BRAND DESIGN COMPANY, INC. v. RITE AID CORPORATION

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

BRAND DESIGN COMPANY, INC., d/b/a CIVIL ACTION

HOUSE INDUSTRIES,

Plaintiff,

v.

NO. 22-1174

RITE AID CORPORATION, SWAY

CREATIVE LABS, LLC, GA

COMMUNICATIONS, INC., d/b/a

PURERED CREATIVE, LLC, and BURNS

GROUP, NYC, LLC,

Defendants.

MEMORANDUM OPINION

Plaintiff Brand Design Company, Inc., d/b/a House Industries (“House”), is company that

develops and markets proprietary font software, logos, and related products. One of its most

popular typefaces is Neutraface, and House generates considerable revenue by licensing the

software necessary to generate this font and its associated glyphs. Defendant Rite Aid

Corporation, with the assistance of Defendants Sway Creative Labs, LLC (“Sway”), Burns

Group, NYC, LLC (“Burns Group”), and GA Communications, Inc., d/b/a PureRED Creative,

LLC (“PureRED”), (collectively, “Defendants”), recently unveiled a multi-million dollar

corporate rebrand that makes heavy use of Neutraface. This, House alleges, notwithstanding the

fact that the licenses obtained by Rite Aid and its advertising agencies did not permit them to use

Neutraface for this purpose.

Presently pending are cross-motions for summary judgment from all parties save Rite

Aid1 and Burns Group, pursuant to Federal Rule of Civil Procedure 56. Additionally, the parties

1 Pursuant to 11 U.S.C. § 362(a), proceedings in this matter are currently stayed as to Rite Aid in light of the

move to seal various portions of the summary judgment record. For the reasons that follow,

these motions will be granted in part and denied in part.

FACTUAL BACKGROUND

Unless otherwise noted, the following facts are undisputed. House is a design studio and

typeface foundry that develops and licenses a suite of proprietary products. One of these

proprietary products is Neutraface, a sans-serif typeface consisting of upper- and lower-case

letters, numbers, and an alternative font in multiple weights and a unique tilting. After

developing the Neutraface font and glyphs, House wrote these designs into font software that

could faithfully reproduce their designs and interactions with one another (spacing, kerning,

etc.). The licensing agreement for the Neutraface font software defined these terms as follows:

− Font: a set of character outlines that defines a particular typeface

(e.g. Times New Roman) in one or more stylizations (e.g., Script,

Interlock)

− Font software: machine readable instructions for causing a

rasterizing device to render a font

− Glyph: a graphic symbol that provides the appearance or form for

a character

For clarity, this opinion will use the term “Neutraface” to refer collectively to the Neutraface

font, glyphs, and font software, with further specificity added as needed.

House did not, nor could it, hold a copyright in the Neutraface font or glyphs. See 37

C.F.R. § 202.1(e) (listing “[t]ypeface as typeface” as an “example[] of works not subject to

copyright”). It did, however, control access to the font software, which was the only practical

way to generate the Neutraface font and glyphs. House’s business model therefore consisted of

licensing this font software to users; the permitted uses of that font software and the font and

glyphs generated thereby were governed by a contract: a licensing agreement entered into by

company’s recent bankruptcy filing.

House and its licensees.

Defendants each purchased a “desktop” version of the Neutraface font software, and in

doing so agreed to the terms of the accompanying licensing agreement. Sway and Burns Group

purchased their copies in 2019, after Rite Aid selected Neutraface for use in rebranding, and the

summary judgment record contains copies of their licensing agreements. PureRED, conversely,

had a copy of the Neutraface software that it had purchased in 2015; in early 2020, though, it

requested an additional copy of the font software, which House provided pursuant to PureRED’s

2015 purchase. As with all of House’s font software, this copy came packaged with a

“clickwrap” licensing agreement.

Though there are minor differences between the three licensing agreements in the record,

most of their key provisions were identical. First, Paragraph 2 of the licensing agreements

provided that “[l]icensed uses of the Licensed Software [i.e., “House Industries Font software”]

and Fonts and glyphs generated thereby in accordance with this agreement include: (a)

Installation on the number of Devices specified on the invoice associated with this License; (b)

Embedding in documents for the purpose of: (i) Proofing or distributing to fewer than 100

people; (ii) Sending files for print production; (c) Using in conventional office correspondence.”

Second, Paragraph 8 of the licensing agreement enumerated a number of uses of the font,

font software, and glyphs that “are expressly NOT PERMITTED under this agreement.” For all

three Defendants, this list includes “In a logo.” The term “logo” is defined to mean “a unique set

of stylized letters, optionally integrated with graphic elements, adopted as a proprietary

identifier, such as a trademark.” Additionally, Paragraph 8 of the agreement for Sway (though

not Burns Group or PureRED) prohibited their use in “Any product for sale, product packaging,

digital/social media/web advertising, print/POS advertising, and/or tv advertising.”

Third, Paragraph 10 of the licensing agreements provided that “Licensee agrees to treat

the Licensed Software as confidential information and exercise reasonable care to avoid

unauthorized distribution of the Licensed Software.”

Finally, Paragraph 14 of the licensing agreement provided that “[a]ll rights not expressly

identified and granted as part of this License are expressly reserved by House Industries.”

In late 2020, Rite Aid announced its rebranding effort, unveiling a new logo that utilized

Neutraface, as depicted below:

Old Logo New Logo

cui FARITE

Cypy / AID

In addition to this logo, the rebranding also utilized Neutraface in other applications, e.g., other

Rite Aid logos (such as the logo for Rite Aid Rewards), in-store signage, digital/print/television

advertising, product packaging, prescription bottles, and other branded products.

Il. LEGAL STANDARDS

A. Summary Judgment Standard

Summary judgment is proper when “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). “By its very

terms, this standard provides that the mere existence of some alleged factual dispute between the

parties will not defeat an otherwise properly supported motion for summary judgment; the

requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 247-48 (1986). “A genuine issue is present when a reasonable trier of fact,

viewing all of the record evidence, could rationally find in favor of the non-moving party in light

of his burden of proof.” Doe v. Abington Friends Sch., 480 F.3d 252, 256 (3d Cir. 2007) (citing

Celotex Corp. v. Catrett, 477 U.S. 317, 322-26 (1986); Anderson, 477 U.S. at 248-52).

