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Baker Hughes, Inc. v. Summit ESP, LLC

United States District Court, N.D. Oklahoma

January 18, 2018

BAKER HUGHES, INCORPORATED, a Delaware corporation, Plaintiff,
v.
SUMMIT ESP, LLC, an Oklahoma limited liability company, Defendant.

          OPINION AND ORDER

          Jodi F. Jayne, Judge.

         Before the Court is Plaintiff's Motion for Civil Contempt (ECF No. 30). Plaintiff Baker Hughes, Inc. (“Baker Hughes”) seeks an order of civil contempt against Defendant Summit ESP, LLC, (“Summit”) for alleged violations of the Agreed Permanent Injunction (“PI”) entered by United States Magistrate Judge T. Lane Wilson on June 14, 2016 (ECF No. 28). Baker Hughes seeks monetary damages, equitable relief, and attorneys' fees.

         I. Factual Background

         Baker Hughes filed its lawsuit against Summit in August 2015, alleging trademark infringement and deceptive trade practices. ECF No. 2. Specifically, Baker Hughes alleged that Summit was covering Baker Hughes' trademark-protected logo on Baker Hughes' equipment with a Summit logo, and that Summit was selling a product under the name SENTRY, which infringed upon Baker Hughes' trademark, SENTRYNET. Id. at ¶¶ 15-17. The parties reached a settlement in May of 2016. On June 14, 2016, Judge Wilson entered the agreed PI. ECF Nos. 23, 28. The PI prohibits Summit, in pertinent part, from

[i]ntentionally covering or obscuring any Trademarks, Service Marks, contact information of other source, manufacturing or reference information depicted on any equipment manufactured by or on behalf of Baker Hughes, including but not limited to the service mark SENTRYNETTM, the registered trademark CENTRILIFT® (U.S. Reg. No. 4, 236, 677), the registered trademark BAKER HUGHES® (U.S. Reg. No. 2, 987, 193), any registered and common-law trademarks or service marks incorporating the literal elements BAKER HUGHES, and all trademarks and service marks specifically set forth in the Complaint filed in this proceeding; . . . .

ECF No. 28 (emphasis added). The PI operated as a final judgment, and all other “claims, counterclaims and other requests for relief set forth in the pleadings” were dismissed with prejudice. Id.

         In support of its Motion for Civil Contempt, Baker Hughes presented evidence establishing the following facts. In the spring of 2017, Baker Hughes employees working in Wyoming discovered two Summit stickers covering the Baker Hughes mark. On April 10, 2017, a Baker Hughes technician working at a location called “Greaswood 22-6” observed a Summit service sticker covering the Baker Hughes mark on a piece of Baker Hughes' equipment called a Variable Speed Drive (“VSD”). The technician took a photo of the VSD and recorded the serial number. After tracing the serial number, Baker Hughes learned it had sold the VSD, took it back on trade in July of 2016, and then sold and shipped the VSD to a new customer, Breitburn Management Company (“Breitburn”), on September 26, 2016. On May 25, 2017, a Baker Hughes field specialist working at a location called “Greaswood State 44-36” observed a Summit service sticker covering the Baker Hughes mark on a second VSD. The field specialist took a photo of the VSD. Baker Hughes discovered the VSD had been sold, returned to Baker Hughes on trade in July 2016, and then sold and shipped to Breitburn on September 26, 2016. The Baker Hughes Field Service Supervisor at Cody, Wyoming, submitted a declaration stating that the two VSDs did not have Summit stickers on them when they left Baker Hughes' facility in September of 2016.

         As proof that Summit employees (as opposed to other individuals) placed the Summit service stickers on these VSDs, Baker Hughes presented evidence that: (1) Summit regularly services the VSDs for Breitburn, and (2) the VSDs are in an isolated location forty miles from the nearest town. In support of its contention that Summit employees “intentionally” covered or obscured the Baker Hughes mark, Baker Hughes submitted evidence showing that both stickers fully covered the Baker Hughes mark and left no portion of the mark visible.

         In response to the Motion for Civil Contempt, Summit raised three legal arguments: (1) Baker Hughes failed to show that Summit intentionally violated the PI by clear and convincing evidence; (2) Summit acted in “good-faith substantial compliance” with the PI; and (3) Baker Hughes failed to establish any losses or harm flowing from the alleged violations. Dan Wells (“Wells”), the Summit official who manages operations in the State of Wyoming, submitted an affidavit stating that: (1) he is familiar with the prohibitions of the PI; (2) he has “advised technical field personnel not to use [Summit] stickers to cover up Baker Hughes Trademarks or names;” and (3) he is not aware of any Summit employees who have intentionally placed Summit stickers over the Baker Hughes mark. Wells Decl., ECF No. 41-1. Wells further stated:

While I have no information that any [Summit] technical field personnel placed the offending [] stickers that led to the Motion to Contempt, it has been the intention of [Summit] to comply with the terms of the injunction. Summit settled the prior filing (admitting no guilt, damage, etc.) in an attempt to move forward and in expectation that Baker Hughes would be reasonable like other competitors in the industry. Stickers are an industry norm and these complaints could have resolved in a businesslike and amicable manner. . . . In the future, I am available to address any concerns by Baker Hughes about [Summit's] compliance with the Injunction rather than require the time and resources of the Court. Again, it has been the intention of [Summit] to comply with the Injunction.

Id.

         In support of its argument regarding the lack of competitive harm flowing from the alleged violations, Summit submitted the affidavit of Thomas Faulkner (“Faulkner”), Wyoming Operations Manager for Breitburn. Faulkner stated, as the owner of the equipment, it “has no concerns over the placement of the [Summit] stickers on Breitburn's ESP equipment.” Faulkner Decl., ECF No. 41-2. He further stated that Breitburn “continues to use Baker Hughes as an ESP vendor based upon competitive bidding among ESP suppliers for various wellsites” and that “[n]othing about the placement of the [Summit] stickers has changed Breitburn's business relationship with Baker Hughes.” Id.

         II. Legal Standards

         A party seeking civil contempt has the initial “burden of proving, by clear and convincing evidence, [1] that a valid court order existed, [2] that the defendant had knowledge of the order, and [3] that the defendant disobeyed the order.” Reliance Ins. Co. v. Mast Const. Co., 159 F.3d 1311, 1315 (10th Cir. 1998) (internal citation omitted). A movant need not prove an intentional or purposeful violation; instead, courts are justified in finding civil contempt based merely on a party's “failure to be reasonably diligent” in complying with the order. Bad Ass Coffee Co. of Hawaii, Inc. v. Bad Ass Coffee Ltd. Partnership, 95 F.Supp.2d 1252, 1256 (D. Utah 2000); see generally McComb v. Jacksonville Paper Co., 336 U.S. 187, ...


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