Florida's Idea Statute of Frauds

Florida Statute § 501.972 is interesting, and to my knowledge has never before been cited by any court.  That has now changed.

Joseph Kaminski, an engineer whom I believe worked for Honeywell building technology for NASA (see here), wanted to help BP after the Deepwater explosion.  BP had set up a system for receiving proposed solutions for stopping the oil leak, and Kaminski submitted a couple of his ideas.  Included in one of his submissions was the following:

Please take this under advisement.  Especially when the new little top hat fails tomorrow for all the reasons I stated.  This will work and it is far easier than the 100 ton top hat.  It will also be great for your image in this whole thing.  When My son and I become paid hero's [sic] for the idea and helping you from here in tampabay [sic] florida.  I will say it was BP's willingness to work and find the right solution from anyone anywhere for this very unique problem.  You will also pay me and my son at least 2 million for the idea and my personal help to guarantee [sic] its succes [sic].

Kaminski believes BP used at least two of his ideas, so he sued for breach of an implied contract as well as unjust enrichment.  BP sought refuge under Florida's (unique?) Idea Protection Statute, which reads as follows:

501. 972   Actions based upon use of a creation that is not protected under federal copyright law.

(1) Except as provided in subsection (2), the use of an idea, procedure, process, system, method of operation, concept, principle, discovery, thought, or other creation that is not a work of authorship protected under federal copyright law does not give rise to a claim or cause of action, in law or in equity, unless the parties to the claim or cause of action have executed a writing sufficient to indicate that a contract has been made between them governing such use.

(2) Subsection (1) does not affect or limit:
     (a) Any cause of action based in copyright, trademark, patent, or trade secret; or
     (b) Any defense raised in connection with a cause of action described in paragraph (2).

Fla. Stat. § 501.972.  In other words, Florida has a statute of frauds for uses of ideas.  While this law was passed in 2006, it does not appear to have been used by a Court previously.

Here, the Court was convinced by BP's argument that this statute shielded BP from liability.  The Court analyzed the Copyright Act and noted the similarity in language between this statute's definition of what is not protected by Copyright and the Copyright Act's similar definitional language.  Recognizing that copyright does not protect ideas, but expressions of ideas, the Court found Kaminski's submissions to be ideas clearly governed by Florida's law:

Here, Plaintiff's ideas are not works of authorship and are expressly excluded from protection under the Copyright Act; Section 501.972 therefore applies to BP's use of Plaintiff's idea.

Because there was no writing between the parties executed by BP, Kaminski's claim fails.

Defendant's Motion for Summary Judgment, Granted.
Kaminski v. BP Exploration & Production, Inc., Case No. 8:12-cv-826 (M.D. Fla. Sept. 24, 2013) (J. Bucklew)

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

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)

Vague Trade Dress Allegations Don't Survive Motion to Dismiss

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)

The Court may consider Patent and Trademark Office records in deciding a motion to dismiss

Savtira Corp. (a Delaware company) sued Savtira Corp. (a Florida company) for trademark infringement, unfair competition, and deceptive trade practices.

Plaintiff's first count is for "Trademark Infringement." But plaintiff did not indicate if its claim was based on state or federal law, or whether the claim was a statutory claim or a claim based in common law. On this basis, defendant asked the Court to dismiss the claim. The Court obliged (granting leave to amend the complaint):

The Court concludes that Defendants’ motion to dismiss is due to be granted as to this claim. Plaintiff failed to identify the legal basis for its trademark infringement claim, and therefore it is not sufficient to give Defendants fair notice of what the claim is and the grounds upon which it rests. Twombly, 550 U.S. at 555. Nevertheless, Savtira Delaware’s trademark infringement claim shall be dismissed without prejudice, and Savtira Delaware shall have leave to amend this claim.

