Where Does Trademark Infringement Tort Occur For Venue Purposes?

Where the trademark owner resides, at least under Florida's long-arm statute:

Under Florida's long-arm statute, Defendant is subject to personal jurisdiction where it commits a “tortious act within th[e district].” § 48.193(1)(a)(2), Fla. Stat. Trademark infringement is considered a tortious act under Florida's long-arm statute, Mighty Men of God, Inc. v. World Outreach Church of Murfreesboro Tenn., Inc., 6:14-cv-947-Orl-41TBS, 2015 WL 1534446, at 3 (M.D. Fla. Apr. 6, 2015), and is deemed to take place where the trademark owner resides, Nida Corp. v. Nida, 118 F. Supp. 2d 1223, 1228 (M.D. Fla. 2000).  Because the true owner of the trademark and trade dress at issue is disputed among the parties, Plaintiff is credited as the trademark holder for the purposes of determining venue.  Because Plaintiff resides in the Middle District, the tortious act of trademark infringement is deemed to have occurred here.   Thus the Middle District has personal jurisdiction over Defendant under Florida’s long-arm statute.

Motion to dismiss or transfer, denied.
Tile World Corp. v. Miavana & Family, Inc., Case No. 6:15-CV-919 (M.D. Fla. Dec. 2, 2015) (J. Antoon)

Does Re-Registering a Domain Name Constitute "Registering" a Domain Name for Anticybersquatting Purposes?

Yes.

Jysk Bed'N Linen operates furniture stores in Georgia, New Jersey, and North Carolina.  In early 1999, it had a website developed for it and hosted that website at http://www.bydesignfurniture.com.  It had asked the website developer to register the domain name and assign the domain to Jsyk.  The domain name was registered, but it was never listed in the name of Jsyk.

In 2012, the domain name registration expired, and the website went down.  Jsyk asked the web developer to re-register the domain name and transfer it to Jsyk.  The web developer did re-register the domain, but did not transfer it.  Instead, the web developer registered a handful of other domains (bydesignfurniture.org, bydesignfurnitures.com, etc...) and demanded that he be compensated for his thousands of hours of work.  Jsyk sued, claiming violation of the Anticybersquatting Consumer Protection Act.

ACPA

The ACPA makes it unlawful to register, traffic in, or use a domain name that uses another's distinctive mark (where the accused cybersquatter has a bad faith intent to profit off of this usage).  Here, the web developer argued that "re-registration" does not constitute "registration" and thus did not violate the ACPA.  The Eleventh Circuit was not persuaded:

Including re-registrations under the registration hook comports with the purpose of Congress in enacting the ACPA—to prevent cybersquatting. See S. Grouts & Mortars, Inc., 575 F.3d 1235, 1246–47 (11th Cir. 2009) (“Registering a famous trademark as a domain name and then offering it for sale to the trademark owner is exactly the wrong Congress intended to remedy when it passed the ACPA.”(quotation marks omitted) (quoting Ford Motor Co. v. Catalanotte, 342 F.3d 543, 549 (6th Cir.2003))). It would be nonsensical to exempt the bad-faith re-registration of a domain name simply because the bad-faith behavior occurred during a noninitial registration, thereby allowing the exact behavior that Congress sought to prevent. We accordingly will not read additional words into the statute such as initial or creation. The plain meaning of register includes a re-registration. 

Thus, here in the Eleventh Circuit, re-registration constitutes registration for purposes of the ACPA.  This comports with the Third Circuit.  See Schmidheiny v. Weber, 319 F.3d 581 (3d Cir.2003).  Notably, the Ninth Circuit has reached a different conclusion.  See GoPets Ltd. .v. Hise, 657 F.3d 1024 (9thCir.2011) (determining that "re-registration" was not "registration" for concern that it would limit the transferability of rights associated with domain names).

The Court went on to confirm the web developer's activities demonstrated a bad faith intent to profit off of Jsyk's trademark rights.

Issuance of preliminary injunction, affirmed.
Jysk Bed'N Linen v. Dutta-Roy, Case No. 13-15309, (11th Cir. Dec. 16, 2015)

Are Shotgun Patent Infringement Pleadings Allowed?

No.