“Inferences to be drawn from the underlying facts contained in the evidential sources must be

viewed in the light most favorable to the party opposing the motion.” Peters Twp. Sch. Dist. v.

Hartford Acc. & Indem. Co., 833 F.2d 32, 34 (3d Cir. 1987).

When, as here, the parties have filed cross-motions for summary judgment, the summary

judgment standard remains the same. Appelmans v. City of Phila., 826 F.2d 214, 216 (3d Cir.

1987). “If review of [the] cross-motions reveals no genuine issue of material fact, then judgment

may be entered in favor of the party deserving of judgment in light of the law and undisputed

facts.” Transguard Ins. Co. of Am., Inc. v. Hinchey, 464 F.Supp.2d 425, 430 (M.D. Pa. 2006)

(citing Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998)).

B. Choice of Law

The Amended Complaint describes House’s claims as arising “under Pennsylvania

common law,” and House relies on that jurisdiction’s substantive law in its motions for summary

judgment. Two defendants—Sway and Burns Group—acquiesce to this choice without

comment, and so with regards to House’s claims against them, the Court will as well. See Buck

v. Endo Phara., Inc., 2019 WL 1900475, at *3 (E.D. Pa. Apr. 29, 2019) (“When the parties agree

a state’s law applies, we apply the agreed-to law.”); see also Neely v. Club Med Mgmt. Servs.,

Inc., 63 F.3d 166, 180 (3d Cir. 1995) (en banc) (“[C]hoice of law issues may be waived.”).

PureRED, however, maintains that this dispute should be resolved by applying the law of

Georgia (the state of its incorporation), arguing that “Pennsylvania has no interest in applying its

laws to the parties’ contract.”2

2 House argues that PureRED waived this choice of law argument by failing to raise it in its responsive pleading.

“However, before a choice of law question arises, there must actually be a conflict

between the potentially applicable bodies of law.” On Air Ent. Corp. v. Nat. Indem. Co., 210

F.3d 146, 149 (3d Cir. 2000). If there is no actual conflict, “the court should avoid the choice of

law question.” Id. Here, although PureRED’s briefing cites extensively to non-Pennsylvania

caselaw, the only specific conflict it identifies is one of remedies—namely, whether state law

permits a plaintiff to seek disgorgement of profits when a defendant’s breach of contract was

“opportunistic.” That point will be addressed in Part III.C. But absent an argument that some

other conflict exists, the remainder of this opinion will be evaluated under Pennsylvania law.

BREACH OF CONTRACT CLAIMS

The first count in House’s Amended Complaint is for breach of contract, which it presses

against all Defendants. To successfully maintain this cause of action, “the plaintiff must

establish: (1) the existence of a contract, including its essential terms, (2) a breach of a duty

imposed by the contract, and (3) resultant damages.” Hart v. Arnold, 884 A.2d 316, 332 (Pa.

Super. 2005). House argues that it is entitled to judgment as a matter of law on liability, and that

a trial is only needed to determine the damages stemming from Defendants’ breach. Defendants

Sway and PureRED, conversely, argue that the evidence shows the opposite, and that they are

entitled to judgment as a matter of law on House’s breach of contract claim. Although it did not

file a motion for summary judgment, Burns contends in its response to House’s motion for

summary judgment that contractual ambiguities mean that this case must be submitted to a jury.

For the reasons that follow, the summary judgment record establishes the existence of a

But its principal authority for this proposition, Nat. Grange Mut. Ins. Co. v. Goldstein, Heslop, Steel, Clapper,

Oswalt & Stoehr, 142 F. App’x 117 (3d Cir. 2005), was discussing waiver in the context of state court

proceedings—a critical distinction, as litigants in that Pennsylvania courts are required to affirmatively plead any

choice of law defenses. Id. at 124 (citing 42 Pa. C.S. § 5327(a) and Pa. R. Civ. P. 1030(a)). Not only does a that

rule not apply in federal court, PureRED’s motion to dismiss explicitly flagged a potential choice of law dispute.

That was sufficient to avoid waiver.

valid contract between House and each of the Defendants. But, as to some of House’s theories

of breach, the record shows genuine disputes of material fact on the remaining elements that

must be resolved by a jury. And with regards to other theories, no reasonable factfinder could

find in House’s favor.

A. Element 1: Existence of a Contract

There is no dispute that Sway nor Burns Group had a contract with House; both agree

that the licensing agreement they agreed to when downloading the Neutraface font software was

valid and binding.

PureRED, however, argues that things are not so straight-forward. The company had

initially purchased a desktop license for Neutraface in 2015, well before Rite Aid’s rebranding

got underway. PureRED maintains that much of its work for the pharmacy chain was performed

pursuant to that 2015 license. House did not, however, produce the licensing agreement

associated with that purchase during discovery. As a result, PureRED argues, House has not met

its burden of establishing “[the contract’s] essential terms.” Lackner v. Glosser, 892 A.2d 21, 30

(Pa. Super. 2006).

But PureRED’s insistence that a missing, 2015 contract governs this dispute is belied by

the testimony of its corporate representative, Jonna Unger. Specifically, during her 30(b)(6)

deposition, Unger was shown a copy of a licensing agreement for the Neutraface font software,3

and she was asked if that agreement “governs the licenses between House and Rite Aid, as well

as House and PureRED.” She responded that it did. “[T]he testimony of the Rule 30(b)(6)

designee is deemed to be the testimony of the corporation itself,” State Farm Mut. Auto. Ins. Co.

3 This document, which is included in the summary judgment record, is undated. At oral argument, House

represented it was the licensing agreement agreed to by PureRED in early 2020, when the company obtained an

additional copy of the Neutraface font software.

v. New Horizont, Inc., 250 F.R.D. 203, 212 (E.D. Pa. 2008), and so this testimony alone is

sufficient to resolve any doubt regarding the existence of a contract between PureRED and

House, that it was the document handed to her, and that the terms of that document governed the

relationship between House and PureRED.

Nevertheless, once House flagged Unger’s testimony in its motion for summary

judgment, PureRED attempted to walk it back, producing a sworn declaration in which Unger

averred that she is actually “uncertain which version of this license was the one PureRED would

have agreed to on May 20, 2020.” But this self-serving document, drafted more than 8 months

after Unger sat for her deposition, is not enough to make out a genuine dispute of material fact.

