Florida IP

Patent Obtained During Marriage Is Marital Asset in Florida

2013-05-07T13:55:00.001-04:00

James Taylor (I believe no relation to the singer) was awarded U.S. Patent No. 5,806,566 in 1998. At the same time, he was married to Mary Taylor. In 2011, the Taylors obtained a final judgment of dissolution of their marriage. The divorce settlement subjected the Taylors' marital assets to equitable distribution, and specified that a percentage of proceeds from the patents were to be divided 60% to Ms. Taylor with 40% to Mr. Taylor.

A year later, Mr. Taylor sued Taylor Made Plastics, Inc. for patent infringement. Taylor Made sought dismissal, arguing that Mr. Taylor alone does not own the '566 Patent, and thus did not have standing to sue for its infringement.

While patent disputes are governed by federal law, state law governs the question of shared ownership here.

Under Florida law, properties acquired during a marriage are presumably marital assets. Fla. Stat. § 61.075(6)(a)(l) (2012). Further, under Florida law "a patent is personal property that may be the subject of equitable distribution when the inventor and his or her spouse dissolve their marriage." Gulbrandsen v. Gulbrandsen, 22 So. 3d 640, 644 (Fla. Dist. Ct. App. 2009). Additionally, the Florida Supreme Court has definitively held that "a final judgment of dissolution settles all such matters as between the spouses ... and acts as a bar to any action thereafter to determine such rights and obligations." Davis v. Dieujuste, 496 So. 2d 806, 809-10 (Fla. 1986). Accordingly, since the Patent was issued to the Plaintiff while he was married to Ms. Taylor, Dkt. 1, the Patent was presumably a marital asset, under Florida law, prior to the issuance of the Divorce Settlement. The Divorce Settlement merely reinforced that presumption by subjecting the Patent to equitable distribution and awarding Ms. Taylor a 60% interest in any proceeds from the Patent.

The Court went on to conclude that the divorce settlement reinforced Ms. Taylor's ownership interest in the patent. As such, the complaint needed to be dismissed for failure to join the co-owner of the '566 Patent.

Motion to dismiss granted.
Taylor v. Taylor Made Plastics, Inc., Case No. 8:12-cv-746 (M.D. Fla. Apr. 29, 2013) (J. Kovachevich)

Trademark Statute of Limitations - Governed by Laches

2013-04-24T07:27:00.000-04:00

Roca Labs has sued Boogie Media, LLC and Slava Krasnov for unfair competition, cybersquatting, and trademark infringement concerning the trademarks NATURLA GASTRIC BYPASS, GASTRIC BYPASS NO SURGERY, ROCA LABS, and Gastric Bypass EffectTM. Roca was able to serve the corporate defendant, but has not yet served the individual.

According to Fed. R. Civ. P. 4(m), a plaintiff is given 120 days to serve a defendant, lest the Court dismiss the claim without prejudice (or direct service be made within a certain time period). Here, the 120 period expired on January 31, 2013. Two months later, plaintiff asked for an extension of time to serve the individual defendant, arguing that it has made a number of attempts to serve the defendant, but has not succeeded.

The Court held that it could extend the deadline for "good cause," which has historically involved issues such as sudden illness, natural catastrophe, or evasion of service of process. Problem for the plaintiff was that it did not submit any evidence (affidavit or the like) which demonstrated such good cause.

The Court also recognized its discretion in being able to extend the deadline in a circumstance where the applicable statute of limitations would bar relief to the plaintiff. Here, the Court noted that the Florida state unfair competition claims had a 4 year statute of limitations, but noted that the federal trademark and cybersquatting claims do not have an explicit statute of limitations:

The federal trademark and cybersquatting statutes do not contain a limitations period; rather laches principles apply. See Kason Indus. v. Component Hardware Group, Inc., 120 F.3d 1199, 1203 (11th Cir.1997) (“The Lanham Act does not contain a statute of limitations. However, in trademark cases, this circuit has followed the Sixth Circuit, which applies the period for analogous state law claims as the touchstone for laches.”); see Tandy Corp. v. Malone & Hyde, Inc., 769 F.2d 362, 365 (6th Cir.1985) (“The Lanham Act does not contain a statute of limitations. In determining when a plaintiff's suit should be barred under the Act, courts have consistently used principles of laches as developed by courts of equity.”); What–A–Burger of Va. v. Whataburger of Corpus Christi, 357 F.3d 441, 449 (4th Cir.2004) (“Courts use the doctrine of laches to address the inequities created by a trademark owner who, despite having a colorable claim, allows a competitor to develop its product around the mark and expand its business, only then to lower the litigation boom.”).

The Court then determined that the federal claims would be subjected to the same 4 year statute of limitation as the Florida unfair competition. And this statute of limitation does not pose an immediate risk to plaintiff's claim.

Motion for extension to effect service denied; Individual defendant dismissed without prejudice.

Roca Labs, Inc. v. Boogie Media, LLC, Case No. 8:12-cv-2231 (M.D. Fla. Apr. 19, 2013) (J. Covington)

Back to State Court, Brother

2013-04-04T10:54:00.001-04:00

Hulk Hogan (a/k/a Terry Bollea) sued a local radio host (you may have heard of him -- Bubba the Love Sponge) and his ex-wife in state court for releasing a vide of Hogan having sex with Bubba's ex-wife. Hogan amended his complaint, dropping the radio host, and adding Gawker. Gawker removed the case to federal court, under the guise that: (1) the radio host's ex-wife was fraudulently joined in the suit; and (2) the suit arose under the Copyright Act.

Fraudulent Joinder
Diversity juridiction requires a disputed amount exceeding $75k and parties being citizens of different states. Recognizing that Hogan and the ex-wife are both Florida citizens, Gawker needed to establish that the ex-wife was fraudulently joined to the case to satisfy the diversity requirement. First, Gawker argued that the statute of limitations had run against any claim Hogan could bring against the ex-wife. The Court disagreed, noting that Hogan's complaint did not indicate a date on which the video was published (publication serving as the basis of Hogan's claims), and thus the Court could not determine from the pleadings alone whether the statute of limitations had run.

Gawker also argued that joining the ex-wife was "so egregious as to constitute fraudulent joinder." Here, the Court applied the Eleventh Circuit's "logical relationship" test to determine if joinder of the ex-wife and Gawker was permissive under Fed. R. Civ. P. 20(a)(2). See Republic Health Corp. v. Lifemark Hosps. of Fla., 755 F.2d 1453, 1455 (11th Cir. 1985). Here, the claims of the ex-wife publishing the video without Hogan's permission are logically related to the claims against Gawker as they rest on the same operative facts (recording and publishing the video). The Court also found common questions of law (i.e. the video's chain of custody, Florida's privacy laws, and certain defenses).

Federal Jurisdiction -- Copyright Preemption
Gawker's other avenue to keep the case in federal court was to present the case as a copyright dispute. To remove a state court claim on the basis of a federal question, the federal question must present itself on the face of the complaint. Here, the Court must address if the federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of federal court resolution without offending the federal-state balance. See Gunn v. Minton, 133 S.Ct. 1059, 1065 (2013) (concluding that legal malpractice claims based on patent matters will "rarely, if ever, arise under federal patent law).

Here, Hogan's privacy claims arise under state law. Gawker's argument was that Hogan claimed his rights of privacy "as recognized under the United States Constitution" were violated. But when read as a whole, Hogan's complaint made only state law claims.

Hogan's claims also were not completely preempted by the Copyright Act. The Court first acknowledged that the Eleventh Circuit has not decided whether the Copyright Act completely preempts related state law claims. Those circuits that do find complete preemption ask: (1) whether the work is of the type protected by the Copyright Act; and (2) whether the claim seeks to vindicate rights equivalent to the bundle of rights protected by the Copyright Act. The state law claim, to be preempted, must not have any extra elements making it different from a copyright infringement claim.

Hogan's claims are not completely preempted. While he is seeking to regulate publication and distribution of a work that would fall under the Copyright Act, his claims for invasion of his privacy involve additional elements, such as proving "intrusion into one's private quarters." Thus, there is no complete preemption.