The Eleventh Circuit is not a big fan of shotgun pleadings, and neither is the Middle District of Florida.  Christ Tavantzis and Christrikes Custom Motorcycles filed a complaint asserting at least 10 counts against 29 defendants for allegations including alleged patent infringement of U.S. Patent 7,419,024 directed to a wheelchair accessible motorcycle:

It appears the reality show American Chopper built such a bike and the plaintiffs' claims concern allegations that the show stole the idea from the inventor and conspired to profit off of this invention.  TMZ wrote a brief story about the lawsuit here.

The complaint is not without colorful language:

This metaphorical "shoving of the disabled inventor into the darkness of a closet" to bring the light upon themselves is disheartening, pathetic, appalling, distressing, disparaging, offensive, atrocious and utterly intolerable to the reasonable decency of humankind everywhere.

It goes on to allege the following actions violate the plaintiffs' rights:

1. Building the Bike on National Television to increase [defendants'] public image and sales
2. Offering the bike for sale on the company website for approximately $45,000, plus customaization fees for additional requests.
3. Publicly and falsely holding the bike out to be theirs by distributing the images and production concepts through distribution channels "TLC", "Discovery," "CMT" and their parent corporations, partnerships and mass media distribution companies.
4. Creating an infringing copy that is a dangerous instrumentality and life threatening to the Disabled and the public

It then goes on to allege Counts I through X.  But each count incorporates all allegations previously pleaded.  A number of defendants sought dismissal.  The Court explained the law in the Eleventh Circuit:

The most common type—by a long shot—is a complaint containing multiple counts where each count adopts the allegations of all preceding counts, causing each successive count to carry all that came before and the last count to be a combination of the entire complaint. The next most common type . . . is a complaint . . . replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action. The third type of shotgun pleading is one that commits the sin of not separating into a different count each cause of action or claim for relief. Fourth, and finally, there is the relatively rare sin of asserting multiple claims against multiple defendants without specifying which of the defendants are responsible for which acts or omissions, or which of the defendants the claim is brought against.

quoting Weiland v. Palm Beach Cnty. Sheriff's Office, 792 F.3d 1313, 1321-23 (11th Cir. 2015) (footnotes omitted).  These shotgun pleadings fail to put the defending parties on adequate notice and must be amended.  Aside from each count incorporating all prior allegations, the Court was also troubled by another issue:

Finally, and what causes the most confusion in this case, Plaintiffs do not identify which counts and factual allegations are alleged against which defendants or which plaintiff brings each count. For example, Plaintiffs’ patent infringement claim references “Defendant” in some paragraphs and “Defendants” in other paragraphs. (Id. ¶¶ 70–75). However, Plaintiffs never name a particular defendant and the Court is left to guess whether Plaintiffs intend to sue one defendant, some of the defendants, or all thirty-one defendants for patent infringement. Further, Plaintiffs never identify which of them brings each count, which can be especially confusing where, as here, one plaintiff is an individual and the other plaintiff is a corporation. For example, as the Complaint currently reads, both Plaintiffs allege claims for ADA discrimination, ADA exclusion, and intentional infliction of emotional distress. However, without an explanation from Plaintiffs, the Court is left to guess whether these counts are brought by the individual plaintiff, the corporate plaintiff, or both, despite the fact that one would presume a corporation could neither be disabled within the meaning of the ADA nor suffer emotional distress. Plaintiffs further exacerbate this confusion by referring to the individual plaintiff and the corporate plaintiff both collectively and interchangeably throughout the Complaint.

As such, plaintiffs must amend their complaint.

Motion to dismiss, granted.
Tavantzis v. American Choppers, Case No. 6:14-CV-1519 (M.D. Fla. Nov. 4, 2015) (J. Byron)

Is Using an Unflattering Candid Photo in Blog Posts To Criticize the Subject of the Photo Fair Use?

Yes.

Irina Chevaldina was a tenant in commercial property owned by one of Raanan Katz's corporate entitles.  Chevaldina was unhappy with Katz and posted a number of blog entries criticizing him.  Some of those posts included a candid photo of Katz that Katz deemed unflattering:

Katz acquired the copyright to the photo from the photographer, and then sued Chevaldina (and Google) for infringement.  Katz apparently dropped his vicarious infringement claim against Google but pursued the direct infringement claim against Chevaldina.  Chevaldina argued that fair use protected her usage.  The district court agreed, granting summary judgment in her favor.  Katz appealed.