As the Third Circuit has explained, “a party may not create a material issue of fact to defeat

summary judgment by filing an affidavit disputing his or her own sworn testimony without

demonstrating a plausible explanation for the conflict.” Baer v. Chase, 392 F.3d 609, 624 (3d

Cir. 2004). That rule—known as the sham affidavit doctrine—applies here. Unger’s only

explanation for the flat inconsistency between her deposition testimony and sworn statement was

that she “[is] not a lawyer,” and that she was confused as to exactly what document she was

being shown. This is not a plausible explanation. As PureRED’s corporate representative,

Unger had advanced notice of “the matters for examination,” Fed. R. Civ. P. 30(b)(6), and could

have conferred with her attorneys regarding the same.4 “Rule 30(b)(6) obligates the corporation

‘to prepare its designee to be able to give binding answers’ on its behalf.” In re Linerboard

4 Though the summary judgment record does not contain a copy of the 30(b)(6) deposition notice, it presumably

included this topic. The transcript shows that when Unger was asked about the licensing agreement, PureRED’s

lawyers objected (incorrectly) that the inquiry called for a legal conclusion, and further that it was inappropriately

phrased as a compound question. No objection was noted, however, on the basis that the question exceeded the

scope of the deposition notice. See Wright & Miller, 8A Fed. Prac. & Proc. § 2113 (3d ed., Apr. 2023 update) (“A

party waives any objection, whether to the form of questions or answers or to other errors that might be obviated,

removed, or cured if promptly presented, by failing to note the objection at the taking of the deposition.”).

Antitrust Litig., 237 F.R.D. 373, 382 (E.D. Pa. 2006) (quoting Ierardi v. Lorillard, Inc., 1991 WL

158911, at *3 (E.D. Pa. Aug. 13, 1991)). If Unger’s affidavit is to be believed, PureRED did not

do so here.

B. Element 2: Breach of the Contract

Because there was a valid contract between House and each of the Defendants, the

question becomes whether the evidence adduced during discovery shows a breach of the duties

those contracts imposed. House argues that no reasonable factfinder could conclude otherwise,

and that while the particulars vary somewhat between each Defendant, the summary judgment

record unambiguously shows breaches of three provisions of the licensing agreement: Paragraph

8(k) (prohibiting Neutraface’s use “[i]n a logo”); Paragraph 10 (requiring licensee to “treat the

Licensed software as confidential information”); and Paragraph 2 (identifying the “[l]icensed

uses of the Licensed Software and fonts and glyphs generated thereby”). These theories of

breach will be addressed seriatim below.

i. Breach of Paragraph 8(k)

House’s first theory of breach relates to Paragraph 8(k) of the licensing agreement.

Recall that Paragraph 8 identified a number of prohibited uses of the House’s software, fonts,

and glyphs generated thereby. And this list included using Neutraface “[i]n a logo for a product,

company, or other entity,”5 defining the term “logo” to mean “a unique set of stylized letters,

optionally integrated with graphic elements, adopted as a proprietary identifier, such as a

trademark.” According to House, this is exactly what happened. The summary judgment record

shows that on various occasions during their work for Rite Aid, each of the Defendants utilized

5 Sway’s licensing agreement omits the phrase “for a product, company, or other entity,” but no party ascribes any

significance to this difference.

the Neutraface font software to create or edit some version of the Rite Aid logo: the “shield”

logo (Sway); the “tagline” logo (Burns Group); and the “work mark,” “Women’s Leadership

Network,” and “Rite Aid Photo” logos (PureRED). As a result, House argues, each Defendant

breached Paragraph 8(k) of the licensing agreement.

This evidence is materially uncontroverted, and it is consistent with the allegations in the

Amended Complaint. Nonetheless, Defendants argue that it does not actually show a breach of

contract. As noted, the licensing agreements define the term “logo” to mean “a unique set of

stylized letters . . . adopted as a proprietary identifier, such as a trademark” (emphasis added).

The only reasonable interpretation of this provision, Defendants argue, is that it refers to “a

unique set of stylized letters” that the licensee of the font software (e.g., Sway, Burns Group, or

PureRED) has adopted as an identifier—not something the licensee prepares for use by a third-

party client (e.g., Rite Aid). In other words, because Sway, Burns Group, and PureRED did not

use Neutraface to develop a trademark that they adopted for themselves, they did not use the font

software “[i]n a logo” as the term is defined by the contract. House counters with the inverse of

this position. By their reading, the licensing agreement defines “logo” as a set of stylized letters

adopted as a proprietary identifier by anyone—be they the licensee of the font software or the

licensee’s third-party client. Any other construction of the contract, they maintain, would

inappropriately add in a limitation to the definition of the term “logo” that the contract’s plain

text does not include.

These arguments are not new. The parties previously aired them, without any meaningful

difference, in their briefing on Defendants’ motions to dismiss. At that time, the Court

determined that the text of the licensing agreements did not permit resolution in favor of either

position. Although the Neutraface licensing agreements require that someone have adopted the

Defendants’ work product as a proprietary identifier in order for it to be deemed a “logo,” those

agreements “do[] not specify who—be it the licensee, the licensee’s client, or some other third

party—may” do so. Brand Design v. Rite Aid, 623 F.Supp.3d 526, 536 (E.D. Pa. 2022).

Because both parties offered reasonable interpretations, and the text of the contract did not

establish which interpretation was correct, the contract was facially ambiguous and therefore

“present[ed] a question for the jury.” Id.

But that holding is not the end of things, now that discovery has been had. Pennsylvania

permits courts to “look outside the ‘four corners’ of a contract if the contract’s terms are unclear”

by considering “extrinsic evidence, i.e., parol evidence, to resolve the ambiguity.” Bohler-

Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 93 (3d Cir. 2001) (citing Krizovensky v.

Krizovensky, 624 A.2d 638, 642 (Pa. Super. 1993)). Now that discovery is complete, both

Plaintiff and Defendants point to examples of such extrinsic evidence, arguing that when

considered alongside the text of the licensing agreement, it leaves no doubt that their respective

interpretation is the only reasonable one.

