Does the COVID19 Crisis Warrant Relief from a Preliminary Injunction Related to Fire Engines?

Yes.

Pierce Manufacturing secured a preliminary injunction prohibiting E-One from selling its Metro 100 single rear axle quint.  That preliminary injunction prohibits E-One from selling the Metro 100 during the pendency of the patent infringement litigation Pierce Manufacturing is pursuing against E-One. 

Pierce Manufacturing accuses E-One of infringing 2 of its quint configuration patents: U.S. Patent 9,597,536 and 9,814,915.  (It appears from later pleadings that Pierce has dropped claims related to the '915 Patent). 

Trial had been scheduled for March 23, 2020, after the COVID19 pandemic had taken over in Florida and the U.S.  Pierce asked the court to delay trial by 60-days, but E-One would only agree if the injunction was modified.   The Court quickly set a telephonic hearing to address the motion.  During the hearing, the Court granted the motion to remove the case from a March 23, 2020 trial start, and ordered the parties to meet and confer to see if agreement could be reached on the injunction.  The Court gave the parties 20-days to see if they could reach a resolution.

The parties did not reach a full agreement, but got close.  Pierce didn't agree a modification was appropriate, but in the case the Court ruled otherwise, Pierce and E-One agreed to provide certain relief from the injunction from the time period essentially overlapping with what will be the COVID19-related delay of the trial.  Specifically, the parties agreed that E-One may sell the Metro 100 during this time period to fire departments.  The parties agreed that if the jury eventually determines that sales of the Metro 100 are infringing, these interim sales can be factored into a damages award.  The parties further agreed that nothing about permitting the interim sales during this COVID19 crisis could be used by the parties to argue there would be no irreparable harm in continued sales of the Metro 100.

The parties were unable to agree as to whether or not a future injunction could cover these interim sales.  The Court entered the modification to the preliminary injunction, and sided with E-One in holding that:

Any such Interim Sales, as defined by the receipt of a purchase order from a bona fide purchaser, shall not be subject to any future injunction, regardless of the outcome of the jury trial in the case.

Preliminary injunction modified.
[Notably, shortly after entering this modification, Judge Moody transferred this case to Judge Barber, with his consent.] 
Pierce Manufacturing, Inc. v. E-One, Inc., Case No. 8:18-CV-617-JSM-TGW (M.D. Fla. Apr. 8, 2020) (J. Moody)

Do You Need To Threaten Litigation To Trigger Declaratory Judgment Subject Matter Jurisdiction?

No.

Erbaviva, LLC, a California LLC, sent a demand letter to Era Organics, a Florida company.  The letter identified a number of Erbaviva federal trademark registrations, and "request[ed]" Era Organics:

1. Request the USPTO expressly abandon certain Era Organics trademark registrations;
2. Permanently refrain from using ERA ORGANICS, or any similar mark, in connection with certain goods;
3. Provide written assurances Era Organics will comply with these "requests"

The letter then concluded:

Provided we receive Era Organics' full and prompt cooperation, as well as confirmation that the above action has been performed, our client is prepared to give Era Organics a reasonable amount of time to transition to a new company name/trademark and sell through its remaining inventory.

The letter demanded compliance within 11 days.

Instead of changing the name it had been using for at least 4 years, Era Organics filed suit, seeking a declaratory judgment that there was no trademark infringement.  Erbabviva sought dismissal, arguing there was no jurisdiction to hear the dispute, as there was no "actual controversy."  Erbabviva argued its letter did not create any such dispute:

Nowhere in the letter did Defendant threaten litigation or suggest that it intended to take any formal action.  To the contrary, Defendant indicated that it was concerned about confusion in the marketplace and expressed a willingness to work with Plaintiff on resolving the dispute informally and amicably.  Plaintiff never responded to Defendant's letter but instead rushed to Court to file the present action.  In doing so, Plaintiff effectively jumped the gun.

The Court was not persuaded:

Defendant's letter described the likelihood of confusion between its products as "substantial" and "perhaps inevitable," and requested that Plaintiff cancel its federal trademarks and "permanently refrain" from using its own mark, among other things.  Dkt. 1, p. 14.  An actual controversy exists.