The Eleventh Circuit explained the test for fair use:

In deciding whether a defendant's use of a work constitutes fair use, courts must weigh the following four factors: (1) the purpose and character of the allegedly infringing use; (2) the nature of the copyrighted work; (3) the amount of the copyrighted work used; (4) and the effect of the use on the potential market or value of the copyrighted work. Id. These four statutory factors are not to be treated in isolation from one another. See Campbell v. Acuff–Rose Music, Inc., 510 U.S. 569, 578, 114 S.Ct.1164, 1170–71, 127 L.Ed.2d 500 (1994)

Purpose and Character
Katz argue that the purpose and character of usage was commercial in nature because one of the blog posts indicated a desire to write a book in the future about the experience.  The Court was not persuaded:

Chevaldina's reference to her intention to write a book about her experiences with Katz does not alone, however, transform the blog post into a commercial venture. Overall, the blog post retains her educational purpose of lambasting Katz and deterring others from conducting business with him. See March 4, 2012 Blog Post (“I hope my book will help ambitious people in their dream to be successful without selling the[ir] soul to the [d]evil.”). Moreover, the link between Chevaldina's commercial gain and her copying of the Photo was attenuated given that Chevaldina never wrote a book nor made any profits whatsoever. See Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 756F.3d 73, 83 (2d Cir.2014) (discounting commercial nature of use where “the link between the defendant's commercial gain and its copying is attenuated such that it would be misleading to characterize the use as commercial exploitation” (quotations and alterations omitted)).

The Court also explained that, even though the photo was not altered, the usage was still transformative:

Chevaldina's use of the Photo was also transformative. A use is transformative when it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” See Campbell, 510 U.S. at 579, 114 S.Ct. at 1171. Chevaldina's use of the Photo was transformative because, in the context of the blog post's surrounding commentary, she used Katz's purportedly “ugly” and “compromising” appearance to ridicule and satirize his character. See Swatch,756 F.3d at 84 (“Courts often find such uses [of faithfully reproduced works] transformative by emphasizing the altered purpose or context of the work, as evidenced by the surrounding commentary or criticism.”); A.V. ex el Vanderhyev. iParadigms, LLC, 562 F.3d 630, 639 (4th Cir.2009) (“The use of a copyrighted work need not alter or augment the work to be transformative in nature.”); Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1270 (11th Cir.2001) (finding transformative use where work was “principally and purposefully a critical statement”).

Nature of the Copyrighted Work
The Court stated that the law recognized a greater need to disseminate factual works than works of fantasy or fiction and went on to find this work to be factual as it was a mere candid photo.

Amount of Work Used
This factor garnered little attention as it is less relevant in analyzing alleged infringements of photographs.

Effect of the Use on the Potential Market for the Work
By Katz's own activities, it appears there is no market for the work, thus no market to destroy:

The district court did not err in finding Chevaldina's use of the Photo would not materially impair Katz's incentive to publish the work. Katz took the highly unusual step of obtaining the copyright to the Photo and initiating this lawsuit specifically to prevent its publication. Katz profoundly distastes the Photo and seeks to extinguish, for all time, the dissemination of his “embarrassing” countenance. Due to Katz's attempt to utilize copyright as an instrument of censorship against unwanted criticism, there is no potential market for his work. While we recognize that even an author who disavows any intention to publish his work “has the right to change his mind,” see Monge v. Maya Magazines, Inc., 688 F.3d 1164, 1181 (9thCir.2012) (quotation omitted), the likelihood of Katz changing his mind about the Photo is, based on the undisputed evidence in the record, incredibly remote.

Summary judgment decision affirmed.
Katz v. Google, Inc., Case No. 14-14525 (11th Cir. Sept. 17, 2015)

Patent Eligibility and Collateral Estoppel

I previously wrote about a Middle District of Florida Court invalidating one FairWarning IP's patents at the pleading stage.  There, the Court determined the asserted patent (U.S. Patent 8,578,500) was invalid because it was directed only an abstract idea.  FairWarning has appealed that decision.

FairWarning had also sued Cynergistek for alleged infringement of the '500 Patent.  That case was reassigned to Judge Merryday (who decided the case above) as it shared common issues.  Cynergistek also moved for judgment on the pleadings based on the alleged invalidity of the '500 Patent, but also argued that FairWarning was now collaterally estopped from asserting the '500 Patent because of Judge Merryday's prior finding.

