.
origin, sponsorship, or approval" of goods or services. No/a Spice Designs

v.

. .

as to...

Haydel Enterps.,

783 F.3d 527, 537 (5th Cir. 2015).

Words or symbols can be distinctive in one of two ways. First, words or symbols are

inherently distinctive if their intrinsic nature serves to identify a particular source. Wa/-Mart
Stores

v.

Samara Bros., 529 U.S. 205, 210-11(2000). Alternatively, words or symbols can

"acquire[] distinctiveness, even if

.

.

.

not inherently distinctive, if [they] ha[ve] developed

secondary meaning, which occurs when, in the minds of the public, the primary significance...
is to identify the source of the product rather than the product itself." Id. (quotation and citation

omitted).
As to Defendants' claim that there was insufficient evidence to support a finding that

Wickflre's unique identifiersits tracking identifier 606880 and TheCoupon.coare distinctive,
the Court disagrees. The jury heard evidence that in some of the impersonating ads, Wickfire's

tracking identifier was embedding in the ad, while other impersonating ads linked to Wickfire's

uniform resource locator (URL) for TheCoupon.co. Id. at 40:4-42:7. Both the tracking identifier,
which is a distinctive numerical identifier, and TheCoupon.co, which Wickfire owns, serve to

identify one sourceWickfire--and therefore comport with Supreme Court precedent holding
symbols are distinctive if their intrinsic nature serves to identify a particular source. See Samara

Brothers, Inc., 529 U.S. at 210-11.
Even if Wickfire's unique identifiers are not inherently distinctive, both 606880 and
TheCoupon.co have acquired secondary meaning. The Court instructed the jury that it could find
a word or symbol acquired secondary meaning by considering seven factors. Charge Ct. [#355]
at 7. One of the factors the Court explicitly directed the jury to consider was "instances of actual

consumer conftsion[.]" Id. Hall testified that Defendants' use of Wickfire's unique identifiers
caused Wickfire's customers to believe Wickflre published the violating ads. Afternoon of Jan.
30, 2017 Tr. at 43:19-44:12; see also Merchant Violation Notice. Hall further testified that this

belief led dozens of merchants to send violation notices to Wickfire and, in some cases, even
terminate their relationship with Wickfire. See Afternoon of Jan. 30, 2017 Tr. at 44:4-1 8; Pl.'s
Exs. [#361-4] Ex. 105 (Bloomex Termination Notice) at 592. In light of the foregoing, the Court

finds there is legally sufficient evidence in the record to support the jury's finding of liability

under Section 43(a) of the Lanham Act.
2.

Defendants' Unclean Hands Defense

Defendants argue Wickfire's Lanham Act claim is barred by the equitable defense of
unclean hands. This defense applies "when a party seeking relief has committed an
unconscionable act immediately related to the equity the party seeks in respect to the litigation."

Petro Franchise Sys., LLC v. All Am. Properties, Inc., 607 F. Supp. 2d 781, 799 (W.D. Tex.
2009) (quoting Highmark, Inc.

v.

UPMC Health Plan, Inc., 276 F.3d 160, 174 (3d Cir. 2001)).
16

The unclean hands defense is available only where the alleged misconduct is directly related to
the merits of the controversy between the parties. See Mitchell Bros. Film Grp.

v.

Cinema Adult

Theater, 604 F.2d 852, 863 (5th Cir. 1979). In the context of the Lanham Act, "the unclean
hands of the plaintiff must relate to the same product that the defendant allegedly falsely

advertised." Healthpoint, Ltd.

v.

Ethex Corp., 273 F. Supp. 2d 817, 848-49, 851 (W.D. Tex.

2001).
In support of their unclean hands defense, Defendants contend Wickfire took the same
actions of which it now complains; that is, although Wickfire complains of Defendants' actions

in using its tracking identifiers to confuse merchants, Wickflre itself confused merchants into
believing ads originated by Wickfire by (1) "post[ing] ads with a link to WebCrawler, even

though the WebCrawler mark belonged to someone else," and (2) "us[ing] tracking links
virtually identical to TriMax's tracking links." Renewed Mot. J. Matter Law [#364] at 24. Even

assuming the evidentiary record supports these allegations, none of the alleged misconduct has
any bearing on the subject matter of this controversy. Defendants urge the Court to draw a

comparison between exact tracking identifiers Defendants used to identify Wickfire in their
impersonating ads, and the "virtually identical" tracking identifiers Wickfire used to identify

Defendants in direct ads it posted after the WebCrawler ad depleted the budget of the direct ad in
the first place. See Renewed Mot. J. Matter Law [#364] at 24. However, as Wickfire points out,

using a "virtually identical" tracking identifier is like using a "virtually identical" driver's license
number: any difference between the two numbers removes the possibility of confusion.
Defendants have therefore failed to convince the Court of Wickfire' s unclean hands.

17

II.

Motion for New Trial

A.

