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)

Can You Get Self-Help Relief Through A Default Judgment?

Not if you don't plead it in your complaint.   Sony sued Discount Cameras & Computers Inc. and Mauricio Martinez for trademark infringement and a handful of other causes related to Discount Camera's unauthorized usage of the SONY trademarks.  Defendants did not respond, so Sony sought and received a default.  After the Clerk entered Default, Sony moved for a Default Judgment, seeking an injunction.  So far, so good.  But the proposed judgment included the following language:

ORDERED and ADJUDGED that the Defendants ... shall, within fifteen (15) days of the date of entry of this Default Final Judgment and Permanent Injunction, remove [from their premises] all signage bearing one or more of the SONY Trademarks ...

ORDERED and ADJUDGED that, in the event that the Defendants ... fail to remove from the business premises ... all signage ... then the Court hereby authorizes the Plaintiffs and their representatives ... to enter the property ... and remove all signage...

(emphasis added).  The Court did not approve of this language, relying on Fed. R. Civ. P. 54(c) ("A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings."):

Plaintiffs are therefore entitled to default judgment on all of their claims, as well as a permanent injunction enjoining Defendants from further infringement and unlawful conduct -- but only as to the injunctive relief demanded in the Complaint (Doc. 1).  Plaintiffs are not entitled to self-help should Defendants continue to infringe Plaintiff's marks.  The Court declines to retain jurisdiction over this matter.

Motion for Default Judgment, Granted in Part, Denied in Part.
Sony Corp. v. Discount Cameras & Computers, Inc., Case No. 6:12-cv-1892 (M.D. Fla. Sept. 5, 2013) (J. Dalton) (adopting Report and Recommendation of Mag. Baker).

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)

Your agreement to file under seal doesn't matter -- the public interest does

Parties regularly enter into protective orders or confidentiality agreements during litigation to be able to designate material confidential and/or attorneys-eyes-only.  This generally works well among litigants, but can be sticky when needing to file materials with the Court.  The Courts are public forums, theoretically open to all.

NXP, BV. has sued Research in Motion here in the Middle District for patent infringement.  (NOTE: GrayRobinson represents RIM as local counsel.)  The parties entered into such a confidentiality agreement, but a discovery dispute ensued.  To support their respective positions, each side needed to refer to information that had been designated confidential or attorneys-eyes-only.  So the parties filed redacted versions of their briefs, but jointly sought leave to file the confidential information under seal.

Generally, these motions are dispensed with quickly, which is why this decision caught my eye.  One of the first motions I ever filed was a motion to adopt the parties proposed protective order in a case here in the Middle District.  That joint motion was rejected by the Magistrate Judge because it did not specifically and explicitly follow the mandate of our Local Rule 1.09, which states that no document may be filed under seal without first seeking permission from the Court (unless there is some other law permitting such a filing).  (NOTE: In my defense, that joint motion that I filed years ago did indicate that filings under seal would only be done according to local rule, but we revised the motion when we refiled it to explicitly incorporate the provisions of L.R. 1.09.)

In the NXP decision, the Court wrote a detailed opinion explaining the reasoning behind this practice, and it's a short but worthwhile read:

In this Circuit, it is well settled that “[t]he operations of the courts and the judicial conduct of judges are matters of utmost public concern” and the integrity of the judiciary is maintained by the public's right of access to court proceedings. Romero v. Drummond Co., 480 F.3d 1234, 1245 (11th Cir.2007) (citing Landmark Commc'ns, Inc. v.Virginia, 435 U.S. 829, 839 (1978)). The public's right “includes the right to inspect and copy public records and documents.” Chicago Tribune, 263 F.3d at 1311. But, the public's right of access is not unfettered and does not apply to discovery. Romero, 480 F.3d at 1245. Indeed, “the need for public access to discovery is low because discovery is ‘essentially a private process ... the sole purpose [of which] is to assist trial preparation.’ “ Id. (quoting United States v. Anderson, 799 F.2d 1438, 1441 (11th cir.1986). And, “[t]he prospect of all discovery material being presumptively subject to the right of access would likely lead to an increased resistance to discovery requests.” Chicago Tribune, 263 F.3d at 1312 n. 10. 

Courts draw a distinction between documents filed with discovery motions and documents filed in connection with other types of motions. “ ‘[T]here is a presumptive right of public access to pretrial motions of a nondiscovery nature, whether preliminary or dispositive, and the material filed in connection therewith.’ “ Id. at 1246 (quoting Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157, 164 (3d Cir. 1993)). Material filed as part of a discovery motion is not subject to the common law right of access. Chicago Tribune, 263 F.3d at 1312. 

“The common law right of access may be overcome by a showing of good cause, which requires balancing the asserted right of access against the other party's interest in keeping the information confidential.” Romero, 480 F.3d at 1245 (quoting Chicago Tribune, 263 F.3d at 1313). In balancing these interests “courts consider, among other factors, whether allowing access would impair court functions or harm legitimate privacy interests, the degree of and likelihood of injury if made public, the reliability of the information, whether there will be an opportunity to respond to the information, whether the information concerns public officials or public concerns, and the availability of a less onerous alternative to sealing the documents.” Id. at 1246. “Good cause is established by the moving party when disclosure will cause the party to suffer a clearly defined and serious injury.” Vista India, Inc. v. Raaga, LLC, Case No. 07–1262, 2008 WL 834399 *2 (D.N.J. Mar. 27, 2009). The parties' agreement to seal court documents “is immaterial” to the public's right of access. Brown v. Advanatage Eng'g, 960 F.2d 1013, 1016 (11th Cir.1992).

The Court went on to explain that it needed the confidential information at issue to resolve the parties' discovery dispute, and that the confidential information indeed satisfied the tests described above.

Joint Motion to File Under Seal, Granted
NXP BV v. Research In Motion Ltd, Case No. 6:12-cv-498 (M.D. Fla. Aug. 15, 2013) (Mag. Smith)

11th Circuit Copyright and Trademark Jury Instructions

Thanks to Dineen Wasylik for pointing out the Eleventh Circuit's new pattern jury instructions to me.  As Dineen writes, these new instructions include forms for both Copyright and Trademark trials.   The instructions are available here.

On first blush, these instructions appear relatively comprehensive for copyright matters, with one noticeable omission.  Namely, how the jury should be instructed with regards to establishing a plaintiff's profits attributable to the defendant's infringement.  While the statute reads:

In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.

17 USC 504(b), it appears left for future decisions how the Eleventh Circuit will apply this law.

Patent Obtained During Marriage Is Marital Asset in Florida

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

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)