Free Answer to Counterclaim - District Court of California - California

Case 3:07-cv-02222-IEG-BLM

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1 AMAR L. THAKUR, CAL. BAR NO. 194025 JON E. MAKI, CAL. BAR NO. 199958 2 NICOLE M. LEE, CAL. BAR NO. 222344 CRYSTINA COATS, CAL BAR NO. 234301 3 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership 4 Including Professional Corporations 12275 El Camino Real, Suite 200 5 San Diego, California 92130 Telephone: 858-720-8900 6 Facsimile: 858-509-3691 Email: [email protected] 7 [email protected] [email protected] 8 [email protected] 9 Attorneys for Plaintiff and Counterdefendant Bridgepoint Education, Inc. 10 11 12 13 14 BRIDGEPOINT EDUCATION, INC., 15 16 v. Plaintiff, CASE NO. 07 CV 2222 IEG (BLM) BRIDGEPOINT EDUCATION, INC.'S REPLY TO PROFESSIONAL CAREER DEVELOPMENT INSTITUTE, LLC'S COUNTERCLAIM UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

17 PROFESSIONAL CAREER DEVELOPMENT INSTITUTE, LLC, and 18 DOES 1-10, inclusive, 19 20 21 PROFESSIONAL CAREER DEVELOPMENT INSTITUTE, LLC, 22 Counterclaimant, 23 v. 24 BRIDGEPOINT EDUCATION, INC., 25 Counterdefendant. 26 27 28
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Defendants.

Complaint Filed: Trial Date:

November 20, 2007 None set.

BRIDGEPOINT'S REPLY TO PCDI'S COUNTERCLAIM 07cv2222

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Plaintiff and Counterdefendant Bridgepoint Education Inc. ("Counterdefendant" or

2 "Bridgepoint") hereby responds to Defendant and Counterclaimant's, Professional Career 3 Development Institute, LLC ("Counterclaimant" or "PCDI") Counterclaim, and asserts affirmative 4 defenses, as follows: 5 6 7 8 1. INTRODUCTION Bridgepoint admits that the Patent and Trademark Office records appear to REPLY TO COUNTERCLAIM

9 show that the mark "ASHWORTH COLLEGE" was registered on the Supplemental Register to 10 PCDI on July 30, 2002. Bridgepoint is without knowledge or information sufficient to form a 11 belief as to the remaining allegations of paragraph 1 of the Counterclaim, and on that basis denies 12 them. 13 2. Bridgepoint denies that it first used the mark "ASHFORD COLLEGE" in

14 March 2005, denies that Bridgepoint's service mark registration on the Principal Register lists its 15 mark as "ASHFORD COLLEGE" or that "its" mark, "ASHFORD COLLEGE," was registered on 16 March 20, 2007. Bridgepoint admits that it "made no claim to the exclusive right to use 17 `University' apart from `ASHFORD'" on its service mark registration on the Principal Register 18 for its mark "ASHFORD UNIVERSITY." Bridgepoint admits that the Patent and Trademark 19 Office records appear to show that in the service mark registration for the mark "ASHWORTH 20 COLLEGE" on the Supplemental Register, PCDI made no claim to the exclusive right to use 21 "College" apart from "ASHWORTH." Bridgepoint denies the remaining allegations of paragraph 22 2 of the Counterclaim. 23 24 25 26 4. GENERAL COUNTERCLAIM ALLEGATIONS Bridgepoint denies the allegations of Paragraph 4 of the Counterclaim to the 3. Bridgepoint denies the allegations of Paragraph 3 of the Counterclaim.

