Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-01713/USCOURTS-azd-2_14-cv-01713-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Mindspace, Inc., )

)

Plaintiff, ) 2:14-cv-1713 JWS

)

vs. ) ORDER AND OPINION

)

Todd Young, et al., ) [Re: Motion at docket 4]

)

Defendants )

)

I. MOTION PRESENTED

At docket 4, plaintiff Mindspace, Inc. (“Mindspace”) moved for a preliminary

injunction requiring certain actions and prohibiting other actions by defendants Todd

Young (”Young”); Jason Edwards (“Edwards”); Fiero Agency, Inc.; and Fiero LLC

(collectively “Fiero“). Defendants filed a response at docket 18, to which Mindspace

replied at docket at docket 29. Following discovery relating to the request for an

injunction, the court permitted the parties to file supplemental briefing. Mindspace’s

supplement was filed at docket 68, and defendants’ supplement was filed at docket 78. 

The parties advised the court that an evidentiary hearing was not necessary, but

requested oral argument. Argument was heard on December 17, 2014.

Case 2:14-cv-01713-JWS Document 99 Filed 12/31/14 Page 1 of 6
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II. BACKGROUND

Mindspace is a “gamification” consultancy which solicits clients for whom it can

provide marketing advice and programs based on the use of games. The premise upon

which Mindspace’s business rests is that when a business engages customers and

prospective customers in game-like relationships it improves the business’

communications with and strengthens its’ ties to those customers and prospective

customers. Airline frequent flyer programs are an example of gamification programs.

Mindspace is an Arizona corporation which has been operating since 2002. It is

owned by its president and chief operating officer Brent Shetler. Securing gamification

clients sometimes requires extensive efforts by Mindspace employees in identifying

likely clients, introducing those prospects to the gamification concept as it could be

applied to their businesses, and then selling Mindspace’s services. This effort may

make use of case studies developed by Mindspace, and other materials which

Mindspace considers to be proprietary information and trade secrets. The company has

been successful: Among Mindspace’s clients are major businesses such as Time

Warner, Hyatt, Paramount, and Coca-Cola.

Mindspace hired Young–who had considerable experience in selling digital

advertising–to be its director of business development on April 28, 2011. In that

position Young played a major role in obtaining new clients for Mindspace. Edwards

was recruited to work at Mindspace by Young. Edwards was employed by Mindspace

on November 2, 2012, to be Mindspace’s technical director, a position which called for

him to develop web-based products for use by Mindspace’s clients. Young and

Edwards each signed a Proprietary Rights Agreement (“PRA”) prepared by Mindspace,

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which purports to set out numerous protections for Mindspace’s business interests. 

The two PRAs are substantively identical.1

 Mindspace terminated Edwards’ employment on October 2, 2013. There was

some dispute about how much money Mindspace might owe Edwards. This was

eventually resolved, and as part of the resolution Edwards signed a separation

agreement (“SA”), which purports to limit future actions by Edwards and provide

additional protection for Mindspace’s interests. Young resigned from Mindspace on

January 28, 2014. Young and Mindspace did not execute a separation agreement.

Fiero is a gamification consultancy which competes with Mindspace. Fiero is

owned by Young and Edwards. Mindspace accuses defendants of wrongfully using its

proprietary information and trade secrets to advance Fiero’s business.

In its complaint, Mindspace advances twelve claims which it denominates

“counts.” Count One seeks injunctive relief based on alleged breaches of the PRAs,

the SA, and fiduciary duties owed to Mindspace by Young and Edwards. Count Two

seeks damages based upon the alleged breach of the PRAs while Young and Edwards

were still employed at Mindspace. Count Three seeks damages based upon the

alleged breach of the PRAs and the SA through wrongful use of confidential

information. Count Four seeks damages arising from defendants alleged solicitation of

clients in violation of the PRAs and SA. Count Five seeks damages based on the

alleged breach of fiduciary duties by Young and Edwards. Count Six seeks damages

on the theory that defendants tortiously interferred with Mindspace’s business

1Young’s PRA is dated 7/18/11, and Edwards’ PRA is dated 11/2/12.

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expectancy. Count Seven seeks damages on the theory that defendants Edwards and

Fiero tortiously interfered with Mindspace’s employment contract with Young. Count

Eight seeks both injunctive relief and damages on the theory that defendants

misappropriated Mindspace’s trade secrets. Count Nine seeks damages based on

defendants violation of Arizona’s law prohibiting unfair competition. Count Ten seeks to

recover for “harm in an amount to be proven at trial”2 resulting from defendants’ unjust

enrichment. Count Eleven alleges that defendants have violated the Lanham Act by

engaging in false advertising for which they seek both damages and injunctive relief. 

Count Twelve, which might be called the “Kitchen Sink” count, accuses each defendant

of aiding and abetting each other defendant giving rise to a claim for damages.

Of the twelve counts, the only ones which could support injunctive relief are

Counts One, Eight, and Eleven. It follows that injunctive relief turns upon Mindspace’s

assertion that Young and Edwards violated the PRAs, that Young violated the SA, that

all defendants misappropriated Mindspace’s trade secrets, and that all defendants have

engaged in false advertising in violation of the Lanham Act.

III. JURISDICTION

The court has subject matter jurisdiction over the Lanham Act claim pursuant to

28 U.S.C. § 1331. The court has subject matter jurisdiction over the related state law

claims pursuant to 28 U.S.C. § 1367.

2Complaint, doc. 1 at para. 158.

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IV. STANDARD OF REVIEW

"A plaintiff seeking a preliminary injunction must establish (1) that he is likely to

succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of

preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an

injunction is in the public interest."3

V. DISCUSSION

To obtain injunctive relief beyond the relief already provided in the order at

docket 97 on any of the claims which might support injunctive relief, Mindspace has the

burden of proving irreparable harm. As the Supreme Court has written, to obtain a

preliminary injunction, a plaintiff must “demonstrate that irreparable injury is likely in the

absence of an injunction."4 Elaborating on that point, the Court has explained that 

“[i]ssuing a preliminary injunction based only on a possibility of irreparable harm is

inconsistent with our characterization of injunctive relief as an extraordinary remedy that

may only be awarded upon a clear showing that the plaintiff is entitled to such relief."5

Mindspace has not made a clear showing that it will suffer irreparable harm if a

preliminary injunction (going beyond the relief already awarded) is not issued. If

defendants wrongfully obtain clients and secure revenue that would otherwise have

been available to Mindspace, there is an adequate legal remedy. The ensuing harm to

3

Johnson v. Couturier, 572 F.3d 1067, 1078 (9th Cir. 2009) (quoting Winter v. Natural

Resource Defense Council, Inc., 555 U.S. 7, 21 (2008). 

4Winter, 555 U.S. at 21.

5

Id.

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Mindspace is capable of reasonable estimation and can be adequately remedied by an

award of damages. This assessment by the court is consistent with Mindspace’s

complaint, which generally seeks both damages and injunctive relief for the very same

types of conduct.

VI. CONCLUSION

For the reasons above, the motion at docket 4 is DENIED, except for the relief

already provided by the order at docket 97. 

DATED this 31st

 day of December 2014.

/s/ JOHN W. SEDWICK

SENIOR UNITED STATES DISTRICT JUDGE

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