Motion To Dismiss for Lack of Jurisdiction, Denied
Era Organics, Inc. v. Erbaviva, LLC, Case No. 8:18-CV-2219-T-30SPF (M.D. Fla. Jan 4, 2019) (J. Moody)

Staying Litigation Because of Request for Inter Partes Review?

Not yet.  The request is premature until the Patent Office determines whether or not to institute the Inter Partes Review ("IPR").

TAS Energy, Inc. sued Stellar Energy Americas, Inc. for patent infringement concerning U.S. RE 44,815.  TAS and Stellar are competing engineering firms that each sought to design and construct a gas turbine inlet air cooling and thermal energy storage system for Duke Energy.  TAS additionally sought a preliminary injunction to enjoin Stellar's activities, but that motion was denied.  Stellar next petitioned the U.S. Patent and Trademark Office for IPR, seeking to invalidate claims of the '815 patent.

As has become common practice, Stellar also asked the district court to stay the litigation based on Stellar's request for review.  TAS responded that the request for a stay was premature because the Patent Office had not yet decided whether or not to grant the petition.

The Court resolved the issue quickly:

Stellar argues that there is a substantial likelihood that the PTO will institute review of the patent-in suit because it already instituted review of the parents of the patent-in-suit in prior inter partes review proceedings. Stellar also argues that TAS Energy will not be unduly prejudiced because its motion for preliminary injunction was denied, which Stellar argues raises a substantial question as to the validity of the patent-in-suit. Stellar further argues that the PTO grants a majority of the petitions filed and it is likely to resolve the question regarding the validity of the patent-in-suit, which would minimize duplicative efforts and may streamline the district court’s litigation. It further argues that the stay would be “brief.”

TAS Energy opposes Stellar’s Motion and argues that this Court should deny the motion for three reasons: Stellar’s motion is premature; Stellar exaggerates the possibility that its IPR petitions—if instituted at all—will simplify this litigation; and Stellar ignores the prejudice that TAS Energy will suffer as a result of a stay. It argues that the majority of the courts in the Middle District of Florida deny motions for stay when the PTO has not yet granted a movant’s petition for inter partes review and no circumstances in this case justify a departure from that trend. Further, TAS Energy states that Stellar’s petitions challenge different claims of the ‘815 patent, and each petition challenged less than half of the ‘815 patent’s claim; therefore, the review would not simplify the issues in this case because it will not finally resolve all issues in the litigation. It further argues that when the parties are direct competitors the risk of prejudice in delaying a patent infringement suit is high, which courts in this district recognize as a basis to deny a stay.

The Court concludes that granting a stay at this stage of the inter partes review process is premature. Therefore, the Court denies the Motion without prejudice to Stellar to raise the issue if and when the PTO grants its petitions. Accord CANVS Corp. v. FLIR Sys., Inc.,2:14-CV-180-FTM-38CM, 2014 WL 6883127, at *1 (M.D. Fla. Dec. 5, 2014) (referencing defendant’s previous motion for stay which the court denied as premature without prejudice to re-file if and when the PTO granted inter partes review). See also Automatic Mfg. Sys., Inc. v. Primera Tech., Inc., No. 6:12-cv-1727-Orl-37DAB,2013 WL 1969247, at *3 (M.D. Fla. May 13, 2013) (“it seems clear that a stay of a patent infringement action is not warranted when based on nothing more than the fact that a petition for inter partes review was filed in the USPTO.”); U.S. Nutraceuticals, LLC [v. Cyanotech Corp.], 2013 WL 6050744, at *3 (explaining since it remained uncertain as to whether the petition for inter partes review would be granted, a stay would prejudice the plaintiff’s ability to prosecute its claims and present a clear tactical advantage to the defendants).

[EDITOR'S NOTE: This is a very disturbing and troubling trend to me, and it appears to me that the Middle District of Florida is handling it correctly.  Issued patents are presumed valid, and the owner of the patent is charged with policing his or her rights.  That policing is in the form of a patent infringement litigation to stop the alleged infringer from violating the patent owner's presumed-valid rights.   Congress, perceiving there is a larger problem with patent infringement activity than actually exists, created a framework for attacking the validity of patents at the Patent Office.  Under this framework, if the Patent Office agrees to analyze the validity of the patent, a Court should stay the litigation under most circumstances.  But numerous (hundreds?  more?) defendants have asked district courts to stay litigations on the basis of their requests for review alone.  These defendants usually combine their requests for a stay with outright refusals to cooperate in the litigation, forcing the plaintiff to engage in additional motion practice to compel compliance with the rules of civil procedure.  In essence, the presumption of validity has disappeared and the already daunting task of enforcing Constitutionally created property rights is even harder.  It's worthwhile to remember we are an innovation economy and patents have historically been a strong vessel for protecting and valuing that innovation.  Time will tell whether balance will return to the patent system or not.]