For its part, House highlights evidence supposedly showing that, regardless of any

imprecision in the licensing agreement’s text, Defendants were subjectively aware that they were

violating its terms when utilizing Neutraface to develop Rite Aid’s logo. For example, it notes

that Emily Stern, Burns Group’s corporate representative, testified at her 30(b)(6) deposition that

at least some of the company’s employees had concerns about whether their license permitted

their uses of Neutraface. In a similar vein, it points to emails between PureRED’s Jonna Unger

and Rite Aid employees raising doubts about whether “the proper license [has] been purchased.”

Because the goal of contract interpretation is ultimately to discern the intent of the parties, House

argues, evidence that Defendants may have agreed with House’s interpretation of the contract

provides strong reason to conclude that it is correct.

Defendants, meanwhile, argue that any contract must be interpreted in light of the nature

and custom of the industry, and they point to deposition testimony indicating that this standard

industry practice was to permit advertising agencies to utilize desktop license when undertaking

preliminary design work on behalf of a client. House was no exception to this general practice,

Defendants argue, noting emails in which its licensing director explained to PureRED that “[o]ur

desktop license is for design,” while only “commercial deployment of the fonts” required

“extended licensing.” This view was echoed on House’s website, which explained additional

licensing was required for “commercial deployment of collateral.”

But “when parol evidence is used to resolve an ambiguity in a contract, the intention of

the parties is a question of fact.” Hankin v. Goodman, 246 A.2d 658, 660 (Pa. 1968). Thus, like

any question of fact, summary judgment is only proper when the evidence reveals no genuine

dispute for resolution by the fact finder. That is not the case here. Even accepting the parties’

arguments that this parol evidence sheds light on the licensing agreement’s meaning, the

evidence points in opposite directions, only further highlighting the ambiguous nature of the

contractual language. As such, the question of whether Defendants breached Paragraph 8 of the

licensing agreement must be submitted the jury.

ii. Breach of Paragraph 10

House’s second theory of breach turns on Paragraph 10 of the licensing agreement, which

requires the licensee “to treat the Licensed Software as confidential information and exercise

reasonable care to avoid unauthorized distribution of the Licensed Software.” Discovery in this

case, they argue, yielded evidence that all three Defendants breached this provision.

The evidence regarding Burns Group is the most straight-forward. During discovery, the

company produced an email indicating that one of its employees had uploaded the Neutraface

font software to a Dropbox site. Nicole Lucey, the company’s creative director, testified at her

deposition that the software’s confidentiality was nonetheless maintained, as “only Burns Group

employees can access [it].” But House argues that this was not the case, and that as late as the

end of discovery, its attorneys were able to access the Dropbox site and freely download the files

it contained. In support of this contention, it points to screenshots of the Dropbox site showing

the file available for download, as well as a sworn declaration attesting to those screenshots’

veracity and stating that the font software could be downloaded without a password.

House’s contention that Sway and PureRED’s breached Paragraph 10 is somewhat

narrower. Email records produced by Rite Aid show that both Defendants transmitted what

appears to be a copy of the Neutraface font software to a company called Elixir Solutions, a

pharmacy benefits manager owned by Rite Aid. In Sway’s case, the transmission was direct: an

email to an Elixir employee stating “Here is the typeface for the Rite Aid type treatment. Hope

this helps!” with a file labeled “NeutraType-Demi.otf” attached. In PureRED’s case, there is

indirect evidence that a copy of the software was transmitted to Elixir: an email to a Rite Aid

employee containing the “attached font to send to Elixir.” Either way, House argues, the emails

unequivocally demonstrate that Sway and PureRED breached their confidentiality obligations, as

while Elixir is a subsidiary of Rite Aid, the pharmacy chain’s corporate representative testified

that it is an “unrelated affiliate.”

Defendants respond with a variety of counter-arguments, primarily that House’s evidence

is insufficient to establish breach, and that in any event House failed to properly plead a breach

of Paragraph 10 in its Amended Complaint. They might be right—particularly regarding that

second point.6 But the Court need not definitively settle either contention. Even if House had

properly pled this claim, and even if its evidence left no doubt that Defendants breached

Paragraph 10 of the licensing agreement, the absence of any evidence of damages resulting from

this breach is fatal to this theory of liability.

As noted, proof of damages is an element of any claim for breach of contract. Hart, 884

A.2d at 332. Barring unusual circumstances, the preferred measure of these damages is the

plaintiff’s “expectation” interest. In other words, damages are awarded “to place the aggrieved

in as good a position as would have occurred had the contract been performed.” ATACS Corp. v.

Trans World Comm’ns, Inc., 155 F.3d 659, 669 (3d Cir. 1998); see Restatement (Second) of

Contract § 347, cmt. a (Am. L. Inst. 1981) (“Contract damages are ordinarily based on the

injured party’s expectation interest and are intended to give him the benefit of his bargain.”). As

with the existence of a contract and breach, “damages are an essential element of a breach of

contract action.” Rade v. Transition Software Corp., 1998 WL 767455, at *2 (E.D. Pa. Oct. 30,

1995). And so when a plaintiff fails to adduce evidence that they were actually harmed by a

defendant’s breach of contract, their claim necessarily fails.

As will be discussed in Part III.C, infra, House’s damages evidence in this case consists

primarily of a report prepared by its expert, Graham D. Rogers. In his report, Rogers calculated

6 House argues that it satisfied Rule 8’s pleading requirement by alleging that Defendants “engage[d] in

unauthorized uses of Neutraface.” But the Federal Rules require that “the complaint . . . give the defendant fair

notice of what the plaintiff’s claim is and the grounds upon which it rests.” Liberty Lincoln-Mercury, Inc. v. Ford

Motor Co., 676 F.3d 318, 326 (3d Cir. 2012) (quoting Thomas v. Independence Twp., 463 F.3d 285, 295 (3d Cir.

2006)). And this reference to “unauthorized uses of Neutraface” is just a legal conclusion. The substance of the

Amended Complaint was therefore the facts pled by House that illustrated how Neutraface was misused and

demonstrated why, if true, it would be entitled to relief. Those well-pled facts are what provided the required “fair

notice of what the plaintiff’s claim is.” Liberty Lincoln-Mercury, 676 F.3d at 326; see Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007) (a complaint requires “[f]actual allegations,” not mere “labels and conclusions”). And

they related only to Defendants’ use of Neutraface in the Rite Aid logo—not to any potential breaches of

Defendants’ confidentiality obligations.