Motion for Remand granted.
Bollea v. Clem, Case No. 8:13-cv-00001 (M.D. Fla. Mar. 28, 2013) (J. Whittemore)

Hide & Seek Safari - Florida's Long Arm Statute

2013-04-03T05:00:00.000-04:00

R&R Games makes a children's game called Hide & Seek Safari. R&R owns the federal trademark registration for HIDE & SEEK SAFARI. R&R has discovered a number of "Safari Hide & Seek" and "Hide & Seek Safari" puzzle games online. R&R has thus sued a number of defendants for trademark infringement and conspiracy to commit trademark infringement. R&R sued a number of defendants for this action as per below:

Smart - Corporate defendant - principal place of business in Belgium.
Vandoren - CEO of Smart, lives in Belgium, has not resided/worked in Florida.
Smart Tangoes - Delaware corporation (which is a subsidiary of Smart) - principal place of business in California.
Whitney - CEO of Smart Tangoes, resides in California
Jumbo - subsidiary of a Dutch entity with principal place of business in the Netherlands and offices in Europe

These defendants sought dismissal for lack of personal jurisdiction. The Court began with Florida's long-arm statute, which permits jurisdiction over a defendant who committed a tortious act within this state. While Florida's Supreme Court has not decided whether injury alone satisfies this requirement, the Eleventh Circuit applies a broad construction of the long arm statute, allowing a court to exercise personal jurisdiction over a non-resident defendant if a tort committed outside Florida causes injury in Florida. See Licciardello v. Lovelady, 544 F.3d 1280, 1283 (11th Cir. 2008).

Here, R&R's allegations are that the three corporate defendants above directly infringed the trademark, while the two officers contributed to the infringement. As trademark infringement is an intentional tort, and R&R is located in Florida, the injury to R&R is here in Florida, and thus satisfies this part of the statute. Defendants offered evidence that they hadn't targeted Florida in their advertising, and that their sales were not directed to Florida citizens (rather, they sold the items to Amazon.com, and Amazon.com then sold it to Florida citizens). This argument, however, ignored that there was still a tort committed, and injury in Florida -- sufficient to satisfy the long arm statute.

Due Process

Having met the statutory requirement, the Court next analyzed whether it was constitutionally proper to hail these defendants into court in Florida. First, the defendant must have purposefully directed its activities at Florida. An intentional tort may satisfy this purposeful direction requirement. And courts "have consistently found the minimum contacts inquiry satisfied because trademark infringement is an intentional tort directed toward the state in which the plaintiff is domiciled." (citations omitted).

All that was left was analyzing whether it is fair to haul these defendants into court in Florida. For the California defendants (Smart Tangoes and Whitney), "modern methods of transportation and communication" ameliorated any concern about forcing them to litigate in Florida. For the Belgium defendants (Smart and Vandoren), their international domiciles did not present a "compelling case" sufficient to keep them out of court here. This was in part because the entity (Smart) owned a subsidiary (Smart Tangoes) which was domiciled here in the U.S., and which the individual (Vandoren) was an officer of. Additionally, the Belgium defendants have the same lawyer as the California defendants. And the Belgium defendants travel to the U.S. for trade shows.

As for the last corporate defendant -- Jumbo -- the Court found it would be unfair to subject that entity to personal jurisdiction here in Florida. It does not conduct business in the U.S., does not have a subsidiary here, and its activities were directed only at the U.K, not Florida.

Transfer

Having found four of the five moving defendants were subject to jurisdiction in Florida, the Court quickly dispensed with a motion to transfer the matter to California. Recognizing the numerous localities involved (Canada, Indiana, Belgium, Arkansas, Illinois, etc.), the court determined that Tampa was at least as convenient, and perhaps more so, than California (noting that flights from many of the locations will be shorter to Tampa than to California). Thus, the Court denied the motion to transfer.

Shotgun Pleading

It was not a complete win for R&R. R&R's amended complaint identifies 17 defendants. The amended complaint appears to have only a single count entitled "Federal Trademark Infringement" but also appears to assert claims for direct and contributory trademark infringement, and conspiracy. The Court found this to be the "hallmark of a 'shotgun' pleading." R&R is given an opportunity to replead. (And, indeed, has done so asserting federal trademark infringement, inducement of trademark infringement, contributory infringement, and trademark infringement conspiracy).

Motion to dismiss or transfer is granted in part, denied in part. Defendant Jumbo is dismissed without prejudice.
R&R Games, Inc. v. Fundex Games, Ltd. et al., Case No. 8:12-cv-1957 (M.D. Fla. Mar. 1, 2013) (J. Whittemore)

First-to-file rule is alive and well

2013-04-01T20:57:00.000-04:00

AAMP of Florida owns U.S. Patent 8,014,540 entitled "Remote Control Interface For Replacement Vehicle Stereos." AAMP is currently asserting the '540 Patent (and another) against Metra Electronics Corporation here in the Middle District. AAMP sent a cease and desist letter to another company -- Crux Interfacing Solutions -- located in California. The risk of doing so, of course, is that the California company will respond to the letter by filing its own lawsuit for a declaratory judgment of noninfringement/invalidity in its jurisdiction. That's exactly what happened here, with Crux filing suit first in California.

AAMP responded quickly, filing its own patent infringement lawsuit against CRUX in Tampa ten days later. Expectedly, Crux asked to dismiss this second filed case, or transfer it over to California where Crux's declaratory judgment action had been pending for ten days longer.

AAMP asked the Court to recognize the exception to the first-to-file rule when a party files a declaratory judgment action in an attempt to preempt a soon-to-be-plaintiff's chosen forum. While the Court agreed that such an activity is an equitable consideration that must be considered in figuring out which of the two forums should handle the dispute, the Court recognized that the decision was in the hands of the Court handling the first case filed:

But, whatever merit there may be in AAMP's contention that Crux's California action falls within this "anticipatory declaratory judgment" exception to the first filed rule -- an issue upon which this Court expresses no opinion -- this Court finds that such a determination should be reached by the United States District Court for the Central District of California. [Marietta Drapery & Window Coverings Co., Inc. v. N. River Ins. Co., 486 F.Supp.2d 1366, 1369 (N.D. Ga. 2007).]
"The 'first to file' rule not only determines which court may decide the merits of substantially similar issues, but also establishes which court may decide whether the second suit filed must be dismissed, stayed or transferred and consolidated." (citation omitted)

Thus, the case has to go to California to let that Court determine which of the two cases will go forward. Perhaps it will come back. We'll wait and see.

Motion to Dismiss, or in the Alternative, Transfer, Granted in Part.

AAMP of Florida, Inc. v. Audionics System, Inc., Case No. 8:12-cv-2922 (M.D. Fla. Mar. 18, 2013) (J. Covington)

You Fit vs. Fit U - injunction entered against former franchisee

2013-02-19T17:15:00.000-05:00

Plaintiffs are entities that own and operate the You Fit brand of health clubs. They claim ownership of 3 federal trademark registrations: "YOUFIT," "Fit begins with You," and "It's where YOU FIT In." They operate at least 38 gyms in Florida, Georgia, and Arizona under the You Fit name.

Defendants, made up of a number of entities including some former You Fit franchisees, opened a competing gym called "Fit U." These gyms are in California. This litigation followed.

Plaintiffs sought a preliminary injunction on the basis of trademark infringement and misappropriation of Plaintiffs' trade secrets. Magistrate Judge Jenkins recommended granting the preliminary injunction. Defendants objected to this decision on three grounds: (1) Plaintiffs' marks were merely descriptive and weak or invalid, and there was no likelihood of confusion; (2) there was no consideration as to whether the confusingly similar mark was used in the same trade area; and (3) Plaintiff had not properly identified any justiciable trade secrets. The Court only addressed the trademark claims to resolve Defendants' objections.

Likelihood of Confusion

The Court analyzed the seven factors to address this concern:

1) the type of mark
Here, the Court found the marks somewhere between descriptive and suggestive. While "YOU" and "FIT" "bear a logical relationship to the health club services provided by Plaintiff," .... "a consumer would not automatically associate the marks 'YOUFIT,' 'It's Where YOU FIT In,' and 'Fit begins with You' with a health club. Thus, Plaintiff's will likely be able to prove their marks are suggestive and entitled to a heightened level of protection.

2) the similarity of the marks
"'YOUFIT' and 'FIT U' are plainly very similar marks." Enough said.

3 & 4) the similarity of the services; similarity of the parties' service outlets and customers
Services, service outlets, and customers were all similar. This weighed in Plaintiff's favor.

5) nature and similarity of the parties' advertising
Insufficient evidence for the Court to evaluate this factor.

6) Defendants' intent
While there were text messages from a defendant suggesting intent to copy, there was also conflicting evidence. This factor was neutral.

7) actual confusion
Reviews on yelp demonstrated at least one consumer was confused. "While these anonymous posts are not conclusive evidence of actual confusion, they are indicative of potential consumer confusion." This factor favored Plaintiffs.

On balance, the Court agreed with the Magistrate Judge, and found the Plaintiff's likely to prevail on this claim.

