United States District Court, D. Nevada
ORDER PLAINTIFF'S MOTIONS FOR PARTIAL SUMMARY
JUDGMENT (ECF NOS. 34, 35, 37) DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT (ECF NO. 38)
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court are Plaintiff / Counterdefendant Boston Dental
Group, LLC (“BDG”)'s Motion for Partial
Summary Judgment (Unlawful use), (ECF No. 34);
Plaintiff's Motion for Summary Judgment (Naked
Licensing), (ECF No. 35); Plaintiff's Motion for Summary
Judgment (Laches), (ECF No. 37); and Defendant /
Counterclaimant Affordable Care, LLC (“AC”)'s
Motion for Partial Summary Judgment, (ECF No. 38).
12, 2016, BDG filed its Complaint against AC. (ECF No. 1). AC
filed an Answer and Counterclaim on September 12, 2016. (ECF
No. 5). BDG filed an Answer to the Counterclaim on September
27, 2016. (ECF No. 10).
30, 2017, BDG filed the instant Motion for Partial Summary
Judgment on the issue of unlawful use, a Motion for Summary
Judgment on the issue of naked licensing, and a Motion for
Summary Judgment on the issue of laches. (ECF Nos. 34, 35
& 37). AC filed a Motion for Partial Summary Judgment on
the same day. (ECF No. 38). BDG filed its Response to
AC's Motion on August 4, 2017. (ECF No. 46). AC also
filed its Responses to BDG's Motions on August 4, 2017.
(ECF Nos. 53, 54, 55). AC filed its Reply to its Motion for
Summary Judgment on August 25, 2017. (ECF No. 62). The same
day, BDG filed Replies to its Motions. (ECF Nos. 64, 65, 66).
Motion for Summary Judgment
judgment is appropriate when the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show “that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a); accord Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986).
considering the propriety of summary judgment, the court
views all facts and draws all inferences in the light most
favorable to the nonmoving party. Gonzalez v. City of
Anaheim, 747 F.3d 789, 793 (9th Cir. 2014).
movant has carried its burden, the non-moving party
“must do more than simply show that there is some
metaphysical doubt as to the material facts . . . . Where the
record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party, there is no genuine
issue for trial.” Scott v. Harris, 550 U.S.
372, 380 (2007) (alteration in original) (quotation marks
Court finds the following facts to be undisputed. BDG is a
limited liability company owned by Dr. David Ting (“Dr.
Ting”). (Ting Decl., ECF No. 34-1 at 2). In 2007, Dr.
Ting and BDG began to promote the opening of a dental office
called Affordable Dental in Las Vegas, Nevada. (Id.)
The office opened for business in January 2008.
(Id.). AC is a dental support organization
(“DSO”) that provides a variety of non-clinical
services, including billing, purchasing, financing,
marketing, assistance with securing legal services, and
advertising services to its affiliated dental practices
(“Affiliates”). (Steelman Decl., ECF No. 86-3 at
3). AC has one Affiliate dental practice in Nevada, located
in Las Vegas (“Vegas Affiliate”). (Id.
at 4). The Vegas Affiliate opened its doors for customers in
2007, and has remained open through the present.
parties have trademarks that they license to dental practices
or dental offices. In November 2000, Affordable Care applied
to register the AFFORDABLE DENTURES mark on the Patent &
Trademark Office (“PTO”)'s Principal
Register. (Affordable Dentures PTO Page, ECF No. 86-9 at 2).
In March 2002, AC's AFFORDABLE DENTURES mark was granted
registration on the Principal Register for “dental
services” under Reg. No. 2, 546, 707. (List of AC
Trademark Registrations, ECF No. 86-2 at 4). AC's federal
registration for the AFFORDABLE DENTURES mark is based on a
first use in commerce of 1977. (Id.). AC owns
federal trademark registrations on the Principal Register for
a family of additional AFFORDABLE-formative marks used in
connection with dental services (collectively, and inclusive
of the AFFORDABLE DENTURES mark, the “AC Marks”)
(Id. at 3-12). AC licenses the AC Marks to more than
230 Affiliates to be used in connection with the provision of
dental services, including dentures. (ECF No. 86-3 at 4).
August 21, 2012, BDG filed U.S. Trademark Application No. 85,
709, 476 to register the mark AFFORDABLE DENTAL for
“dentist services; oral surgery and dental implant
services; orthodontic services; providing cancer screening
services; [and] teeth whitening services.” (Affordable
Dental PTO Page, ECF No. 86-10 at 2). On December 19, 2012,
the PTO denied registration based upon likelihood of
confusion with AC's AFFORDABLE DENTURES mark. On March 7,
2013, the PTO suspended action on BDG's application, in
part because it found BDG's arguments unpersuasive with
regard to the prior “likelihood of confusion”
refusal to registration on the Principal Register. (PTO
Suspension Letter, ECF. 86-19 at 2). BDG's AFFORDABLE
DENTAL application was subsequently amended and allowed to
register on the Supplemental Register on January 6, 2015,
Reg. No. 4, 668, 829. (ECF No. 86-10 at 2).
