IP Law Daily, TRADEMARK—S.D. Miss.: Court grants one of two motions to enforce settlement agreement, (Feb 3, 2026)

By Robert Margolis, J.D.

Provision requiring defendant to “donate” prescribed amount means defendant breached agreement by choosing payment method by which plaintiff incurred transaction fees and received less than agreed on amount.

Resolving disputes between Phi Theta Kappa Honor Society (PTK) and HonorSociety.org, Inc. that have continued to simmer even after the parties settled their years-long trademark and trade dress infringement dispute, the federal district court in Jackson, Mississippi has granted one of two motions by PTK to enforce the settlement agreement. The court granted PTK’s motion and ordered that HonorSociety make a required “donation” to PTK in a manner that does not result in PTK paying transaction fees and receiving less than the amount agreed on in the settlement agreement. The court denied, however, PTK’s motion asserting that HonorSociety materially breached a non-solicitation provision, finding any breach was not material and was cured within the period the agreement provided (Phi Theta Kappa Honor Society v. Honorsociety.Org, Inc., No. 3:22-cv-00208-CWR-RPM (S.D. Miss. Feb. 2, 2026)).

Contentious litigation. PTK is an international academic honor society that recognizes academic excellence and provides opportunities for members to develop professional and leadership skills. It alleges having more than 3.8 million members and is active on nearly 1,300 community college campuses in eleven nations. HonorSociety.org, a competitor, is a Nevada corporation seeking to (1) provide scholarships to high achievers, (2) create values-driven educational content, and (3) preserve the distinguished history of honor societies. In 2022, PTK sued HonorSociety asserting claims under the Lanham Act for trademark and trade-dress infringement and Mississippi state-law claims for unfair competition and trade-dress infringement. It later added additional claims.

After what the district court describes as “contentious and numbing litigation” in the district court and then in the Fifth Circuit Court of Appeals, the parties reached a confidential settlement agreement (the Agreement). The district court then entered an Order of Dismissal on May 20, 2025, retaining jurisdiction to enforce the Agreement. The contentiousness has continued after the settlement, as PTK made two separate motions to enforce the Agreement, alleging HonorSociety has breached provisions (1) regarding payment of a donation to PTK, and (2) that HonorSociety not solicit for membership certain classes of students.

Donation. The Agreement provides that HonorSociety shall “donate” to PTK an agreed-on sum (the amount of which is confidential, and not included in the court’s order) by June 20, 2025, with the remainder due on February 16, 2026. Two days before the first payment was due, HonorSociety’s President made a donation via a “Donate Now” button on PTK’s website. The third-party operator of PTK’s online donation mechanism collects a service fee of 5% to process transactions, which PTK’s website disclosed. Donors may choose to absorb that fee themselves, with the website providing an option stating: “I’d like to cover the 5% transaction fee so that 100% of my donation goes to [PTK].” When making the donation, HonorSociety’s President elected not to absorb the fees, resulting in PTK receiving approximately $35,000 less than the amount provided in the Agreement for that first payment. PTK then refunded the donation, asserting HonorSociety had to pay the transaction fees. When HonorSociety refused, PTK made its first motion to enforce the Agreement.

The court first noted the Agreement is silent on the method by which the donation was to be made. But the court found use of the word “donate” rather than “pay,” “transfer,” or “wire” to be significant. That word is not ambiguous, and a provision requiring HonorSociety to “donate” a particular amount is clear, the court reasoned. By failing to choose the option that it absorb the transaction fee, so “100% of [its] donation goes to [PTK],” HonorSociety ensured that PTK would not receive the full amount the Agreement required from HonorSociety. Calling HonorSociety’s efforts to “shortchange” PTK “tomfoolery,” the court granted PTK’s motion and ordered HonorSociety to pay PTK’s attorney fees for filing the motion. It ordered HonorSociety to pay the full amount (both payments’ worth) by February 16, 2026, but did not specify the method HonorSociety must use to make the payment. It only ordered that whatever method is used must result in PTK receiving the full amount set forth in the Agreement.

Non-solicitation. HonorSociety also agreed that after July 22, 2025, it would not knowingly solicit or accept membership of persons enrolled at a community college, junior college, technical school, trade school, or college primarily offering associate-type degrees or credentials with program length two-years or less (Excluded Students). HonorSociety also must display screening questions so Excluded Students cannot become members, and must purge or suppress from its database any email address or contact information for Excluded Students. The Agreement provides for a fourteen-day opportunity to cure after a party receives written notice of a breach.

After the no-solicitation deadline date, PTK learned that HonorSociety sent membership invitations to some Excluded Students, and was not displaying the “requisite screening questions” on membership registration pages. PTK notified HonorSociety of the alleged breaches, and asserts the breaches have not been cured, leading to its second motion to enforce the Agreement. The court disagreed with PTK and denied the motion, awarding HonorSociety its attorney fees for opposing the motion.

The court noted that HonorSociety has suppressed nearly 400,000 community college addresses, and PTK has identified only some twenty solicitations of Excluded Students. This is not a material breach, the court held. Further, the Agreement does not require HonorSociety to include verbatim questions posited by PTK, but in any event HonorSociety asserts it has adopted those questions as of September 24, 2025. Finally, HonorSociety has demonstrated to the court that it will cure any breaches of which it becomes aware.

The Case is No. 3:22-cv-00208-CWR-RPM.

Judge: Reeves, C.

Attorneys: Michael B. Wallace (Wise, Carter, Child & Caraway, PA) for Phi Theta Kappa Honor Society. Derek Linke (Newman, LLP) for HonorSociety.org, Inc.

Companies: Phi Theta Kappa Honor Society; HonorSociety.org, Inc.

Cases: Trademark MississippiNews