Zone of Natural Expansion

Defendants also argued that Plaintiff's franchise business in Florida, Georgia, and Arizona was not likely to expand to Defendants' forum -- California. The Court dispensed with this argument quickly on two grounds.

First, there was evidence that the franchise was expanding to California as demonstrated by the presence in Arizona. Second, the federal registrations entitled Plaintiffs to exclusive use of their marks and Defendants could not use the common law zone of natural expansion doctrine to avoid liability.

Injunction entered; $50,000 bond.

You Fit, Inc. v. Pleasonton Fitness, LLC, Case No. 8:12-cv-1917 (M.D. Fla. Feb. 11, 2013) (J. Whittemore)

USF Young Innovator Competition

2013-01-28T17:15:00.002-05:00

I am honored to be serving as a judge for the preliminary phase in this year's USF Young Innovator Competition. Read more about it here.

Does a Trademark Owner Need a Judgment Against a Direct Infringer Before Pursuing a Vicarious Infringer?

2012-08-09T07:24:00.001-04:00

No.

Slep-Tone Entertainment Corp. owns a U.S. Trademark Registration for the mark Sound Choice in connection with karaoke products. Slep-Tone sued a restaurant, which had hired one or more karaoke operators who allegedly were using Slep-Tone's trademark without Slep-Tone's authority. Slep-Tone's claim against the restaurant is that the restaurant derives a benefit from the karaoke operators' use of the mark, and the restaurant knows the karaoke operators are not operated to use the trademark.

The restaurant sought dismissal, arguing that Slep-Tone must first establish that the karaoke operators are infringing the trademark. The Court was not convinced.

Defendant’s argument lacks merit. As Plaintiff points out, this Court previously held in a related Slep-Tone case that to prevail on a contributory trademark infringement claim, a plaintiff must show that the defendant “intentionally induces another to infringe a trademark, or [ ] continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement....” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982).

Vicarious liability for trademark infringement “requires a finding that the defendant and the infringer have an apparent or actual partnership, have authority to bind one another in transactions with third parties or exercise joint ownership or control over the infringing product.” RGS Labs Intern., Inc. v. The Sherwin-Williams Co., 2010 WL 317778, at *3 (S.D. Fla. Jan. 11, 2010) (citing Hard Rock Café Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143, 1150 (7th Cir. 1992)).

Here, with respect to all of the claims alleged in the complaint, it is immaterial whether the karaoke operators are named in the complaint. Plaintiff also does not need to achieve a judgment in its favor against the karaoke operators before it brings the instant action. Plaintiff’s allegations are sufficient because they include the facts that Defendant was aware of the karaoke operators’ unlawful activity and continued to utilize their services at its establishment. In other words, a finder of fact could determine that Defendant had the ability to control whether its karaoke providers/operators were performing using lawful, properly licensed accompaniment tracks.

Motion to dismiss denied.
Slep-Tone Entertainment Corp. v. Il Mio Sogno, LLC, Case No. 8:12-cv-1187 (M.D. Fla. Aug. 3, 2012) (J. Moody)

Patent eligible subject matter for a method of managing financial instruments?

2012-08-03T07:49:00.000-04:00

Digitech Information Systems sued BMW Financial Services NA, LLC for infringement of U.S. Patent 7,739,180 directed to a method of managing financial instruments, equipment lease derivatives, and other collateral instruments, data architecture, application and process program. Claim 1 recites:

A method for selecting leases to optimize an investment portfolio comprising
the steps of:
receiving data regarding an equipment purchase price, an equipment sales price, a number of units, a lease purchase price, a life of lease, a lease acquisition fee, an accelerated depreciation of change, and a yearly payment;
calculating by computer a total purchase price by adding the lease purchase price to the lease acquisition fee;
calculating by computer an accelerated depreciation result by multiplying the equipment purchase price by the number of units;
calculating by computer a rate of return by subtracting from the yearly payment the total purchase price and the accelerated depreciation result and dividing by the lease purchase price; and
selecting a lease based on the rate of return being greater or equal to a predetermined value and using the selected lease to create lease backed financial instrument derivatives and optimize the investment portfolio.

Months ago, BMW sought and was awarded summary judgment that the '180 Patent is invalid for not being directed to patent eligible subject matter under 35 U.S.C. § 101. Digitech sought to undo that damage by asking the Court to reconsider.

Motions for reconsideration are tough. Three main grounds can justify reconsideration: (1) change in the law; (2) new evidence; or (3) a need to correct clear error or prevent manifest injustice. Digitech argued that all three applied here. As to a change in the law, a few recent Federal Circuit decisions (CLS Bank Int'l. v. Alice Corp, 103 U.S.P.A.2d 1297 (Fed. Cir. 2012) and Bancorp Services, LLC v. Sun Life Assur. Co. of Canada (U.S.), ___ F.3d ___ (Fed. Cir. 2012)) and have addressed patent eligibility under § 101. As to new facts, Digitech brought up some deposition testimony. As to clear error, Digitech raised some challenges to how the Court had construed the claims.

The Court was not persuaded by any of these arguments. Regarding the new law, the Court recognized that the test for patent eligibility under § 101 - the abstract idea test -- is not well defined:

This so-called "abstract idea test" is not a concrete test but rather a set of guidelines promulgated in various Supreme Court and Federal Circuit opinions.

True enough. This has created the unfortunate result that the test for abstractness still works out as "I know it when I see it" reasoning and logic. Dennis Crouch (a.k.a. Patently-O) recently posted on the CLS Bank and Bancorp decisions. CLS Bank found computerized stock trading claims patent eligible, while Bancorp found computer related financial claims patent ineligible. Prof. Crouch aptly concluded his post as follows:

It is simply ridiculous that after 40 years of debate, we still do not have an answer to the simple question of whether (or when) software is patentable.

I would rephrase that comment slightly, as we know that software is patent eligible, but we still have a great lack of clarity as to when. And it has less to do with the software itself and more to do with how that software is claimed.

The Digitech decision is another example of this theme. Judge Antoon analyzed the CLS Bank and Bancorp decisions and found Digitech's claims closer-in-kind to Bancorp's. Accordingly, the '180 patent remains invalid. We'll have to see what happens on appeal.

Motion for Reconsideration Denied.
Digitech Information Systems, Inc. v. BMW Financial Services NA, LLC, Case No. 6:10-cv-1373 (M.D. Fla. July 30, 2012) (J. Antoon)

Tough Mudder vs. Baddest Mudder

2012-07-26T22:54:00.001-04:00

Tough Mudder has been around since 2009, staging outdoor endurance and obstacle courses throughout the country. A number of friends have participated in these events. They sound cool, but the idea of allowing someone to shock me with electricity doesn't appeal to me so I've not yet signed up. Apparently, there's another challenger in town -- Baddest Mudder. Baddest Mudder has scheduled an event in November of this year in Brooksville. Baddest Mudder also includes the following disclaimer on its website:

NOTICE
We want to notify the general public and all others that Tough Mudder LLC. is in no WAY shape or form related to, operated by, directed by or affiliated with "BADDEST MUDDER"
All We r... Is what we r...
Welcome To The Badlands

Tough Mudder sued Baddest Mudder for trademark infringement, false designation of origin, trademark dilution, and trademark cyberpiracy. To speed things along, Tough Mudder also sought a temporary restraining order pursuant to Fed. R. Civ. P. 65(b). A pretty aggressive approach. As a refresher, temporary restraining orders, prohibiting an adverse party from doing something without notice, are proper only when:
1) specific facts clearly show that immediate and irreparable harm will result before the adverse party can be heard; and
2) the moving party certifies in writing any efforts to give notice and the reasons why notice should not be required.

Here, Tough Mudder's TRO argument addresses the standards for a preliminary injunction, but did not specifically identify what the immediate irreparable harm was. Instead, the irreparable harm complained of was, expectedly, the injury to Tough Mudder's goodwill. Tough Mudder filed its TRO motion on a Friday. Judge Scriven denied it the following Monday:

Federal Rule of Civil Procedure 65(b)(1) provides that a TRO may be granted without notice only if the party requesting the TRO can: (1) offer specific facts clearly showing that “immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition;” and (2) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not be required. The Court has reviewed Plaintiff’s motion, memorandum, amended complaint, and accompanying documents. Upon consideration and review, the Court finds that a temporary restraining order without notice should not be granted since it does not clearly appear that immediate and irreparable harm will result before Defendants can be heard in opposition. The main event to be held by Defendants which Plaintiff claims will cause its injury is not scheduled to be held until November 2, 2012. Plaintiff has not provided sufficient reasons why notice of the TRO has not been given and should not be given to Defendants.