Count Two asserts a claim of unfair competition. Defendant moved to dismiss this count because defendant argued it had priority in the mark since plaintiff filed its intent-to-use trademark application after defendant was incorporated. To support this argument, defendant attached a copy of plaintiff's intent-to-use trademark application for the mark. Plaintiff responded by arguing that the Court should not consider the intent-to-use application record, as it was outside the four corners of the complaint. The Court did not agree:

[T]he Eleventh Circuit has adopted the “incorporation by reference” doctrine, under which the district court may take judicial notice of certain facts without converting the motion to dismiss into one for summary judgment, if the attached document is (1) central to the plaintiff’s claim and (2) undisputed. Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002); see also Universal Express, 177 Fed. Appx. at 53 (citing Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1999)). Public records, including administrative agency records, are documents that may be incorporated by reference. Universal Express, 177 Fed. Appx. at 53 (citing Bryant, 187 F.3d at 1278). Because records from the United States Patent and Trademark Office are (1) central to Plaintiff’s claims of trademark infringement and unfair competition and (2) a public record that Plaintiff has not disputed, the Court may consider the records in resolving a motion to dismiss. See Horsley, 304 F.3d at 1134 (11th Cir. 2002).

Plaintiff's backup argument was that it had adequately pleaded the elements of an unfair competition claim under 15 U.S.C. 1525(a). The Court agreed:

To state a claim under 15 U.S.C. § 1125(a), a plaintiff must plead facts that demonstrate (1) that it had prior rights to its mark or name and (2) that the other party had adopted a mark or name that was the same, or confusingly similar to its mark, such that consumers were likely to confuse the two. Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 358 (11th Cir. 1997). To satisfy the first element of trademark infringement under Section 43 of the Lanham Act, proof of a valid trademark, a plaintiff need not have a registered mark. Tana v. Dantanna’s, 611 F.3d 767, 773 (11th Cir. 2010). Ownership of a mark under the Lanham Act is determined by use, and registration does not necessarily create ownership. Compton v. Fifth Ave. Ass’n, Inc., 7 F. Supp. 2d 1328, 1331 (M.D. Fla. 1998); see also In re Wrubleski, 380 B.R. 635, 639 (Bankr. S.D. Fla. 2008) (“The party that first uses a mark, develops common law trademark rights that are, or may be, superior to the rights acquired by a later registrant of the mark.” (quoting Goldberg v. Cuzcatlan Bevs., Inc., 260 B.R. 48, 53 (Bankr. S.D. Fla. 2001))).

Plaintiff adequately pleaded this count because it pleaded: (1) it commenced business first; and (2) defendant's use of the mark would harm plaintiff.

Motion to dismiss granted in part, otherwise denied.

Savtira Corp. v. Hillier, slip op., Case No. 8:11-cv-0719 (M.D. Fla. June 7, 2011) (J. Bucklew)

Rule 11 sanctions motion directed to original complaint denied where plaintiff filed an amended complaint

eWinWin has sued Groupon for patent infringement relating to a number of patents here in the Middle District. Groupon responded with a number of counterclaims, and sent a Rule 11 safe harbor letter. eWinWin responded by offering to amend its complaint to remove some of the asserted patents from the litigation, narrow some of the asserted claims, and assert another patent that issued after the case had begun. Groupon would not consent. After the Rule 11 safe harbor period elapsed, Groupon filed its motion for sanctions. eWinWin then asked for leave to file its amended complaint. Judge Bucklew granted that leave. Today, she also denied Groupon's motion for sanctions:

In the instant motion for Rule 11 sanctions, Groupon alleges that the four counts asserted in eWinWin’s original complaint are frivolous and unsupportable. However, the amended complaint is substantially different from the original complaint in that eWinWin withdrew the infringement claims of two previously asserted patents, narrowed the infringement claims in another previously asserted patent, and added claims of infringement of a newly issued patent to the action. Because eWinWin’s amended complaint is substantially different from the original complaint and because Groupon’s motion for Rule 11 sanctions is based on the original complaint, the Court denies Groupon’s Rule 11 motion for sanctions without prejudice.

eWinWin v. Groupon, slip op., Case No. 8:10-cv-02678 (M.D. Fla. May 23, 2011) (J. Bucklew)