“the value of the hypothetical license that defendants were obligated to, but did not, obtain,”

which he placed at approximately $7.5 million. Brand Design Co. v. Rite Aid Corp., 2024 WL

643141, at *1 (E.D. Pa. Feb. 14, 2024). But, it is clear from the Court’s review of this report that

Rogers’ analysis merely addressed the damages resulting from Defendants’ use of Neutraface in

Rite Aid’s new logo and related promotional materials—i.e., their alleged breaches of

Paragraphs 8(k) and 2—and not their breaches of Paragraph 10. The report does not even

acknowledge House’s contention that Defendants breached Paragraph 10’s confidentiality

requirement, let alone provide the necessary explanation for how the damages it calculated were

causally linked to any such breach. See Logan v. Mirror Printing Co., 600 A.2d 225, 226 (Pa.

Super. 1991) (“In order to recover for damages pursuant to a breach of contract, the plaintiff

must show a causal connection between the breach and the loss.”).

Beyond Rogers’ report, House points to no other evidence of damages resulting from

Defendants’ alleged breach of Paragraph 10, nor was any evident in the Court’s review of the

summary judgment record. To the extent House believes it was harmed by the loss of

confidentiality qua confidentiality, nothing in the record would permit a jury to determine

damages resulting from this nebulous harm to any degree of reasonable certainty. See Bostick v.

ITT Hartford Grp., Inc., 82 F.Supp.2d 376, 381 (E.D. Pa. 2000) (“Unless plaintiffs produce such

evidence, the issue will not be submitted to a jury.”).

At oral argument, House suggested that even if there was no evidence of expectation

damages, it would still have a claim for nominal damages for Defendants’ breaches of Paragraph

10. This is true insofar as it goes: it is black letter law in Pennsylvania that “[i]f a plaintiff is able

to prove a breach of contract but can show no damages flowing from the breach, the plaintiff is

entitled to recover nominal damages.” Thorsen v. Iron & Glass Bank, 476 A.2d 928, 931 (Pa.

Super. 1984). Thus, summary judgment “on the sole basis of absence of provable damages [] is

generally improper.” Id. But, in order to “defeat summary judgment based on an entitlement to

nominal damages, a plaintiff must request nominal damages in its complaint or seek to amend its

complaint to request nominal damages.” Welding Eng’rs Ltd. V. NFM/Welding Eng’rs, Inc., 352

F.Supp.3d 416, 435 (E.D. Pa. 2018); accord Cohen v. Resolution Tr., 107 F. App’x 287, 289 (3d

Cir. 2004) (“Pennsylvania courts have only reversed a trial court’s failure to award nominal

damages if the plaintiff has, at a minimum, requested nominal damages or sought permission to

amend the complaint to do so.”) (citing cases).

Here, the ad damnum clause in House’s Amended Complaint sought a range of

remedies—including “actual damages, enhanced damages, exemplary damages, costs,

prejudgment and post judgment interest, and reasonable attorneys’ fees”—but it did not request

nominal damages. Accordingly, because no evidence ties Defendants’ alleged breaches of

Paragraph 10 to damages sustained by House, this theory of breach of contract must fail.

iii. Other Breaches

House’s final theory of liability, which it presses against Burns Group and PureRED

only, stems from these Defendants’ use of Neutraface in applications other than Rite Aid’s logo.

As to Burns Group, House argues that it used Neutraface “in connection with letterhead and

monographs for Rite Aid, prescription bottle caps, prescription bags, name badges, and the Rite

Aid brand guidelines.” Similarly, it argues that PureRED used Neutraface in connection with

“digital, social media, and web advertising, print and point-of-sale advertising, signage,

immunization record cards, gift cards, corporate communications material for Rite Aid, and

promotional marketing materials.” Because there is no material dispute as to this evidence,

House argues, it is entitled to judgment as a matter of law that Defendants violated their

licensing agreements.

Textually, this theory of breach gets off to a rocky start because unlike the use of

Neutraface in a logo, Defendants’ contracts do not explicitly prohibit using the font in these

applications. The absence of this provision is particularly noteworthy, as such a restriction was

included in the version of the licensing agreement attached to the Amended Complaint.

Specifically, Paragraph 8(d) of that contract directs that Neutraface not be used in “[a]ny product

for sale, product packaging, digital/social media/web advertising, print/POS advertising, and/or

tv advertising.” If present here, this restriction would plainly cover Defendants’ actions. But

this language was not included in the versions of licensing agreement that Burns Group and

PureRED actually agreed to.7 Paragraph 8(d) of these Defendants’ contracts merely bar the use

of Neutraface in “[a]ny product for sale where the shape of the product is determined by the

shape of single or multiple glyphs from the font data,” something neither Defendant stands

accused of doing.

Notwithstanding this absence of this provision, House maintains that such a prohibition

may be inferred from other sections of the licensing agreements. It first points to Paragraph 2,

which identifies the “[l]icensed uses of the Licensed Software and Fonts and glyphs generated

thereby” as including “installation on the number Devices specified on the invoice,”

“[e]mbedding in documents for the purposes of” small scale distribution and print production,

and “[u]se in conventional office correspondence.” This provision, House argues, enumerates

the only permitted uses for Neutraface, and these permitted uses did not include utilizing the font

in connection with signage, branded products, and the like. House further points to Paragraph

7 It was present in version agreed to by Sway, but House does not contend that this Defendant utilized Neutraface in

any application other than Rite Aid’s logo.

14, which states that “[a]ll rights not expressly identified and granted as a part of this License are

expressly reserved by House Industries.” As explained, most (if not all) of Defendants’ uses of

Neutraface were in applications other than those expressly authorized by Paragraph 2. Taken

together, House argues, these provisions make clear that Defendants not only violated their

licensing agreements when utilizing Neutraface in Rite Aid’s logo, but also when they utilized

the font software in these other applications.

But it is axiomatic that the purpose of contract interpretation “is to ascertain and give

effect to the intent of the contracting parties,” and this intent is best determined by the plain text

of the written agreement. Hart, 884 A.2d at 332 (quoting Murphy v. Duquesne Univ., 777 A.2d

418, 429 (2001)). Thus, “a court may not rewrite into contract conditions that parties did not

insert or, under the guise of construction, remake a contract to implement an unexpressed

intention.” O’Sullivan v. Joy Tech., Inc., 666 A.2d 664, 668 (Pa. Super. 1995) (quoting In re

17th Glenville Corp., 625 N.Y.S.2d 100, 101 (N.Y. App. Div. 1995)); accord Hutchinson v.