I imagine the next motion we will see will be the preliminary injunction motion.

Motion for Temporary Restraining Order, Denied.
Tough Mudder, LLC v. La. Placa, Case No. 8:12-cv-1513 (M.D. Fla. Jul. 9, 2012) (J. Scriven)

If you sell airplane parts in South Carolina to a customer who advertises and flies in Florida, are you subjected to personal jurisdiction in Florida for patent infringement?

2012-03-20T09:47:00.000-04:00

No.

William Fondriest sued Chippewa Aerospace and Icore International for infringement of U.S. Pat. No. 7,135,790 related to jet aircraft landing gear. Icore was dismissed earlier with the Plaintiff's consent.

Plaintiff alleged both general jurisdiction and specific jurisdiction. As to general jurisdiction, which requires "continuous and systematic general business contacts between the defendant and the forum state," Plaintiff relied on Chippewa's long standing and ongoing relationships with multiple companies that maintain significant operations in Florida. Chippewa's customers's significant connections to Florida did not carry over to justify suing Chippewa here:

The fact that Chippewa allegedly provides Harness Products to airlines that advertise in Florida and fly throughout Florida does not demonstrate the continuous and systematic contacts that warrant the exercise of jurisdiction over Chippewa.

Plaintiff next tried specific jurisdiction, which involves a three-prong test: (1) defendant purposefully directed its activities at the residents of Florida; (2) the claim arises out of or is related to those activities; and (3) asserting personal jurisdiction is reasonable and fair. Plaintiff argued that the regional airlines Chippewa sells to use Chippewa's allegedly infringing product in flights to and from Florida (and thus commit infringement in Florida). Chippewa responded that it manufactures the products in South Carolina, has never sold one in Florida or to a customer in Florida, has never received any payment from anyone in Florida, and has never delivered the allegedly infringing product to Florida. Instead, Chippewa has sold the product to a customer in North Carolina and another in Utah and those sold to the North Carolina entity were installed on landing gear for companies in Wisconsin and Canada.

There is no evidence before this court to indicate that Chippewa purposefully directed its activities at residents of Florida. Thus, Plaintiff's claim does not arise out of tor relate to activities that Chippewa purposefully directed at residents of Florida. Assertion of personal jurisdiction over Chippewa would be unreasonable and unfair, as there are no contacts between Chippewa and Florida that give rise to the claims asserted by Plaintiff in this case.

Motion to dismiss for lack of personal jurisdiction granted.

Fondriest v. Chippewa Aerospace, Inc., Case No. 6:11-cv-1206 (M.D. Fla. Mar. 16, 2012) (J. Honeywell)

Litigants -- pick your battles wisely; Rube Goldberg's Self-Operating Napkin more interesting than sanctions motion

2012-02-27T09:08:00.000-05:00

PPS Data sued Athenahealth for patent infringement. Athenahealth thought PPS didn't do a thorough enough pre-suit investigation, and filed a Rule 11 motion seeking sanctions. PPS responded that it investigated the accused product and reasonably believed it read on the claims. In responding to Athenahealth's sanction motion, PPS made a request for "counter-sanctions" against Athenahealth and its counsel for filing a "frivolous" Rule 11 motion. Athenahealth, of course, responded. PPS next filed a motion to strike a paragraph from that response, to which Athenahealth filed another response. You can imagine how pleased the Court was to receive this barrage.

First, the Court dispensed with the law. An adequate pre-suit investigation in a patent case requires a plaintiff to: (1) investigate the legal basis of the patent infringement claims (i.e. interpret the claims to be at issue); and (2) conduct a comparison of the accused product and the asserted claim(2).

Here, neither party presented the Court with Plaintiff's pre-suit claim interpretation -- thus the Court could only conclude that such construction was reasonable. As to the comparison of the accused product, PPS relied on Athenahealth's public statements about its products. Athenahealth challenged this with the affidavit testimony of its managing director. This was not persuasive. As my trial advocacy professor often stated, "that goes to the weight, not admissibility." The Court saw things the same way:

To the extent that affidavit can be seen as a repudiation of Defendant's public statements about its product, the affidavit may call into question the accuracy of those statements or, perhaps, the credibility of the managing director. It does not, however, cast doubt on the reasonableness of Plaintiff's reliance on Defendant's public statements.

Having now denied Athenahealth's sanctions motion, the Court addressed the various briefings. I see no reason to try to improve on the Court's language, so I quote it below:

Putting to one side the original motion for sanctions, the Court must now turn to several papers that related to Defendant's motion in a Rube Goldberg-like manner. [FN - The Official Rube Goldberg Website]
* * *
All-in-all, the Court finds Rube Goldberg's cartoon of a Self-Operating Napkin more entertaining than the Rube Goldberg-like web of papers submitted in this case. Although both parties have likely spent a great deal of time and money preparing these submissions, neither party has benefitted. The Court has spent too much time addressing them. For future submissions, counsel should note that this Court, like the U.S. Court of Appeals for the Seventh Circuit, "is not inclined to award sanctions in favor of a party that cannot be bothered to follow the rules itself." Heinen v. Northrop Grumman Corp., 2012 WL 372988, at *2 (7th Cir. Feb. 7, 2012).
Furthermore, as this case remains in its early stages, counsel are advised that the effect of launching a litigation nuclear arsenal directed at peripheral issues not genuinely intended to advance the case toward resolution in an efficient, meaningful way will greatly diminish the credit given by the Court to future filings. Choose your battles wisely lest the early salvos cost you the war.

Motion for sanctions denied.

PPS Data, LLC v. Athenahealth, Inc., Case No. 3:11-cv-746 (M.D. Fla. Feb. 23, 2012) (J. Dalton, Jr.)

Pro Se Litigants - Be Warned - Futile Demonstrations Will Not Last Long

2012-02-23T05:00:00.000-05:00

Pearle Vision sued an individual (his wife and related corporate entitle) for unauthorized operation of a two "Pearle Vision" stores. Pearle Vision moved for a preliminary injunction. Defendants responded without counsel, with the following notice:

Now coming is the man george-leslie, formerly of the Haffner family, by Limited Appearance and not by general appearance, reserving all rights, by necessity, for the protection of freedom, rights, titles, and interests in this civil action. The sole purpose of this limited appearance is to honor this court and at all pertinent times by acting under Variation of Agreement, in good-fath, with clean hands, with no intention of contempt, delay, or obstruction of the due process of the law, but for the purpose of maintaining the domestic, private, and public international order. Moreover, limited appearance is made in an effort to facilitate the peaceful and immediate-settlement of any and all stated disputes or claims, charges) [sic] and to further facilitate the immediate satisfaction, closure, and discharge of GEORGE L. HAFFNER pertaining to this account . . . and any other related account(s).

Additional documents were filed with similar language. The defendants next filed two boxes of documents with the Court. The corporation never appeared, so Plaintiff sought (and obtained) default. The individual defendants returned to the Court with more documents. The Court was not entertained. Rule 55 provides that if party fails to defend itself, default is appropriate. While no explicit definition is provided for "otherwise defend," such actions include attacking service, moving to dismiss, and seeking summary judgment. Nothing the defendants had done fell into this type of activity:

None of the documents filed by Haffner and Mabry reveals an intent to “defend” the suit. Indeed, the documents reveal no intent whatsoever. Failing to conform with the prescriptions of Rule 8 by either responding “to the substance of the allegation” or stating a defense in “short and plain terms,” Haffner and Mabry fail to “plead or otherwise defend.” See 10 MOORE’S FEDERAL PRACTICE § 55.02 (3d ed. 2010) (“[D]efault promotes efficient administration of justice by requiring a responding party to conform with the requirements set out in the Federal Rules in a timely fashion.”). Haffner and Mabry have defaulted.

Default granted, with Pearle Vision invited to brief damages for the Court.

Luxottica Retail North America, Inc. v. George L. Haffner Enterprises, Inc., Case No. 8:11-cv-2433 (M.D. Fla. Dec. 16, 2011) (J. Merryday)

Amended Pleading (Rule 15(a)(1)) vs. Supplemental Pleading (Rule 15(d)) -- Are they different?

2012-02-20T05:00:00.000-05:00

Yes.

MacNeil IP (an Illinois company) sent a cease and desist letter to Kramer America (a Florida company) informing Kramer of a number of patents owned by MacNeil and asserting that Kramer infringed one of those patents. As is the risk whenever you send a letter accusing another of infringement, Kramer responding by filing a declaratory judgment lawsuit, asking the Court to declare that Kramer did not infringe the patent MacNeil had accused it of infringing.