The Court explained the standard:

Blonder–Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), holds that, if a previous action invalidated a patent after the patent-holder had a full and fair opportunity to litigate, collateral estoppel prevents the patent-holder from enforcing the patent against an unrelated party in another action.

FairWarning argued that it lacked a full and fair opportunity to present its case in the prior decision because that decision "was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit."  The Court was not persuaded:

A review of Iatric System confirms (1) that FairWarning responded (without requesting a hearing) to Iatric Systems's motion to dismiss, which challenged the '500 patent's validity, and (2) that the order dismissing the action both considered and rejected FairWarning's arguments.

The Court then avoided the collateral estoppel question and ruled on the merits:

Regardless of collateral estoppel, for the same reasons explained in Iatric Systems, FairWarning fails to state a claim for infringement of the ‘500 patent, which is “directed to” nothing more than a patent-ineligible abstract idea. FairWarning asserts neither a fact nor an argument that warrants a different conclusion in this action.

The Court then dismissed as moot defendant's counterclaims seeking declarations of invalidity and non-infringement.

Motion for judgment on the pleadings, granted in part.

FairWarning IP, LLC v. Cynergistek, Inc., Case No. 8:15-CV-100 (M.D. Fla. Sept. 14, 2015) (J. Merryday)

  

Middle District of Florida Releases New Discovery Handbook

The Handbook on Civil Discovery Practice has been revised (dated June 5, 2015).  You may download a copy here.  (You may receive a printed copy at the Intake counter in each divisional Clerk's office.)  It's a good idea to take a read through every now and then, and nice to see the Court has updated it.  (I believe the last revision was 15 years ago.)   From the Court's website announcing this revised version:

The Federal Rules of Civil Procedure, the Local Rules of the Middle District of Florida, and existing case law cover only some aspects of civil discovery practice. Many of the gaps have been filled by the actual practice of trial attorneys and, over the years, a custom and usage has developed in this district in frequently recurring discovery situations. Originally developed by a group of trial attorneys, this handbook on civil discovery practice in the United States District Court, Middle District of Florida, updated in 2001, and again in 2015, attempts to supplement the rules and decisions by capturing this custom and practice. This handbook is neither substantive law nor inflexible rule; it is an expression of generally acceptable discovery practice in the Middle District. It is revised only periodically and should not be relied on as an up-to-date reference regarding the Federal Rules of Civil Procedure, the Local Rules for the Middle District of Florida, or existing case law. Judges and attorneys practicing in the Middle District should regard the handbook as highly persuasive in addressing discovery issues. Parties who represent themselves (“pro se”) will find the handbook useful as they are also subject to the rules and court orders and may be sanctioned for noncompliance. Judges may impose specific discovery requirements in civil cases, by standing order or casespecific order. This handbook does not displace those requirements, but provides a general overview of discovery practice in the Middle District of Florida.

Fraud Detection in Patient Records Patent -- Is it Patent-Eligible?

"In other words, Claim 1 comprises..." Perhaps the most dangerous words in a court opinion directed to the patent eligibility of a challenged patent. I say dangerous because essentially any patent claim can be presented "in other words" in order to describe them broadly directed to some abstract idea and doing so avoids careful analysis of the particular meaning of all words in a challenged claim. 

Fairwarning IP, LLC sued Iatric Systems for infringement of U.S. Patent 8,578,500 directed to a method and system for detecting fraud and misuse in connection with electronic patient data.  The defendant asked the Court to dismiss the claim, arguing the patent was directed to an ineligible abstract idea.

The Court went through the basic framework for making such a determination: (1) Is the claim directed to an abstract idea; and (2) if so, look at the claims to determine whether the elements of the claim transform the nature of the claim into patent-eligible subject matter.  See Alice Corp. v. CLS Bank International, 134 S. Ct. 2347, 2355 (2014).

The Federal Circuit has sought to clarify this test, particularly in connection with computer inventions.  See DDR Holdings LLC. v. Hotels.com, L.P., 773 F.3d 1245, 1247 (Fed. Cir. 2014) (upholding claims which are "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.")