Sunbeam Coal Corp., 519 A.2d 385, 388 (Pa. 1986) (“The law will not imply a contract different

than that which the parties have expressly adopted.”). Here, House’s interpretation of the

licensing agreement violates this fundamental tenant.

First, House is mistaken that the licensing agreement limits the permitted uses of

Neutraface to only those uses specifically enumerated in Paragraph 2. While that provision

identifies three examples of “[l]icensed uses of the Licensed Software and Fonts,” this list was

introduced by the word “include.” The ordinary meaning of the word “include,” at least when it

precedes a specific list of included items, is that it should “be considered as [a] word[] of

enlargement and not limitation.” Dept. of Env. Prot. v. Cumberland Coal Res., LP, 102 A.3d

962, 976 (Pa. 2014); accord Tax Matrix Tech., LLC v. Wegmans Food Markets, Inc., 154

F.Supp.3d 157, 175 (E.D. Pa. 2016) (“[T]he list included after the words ‘shall include’ may be

read as illustrative rather than exhaustive or definitive.”). The contract offers no reason to think

that the parties intended to depart from this common usage. Thus, while the text of Paragraph 2

identifies three permitted uses of Neutraface, such as its “[u]se in conventional office

correspondence,” it does not follow, as House argues, that all other uses are necessarily

prohibited.

This conclusion is buttressed by the fact that the licensing agreements plainly envisions,

and accordingly prohibits, other uses of Neutraface beyond those listed in Paragraph 2. Recall

that Paragraph 8 of the contract consists of a lengthy list of “uses of the Licensed Software and

Fonts and glyphs generated thereby [that] are expressly NOT PERMITTED under this

agreement,” such as “[i]n a logo,” “eBook or ePublishing embedding,” and “[u]se in

entertainment services.” This provision would be entirely redundant if House’s interpretation of

Paragraph 2 were correct, since anything beyond the three three uses of Neutraface it expressly

permits would already be prohibited. This is not how parties typically understand their written

instruments, and Pennsylvania courts have accordingly cautioned against “interpret[ing] one

provision of a contract in a manner which results in another portion being annulled.” Lesko v.

Frankford Hosp.-Bucks Cnty., 15 A.3d 337, 342 (Pa. 2011) (quoting LJL Trans., Inc. v. Pilot Air

Freight Corp., 962 A.2d 639, 647-48 (2009)). In other words, contractual language must not “be

treated as surplusage if any reasonable meaning consistent with the other parts can be given to

it.” Gen. Mills, Inc. v. Snavely, 199 A.2d 540, 544 (Pa. Super. 1964). House’s proposed

interpretation of the licensing agreements would do exactly that.

Regarding Paragraph 8, this provision, too, provides reason to conclude that Defendants’

uses of Neutraface in applications other than a logo were permitted. As explained, multiple

versions of House’s licensing agreement exist, some of which expressly ban the uses of

Neutraface “in “[a]ny product for sale, product packaging, digital/social media/web advertising,

print/POS advertising, and/or tv advertising,” and some of which do not. The absence of this

prohibition in Burns Group and PureRED’s versions is thus significant, as Pennsylvania courts

have determined that “expressio unius est exclusio alterius is a common and accepted method of

contract interpretation.” Marion Ctr. Area Sch. Dist. v. Marion Ctr. Area Educ. Ass’n, 982 A.2d

1041, 1046 (Pa. Commw. 2009); see, e.g., Clarke v. MMG Ins. Co., 100 A.3d 271, 276 (Pa.

Super. 2014); Com., Dept. of Transp. v. Mosites Const. Co., 494 A.2d 41, 43-44 (Pa. Commw.

1985). That maxim instructs “that the expression of one thing implies the exclusion of another

thing not mentioned.” Marion Ctr., 982 A.2d at 1044 n.2. And it supports an inference that

where parties could have, but did not, prohibit a specific use of Neutraface, that use is permitted.

Finally, to the extent that the preceding considerations leave any uncertainty as to the

licensing agreement’s meaning, it is well-settled that “a contract is to be construed against its

drafter,” which in this case was House. Vinikoor v. Pedal Pa., Inc., 974 A.2d 1233, 1238 (Pa.

Cmmw. 2009). This principal points towards an interpretation of the licensing agreement that

lessens, rather than heightens, the licensee’s potential liability. See Restatement (Second) of

Contracts § 206, cmt. a (“Where one party chooses the terms of a contract, he is likely to provide

more carefully for the protection of his own interests than for those of the other party. . . . In

cases of doubt, therefore, so long as other factors are not decisive, there is substantial reason for

preferring the meaning of the other party.”). As Defendants argue, such an interpretation is

inconsistent with House’s position that Paragraph 2 implies a restriction its text does not clearly

contain.

Taken together, these principles of contract interpretation make the meaning of the

Defendants’ licensing agreements clear. While some versions of that contract prohibited the use

of Neutraface in product packaging, advertising, and similar, the versions which bind Burns

Group and PureRED do not. Thus, even assuming House’s evidence showed that Burns Group

and PureRED used Neutraface for these purposes, these uses did not violate the licensing

agreement, and accordingly do not present a genuine dispute of fact that must be submitted to the

jury.

C. Element 3: Damages

The final element of a breach of contract claim is damages, which as explained above, are

typically based on the injured party’s expectation interest. House has adduced evidence as to the

measure of these damages—namely, the report prepared by its expert witness, Graham Rogers.

As explained, Rogers calculated actual damages by determining the value of the theoretical

extended use license House contends Defendants were obligated to, but did not, obtain. Rogers

put the value of this theoretical license at approximately $7.5 million, which House argues

provides a sufficient basis “upon which the jury can determine the amount of damages without

conjecture.” McDermott v. Party City Corp., 11 F.Supp.2d 612, 628 (E.D. Pa. 1998) (citing

Delahanty v. First Pa. Bank, N.A., 464 A.2d 1243, 1257 (Pa. Super. 1983)).