MacNeil responded by doing two things. First, it provided Kramer a covenant promising that it would not sue Kramer for the patent MacNeil previously accused Kramer of infringing. This had the net effect of removing subject matter jurisdiction as no controversy existed between the parties related to that patent any longer. (For a discussion on this approach, see my post on Super Sack.) MacNeil also filed a patent infringement case in Illinois, charging Kramer with infringing some of MacNeil's other patents.

Kramer responded to the covenant not to sue by filing an Amended Complaint, pursuant to Fed. R. Civ. P. 15(a)(1), asking now for a declaration that it did not infringe the patents MacNeil sued over in Illinois. MacNeil objected, and asked the Court to strike the "Amended Complaint" as not being an amended complaint at all. Instead, MacNeil argued the "Amended Complaint" was a "Supplemental Complaint" pursuant to Rule 15(d), which Kramer needed leave of court to file.

Rule 15(a)(1) allows a party to file an amended pleading, without leave of court, within a 21-day time period (which Kramer was within). Rule 15(d), on the other hand, allows a party to file a supplemental pleading setting out any transaction, occurrence, or event that happened after the original pleading was filed. But a party must first receive permission from the Court to file such a supplemental pleading.

MacNeil further argued that the "Amended Complaint" could not supplement the original complaint under Rule 15(d) because, while there was subject matter jurisdiction for the original complaint as, at the time it was filed, there was a controversy between the parties related to the patent at issue therein, there was not subject matter jurisdiction at the time the original complaint was filed related to the other patents because they had not been asserted against Kramer.

The Court refused to strike the Amended Complaint, and instead invited MacNeil to file a motion to dismiss the Amended Complaint under this subject matter jurisdiction analysis. MacNeil did precisely that.

MacNeil's cease and desist letter stated:

We ... are writing to you concerning the ... vehicle floor mat that you manufacture, sell, offer to sell and import. MacNeil owns multiple patents directed to vehicle floor trays, including U.S. Patent Nos. 7,401,837; 7,316,847; 7686,370; 7607,713; 7,444,748; 7686,371; and 7,784,848. ....
It has come to our attention that your use, manufacture, sale, offers to sell and importing of the ... mats infringes at least one of the MacNeil IP LLC patents. See U.S. Patent No. 7,401,837 attached hereto....

While MacNeil provided a covenant not to sue on the '837 patent, MacNeil did sue Kramer for infringement of the '370 and '819 patents.

The issues presented are different for the '370 patent and the '819 patent. First, the '370 patent is identified in MacNeil's letter. The '819 is not. Second, the '819 patent is related to a mechanism for affixing a floor mat to a vehicle floor, and not to a floor tray itself. Thus, the Court determined that subject matter properly exists for the declaratory judgment case related to the '370 patent. But the declaratory judgment count concerning the '819 patent (and related trade dress and unfair competition issues) did not present a justiciable issue at the time the complaint was filed because they had not been asserted.

[NOTE: This presents an interesting timing issue to me. Kramer has subject matter jurisdiction here in Florida on one patent claim. The day after it filed its declaratory judgment case here, MacNeil filed a patent infringement case in Illinois asserting another patent (not previously identified in its letter). But MacNeil's letter says that Kramer allegedly infringes "at least one of" MacNeil's patents. So Kramer amends its complaint to name the two others MacNeil sued on in Illinois. One of those cases can stick because that patent number happened to be mentioned in the cease and desist letter, but the other can't because it wasn't mentioned? This seems to give MacNeil grounds to go back to Illinois -- the second filed jurisdiction -- and seek to proceed there on the second patent. Thus, 2 different court will be addressing the same parties in similar patents at the same time. Perhaps the next round of motions here will shake that issue out. We'll see.]

Kramer America, Inc. v. MacNeil IP, LLC, Case No. 6:11-cv-1489, (M.D. Fla. Dec. 8, 2011 (motion to strike amended complaint) Feb. 3, 2012 (motion to dismiss amended complaint)) (J. Presnell)

Is A Patent Claim's Preamble Limiting? Following the Guideposts...

2012-02-16T05:00:00.000-05:00

Enpat sued a number of entities (in separate cases) for infringing U.S. Patent No. 6,328,260, a patent related to a wing spar modification kit to be used for strengthening wings on certain amphibious airplanes. Asking for claim construction, one defendant argued that the preamble of the first independent claim was limiting. Enpat disagreed, arguing instead that the preamble merely recited an intended use.

The preamble of claim 1 reads:

A modification kit for retrofitting a wing spar on an amphibious airplane, said airplane having a root rib, and said wing spar comprising a wing-spar cap angle that is attached to a wing spar web, said wing spar web having an upper edge and a lower edge and an inboard end that attaches to said root rib, a first series of wing-attach bolt-holes that is provided in said upper edge and a second series of wing-attach bolt-holes that is provided in said lower edge of said wing spar web, wherein said root rib is angled relative to a vertical plane of said amphibious airplanes, and wherein said inboard end of said wing spar has an inboard-end angle that corresponds to an angle of said root rib, said modification kit comprising:

The Court recognized that no litmus test exists for determining whether or not a preamble is limiting. Instead, a number of "guideposts" should be followed. If the preamble merely describes "the use of an invention" while the body of the claim sets forth a "structurally complete invention," the preamble is not limiting. But the preamble may be limiting if (1) the applicant clearly relies on it during prosecution as distinguishing the invention over the prior art; or (2) a particular disputed phrase within the preamble provides the antecedent basis for a limitation within the claim.

After laying out this law, the Court concluded that the '260 patent and its file history did not rely on the preamble language as a basis for distinguishing the invention from the prior art. The defendant sought to capitalize on a scrivener's error in the claim body language. The claim body referred to the limitation "said wing spar." Defendant pointed to the preamble as the only antecedent basis for "wing spar." While no qualm could be had with that statement, the Court saw through it:

While a cursory reading of claim 1 confirms [Defendant's] statement, a fair reading of claim 1 in the context of the entire Patent reveals that "said wing spar" in the body of claim 1 should read "said wing spar web." Read without the scrivener's omission of "web," one need not resort to the preamble to find any antecedent basis for the "wing spar" referenced in the body of the claim.

Defendant's second approach was to point to limitations in dependent claim 10 that had their antecedent basis in the preamble. Enpat agreed. The Court thus found the preamble limiting only for claim 10 (and not the broader independent claim 1).

Enpat, Inc. v. Shannon, Case No. 6:11-cv-84 (M.D. Fla. Nov. 30, 2011) (J. Presnell)

Prevailing Party for bill of costs -- Look at the overall objective of the litigation

2012-02-13T05:15:00.000-05:00

I've previously written about the Voter Verified v. Premier Election Solutions, Inc. First, Judge Fawsett determined that you can't infringe a surrendered patent. Later, she determined that one of the claims at issue was invalid for obviousness.

Since then, the parties briefed additional summary judgment issues regarding infringement. The Court agreed with defendants that a finding of non-infringement of certain claims was appropriate at the summary judgment stage. The Court also later dismissed one of the defendant's invalidity counterclaims, without prejudice. The result was that final judgment was entered against the plaintiff finding there was no infringement concerning two of the patents at issue. Final judgment was also entered against one of the defendants relating to its invalidity counterclaim. Defendants next filed a Proposed Bill of Costs.

Fed. R. Civ. P. 54(d)(1) provides that a "prevailing party" shall recover its costs. Allowable costs, per the statute, are:

(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salareis, fees, expenses, and costs of special interpretation services under section 1828 of this title.

Defendants sought costs relating to depositions. Plaintiff objected, arguing that: (1) Defendants weren't "prevailing parties;" and (2) Defendants hadn't filed the depositions in the Court record, and thus they were not recoverable. The Court was not persuaded.

Prevailing Party

Determining who is the prevailing party is not a calculation of which side won more of its claims than the other. Rather, the Court must look at the "relation of the litigation result to the overall objective of the litigation." The Court dispensed with this step quickly:

The overall objective of the present litigation was for [Plaintiff] to obtain a finding that the Defendants infringed the asserted patents. While Defendants raised a number of different defenses to [Plaintiff's] allegations and several of those defenses failed, [Plaintiff] did not meet its objective. In the end, Defendants were found not to have infringed any of the 149 patent claims asserted by [Plaintiff]. Accordingly, Defendants are "prevailing parties" within the meaning of Rule 54(d).