Legal Standard
A motion for new trial may be granted if the jury's verdict was against the great weight

of the evidence, the trial was unfair, or some prejudicial error was committed during the trial.
FED.

R. Civ. P. 59(a); Smith v. Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985);

Conway

v.

Chem. Leaman Tank Lines, Inc., 610 F.2d 360, 363 (5th Cir. 1980). As with a Rule

50(b) motion, the Court views the evidence "in the light most favorable to the jury verdict."
Seidman
B.

v. Am.

Airlines, Inc., 923 F.2d 1134, 1140 (5th Cir. 1991).

Application
Defendants raise a number of arguments in their motion for new trial which the Court has

already considered, such as their assertion that the jury's verdict was against the great weight of
evidence. See Renewed Mot. J. Matter Law [#364J at 8. The Court rejects these arguments for

the reasons previously stated. See supra Section I.B. Defendants also challenge a laundry list of
evidentiary rulings, but do not even attempt to explain the alleged errors or how these errors

prejudiced them. See id. at 25. Having carefully considered these evidentiary rulings at trial, the
Court declines to revisit them today.

Defendants do, however, proffer a new substantive argument challenging the jury's

finding that Wickfire had a colorable right to intentionally interfere with TriMax's contracts.
Defendants contend this finding "was wrong, since the record is completely devoid of any such
evidence that would represent Wickfire mistakenly believing that its tortious interference was
somehow legal." Id. at 26. However, the jury heard evidence that Google investigated Wickfire' s

AdWords bidding and determined it was permissible. Pl.'s Exs. [#361-4] Exs. 55 (First Email
from Google AdWords Team), 56 (Second Email from Google AdWords Team), 57 (Third
Email from Google AdWords Team); Feb. 1, 2017 Tr. at 90:11-92:11. Moreover, Hall testified

Google never complained to Wickfire about its bidding, even though Google had investigated

these practices. Afternoon of Jan. 30, 2017 Tr. at 35:24-37:8. Hall further testified that it

received awards from Google even after it told Google about its bidding practices. Id. at 37:938:13. Having heard this evidence, the jury could reasonably conclude Wickfire had a "good-

faith belief that it had colorable legal rights to take such actions, even

if that belief ultimately

proved to be mistaken." Charge Ct. [#355] at 12; see, e.g., Wal-Mart Stores, Inc.

v.

Sturges, 52

S.W.3d 711, 727 (Tex. 2001) ("[W]hen two parties are competing for interests to which neither
is entitled, then neither can be said to be more justified or privileged in his pursuit. If the conduct

of each is lawful, neither should be heard to complain that mere unfairness is actionable.").
III.

Wickfire's Motion for Entry of Judgment
In its motion for entry of judgment, Wickfire seeks entry of judgment and requests

prejudgment and postjudgment interest on its damage award. See Mot. Entry J. [#363].
Defendants oppose this motion, arguing, among other things, the language in the proposed

judgment is both inflammatory and misrepresents the jury's verdict and contending Wickfire is
not entitled to prejudgment interest on its damage award. In an attempt to address Defendants'
objections and expedite the resolution of the case, Wickfire filed a revised proposed judgment.

The Court finds the language of the revised judgment accurately represents the jury's verdict and
therefore sufficiently addresses Defendants' first challenge to Wickfire's proposed judgment.

Nevertheless, the Court finds merit in Defendants' challenge to Wickfire's request for
prejudgment interest, and therefore denies Wickfire's motion for entry of judgment to the extent
it seeks prejudgment interest on its damages award. "State law governs the award of prejudgment

interest in diversity cases." Harris v. Mickel, 15 F.3d 428, 429 (5th Cir. 1994) (citations omitted).
Because the Court has supplemental jurisdiction over Wickfire' s state law claims, Texas law
applies to those claims. See, e.g., Wesley

v.

Yellow Transp., Inc., No. 3:05-CV-2266-D, 2010 WL
19

3606095, at *1 (N.D. Tex. Sept. 16, 2010) (applying Texas law to the plaintiff's state law claim
arising under supplemental jurisdiction to determine the award of prejudgment interest). "In the

absence of a statutory right to prejudgment interest, Texas law allows for an award of equitable
prejudgment interest under Cavnar
1985)." Bituminous Cas. Corp.

v.

v.

Quality Control Parking, Inc., 696 S.W.2d 549 (Tex.

Vacuum Tanks, Inc., 75 F.3d 1048, 1057 (5th Cir. 1996).

Under this standard, "an equitable award of prejudgment interest should be granted to a
prevailing plaintiff in all but exceptional circumstances." Id. (citation omitted). Exceptional
circumstances exist where a plaintiff improperly delays resolution of an action, a genuine dispute

over a good faith claim exists in a mutual fault setting, an equitable doctrine cautions against the
award, or the damages award was substantially less than the amount claimed by the plaintiff See

Reeland Tubing, Inc.

v.