Claim 1 of the '500 patent requires the following elements:

1. A method of detecting improper access of a patient’s protected health information (PHI) in a computer environment, the method comprising: 

generating a rule for monitoring audit log data representing at least one of [the] transactions or activities that are executed in the computer environment, which are associated with the patient’s PHI, the rule comprising at least one criterion related to accesses in excess of a specific volume, accesses during a pre-determined time interval, accesses by a specific user, that is indicative of improper access of the patient’s PHI by an authorized user wherein the improper access is an indication of potential snooping or identity theft of the patient’s PHI, the authorized user having a pre-defined role comprising authorized computer access to the patient’s PHI;  

applying the rule to the audit log data to determine if an event has occurred, the event occurring if the at least one criterion has been met;  

storing, in a memory, a hit if the event has occurred; and providing notification if the event has occurred. 

Here, the defendant argued the claims were directed to the abstract idea of "analyzing records of human activity to detect suspicious behavior."  The Court agreed:

[T]he ’500 patent is “directed to” or “drawn to” the concept of “analyzing records of human activity to detect suspicious behavior.” (Doc. 50 at 2) Reviewing activity to detect suspicious behavior is not unique to the context of private health information, and binding precedent has invalidated patents “directed to” similar concepts. E.g., CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1367 (Fed. Cir. 2011) (invalidating a patent that claimed a “method and system for detecting fraud in a credit card transaction between [a] consumer and a merchant over the Internet”); accord Intellectual Ventures II LLC v. JP Morgan Chase & Co., 2015 WL 1941331, *3 (S.D.N.Y. April 28, 2015) (Hellerstein, J.) (invalidating a patent that claimed a “method for monitoring multiple computer hosts within a network for anomalies, and alerting the various hosts of possible intrusion”); Wireless Media Innovations, LLC v. Maher Terminals, LLC, 2015 WL 1810378, *8 (D.N.J. April 20, 2015) (Linares, J.) (invalidating patents “directed to the . . . abstract idea[ of] monitoring locations, movement, and load status of shipping containers within a container-receiving yard, and storing, reporting and communicating this information in various forms through generic computer functions”). Reviewing activity to detect suspicious behavior is a basic and well-established abstract idea 

[EDITOR'S NOTE: The Court referred to "binding precedent," yet only cited a 2011 (i.e. pre-Alice and pre-DDR) decision.]

FairWarning argued the claims were necessarily rooted in computer technology (per DDR Holdings) because the claims "provide[] a solution to a technological problem, namely identifying potential snooping and identify theft by authorized users."  The Court was not persuaded.

Finding the patent directed to an abstract idea, the Court turned to the second step -- do the claim elements transform the patent into something more.  The Court begins the discussion as follows:

In other words, Claim 1 comprises (1) generating a rule “related to” the number of accesses, the timing of accesses, and the specific users in order to review “transactions or activities that are executed in a computer environment”; (2) applying the rule; (3) storing the result; and (4) announcing the result.

[EDITOR'S NOTE: The Court looked at the individual elements of the claim, but then merely paraphrased what those elements might be.  And the Court did so without considering what one of skill in the art would understand the terms to mean.]

The Court conducted the analysis as follows:

None of the steps in Claim 1’s method transforms the abstract idea into a patentable concept. Although the first step of the method requires “generating a rule for monitoring audit log data,” Claim 1 neither states a rule nor instructs a computer to generate a rule. Instead, in at least one embodiment of the invention, “the rule is created by the user and/or a third party, such as a consultant with particular knowledge as to fraud or misuse of the particular type of data.” ’500 patent, col. 13, ll. 11–13. Also, the function performed by the computer in each remaining step of Claim 1’s method is “purely conventional.” Alice, 134 S. Ct. at 2358 

[EDITOR'S NOTE:  The Court appears to have limited its analysis to a single embodiment disclosed in the specification.  And it's not clear the Court addressed Claim 1's limitation that the rule at issue must be "indicative of improper access of the patient's PHI by an authorized user wherein the improper access is an indication of potential snooping or identify theft of the patient's PHI, the authorized user having a pre-defined role comprising authorized computer access to the patient's PHI"]

The Court went on to find the patent directed to ineligible subject matter, and to dismiss plaintiff's complaint without prejudice, allowing "FairWarning [to] amend the complaint to assert a claim that is independent of the '500 patent's validity."

Motion to dismiss, granted.

FairWarning IP, LLC v. Iatric Systems, Inc., Case No. 8:14-CV-2685 (M.D. Fla. June 24, 2015) (J. Merryday)