Facts Regarding Unlawful Use
over 230 Affiliates nationwide. (ECF No. 86-3 at 3). In
addition to other fees, AC charges its Affiliates a general
management fee (“Management Fee”).
(Id.). Nevada is a state that prohibit DSOs from
charging a fee based on the net profit or net operating
margin of the dental practices (“Percentage-Based
Fee”); AC charges its Affiliates in states like Nevada
a fixed fee (“Fixed Fee”). (Id. at 4).
Regardless of whether an Affiliate is located in a state that
allows or forbids fees based on the net profit or net
operating margin of the dental practices, AC does not ask its
Affiliates to pay a Management Fee until after the Affiliate
begins to earn a profit. (Id.).
2007, AC has provided services to the Vegas Affiliate.
(Id.). On October 25, 2007, AC and the Vegas
Affiliate entered into a service contract (the “2007
Service Contract”). (ECF No. 86-4). The 2007 Service
Contract includes a summary of management fees, which summary
lists a “Central Office Service Fee” as a Fixed
Fee and lists a Management Fee as a Percentage-Based Fee.
(ECF No. 86-4 at 20). Section VI(H) of the 2007 Service
Contract, titled “Waiver of Performance, ”
provides that if any act or service of AC under the Agreement
“should be construed or deemed by any government
authority, agency or court to constitute the practice of
dentistry, the performance of said act or service by [AC]
shall be deemed waived and forever unenforceable. . .
.” (Id. at 10). Financial documents from
between 2013 and 2016 show that AC charged the Vegas
Affiliate a fixed Management Fee. (Fee Statements, ECF No.
Facts Regarding Naked Licensing
AC's Role As A DSO
provide affiliate dentists and dental practices with a
variety of non-clinical services, including billing,
purchasing, financing, marketing, assistance with securing
legal services, and advertising services. (Bileca Decl., ECF
No. 38-4 at 3). AC is a member of the Association of Dental
Support Organizations (“ADSO”). (Id. at
5). DSOs are recognized by and permitted to operate under the
laws of all 50 states. (Id. at 3). Members of the
ADSO operate in 44 states and support more than 13, 000
dentists worldwide. (Id.). DSOs typically license
their marks to provide affiliates with a common brand
identity, and most DSO-affiliates practice under marks owned
by their DSO. (Id. at 5). As a DSO, AC recruits
dentists to become practice owners of dental practices that
affiliate with AC. (Siegal Depo., ECF No. 38-15 at 3).
License Provisions Governing The Vegas
provides similar services to all of its Affiliates using the
AFFORDABLE DENTURES mark and related AC Marks, with small
variability due to the individual practice owners
(“Pos”). (Siegal Depo., ECF No. 38-15 at 10). AC
enters into oral trademark licenses with each of its
Affiliates, which allow the Affiliates to use the AC Marks.
(ECF No. 87-3 at 3). The right to use the AC Marks is
concurrent with and dependent upon affiliation with AC.
(Id.). Additionally, as a condition of the oral
license, each Affiliate enters into a service contract and
facility lease with AC. (Id. at 4). The Vegas
Affiliate entered into a Service Contract (“Vegas
Contract”) and building lease (“Vegas
Lease”) with AC. (ECF No. 38-3 at A-1 and A-2). The
current Vegas Contract and Vegas Lease were entered between
AC and the Vegas Affiliate on January 1, 2016.
Vegas Affiliate is wholly owned by PO Dr. Cher Chang
(“Dr. Chang”). (ECF No. 38-3 at A-1). Dr. Chang
is licensed to practice dentistry in the state of Nevada.
(Id.). Dr. Chang opened the Vegas Affiliate under
the AFFORDABLE DENTURES name at the end of 2007. ECF No.
66-22 at 3). Dr. Chang controls the clinical practice of her
office; under the terms of the Service Contract, AC cannot
direct, control, or interfere with Dr. Chang's
independent professional judgment over clinical matters. (ECF
No. 38-3 at A-1). AC provides the Vegas Affiliate with
“business and administrative services . . . to support
the management of the business aspects of the
[Affiliate]” and supplies an on-site dentures
the Vegas Contract requires “that each dentist and
dental staff who works at the Dental Office comply . . . with
the professional and ethical standards, requirements, laws
and regulations applicable to their professions under federal
law and the law of the State (including, without limitation,
OSHA, HIPAA, and workplace safety laws).”
(Id.). When disciplinary complaints, professional
malpractice, or other actions are initiated against any
dentist or dental staff the Affiliate is required under the
terms of the contract to immediately “inform AC of the
action, and the underlying facts and circumstances.”
(Id.). The Vegas Contract also requires the
Affiliate to “maintain comprehensive professional
liability insurance” with minimum limits per claim and
policy and provide AC with proof of coverage. (Id.).