27 extent it is claiming that PCDI's trademark "ASHWORTH COLLEGE" is registered on the 28 Principal Register. Bridgepoint admits that pursuant to Exhibit A to PCDI's Counterclaim, the -1W02-WEST:6NML1\400692461.2

BRIDGEPOINT'S REPLY TO PCDI'S COUNTERCLAIM 07cv 2222

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1 trademark "ASHWORTH COLLEGE," having registration number 2,603,090 appears to have 2 been registered on the Supplemental Register to PCDI on July 30, 2002. Bridgepoint is without 3 knowledge or information sufficient to form a belief as to the remaining allegations of paragraph 4 4 of the Counterclaim, and on that basis denies them. 5 5. Bridgepoint is without knowledge or information sufficient to form a belief

6 as to the allegations of paragraph 5 of the Counterclaim, and on that basis denies them. 7 6. Bridgepoint admits that Ashford University offers learning programs for

8 individuals to receive degrees in business administration (associate degree), criminal justice and 9 master's in accounting. Bridgepoint denies that it offers courses in high school diploma subjects, 10 paralegal, gunsmithing or medical transcription. Bridgepoint is without knowledge or information 11 sufficient to form a belief as to the remaining allegations of paragraph 6 of the Counterclaim, and 12 on that basis denies them. 13 7. Bridgepoint is without knowledge or information sufficient to form a belief

14 as to the allegations of paragraph 7 of the Counterclaim, and on that basis denies them. 15 8. Bridgepoint is without knowledge or information sufficient to form a belief

16 as to the allegations of paragraph 8 of the Counterclaim, and on that basis denies them. 17 9. Bridgepoint denies that its "distance learning-related goods and services in

18 interstate commerce, including within and without California and including this judicial district, 19 though websites, and other means of advertising, including those with domain names are 20 confusingly similar to" its own trademark. Bridgepoint further denies that it has a trademark 21 "ASHWORTH UNIVERSITY." 22 10. Bridgepoint admits that substantial similarity exists in sight and sound

23 between Bridgepoint's federally registered trademark "ASHFORD UNIVERSITY" and related 24 domain names and PCDI's name "ASHWORTH UNIVERSITY." Bridgepoint denies that PCDI's 25 name, "ASHWORTH UNIVERSITY," is a registered mark. Bridgepoint also denies that the "use 26 in commerce of the Ashford University name, domain names and service mark and trademark 27 constitute infringement of Defendant's registered trademark, ASHWORTH COLLEGE." 28 Bridgepoint also denies that the "use in commerce of the Ashford University name, domain names -2W02-WEST:6NML1\400692461.2

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1 and service mark ... is likely ... to cause confusion, deception and/or mistake" with Defendant's 2 registered trademark, ASHWORTH COLLEGE. Bridgepoint is without knowledge or 3 information sufficient to form a belief as to whether the "use in commerce of the Ashford 4 University name, domain names and service mark ... has caused actual confusion, deception 5 and/or mistake" with Defendant's registered trademark, ASHWORTH COLLEGE, and on that 6 basis denies them. Bridgepoint also admits that both "ASHFORD UNIVERSITY" and 7 "ASHWORTH UNIVERSITY" begin with "Ash" and contain "or" in text and sound. Bridgepoint 8 further admits that the small differences between the letters in "ASHWORTH UNIVERSITY" and 9 those in Bridgepoint's registered mark of "ASHFORD UNIVERSITY" and related domain names 10 do not significantly change the sound of the names when pronounced. Bridgepoint denies the 11 remaining allegations of Paragraph 10 of the Counterclaim. 12 11. Bridgepoint admits that PCDI's name, "ASHWORTH UNIVERSITY," is

13 strikingly similar in an aesthetic sense to Bridgepoint's federally registered trademark, 14 "ASHFORD UNIVERSITY." Bridgepoint denies that PCDI's name, "ASHWORTH 15 UNIVERSITY," is a registered mark. Bridgepoint admits that "ASHFORD UNIVERSITY" is 16 being used to brand and market goods and services in the U.S. Classes 100, 101 and 107. 17 Bridgepoint also admits that the Patent and Trademark Office records appears to show that the 18 mark "ASHWORTH COLLEGE" was registered on the Supplemental Register to PCDI for the 19 service mark classes of 100, 101 and 107. Bridgepoint is without knowledge or information 20 sufficient to form a belief as to whether Defendant's name "ASHWORTH UNIVERSITY" is 21 "being used to brand and market goods and services in the exact USPTO service mark classes 100, 22 101 and 107," and on that basis denies it. Bridgepoint denies the remaining allegations of 23 Paragraph 11 of the Counterclaim. 24 12. Bridgepoint admits that its goods and services are offered throughout the

