News & Insights

Dykema and Dunnam & Dunnam Team up to Secure IP Bench Trial Win for Neighborly and ProTradeNet in Hotbed Venue for Patent Cases

February 24, 2020

Dykema, a leading national law firm, and Dunnam & Dunnam, a Waco-based law firm, teamed up to and successfully represented Neighborly Franchising LLC and ProTradeNet LLC in the U.S. District Court for the Western District of Texas in Waco, which has quickly become a hotbed for IP filings. After a bench trial concluded in late October 2019, Judge Alan D. Albright issued his final judgment on February 19, 2020, finding in favor of Neighborly and ProTradeNet, including an award of more than $3.6M in damages and granting the requested permanent injunctive relief, and dismissing all of their opponent’s counterclaims.

Neighborly is a holding company of 23 service-based franchise brands, focused on repairing, maintaining and enhancing consumers’ homes and properties. ProTradeNet is the vendor relations division for Neighborly and all of its franchising concepts and serves as a platform in which franchisees are able to build and maintain relationships and programs with Preferred Vendors who have signed a Distributor Vendor Relations Agreement (“Agreement”). However, franchisees are not required to use the Preferred Vendors, who are also non-exclusive. The Agreement is terminable by either party for no cause with 90 days' notice.

Predictive Profiles, Inc. was one of the selected Preferred Vendors. Under the terms of the Agreement, Predictive agreed to post jobs for ProTradeNet’s franchisors by use of their web-based employee application system and was allowed limited rights to use and display 11 of Neighborly and PTN’s trademarks and logos, including use of the IP in domain names and webpage content.

A few months after the Agreement was formalized, ProTradeNet notified Predictive that it was terminating the Agreement after it and Franchisees began to experience issues with Predictive's services. After the Agreement was terminated, ProTradeNet sent Predictive a notice that it was no longer authorized to use the IP on webpages it had been operating as part of its services and it was to disable or terminate the domain names that utilized the trademarks as well. Rather than ceasing to use the IP, taking down the URLs, and discontinuing use of the domains, Predictive instead registered new URLs and then “redirected” all traffic from prior URLs to new ones and continued to use Neighborly and ProTradeNet’s trademarks and logos on the webpages.

As a result, ProTradeNet filed suit for breach of contract, federal trademark infringement, federal unfair competition, and cybersquatting, and obtained preliminary injunction. Predictive also sued ProTradeNet for more than $2 million for breach of contract, unfair competition, and interference with contract. The trial team was made up of Victor Johnson from Dykema and Jim Dunnam from Dunnam & Dunnam.

After the trial concluded, Judge Albright took the matter under advisement and requested a post-hearing briefing. On February 19, Judge Albright issued his judgment finding that Neighborly and ProTradeNet had proven all of their claims and awarded them more than $3.6M in damages plus attorney fees. Judge Albright also found that Predictive had failed to prove any of its claims and dismissed them all. Finally, Judge Albright issued a Permanent Injunction against Predictive.

Since taking the bench in September 2018, Judge Albright’s federal courtroom has quickly become a hotbed for IP filings. Since he’s taken the bench, there have been more than 250 new patent cases filed in the Western District of Texas, which includes Waco. This total exceeds the number of patent cases for the previous four years combined. Last year, civil lawsuit filings of all manner in Waco’s federal court have doubled from an average of about 350 to about 725. As a result, Judge Albright’s Waco courthouse is among the busiest in the country for IP cases.

Johnson is a Member in the Intellectual Property Group out of Dykema’s Dallas office. He has been litigating patent, trademark, copyright and trade secret cases for nearly 20 years for clients across the U.S. and is part of Dykema’s National Trial Team. Johnson has extensive experience representing clients ranging from Fortune 500 to start-ups in patent and IP cases across the U.S., including Eastern and Western Districts of Texas. He has been named a Texas Super Lawyer for IP for the last six years, as a Best Lawyer for Intellectual Property by DMagazine, and as a  Best Lawyer Under 40 by DMagazine.

In just the last three years, Dunnam has personally handled more than 30 civil cases in the Waco Division, the majority involving IP issues, including two successful bench trials before Judge Albright. Having served in diverse roles, ranging from seven-terms in the Texas House of Representatives to membership on the Texas Supreme Court Rules Advisory Committee and the Texas Sunset Commission, he has received numerous awards and recognitions for his legal ability, including the 2001 Baylor Young Lawyer of the Year and Wacoan Magazine’s Best Trial Lawyer.