Wednesday, April 24, 2013

Trademark Statute of Limitations - Governed by Laches

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) 

Thursday, April 4, 2013

Back to State Court, Brother

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)

Wednesday, April 3, 2013

Hide & Seek Safari - Florida's Long Arm Statute

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, and 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.


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)

Monday, April 1, 2013

First-to-file rule is alive and well

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)