25 United States. Bridgepoint further admits that it uses the Internet and various other media 26 channels to market and promote some of its goods and services to the same potential customers for 27 PCDI's "ASHWORTH UNIVERSITY." Bridgepoint is without knowledge or information 28 sufficient to form a belief as to the remaining allegations of paragraph 12 of the Counterclaim, and -3W02-WEST:6NML1\400692461.2

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1 on that basis denies them. 2 3 13. 14. Bridgepoint denies the allegations of Paragraph 13 of the Counterclaim. Bridgepoint neither admits nor denies the averments contained in Paragraph

4 14 of the Counterclaim because those averments are conclusions of law to which no response is 5 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies 6 that it purportedly has constructive notice of PCDI's "ASHWORTH COLLEGE" mark by virtue 7 of its publication and registration on the Supplemental Register. Furthermore, Bridgepoint denies 8 that PCDI's name, "ASHWORTH UNIVERSITY" is registered on either the Principal Register or 9 Supplemental Register. Bridgepoint is without knowledge or information sufficient to form a 10 belief as to the remaining allegations of paragraph 14 of the Counterclaim, and on that basis denies 11 them. 12 13 14 15 16 FIRST CLAIM FOR RELIEF (Federal Trademark Infringement Against Plaintiff (15 U.S.C. § 1114 et seq.)) 16. Bridgepoint refers to and incorporates its responses set forth above to each 15. Bridgepoint denies the allegations of Paragraph 15 of the Counterclaim.

17 and every allegation in Paragraphs 1-15 as if fully set forth herein. 18 19 20 21 22 23 24 25 SECOND CLAIM FOR RELIEF (Unfair Competition and False Designation of Origin (15 U.S.C. § 1125)) 21. Bridgepoint refers to and incorporates its responses set forth above to each 17. 18. 19. 20. Bridgepoint denies the allegations of Paragraph 17 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 18 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 19 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 20 of the Counterclaim.

26 and every allegation in Paragraphs 1-16 as if fully set forth herein. 27 22. Bridgepoint neither admits nor denies the averments contained in Paragraph

28 22 of the Counterclaim because those averments are conclusions of law to which no response is -4W02-WEST:6NML1\400692461.2

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1 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies the 2 allegations of Paragraph 22 of the Counterclaim. 3 4 5 6 7 23. 24. 25. 26. 27. Bridgepoint denies the allegations of Paragraph 23 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 24 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 25 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 26 of the Counterclaim. Bridgepoint neither admits nor denies the averments contained in Paragraph

8 27 of the Counterclaim because those averments are conclusions of law to which no response is 9 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies the 10 allegations of Paragraph 27 of the Counterclaim. 11 12 13 14 15 28. THIRD CLAIM FOR RELIEF (Unfair Competition and False Designation of Origin (California Business & Professions Code §§ 17200 and 17500)) Bridgepoint refers to and incorporates its responses set forth above to each

16 and every allegation in Paragraphs 1-27 as if fully set forth herein. 17 29. Bridgepoint neither admits nor denies the averments contained in Paragraph

18 29 of the Counterclaim because those averments are conclusions of law to which no response is 19 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies the 20 allegations of Paragraph 29 of the Counterclaim. 21 22 23 30. 31. 32. Bridgepoint denies the allegations of Paragraph 30 of the Counterclaim. Bridgepoint denies the allegations of Paragraph 31 of the Counterclaim. Bridgepoint neither admits nor denies the averments contained in Paragraph

24 32 of the Counterclaim because those averments are conclusions of law to which no response is 25 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies the 26 allegations of Paragraph 32 of the Counterclaim. 27 /// 28 -5W02-WEST:6NML1\400692461.2