Motion to stay, denied as premature.
TAS Energy, Inc. v. Stellar Energy Americas, Inc., Case No. 8:14-CV-3145 (M.D. Fla. Apr. 2, 2015) (J. Moody)

Who Do You Sue For Copyright Infringement, Father or Son?

When last we checked in with Malibu Media (owner of a library of adult films and associated copyrights), Malibu had filed suit against John Doe and then used the Court's subpoena power to take an IP address which identified an alleged infringer's network connection and force the ISP to identify which subscriber belonged to that IP address.  (The Electronic Frontier Foundation has written about Malibu Media here.)

In another case, a little further down the enforcement timeline, Malibu Media had received from the ISP the subscriber's identity.  But instead of suing the subscriber, Malibu Media sued the subscriber's son:

The ISP, Bright House Networks Online Service, identified [Father] as the internet subscriber...Upon investigation, Plaintiff learned that [Father] lives with his son...

At the time this case was originally filled, Plaintiff knew only that the infringer was using the internet subscriber's IP address.  Usually, the subscriber is the infringer.  But, as is the case here, sometimes the infringer is another person residing with the the subscriber, who the subscriber has authorized to use the subscriber's internet.

Time timespan of infringing activity precludes the possibility that the infringer was a short term guest or other interloper.

Plaintiff's Amended Complaint [Dkt. 8] at 5.  Malibu then goes on to explain that it found other video files downloaded by the IP address (for tv shows like Breaking Bad, Lost, Weeds, and Futurama) and that the Son had "liked" these tv shows on Facebook.  Thus:

...[Son] is the most likely person to have used BitTorrent in the house from where the infringement emanated.  Consequently, Defendant is the most likely person to have infringed Plaintiff's copyrighted works through the use of BitTorrent.

Plaintiff's Amended Complaint [Dkt. 8] at 6-7.

So, after being served, [Son] sought dismissal, explaining that [Son] did not reside in the home during the time of alleged infringement and attacked Malibu's infringement evidence as stemming from an unlicensed investigator on a contingency pay arrangement.

[Son] also explained a decision by Judge Ungaro in the Southern District that [Son] described as a "game changer" for thwarting Malibu's activities:

Plaintiff has not shown how this geolocation software can establish the identity of the Defendant.  There is nothing that links the IP address location to the identity of the person actually downloading and viewing Plaintiff's videos, and establishing whether that person lives in this district..... 

Even if this IP address is located within a residence, the geolocation software cannot identify who has access to that residence's computer and who would actually be using it to infringe Plaintiff's copyright.

Malibu Media v. Doe, Case No. 1:14-CV-20213 (S.D. Fla. Mar. 5, 2014) (J. Ungaro).

Returning to the present case, Judge Moody was not persuaded by the Southern District's reasoning:

While it may be true that the IP subscriber, or the son of an IP subscriber as it is in this instance, is not undoubtedly the infringing individual, the Plaintiff's burden at this stage is only to demonstrate plausibility.  See [Ashcroft v.] Iqbal, 556 U.S. 662, 678-79 (2009); cf., Malibu Media LLC v. John Does 1-16, 902 F. Supp. 2d 690, 698 (E.D. Pa. 2012) ("The Court acknowledges, however, that the information provided by the ISPs in response to the subpoenas will not necessarily reveal the identities of the actual infringers, but may, with other discovery, lead to the infringer's identities.")  To that end, Plaintiff has alleged a plausible link between the subscriber assigned to [the IP address], Defendant, and the copyright infringement, and any factual disputes are inappropriate at this stage.

As to the charge that the investigator's technique's were inappropriate, the Court found those allegations premature.