M/VCHAD G, 794 F.2d 1026, 1028 (5th Cir. 1986).

The Court finds this case presents nothing if not exceptional circumstances. As the Court

previously stated, "[t]his case is an example of failure to have any diligence in complying with
the Federal Rules of Civil Procedure, this Court's orders or the simple prosecution and

development of a case." Order of Dec. 23, 2014 [#65] at

1.

To highlight just a few instances of

particularly exceptional conduct throughout this litigation, the Court directs the parties' attention
to Wickfire's repeated motions to extend deadlines and its five attempts to plead an adequate

complaint over the course of a year and a half, which is especially striking given Wickfire's

present contention that it was ready for trial in October 2015 even though four months before
trial, each side had taken but a single deposition, and further, thirty-three third-party subpoenas

remained outstanding. See Order of June 20, 2015 [#123] at

1.

Defendants, for their part, contributed to the exceptional circumstances by ignoring the

Court's admonition that Defendants' Sherman Act allegations "appear completely devoid of
factual support and in present form are nothing more than bare legal conclusions," Order of June

10, 2015 [#123], and continuing to pursue these claims for months until the Court ultimately

dismissed these claims on March 24, 2016. See Order of Mar. 24, 2016 [#198]. Defendants'
multiple attempts to plead these claims included language so inflammatory the Court granted

Wickfire's motion to strike the language, noting that "any first-year lawyer would know" the
challenged allegations in the counterclaims "will not be admissible and should never have been

pleaded," and sua sponte sealing one of Defendants' pleadings. See Order of Jan. 5, 2016 [#160];
Am; Countercl. [#15 1]

¶fJ

20,5, 20.10. Although Defendants share in the blame for delays in this

case, it is the "utterly abysmal track record" of both parties that contributed to the beleaguered

nature of this action. See Order of June 15, 2016 [#230] at 1, 8. In light of the exceptional
circumstances presented in this case, the Court declines to award Wickfire's prejudgment interest

on its damages award.
Wickfire is, however, entitled to recover postjudgment interest on this amount.
Postjudgment interest, unlike prejudgment interest, is a matter of federal law and is awarded as a

matter of course under 28 U.S.C.

§

1961. Such interest is calculated at the time the judgment is

entered and is based on the weekly average Treasury yield. 28 U.S.C.

§

1961(a). In this case, the

Court awards postjudgment interest of 1.00% per annum until the entire amount of the final
judgment, including damages, prejudgment interest, and attorneys' fees, is fully paid. See, e.g.,

Fuchs

v.

Lifetime Doors, Inc., 939, F.2d 1275, 1280 (5th Cir. 1991) ("[W]e direct the district

court to award post-judgment interest on the entire amount of the judgment, including damages,
prejudgment interest, and attorney's fees.").

Conclusion
IT IS ORDERED that Plaintiff Wickfire, LLC's Unopposed Motion to Dismiss
[#344] is GRANTED;

21

IT IS FURTHER ORDERED that Plaintiff Wickfire, LLC's claims for business

disparagement, defamation, and misappropriation are DISMISSED WITH PREJUDICE;
IT IS FURTHER ORDERED that Defendants TriMax Media, LLC, WREI, Inc.,

Josh West, and Laura Woodruff's Motion for Judgment as a Matter of Law [#364] is
DENIED;
IT IS FURTHER ORDERED that Plaintiff Wickfire, LLC's Motion for Entry of

Final Judgment [#3 63] is GRANTED IN PART and DENIED

TIN

PART as described in

this opinion;
IT IS FURTHER ORDERED that Plaintiff Wickfire, LLC does have and recover

judgment against Defendants TriMax Media, LLC, WREI, Inc., Josh West, and Laura

Woodruff in the amount of TWO MILLION THREE HUNDRED EIGHTEEN
THOUSAND AND 0/100 DOLLARS ($2,318,000.00), plus postjudgment interest at the

rate of 1.00% per al-mum from the date of this judgment until the judgment is fully paid;
IT IS FURTHER ORDERED that, pursuant to the jury's proportionate

responsibility findings, Defendant Laura Woodruff must pay 95% of the total amount of
the judgment and Defendant Josh West must pay 5% of the total amount of the judgment;
and
IT IS FINALLY ORDERED that the parties, both having argued they are entitled

to reasonable attorneys' fees, shall file respective motions requesting an amount of

attorneys' fees through the procedure provided by Local Rule CV-7(j). Counsel for both

parties shall meet and confer, either in person or by telephonenot by

emailand

attempt to agree on a request for attorneys' fees before any such request is filed. Each

party's request must be filed within FOURTEEN (14) DAYS of entry of this Order, and

22

the responding party shall have FOURTEEN (14) DAYS from the date of the filing of the

request to object or otherwise respond to the request.
SIGNED this the

c23ay of March 2017.

SA?R''

UNITED STATES DISTRICT JUDGE

23