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FOURTH CLAIM FOR RELIEF (Cancellation of Service Mark Registration No. 3,220,625 (15 U.S.C. § 1119)) 33. Bridgepoint refers to and incorporates its responses set forth above to each

4 and every allegation in Paragraphs 1-32 as if fully set forth herein. 5 34. Bridgepoint neither admits nor denies the averments contained in Paragraph

6 34 of the Counterclaim because those averments are conclusions of law to which no response is 7 required. 8 35. Bridgepoint is without knowledge or information sufficient to form a belief

9 as to the allegations of paragraph 35 of the Counterclaim, and on that basis denies them. 10 36. Bridgepoint admits that its stated first use in commerce on its Principal

11 Register application for "ASHFORD UNIVERSITY" is March 2005. Bridgepoint denies the 12 remaining allegations of Paragraph 36 of the Counterclaim. 13 37. Bridgepoint denies the allegations of Paragraph 37 of the Counterclaim to

14 the extent it is referring to Defendant's "ASHWORTH COLLEGE" mark. 15 38. Bridgepoint neither admits nor denies the averments contained in Paragraph

16 38 of the Counterclaim because those averments are conclusions of law to which no response is 17 required. To the extent those averments may be deemed averments of fact, Bridgepoint denies the 18 allegations of Paragraph 38 of the Counterclaim. 19 20 21 PRAYER FOR RELIEF Bridgepoint denies that PCDI is entitled to any of the relief sought in Paragraphs

22 (1) through (16) of PCDI's Prayer For Relief. 23 /// 24 /// 25 /// 26 /// 27 28 -6W02-WEST:6NML1\400692461.2

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BRIDGEPOINT'S AFFIRMATIVE DEFENSES AND FOR AFFIRMATIVE DEFENSES TO THE COUNTERCLAIM, AND

3 EACH PURPORTED CLAIM THEREIN, THE COUNTERDEFENDANT ALLEGES AS 4 FOLLOWS: 5 6 7 8 FIRST AFFIRMATIVE DEFENSE (Failure to State Claim) The Counterclaim and/or each claim contained therein fails to state facts sufficient

9 to constitute a claim against the Counterdefendant. 10 11 12 13 SECOND AFFIRMATIVE DEFENSE (Estoppel) The Counterclaim and each and every purported cause of action set forth therein is

14 barred by the doctrine of estoppel. 15 16 17 18 THIRD AFFIRMATIVE DEFENSE (Waiver) As to each and every claim purporting to sound in equity, Counterclaimant's

19 Counterclaim is barred by the doctrine of waiver. 20 21 22 23 FOURTH AFFIRMATIVE DEFENSE (Laches) As to each and every claim purporting to sound in equity, Counterclaimant's

24 Counterclaim is barred by laches. 25 26 27 28 FIFTH AFFIRMATIVE DEFENSE (Exclusive Right to Use) Counterdefendant has a valid and properly issued registration for the trademark -7W02-WEST:6NML1\400692461.2

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1 "ASHFORD UNIVERSITY" (Registration No. 3,220,625). Pursuant to 15 U.S.C. §§ 1057 and 2 1115, Counterdefendant has the exclusive right to use that registered mark in commerce on the 3 goods and services specified in the registration certificate. Counterclaimant's counterclaims 4 interfere that right. 5 6 7 8 SIXTH AFFIRMATIVE DEFENSE (Acquiescence) The Counterclaim and each and every purported cause of action set forth therein is

9 barred by the doctrine of acquiescence. 10 11 12 13 SEVENTH AFFIRMATIVE DEFENSE (Unclean Hands) As to each and every claim purporting to sound in equity, Counterclaimant's

14 Counterclaim is barred by the doctrine of unclean hands. 15 16 17 18 EIGHTH AFFIRMATIVE DEFENSE (Lack of Intent) Counterdefendant at all times believed its conduct to be fair and lawful, and was

19 therefore without any specific intent to engage in the alleged infringement. 20 21 22 23 NINTH AFFIRMATIVE DEFENSE (Failure to Mitigate Damages) Counterclaimant's claims for relief are barred, or should be reduced, due to

24 Counterclaimant's failure to mitigate its purported damages. 25 26 27 28 TENTH AFFIRMATIVE DEFENSE (Justification) Counterclaimant's claims for relief are barred by the doctrine of justification. -8W02-WEST:6NML1\400692461.2

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ELEVENTH AFFIRMATIVE DEFENSE (Trademark Misuse) Counterclaimant's claims for relief are barred by the doctrine of trademark misuse.