Motion to dismiss, denied.
Malibu Media, LLC v. [Son], 8:13-cv-3007 (M.D. Fla. Aug. 1, 2014) (J. Moody)

Agreeing To An Injunction Waives Personal Jurisdiction Challenge; But Alleging "Deliberate" Copyright Infringement Justifies Personal Jurisdiction?

Gainesville Coins operates a website for selling precious medals.  So does Vanguard Capital Group.  But Vanguard copied product descriptions and pictures off of Gainesville's website.  So Gainesville sued for copyright infringement.  First, Gainesville sought and obtained a temporary restraining order.  Next, the Court referred Gainesville's request for a preliminary injunction the Magistrate Judge, who extended the restraining order and set a hearing.   Three days before the hearing, Vanguard's attorney appeared, and the parties agreed to a stipulated preliminary injunction - presumably to obviate the need for the hearing.

Vanguard next moved the Court to dismiss the case for lack of personal jurisdiction, arguing that merely operating a website was insufficient contacts with Florida to justify a lawsuit here.  The Court was not persuaded:

As Gainesville Coins points out, Vanguard moved to dismiss the complaint for lack of personal jurisdiction after Vanguard stipulated to a preliminary injunction and participated in the case management conference.  Importantly, Vanguard did not reserve its right to contest the Court’s jurisdiction over it at any of these junctures. Under these facts, Vanguard waived the defense and its motion to dismiss is denied on this ground. See Aeration Solutions, Inc. v. Dickman, 85 Fed.Appx. 772, 774 (Fed. Cir. 2004) (finding defendants voluntarily acknowledged and acquiesced to the district court’s jurisdiction over them by stipulating to an injunction); Nat. Union Fire Ins. Co. of Pittsburgh, PA v. Beta Constr. LLC, 8:10-CV-1541-T-26TBM, 2010 WL 4316573, at *1 (M.D. Fla. Oct. 26, 2010) (finding defendant “waived his right to attack the personal jurisdiction of [the] Court by entering an appearance and participating in the case management conference without objecting to the Court’s personal jurisdiction”).

Turning next to the substance of Vanguard's argument, the Court also found personal jurisdiction proper under Florida's long-arm statute and the "effect's test."  As to Florida's long-arm statute:

Copyright infringement is a tortious act that satisfies Florida’s long-arm statute. See Smith v. Trans-Siberian Orchestra, 8:09-CV-1013-T-33EAJ, 2011 WL 824675, at *4 (M.D. Fla. Mar. 3, 2011); see also Cable/Home Commc’ns [v. Network Productions, Inc], 902 F.2d at 854 [(11th Cir. 1990)]. Also, the infringement occurred in Florida to the extent that Vanguard’s website is accessible in Florida and has been accessed by Florida residents.

The Court next turned to the "effects test" and relied on the Calder decision, which found personal jurisdiction appropriate for an intentional tort committed against a Florida resident.  Calder concerned a California plaintiff that sued a Florida newspapers for an alleged libelous article.  The Court held that such an intentional tort committed against a California resident justified jurisdiction over the Florida company in California.

But here, copyright infringement is a strict liability tort.  Intent is irrelevant for purposes of a direct infringement claim, although intent can increase a statutory damage award.  No matter.  The Court concluded because Gainseville alleged deliberate and willful infringement, the cause was akin to an intentional tort such as Calder justifying jurisdiction:

The Court concludes that Vanguard’s alleged actions of: deliberately and willfully infringing upon Gainesville Coins’ copyright by copying nearly the entire website for Gainesville Coins; and displaying the Work at its competing website, the Vanguard Website, for commercial gain because Vanguard is a competitor of Gainesville Coins, are sufficient to meet the “effects test”. In other words, Vanguard’s alleged acts purposefully availed itself of this forum. See Waterproof Gear, Inc. v. Leisure Pro, Ltd., 8:08-cv-2191-T-33MAP, 2009 WL 1066249, at *1 (M.D. Fla. Apr. 20, 2009) (finding that defendant purposefully availed itself of the forum when defendant copied and placed plaintiff’s copyrighted marketing materials on defendant’s website).

Motion to Dismiss for Lack of Personal Jurisdiction, Denied.
Gainesville Coins, LLC. v. VCG Ventures, Inc., Case No. 8:13-CV-1402 (M.D. Fla. Aug. 28, 2013) (J. Moody)

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

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)

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

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

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)