Depositions Need Not Be Filed With The Court To Be Recoverable Costs

A prevailing party need not file a deposition transcript with the Court in order to recover its costs. Rather, the test is the test defined in the statute -- if the deposition transcript was "necessarily obtained for use in the case," it's recoverable.

Generally, deposition costs of a losing party's witnesses are recoverable. To avoid the general rule, the losing party must demonstrate that the deposition was not related to an issue in the case at the time of the deposition:

When challenging whether costs are properly taxable, the burden lies with the losing party, unless the knowledge regarding the proposed cost is a matter within the exclusive knowledge of the prevailing party.

Plaintiff didn't carry that burden here, so the costs were recoverable.

Plaintiff's objections to Defendant's bill of costs Overruled.

Voter Verified, Inc. v. Premier Election Solutions, Inc., Case No. 6:09-cv-1968 (M.D. Fla. Oct. 24, 2011) (J. Fawsett)

Judge Lazzara Takes Senior Status -- No More Patent Cases

2012-02-02T08:10:00.000-05:00

As many of you already know, Judge Lazzara took senior status on December 16, 2011. As part of this transition, he is no longer presiding over new patent cases. See his standing order below.

Judge Lazzara Senior Status Standing Order - 811-mc-132-ral

Dear Trademark Owners, Don't Wait 4 Years to Assert Your Unfair Competition Claims

2011-11-29T05:30:00.000-05:00

Franchisor Western Sizzlin had a franchisee in Kissimmee from 1995 through 2004. The location was taken over by Pinnacle Business Partners ("PBP"). While PBP did make royalty payments to Western Sizzlin in 2005, the parties were unable to come to an agreement, and PBP declined to sign a franchise agreement. Western Sizzlin demanded PBP remove its "Sizzlin Grill" signs at that time due to their similarity to Western Sizzlin's "Western Sizzlin" trademarks.

Four years later, in November 2009, Western Sizzlin visited the Kissimmee location and saw the signs and decor were the same. Western Sizzlin demanded royalties and that PBP cease its usage. Western Sizzlin then sued for trademark infringement as well as unfair competition, unjust enrichment, and violation of the Florida Deceptive and Unfair Trade Practices Act. PBP sought summary judgment of the unfair competition, unjust enrichment, and FDUTPA claims as time barred. Specifically, each of those claims has a four-year statute of limitations, and Western Sizzlin did not sue until 2010 -- five years after it knew of the alleged violations. Western Sizzlin responded by arguing that there was a dispute as to how much knowledge Western Sizzlin had as to PBP's alleged violations in 2006. But Western Sizzlin did not offer evidence to support this argument.

As its second argument, Western Sizzlin explained that a PBP representative previously assured Western Sizzlin that PBP would change the signage, but Western Sizzlin did not discover until November 2009 that PBP hadn't. Thus, PBP should be equitably estopped from asserting the statute of limitations. The Court did not agree:

Under Florida law, equitable estoppel arises when one party lulls another party into a disadvantageous legal position. Major League Baseball v. Morsani, 790 So. 2d 1071, 1076 (Fla.2001). “Equitable estoppel presupposes a legal shortcoming in a party’s case that is directly attributable to the opposing party’s misconduct. The doctrine bars the wrongdoer from asserting that shortcoming and profiting from his or her own misconduct. Equitable estoppel thus functions as a shield, not a sword, and operates against the wrongdoer, not the victim.” Id.

In this case, the “shortcoming” is that the Plaintiff waited more than four years after learning of the alleged violations before filing suit. A simple assurance that the sign would be changed could in theory “lull” a party into delaying the filing of suit for the length of time needed to change – or at least remove – the sign, perhaps a few weeks in this scenario. It would not be enough to lull a party into delaying for more than forty-eight months. And there is no suggestion that the Defendant somehow prevented the Plaintiff from visiting the restaurant, or even just driving by it, to see if the sign had been changed. WSC has failed to establish any grounds for the application of equitable estoppel here.

Motion for Summary Judgment granted.

Western Sizzlin Corp. v. Pinnacle Business Partners, LLC, slip op., Case No. 6:10-cv-1452 (M.D. Fla. Nov. 23, 2011) (J. Presnell)

Groupon's daily deals offer only a single price, and thus do not infringe a "plurality of customized price schedules" claim

2011-11-28T10:41:00.001-05:00

I've written previously about the eWinWin v. Groupon patent infringement case pending in the Middle District. Essentially, eWinWin's patents (3 of them have been asserted) relate to volume pricing systems and methods in which the price of an item decreases as demand increases. In other words, as the quantity of an item purchased increases, the price offered to all who have agreed to buy it decreases. Exemplary of this system is Claim 1 from one of eWinWin's asserted patents (U.S. Patent No. 7,181,419):

A business transaction method, comprising:
maintaining buyer profiles in a data storage device;
deriving a plurality of customized price schedules for a product based on at least one buyer profile, each of the plurality of customized price schedules varying in accordance with a quantity of the product ordered from a plurality of deal rooms;
electronically offering the product for sale in at least one of the plurality of deal rooms, the product being offered in each deal room in accordance with at least one of the plurality of price schedules; and
displaying a listing of at least one of the plurality of deal rooms in which the product is offered when at least a subset of criteria indicated for a product search matches criteria describing the product.

The Court previously construed the underlined language to mean:

creating two or more price schedules for a product based on information contained in at least one buyer's profile, each price schedule consisting of a list of two or more prices for the product that vary based on a quantity of the product ordered from two or more deal rooms.

Thus, to survive summary judgment, eWinWin had to offer evidence that Groupon's system created two or more price schedules for a product, and each price schedule had at least two prices.

eWinWin looked to combine Groupon's daily deal with its Groupon Bucks to satisfy this limitation. Groupon's daily deal provides a single discounted price for an item if a sufficient number of users sign up for the deal. Groupon's Groupon Bucks provide users an incentive for referring new users to the Groupon system. For instance, if you refer a user to Groupon, and that new user buys a Groupon deal, you may get 10 Groupon Bucks. You could then use those Groupon Bucks to purchase a Groupon deal (including, perhaps, the same deal you referred your friend to). eWinWin argued that this created 2 prices for the deal: the price your friend paid, and the price you paid (including the discount of your Groupon Bucks). The Court was not convinced. The price of the deal never changed -- only the method of payment did. Furthermore, to the extent there was any price difference (which the Court concludes there was not), the difference was not related to an increase in the quantity of goods sold. Had your friend purchased the deal without being referred by you, the same quantity of goods would have been sold, and you would have been charged the same amount as your friend.

Summary Judgment granted to Groupon on its non-infringement positions. Only 1 claim remains -- Groupon's counterclaim that eWinWin infringes one of Groupon's patents.

eWinWin v. Groupon, slip op., Case No. 8:10-cv-2678 (M.D. Fla. Nov. 23, 2011) (J. Bucklew)

Noerr-Pennington Immunity and Trademark Registrations

2011-11-22T13:55:00.000-05:00

PODS sued ABF Freight Systems on a number of trademark infringement theories. PODS owns trademark registrations for the term "PODS", the PODS logo, and "PODS PORTABLE ON DEMAND." In advertising its competing storage solutions, ABF uses the term "pods" throughout its website. Additionally, ABF has purchased the "pods" keyword for advertising purposes with Google and other search engines. In defense, ABF filed a number of counterclaims and affirmative defenses. At issue here are some of ABF's counterclaims, and one affirmative defense.

Common Law Unfair Competition

ABF asserted as a counterclaim that PODS' lawsuit was unfair competition because PODS "has no objective or subjective basis for believing ... that consumers are likely to be confused by ABF's use of the term 'pod' or 'pods.'" ABF relied on Ohio law for the proposition that "lawsuits implemented with the design to gain an unfair advantage over a competing business are a basis for a common law suit for unfair competition." Problem is, as the Court recognized, Florida law requires an unfair competition claim to include two elements:
(1) deceptive or fraudulent conduct of a competitor; and
(2) likelihood of consumer confusion

ABF's reliance on Ohio law didn't cut it, so the Court dismissed this counterclaim (without prejudice, should ABF be able to assert the elements of a Florida common law unfair competition claim).

Sherman Act Violation & Noerr-Pennington Immunity

Next, ABF accused PODS of attempted monopolization in violation of the Sherman Act by registering trademarks for the "generic term" "pods" and asserting those trademarks against competitors. PODS responded by relying on Noerr-Pennington immunity.