TWELFTH AFFIRMATIVE DEFENSE (No Attorneys' Fees) Counterclaimant is not entitled to attorneys fees because Counterclaimant cannot

8 prove that Counterdefendant willfully infringed Counterclaimants' lawfully-issued marks. 9 10 11 12 THIRTEENTH AFFIRMATIVE DEFENSE (No Punitive Damages) Counterclaimant has failed to, and cannot, state facts sufficient to warrant punitive

13 damages and Counterclaimant's prayer for punitive damages is unconstitutional because it violates 14 the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States 15 and/or Section 7 of Article I of the Constitution of the State of California and the Excessive Fines 16 Clause of the Eighth Amendment to the Constitution of the United States and/or Section 17 of 17 Article I of the Constitution of the State of California. 18 19 20 21 FOURTEENTH AFFIRMATIVE DEFENSE (No Damages) Counterclaimant has not suffered any damages as a result of any actions taken by

22 Counterdefendant or its agents, and Counterclaimant is thus barred from asserting any cause of 23 action against Counterdefendant. 24 25 26 27 FIFTEENTH AFFIRMATIVE DEFENSE (Adequate Remedy At Law) Counterclaimant's request for injunctive relief must be denied because a legal

28 remedy would be adequate. -9W02-WEST:6NML1\400692461.2

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1 2 3 4 SIXTEENTH AFFIRMATIVE DEFENSE (Reservation of Right to Supplement with Additional Defenses) Counterdefendant presently has insufficient knowledge or information upon which

5 to form a belief as to whether it may have additional, as yet unstated, affirmative defenses 6 available. Counterdefendant reserves the right to assert additional affirmative defenses as may 7 become available during discovery in this action. 8 9 10 11 PRAYER WHEREFORE, Counterdefendant Bridgepoint Education Inc. prays as follows: 1. That the Counterclaim be dismissed with prejudice, and that

12 Counterclaimant take nothing thereby; 13 2. That Counterdefendant be found to have not infringed on any trademark of

14 Counterclaimant; 15 3. That Counterdefendant be found not liable for false designation of origin

16 and not liable for unfair and unlawful competition and business practices in violation of the federal 17 Lanham Act, 15 U.S.C. § 1125 et seq.; 18 4. That Counterdefendant be found not liable for false designation of origin

19 and not liable for unfair and unlawful competition and business practices in violation of the 20 California Business and Professions Code; 21 5. That Counterdefendant's Service Mark Registration No. 3,220,625 be found

22 valid and duly and lawfully issued and not subject to cancellation; 23 6. That judgment be rendered in favor of Counterdefendant Bridgepoint

24 Education Inc.; 25 26 7. 8. That the Court deny any requested injunctive relief; That Counterdefendant Bridgepoint Education Inc. be awarded its costs of

27 suit incurred in defense of this action, including reasonable attorneys' fees; and 28 9. For such other and further relief in Counterdefendant Bridgepoint Education -10W02-WEST:6NML1\400692461.2

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1 Inc.'s favor as the Court deems proper. 2 3 4 DATED: February 4, 2008 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11W02-WEST:6NML1\400692461.2

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP

By

s/Jon E. Maki

[email protected]
AMAR L. THAKUR JON E. MAKI NICOLE M. LEE CRYSTINA COATS Attorneys for Plaintiff and Counterdefendant BRIDGEPOINT EDUCATION, INC.

BRIDGEPOINT'S REPLY TO PCDI'S COUNTERCLAIM 07cv 2222