While Defendants offer a variety of reasons why House’s damages evidence is

insufficient to create a triable issue of fact, their arguments largely stem from two premises that

have now been rejected. First, Defendants argue that House has adduced no evidence of their

economic loss. This would be true if the Court had granted Defendants’ Daubert motions and

excluded Rogers’ expert opinions, but as previously noted, this did not happen. See Brand

Design, 2024 WL 643141, at *1. Second, and relatedly, Sway’s argument that “there can be no

damages from something that Sway was not required to purchase” only follows if Defendants’

interpretation of the licensing agreement were correct. Again, there is a genuine dispute of

material fact on this very point, since the licensing agreement is ambiguous as to whether

Defendants were, in fact, “required to purchase” an extended license to use Neutraface in a logo.

Accordingly, House has demonstrated the proper measure of its expectation damages creates a

genuine dispute of material fact that must be submitted to the jury.

In the alternative to expectation damages, House also argues that it is entitled to the

disgorgement of PureRED’s profit. For background, the Third Restatement of Restitution

instructs that “[i]f a deliberate breach of contract results in profit to the defaulting promisor and

the available damage remedy affords inadequate protection to the promisee’s contractual

entitlement, the promisee has a claim to restitution of the profit realized by the promisor as a

result of the breach.” Restatement (Third) of Restitution & Unjust Enrichment § 39(1) (Am. L.

Inst. 2011). House argues that this is the case here, and that it is entitled to judgment as a matter

of law that PureRED’s breach of the licensing agreement was “deliberate.” PureRED counters

that: (1) Pennsylvania courts have not adopted this Restatement provision, nor would they if

given the opportunity to do so; (2) the available remedies are a matter of Georgia law,8 and that

jurisdiction would likewise reject this Restatement provision; and, (3) in any event, the evidence

does not show that PureRED’s breach was deliberate.

But as discussed above, House is not entitled to judgment as a matter of law that

PureRED actually breached the licensing agreement. at most, it has adduced evidence showing

that there are material disputes of fact that must be submitted to the jury. As a result, its

8 In a single footnote in its opposition to House’s motion for summary judgment, PureRED argues that the same is

true of Delaware law. But although PureRED’s own motion for summary judgment notes that Delaware law is

potentially relevant, as House is both incorporated and headquartered there, this footnote is the only point where it

expressly seeks application of that forum’s law. The Court declines to do so: “An argument made only in a footnote

is not worthy of credence (other than to be rejected by footnote).” Schmalz v. Sovereign Bancorp, Inc., 868

F.Supp.2d 438, 457 n.14 (E.D. Pa. 2012).

contingent argument that PureRED’s breaches were deliberate is for the jury to consider in that it

cannot be resolved here.

The same is true of Defendants’ choice-of-law argument. House has adduced sufficient

evidence to create a triable dispute regarding expectation damages, which is enough to defeat

Defendants’ motion for summary judgment.

* * *

In sum, with respect to House’s breach of contract claim, the summary judgment record

establishes the existence of a contract between House and each of the three Defendants, and it

shows a genuine dispute of material fact as to: (1) whether the Defendants breached Paragraph

8(k) of that contract when they used Neutraface in a logo; and, (2) the measure of damages

resulting from that breach. However, since House has neither alleged nor produced any evidence

supporting damages arising from a breach of Paragraph 10 of the contract, its claim under that

provision cannot proceed. And the Defendants’ remaining uses of Neutraface did not violate the

licensing agreement.

UNJUST ENRICHMENT CLAIMS

The second count in House’s Amended Complaint is for unjust enrichment, which it

presses against Sway and PureRED. “Unjust enrichment is a quasi-contractual theory that

allowed courts to disgorge a gain obtained improperly or unjustly by a defendant.” In re Flonase

Antitrust Litig., 692 F.Supp.2d 524, 541 (E.D. Pa. 2010). In Pennsylvania, “[a] party alleging

that a defendant has been unjustly enriched must establish the following: (1) plaintiff conferred a

benefit on the defendant; (2) the defendant appreciated the benefit; and (3) acceptance and

retention by the defendant of the benefits, under the circumstances, would make it inequitable for

the defendant to retain the benefit without paying for the value of the benefit.” Com. ex rel.

Pappert v. TAP Pharma. Prods., Inc., 885 A.2d 1127, 1137 (Pa. Commw. 2005). “The polestar

of the unjust enrichment inquiry is whether the defendant has been unjustly enriched; the intent

of the parties is irrelevant.” Limbach v. City of Phila., 905 A.2d 567, 557 (Pa. Commw. 2006)

(emphasis in original).

With regards to Sway, House’s briefing concedes that discovery yielded no evidence to

supports its claim for unjust enrichment. Accordingly, Sway’s motion for summary judgment as

to this claim will be granted, and the claim will be dismissed with prejudice.

Things are less straightforward as to its claim against PureRED, however. As discussed

in Part III.B.i, supra, there is a genuine dispute of material fact as to whether PureRED’s actions

breached Paragraph 8 of the licensing agreement. In the event that the jury concludes that they

did not, House maintains that its unjust enrichment claim can thus be submitted to the jury in the

alternative. See Kraus Indus., Inc. v. Moore, 2007 WL 2744194, at *8 (W.D. Pa. Sept. 18, 2007)

(“[A] claim for unjust enrichment will not be barred if it concerns conduct outside the scope of

the original agreement or contract.”).

But while claims of unjust enrichment and breach of contract may be pled in the

alternative, “a plaintiff may not recover under a theory of unjust enrichment if the parties’

relationship is governed by a written contract.” Brezinski v. Widener Univ., 582 F.Supp.3d 257,

267 (E.D. Pa. 2022). This rule is far from absolute; as the Restatement notes, “[r]estitution

claims of great practical significance arise in a contractual context.” Restatement (Third) of

Restitution & Unjust Enrichment § 2 cmt. c (Am. L. Inst. 2011). However, such claims are the

exception, not the rule, and they typically occur “at the margins, when a valuable performance

has been rendered under a contract that is invalid, or subject to avoidance, or otherwise

ineffective to regulate the parties’ obligations.” Id. None of these unusual circumstances is

present here, and House points to no other reason to depart from the ordinary rule. Indeed,

though it insists that these two claims can invariably be tried in the alternative, both (non-

precedential) cases it cites in support of this proposition—Kraus Industries, and I.M. Wilson, Inc.

v. Otvetstvennostyou “Grichko”, 500 F.Supp.3d 380 (E.D. Pa. 2020)—were decided at the

motion to dismiss stage, and thus involved claims merely pled in the alternative. Accordingly,

its claim for unjust enrichment against PureRED fails.