Generally, the First Amendment immunizes a party from liability for petitioning the governement for redress from an injury. ThisNoerr-Pennington immunity (named after the two cases from which it derives) extends to litigation: "Engaging in litigation to seek an anticompetitive outcome from a court is First Amendment activity that is immune from antitrust liability." Like most things in the law, there is an exception. Namely, a sham pleading. You are immune from liability if you file a lawsuit, except if that lawsuit is a sham pleading. The test for whether the lawsuit is a sham pleading considers: (1) whether the pleading is objectively baseless; and (2) whether the plaintiff brought the lawsuit did so with a subjective motivation to interfere directly with the business relations of a competitor.

ABF's argument under the sham exception is generally that PODS should know the 'pods' mark is generic, and thus it shouldn't assert its registrations. The law, however, does not see things that way. The 'pods' trademark registrations themselves are evidence that the marks are not generic. ABF may be able to come forward evidence that they have become generic, but until they, they are presumed otherwise. Indeed, ABF is seeking to cancel PODS's registrations. Until then, the lawsuit and cease-and-desist letters are not shams. So Noerr-Pennington immunity applies, and the counterclaim must be dismissed.

Unclean Hands Affirmative Defense

PODS also asked the Court to strike ABF's affirmative defense of unclean hands. The Court's reasoning for doing so:

In trademark infringement suits, the doctrine of unclean hands requires allegations "specifically related to the trademark which is at issue and not collateral to the trademark itself." Immuno Vital, Inc. v. Golden Sun, Inc., 49 F. Supp. 2d 1344, 1361 (S.D. Fla. 1997); see also Coca-Cola Co. v. Howard Johnson Co., 386 F. Supp. 330, 335 (N.D. Ga. 1974) (a court in equity may "deny the enforcement of a trademark to one who has used the trademark, itself, as the vehicle of unlawful antitrust activities"). "Merely because a plaintiff has violated the antitrust laws ... does not result in 'unclean hands' on plaintiff's part." Coca-Cola, 386 F. Supp. at 337
Taken as a whole, ABF's allegations in support of its affirmative defense of unclean hands are intertwined with the allegations in its counterclaims -- that PODS engaged in trademark misuse and violated unfair competition and antitrust laws by sending cease-and-desist letters and filing suit. Because those activities are not specifically related to the trademark itself, ABF has not properly asserted an unclean hands defense.

Additionally, Noerr-Pennington immunity protected PODS against this affirmative defense.

Motion to dismiss counterclaims and strike affirmative defense granted.

PODS Enterprises, Inc. v. ABF Freight Systems, Inc., Case No. 8:11-cv-84 (M.D. Fla. Oct. 17, 2011) (J. Covington)

Vague Trade Dress Allegations Don't Survive Motion to Dismiss

2011-11-21T11:28:00.000-05:00

Best of Everything of Southwest Florida ("BOE") claims Simply the Best ("STB") is knocking off its retail stores. As one of its eight claims of violations of the Lanham Act, BOE accuses STB of violating BOE's trade dress. STB sought dismissal of this count, arguing that BOE didn't adequately disclose what trade dress was being knocked off. Plaintiff described its trade dress as follows:

Plaintiff's Trade Dress includes, but is not limited to the commercial impression, and overall look and feel of Plaintiff's stores, the unique and highly distinctive combination of separate aspects of the same, the presentation of Plaintiff's goods and the placement of its trade dress in such a a manner which creates a remarkably memorable and commercially pleasing shopping experience for Plaintiff's customers, its prospective customers and the consuming public.

The Court agreed with Defendant, finding this allegation "long on vague descriptions and short on facts." This count was dismissed without prejudice. Plaintiff has since filed an amended complaint with more details on the trade dress as reproduced below:

Plaintiff’s Trade Dress includes various combinations of the following features and is presented so as to be a designation of origin and source identifier unique to Plaintiff; specialized customer shopping boxes at a specially placed location in the store which are also displayed in such a way as to create a further visual effect; a ceiling to floor design and configuration which incorporates and is consistent with the other visual elements of the proprietary store; a certain musical arrangement collection and/or pattern played from a layout of sources that are proprietary; distinctively colored and patterned carpeting; strategically placed and shaped tables situated throughout the store in a proprietary pattern which takes into account Plaintiff’s innovative consumer purchasing data and Plaintiff’s proprietary collection of said data; textile table covers of a certain nonfunctional pattern and texture which are also used in an innovative relationship to the goods so displayed; the arrangement and layout of the goods; the unique contrast of fabric textures and colors used to cast display backgrounds through the store; a unique pattern of mirror displays and shapes; a specific and nonfunctional use of botantical presentations combined into various goods displays; sign color, sign shapes, and location of signs and designations throughout and on the store, as well as in advertising and related displays; various color schemes; a color scheme of certain blue pantones throughout the store and in signage and advertising; and sales and inventory techniques which are believed by Plaintiff to be unique and which combine with the visual features as a part of the overall customer experience and impression.

Defendant has answered that amended complaint.

Defendant also sought dismissal of the claim against an individually named defendant. That allegation was based in part on a facebook posting which stated:

Simply the Best is modeled after a store called The Best of Everything where Weinzimmer and the Slottjes had spent time shopping while vacationing in Florida. Upon returning to New York, they decided to open a similar store, even though Weinzimmer admits "we really didn't know much about the jewelry business," she says.

Recognizing that "an individual may be held liable for Lanham Act violations if she has actively caused the infringement as a moving, conscious force," the Court refused to dismiss this claim, as the discovery process would reveal whether or not she was a moving, conscious force behind the alleged infringement.

Motion to dismiss, granted in part.
Best of Everything of Southwest Florida, Inc. v. Simply the Best, LLC, Case No. 8:11-cv-1090 (Oct. 6, 2011) (J. Bucklew)

Court won't perform claim construction at motion to dismiss stage

2011-09-30T15:36:00.000-04:00

Ecolab sued International Chemical Corp. for infringement of U.S. Patent No. 7,741,257. Ecolab argues that ICC directly infringes the '257 patent, induces third parties to infringe the '257 patent, and contributes to other's infringement of the '257 patent. ICC asked the court to dismiss the vicarious theories of liability because Ecolab did not sufficiently plead these claims.

First, the Court acknowledged a difference in the districts as to whether or not an indirect infringement claim needs more allegations than those listed in the Form 18 model for direct infringement claims. Some courts hold that this level of pleading is enough, while others require the plaintiff to satisfy Twombly and Iqbal's plausibility requirements. The Court did not pick a side, finding that Ecolab had met the mark either way.

Inducement of Infringement

To plead an induced infringement claim, the plaintiff must show: (1) there has been a direct infringement; and (2) the defendant knowingly induced infringement and specifically intended to encourage another's infringement. ICC argued that Ecolab hadn't satisfied the latter, and pointed to Ecolab's instruction's (which were attached to the complaint). According to ICC, these instructions "do not teach how to practice any of the claims of the patents-in-suit." But ICC disregarded Ecolab's complaint, which alleged that ICC had instructed its customers in the manner specified by the '257 patent. As such, for pleading purposes, the claim survived.

ICC also argue that, in order to infringe, one needed to use a particular type of nozzle. ICC supported this argument by citing to the file history of the '257 Patent. The Court refused to indulge in claim construction issues, noting that doing so would be premature.

Contributory Infringement

To plead a contributory infringement claim, the plaintiff must show: (1) there has been a direct infringement; (2) defendant knew the combination for which its components were especially made was both patented and infringing; and (3) defendant's components have no substantial non-infringing uses. ICC argued that Ecolab's complaint didn't have enough facts. The Court disagreed, noting that detailed factual allegations are not necessary to plausibly allege a claim for contributory infringement. Even without detailed factual allegations, the complaint supported a reasonable inference for liability.

Motion to dismiss denied.

Ecolab, Inc. v. International Chemical Corp., slip op., Case No. 6:10-cv-1208 (Sept. 27, 2011) (J. Conway)

Simple knowledge of a prior art reference not disclosed to the PTO is not sufficient to plead inequitable conduct

2011-09-15T09:44:00.000-04:00

Graphic Packaging International sued C.W. Zumbiel Co. for patent infringement related to a number of cardboard carton packages. As part of its defense, CW argued that one of the patents, U.S. Pat. No. 7,134,551, was not enforceable due to GPI's inequitable conduct in prosecuting the '551 Patent with the Patent and Trademark Office. Specifically, GPI's counsel was aware of certain prior art references, but did not tell the PTO about them.

CW's counterclaim included relatively detailed allegations, including a claim chart, listing how 2 of the 3 the withheld references impacted the patentability of the '551 Patent. GPI responded by asking the Court to dismiss the counterclaim (and strike certain allegations).