MOTIONS TO SEAL

In conjunction with their motions for summary judgment, House and PureRED have also

moved to seal portions of the parties’ briefing and the summary judgment record. In both civil

and criminal contexts, “the common law presumes that the public has a right of access to judicial

materials.” In re Avandia Mktg., Sales, Pracs. & Prods. Liab. Litig., 924 F.3d 662, 672 (3d Cir.

2019). Once this presumption attaches, it may only be rebutted by a showing that the parties’

“interest in secrecy outweighs the presumption.” Id. Specifically, “[t]he movant must show

“that the material is the kind of information that courts will protect and that disclosure will work

a clearly defined and serious injury to the party seeking closure.” Id.

For its part, House’s various motions seek leave to seal documents containing two types

of information: (1) proprietary financial data, and (2) confidential settlement communications.

That first category is straightforward. As the Court previously explained, “[i]t is well established

in this circuit that the disclosure of sensitive financial information is the sort of ‘clearly defined

and serious injury’ warranting a departure from the presumption of access to judicial records.”

Brand Design, 2024 WL 643141, at *6 (E.D. Pa. Feb. 14, 2024) (citing cases). Here, the data

House seeks to seal consists of proprietary pricing information, contracts executed with non-

parties, and details regarding House’s historic revenues. As before, “public disclosure of this

information would cause House to suffer a competitive disadvantage in the marketplace by

undermining its negotiating position in future licensing ventures.” Id. And the Court agrees that

House’s proposed redactions are appropriately tailored. See id. (“[P]arties should propose the

most limited redactions consistent with preventing the injuries they identify.”).

Regarding the parties’ settlement communications, it is a “time honored principle that

settlement discussions generally remain confidential.” EEOC v. U.S. Steel Corp., 877 F.Supp.2d

278, 292 n.27 (W.D. Pa. 2012). This principle, reflected in Fed. R. Evid. 408, derives from the

strong federal policy of encouraging settlements. See D.R. ex rel. M.R. v. E. Brunswick Bd. of

Educ., 109 F.3d 896, 901 (3d Cir. 1997) (“Settlement agreements are encouraged as a matter of

public policy because they promote the amicable resolution of disputes and lighten the increasing

load of litigation faced by courts.”). Here, as House argues, disclosing the contents of the

parties’ prior settlement discussions makes it less likely that these discussions will continue,

undermining House’s interest in reaching a negotiated settlement to this matter. The Court

agrees, and further agrees that House’s proposed redactions are appropriate.

PureRED, meanwhile, proposes numerous redactions to the summary judgment briefing

and record, which it justifies with three reasons. First, it argues documents associated with a

prior version of its summary judgment motion, which the Court denied as moot upon the filing of

revised briefing, should be sealed in their entirety. Second, PureRED seeks to redact references

to its proprietary financial data. Finally, it seeks to redact all information designated as

confidential by Rite Aid, pursuant to the protective order entered in this case. PureRED’s

motion includes a table of proposed redactions. This table makes clear which of the redactions is

associated with its first reason for sealing—the documents associated with its mooted briefing

are identified by ECF number. But, for the rest of the proposed redactions, it is unclear which

justification applies.

To start with the prior version of PureRED’s summary judgment motion, maintaining

documents related to this mooted motion under seal is appropriate. The public right of access

applies only to “judicial records,” which consist of documents “incorporated or integrated into a

district court’s adjudicatory proceedings.” Avandia, 924 F.3d at 672 (quoting In re Cendant

Corp., 260 F.3d 183, 192 (3d Cir. 2001). A prior version of the parties’ motion that will never

be evaluated on the merits falls outside this definition, and so the public right of access is not

implicated. Accordingly, the motion to seal will be granted as to these documents, which are

identified in the order accompanying this opinion.

The remaining two categories of redactions are a different matter. As a starting point, see

supra, it is well established that the disclosure of proprietary financial information can cause “a

clearly defined and serious injury.” Avandia, 924 F.3d at 672. Accordingly, protection of such

documents serves as a valid justification for sealing judicial records. But, when a motion to seal

implicates the public right of access, “specificity is essential.” Id. at 673. And, when there is a

request to circumvent the “strong presumption of openness” of judicial records, a court is

required to conduct a document-by-document review engaging in careful fact-finding to

determine whether each document sought to be sealed ought to be sealed. Id. at 672-73. Here,

PureRED has not provided the Court with the tools to conduct that analysis. Its motion does not

differentiate clearly which of its proposed redactions are to protect its own sensitive financial

information, and which are merely the result of Rite Aid’s designation of confidentiality during

the discovery process. As the Third Circuit explained in Avandia, the common law right of

access is “[a]nalytically distinct” from the Court’s ability to protect discovery material under

Rule 26(c). Id. And so, the mere fact that information was designated as confidential by a party

pursuant to a protective order is not a sufficient basis to seal it once it becomes a part of a

judicial record.9 Absent the distinction being made by PureRed between its documents and Rite

Aid’s documents, the Court cannot make the required “specific findings on the record concerning

the effects of disclosure.” Id. at 672. As such, that portion of PureRED’s motion that concerns

documents containing its financial information as well as documents stamped confidential by

Rite Aid during discovery, must be denied.

CONCLUSION

For the foregoing reasons, House’s motions for summary judgment will be denied,

Defendants’ motions for summary judgment will be granted in part and denied in part, House’s

motions to seal will be granted, and PureRED’s motion to seal will be granted in part and denied

in part.

An appropriate order follows.

BY THE COURT:

/S/Wendy Beetlestone, J.

___________________________

WENDY BEETLESTONE, J.

9 Moreover, Avandia requires that a party seeking to seal judicial records show “that disclosure will work a clearly

defined and serious injury to the party seeking closure.” Id. (quoting Miller v. Ind. Hosp., 16 F.3d 549, 551 (3d Cir.

1994)) (emphasis added). PureRED makes no attempt to demonstrate that it will be harmed by disclosing materials

designated as confidential by Rite Aid.