Inequitable conduct pleading requirements

While a claim for relief must only contain a "short and plain statement of the claim showing that the pleader is entitled to relief," inequitable conduct claims must satisfy Rule 9(b)'s heightened pleading requirement. The Court explained the law:

In [Exergen v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)], the U.S. Court of Appeals for the Federal Circuit directed that, “in pleading inequitable conduct in patent cases, [Federal Rule of Civil Procedure] 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” 575 F.3d at 1327. In addition, the Exergen Court identified the pleading requirements for the “conditions of mind” relevant to an inequitable conduct claim, i.e., “(1) knowledge of the withheld material information or of the falsity of the material misrepresentation, and (2) specific intent to deceive the PTO.” Id. While knowledge and intent may be averred generally, according to the Federal Circuit, pleadings must allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind. Id

CW's allegations of inequitable conduct related to 3 prior art references not disclosed to the PTO during prosecution. CW's claim chart only discussed 2 of those references. As to the third, the Court found that CW had not sufficiently plead which claim limitations the withheld reference concerned, where in the withheld reference the material information was located, and why the withheld reference was material.

As to the other 2 references, which included a relatively detailed claim chart, the Court still found the allegations fell short because they did not give rise to a reasonable inference of scienter.

The Federal Circuit makes clear in Exergen that a reasonable inference of scienter arises only when there are factual allegations which particularly point out an individual who owed a duty of disclosure to the PTO, who knew the specific information in the reference that is alleged to be material, and who did not disclose the specific information to the PTO. 575 F.3d at 1330. Defendant’s allegations do point to three individuals who listed the ’671 Publication and the ’991 Patent on various IDSs submitted to the PTO. (Doc. No. 55, ¶¶ 64-66, 68, 72, 74-75, 76.) These allegations suggest that these three individuals were aware of the ’671 Publication and the ’991 Patent. That is not enough, however. It is not knowledge of a reference but rather knowledge of the material information in the reference that must be averred. Because a “reference many be many pages long, and its various teachings may be relevant to different applications for different reasons,” the Court “cannot assume that an individual, who generally knew that a reference existed, also knew of the specific material information contained in that reference.” 575 F.3d at 1330 (emphasis in original). Further, the “mere fact that an applicant disclosed a reference during prosecution of one application, but did not disclose it during prosecution of a related application, is insufficient to meet the threshold level of deceptive intent required to support an allegation of inequitable conduct.” Id. at 1331.

(underlined emphasis supplied by the Court, bold emphasis supplied by me). The closest CW came was the allegation that one of the prosecuting patent attorneys discussed one of the withheld references in response to an office action. But this still didn't cut it:

One can draw more inferences from this allegation than from a bare recitation of omission from an IDS, but not many more. Specific allegations identifying the material information contained in a reference is needed, and none are averred here. Defendant does not identify the specific information from the ’991 Patent that was “discussed.” Thus, Defendant’s allegations are missing a key pleading requirement for deceptive intent.

Counterclaim dismissed.

Striking allegations from the counterclaim

GPI also asked the court to strike: (1) all allegations related to one of the withheld references because it was not actually prior art; and (2) certain affirmative defenses for failing to satisfy heightened pleading. The Court dispensed with these quickly.

As to the first argument, the Court punted, stating that determining the reference date for an international application (the withheld reference) was "a tricky thing" and needn't be handled now. As to the second, the Eleventh Circuit has not determined whether or not heightened pleading applied to affirmative defenses and there was split in this circuit. Regardless, the allegations throughout the counterclaim made up for whatever shortcoming GPI complained of.

Motion to strike denied.
Thanks Docket Navigator for bringing this case to my attention.

Graphic Packaging International, Inc. v. C.W. Zumbiel Co., slip op., Case No. 3:10-cv-891 (M.D. Fla. Sept. 12, 2011)(J. Dalton, Jr.)

jpg's "last modified" date is sufficient corroborating evidence to survive summary judgment on prior inventorship issue

2011-09-13T13:20:00.001-04:00

Hurricane Shooters has sued a number of entities for infringing its plural chamber drinking cup patents. One defendant, EMI Yoshi, claims someone else invented the cup first. Plaintiff asked for summary judgment on this issue, arguing that Plaintiff invented first, and Defendant didn't offer enough evidence to the contrary.

To establish prior inventorship, the challenger must offer corroborating evidence. Here, Defendant's evidence was that another person (Ted Skala) designed what appears to be the same cup patented by Plaintiff arguably before Plaintiff. Defendants evidence consisted of Skala's testimony, and a computer forensic expert's testimony. Plaintiff attacked the credibility of each of these pieces of evidence, but that didn't work. Such credibility determinations are better left to the jury.

Plaintiff also attacked the reliability of the computer expert's report because the expert had simply relied on the information he had been provided by Skala. The Court was not persuaded, and found other record evidence which sufficiently corroborated the prior inventorship theory:

Plaintiff argues that the expert report of forensic computer analyst Sharp is insufficient corroborating evidence because Sharp’s report states, in part, that he had no reason to doubt Skala’s files showing his cup design was created in October 2004. Plaintiff contends that “[h]aving no reason to doubt Mr. Skala does not constitute corroboration of his claim.” (Dkt. 99). The Court disagrees with this strict interpretation. Moreover, Sharp’s report also states that Sharp was able to locate at least two copies of the referenced image, titled “bombcup.jpg” and that both images indicate that they were last modified on October 22, 2004, which is around the same time that Skala claimed he designed the invention. This is sufficient corroborating evidence.

So the prior inventorship issue will go to the jury.

Defendant had also asserted a lack of utility defense. Plaintiff's request for summary judgment on that issue was also denied, as there was record evidence sufficient to send the issue to the jury.

Plaintiff's Amended Motion for Partial Summary Judgment Denied.

Hurricane Shooters, LLC v. EMI Yoshi, Inc., slip op., Case No. 8:10-cv-00762 (M.D. Fla. Sept. 8, 2011)(J. Moody)

Court declines to serve as declaratory judgment plaintiff's private counsel

2011-09-12T09:32:00.000-04:00

United Marine Marketing Group, LLC distributes floating docks and accessories. Jet Dock Systems and Ocean Innovations ("Defendants") manufacture and sell a number of patented dock products. UMMG was concerned that it might infringe Defendants' "drive-on" docks. Problem was, Defendants hadn't made such threats against UMMG (although they had sued other entities), and UMMG didn't really identify any products it was concerned it wasn't able to sell. Rather, UMMG was asking for a declaration the components it was selling (which, potentially, could be assembled into an infringing configuration) did not themselves infringe the patents. This does not suffice to establish subject matter jurisdiction, as this is not an actual case or controversy:

... UMMG has failed to adequately plead a “case or controversy.” Although UMMG contends that they are involved in an “actual dispute” with Defendants concerning whether or not they can produce, and/or sell certain floating docks, UMMG fails to identify even a single dock product which they wish to produce, and/or sell. As a result, there is nothing for a case or controversy to be about.
* * *
While UMMG identifies certain dock components which it intends to assemble into finished docks, these dock components are not at issue in this case. Indeed, UMMG is free to sell these individual components to whoever they choose without risk of infringing Defendants’ five patents. On the contrary, the relevant patents in the instant case relate to finished dock products, or specific configurations of components which meet the various claims contained in Defendants’ patents.

(It's not clear here if the Court is ruling out contributory or induced theories of patent infringement, but perhaps that's a discussion for another day.) The Court then refused to render an advisory opinion:

Plaintiff UMMG appears to be asking this Court to serve as its private counsel, asking the Court for its advice on how to design a non-infringing dock product given the particular components at UMMG’s disposal. As federal courts only possess the authority to decide disputes which are “definite” and “concrete,” this Court must accordingly decline to dispense such advice. Cat Tech LLC, 528 F.3d at 881; (a plaintiff cannot “obtain a declaratory judgment merely because it would like an advisory opinion on whether it would be liable for patent infringement if it were to initiate some merely contemplated activity.” (quoting Arrowhead Indus. Water, Inc. V. Ecolochem, Inc., 846 F.2d 731, 736 (Fed.Cir.1988))).

Finally, the Court dismissed UMMG's unfair competition claims because: (1) they improperly utilize "shotgun pleading," and (2) they boil down to allegations that Defendants' asserting their patents was unfair, which was not actionable so long as the patents were valid.

Complaint dismissed. Plaintiff allowed 20 days to replead.

United Marine Marketing Group, LLC v. Jet Dock Systems, Inc., slip op., Case No. 8:10-cv-02653 (M.D. Fla. Sept. 6, 2011) (J. Moody)