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Businesses have several available causes of action to claim when a competitor attempts to replicate the business’ appearance in advertising or its products.  Trademark law, such as the Lanham Act, provides many remedies to a business which believes that a competitor is emulating the business and creates a “likelihood of confusion.” Consumer protection laws, like the Florida Unfair and Deceptive Trade Practices Act can also cover such conduct because it qualifies as an unlawful “unfair” or “deceptive” method of competition.  Also available to aggrieved businesses is a claim that the competitor violated their copyright.  When it is appropriately brought, copyright law provides unique remedies and may provide recovery which might not otherwise be unlawful under trademark or consumer protection laws.  However, copyright law has a more limited application in comparison to trademark law in cases involving emulation of design amongst competing businesses, as reflected in the recent case, Off Lease Only, Inc. v. Lakeland Motors, LLC, 20-10825, 2020 WL 5553301 (11th Cir. Sept. 17, 2020).  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

When a competitor emulates the appearance of a company’s products or advertising, the first cause of action to consider is usually under trademark law.  Trademark law was enacted to prevent a business emulating or copying the appearance of another.  Copyright law is generally more concerned with protecting artists from unlawful reproductions of their work, such as in music, film, or in books.  However, in limited scenarios, an aggrieved business may also have the opportunity to initiate business litigation under copywrite law when a competitor copies the artistic qualities of a business’ advertising or products.

Title seventeen of the United States Code protects “in original works of authorship fixed in any tangible medium of expression.  17 U.S.C. § 102(a).  However, “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”  17 U.S.C.A. § 102 (b).  Compilations of “work formed by the collection and assembling of preexisting materials” such that “the resulting work as a whole constitutes an original work of authorship” may also be protected by copyright. 17 U.S.C. § 101.  The copyright protection for compilations only protects the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material.  The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.”  17 U.S.C. § 103(b).  Cases deciding business litigation involving copyrights for compilation work has made clear that the protection is far more limited than copyright protection for an original work.  Intervest Const., Inc. v. Canterbury Estate Homes, Inc., 554 F.3d 914 (11th Cir. 2008) (“Accordingly, any similarity comparison of the works at issue here must be accomplished at the level of protected expression—that is, the arrangement and coordination of those common elements…. In undertaking such a comparison, it should be recalled that the copyright protection in a compilation is ‘thin’”).

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A non-compete period may not be tolled because an employee is called for active military duty. While an employee may not be denied reemployment on account of a person’s performance of military duty, under the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4311, a court may consider the fact that the employee was not competing when serving his or her military duties. Peter Mavrick is a Fort Lauderdale non-compete attorney, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete agreement litigation,  employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

An example of this circumstance occurred in the case of SCI Funeral Services of Florida, Inc. v. Henry, 839 So. 2d 702 (Fla. 3d DCA 2002). Anel Henry (Henry) was employed by SCI Funeral Services of Florida, Inc. (SCI) as a sales department group leader. He signed a non-compete agreement with SCI, which prohibited him from competing with SCI for a period of twelve months after his employment had been terminated for any reason, with or without cause. Henry later became the subject of SCI’s investigation of a sexual harassment claim. SCI temporarily suspended his employment while they conducted their investigation. Henry was also on reserve duty with the United States Army.  During the suspension, he was called up for military service in Panama. Henry received a phone call from a SCI employee to warn him that SCI’s sales manager was terminating his employment.

Henry received orders from the Army extended his tour of duty to total about one year. After Henry returned from service in Panama, he requested to resume employment, but SCI refused. Henry then applied for work with Woodlawn Park Cemetery Company (Woodlawn), a competitor of SCI. Woodlawn offered Henry a job, which would begin in the following month. SCI’s counsel sent a letter to the Henry, with a copy to Woodlawn, that threatened a lawsuit for violation of the non-compete agreement.  SCI contended that SCI did not formally terminate Henry until his return from military duty, therefore the twelve-month period began when he came back from Panama rather than when he left about twelve months earlier. Woodlawn terminated Henry’s employment due SCI’s threats to enforce the non-compete agreement. SCI, however, never filed suit to enforce the non-compete agreement.

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Most contractual disputes involve parties that dispute the meaning of particular contract terms.  Whether a party will prevail in a breach of contract case will often depend on the interpretation of terms or phrases within the contract.  Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete agreement litigation,  employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

Contracts establish the rights and responsibilities between the parties agreeing to the contract.  The question as to whether a contract establishes liability depends on the terms of the contract and what the parties intended.

Resolution of a contractual dispute is often dependent upon contract interpretation.  Courts have established general rules for interpreting contracts in business litigation.  “When interpreting a contract, the court must first examine the plain wording of the contract for evidence of the parties’ intent.” Perez-Gurri Corp. v. McLeod, 238 So. 3d 347 (Fla. 3d DCA 2017).  “[W]ords in a contract are presumed to have been used with their ordinary and customary meaning.” Emergency Assocs. of Tampa, P.A. v. Sassano, 664 So.2d 1000 (Fla. 2d DCA 1995).  “The expressed intent of the parties is the controlling factor.  Intent unexpressed will be unavailing, and substantial ambiguity or doubt must be resolved against the person claiming the right to enforce the covenant.”  McInerney v. Klovstad, 935 So. 2d 529 (Fla. 5th DCA 2006).  “[A] court must construe a contract in a manner that accords with reason and probability; and avoid an absurd construction.” Kipp v. Kipp, 844 So.2d 691 (Fla. 4th DCA 2003).

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Congress enacted the Defend Trade Secrets Act (DTSA) to supplement the state law trade secret protection available to aggrieved businesses.  While the Florida Uniform Trade Secrets Act (FUTSA) and DTSA cover essentially identical conduct, the DTSA provides unique opportunities for plaintiffs to pursue their case in a federal forum and allows plaintiffs to seek an order of seizure.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Trade secret law is generally uniform between the states.  Florida codified trade secret law when it enacted the Uniform Trade Secrets Act in 1988.  FUTSA is substantially the same as Uniform Trade Secret Act (UTSA), which was enacted in 47 other states.  FUTSA specifically recognizes that it should be interpreted in conformity with the other states’ versions of the UTSA.   § 688.009, Florida Statutes (“Sections 688.001-688.009 shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it”).

The DTSA, 18 U.S.C. 1831, et seq., was enacted on May 11, 2016 to supplement the trade secret rights already provided under state law.  DTSA makes unlawful the same conduct which is already unlawful under UTSA/FUTSA.  18 U.S.C. § 1839(3) (defining “trade secret” as information which “the owner thereof has taken reasonable measures to keep such information secret; and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information”); § 688.002 (4), Florida Statutes (defining “trade secret” as information which [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy”).

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Former employees who quit their jobs will sometimes sue their former employers for retaliation based on the theory that they were “constructively” terminated.  Under federal employment law, a “constructive” termination occurs when an employee’s resignation is caused by involuntary working conditions, duress, or an employer’s misrepresentation.  However, the threshold of conduct which qualifies as a constructive termination or discharge is high.  Because the threshold is high, employers can often show that the discharge was not “constructive” and thereby defeat claims of retaliation. Peter Mavrick is a Fort Lauderdale employment attorney, who defends businesses and their owners against employment law claims. Such claims include alleged employment discrimination and retaliation as well as claims for overtime wages and other related claims.

“A plaintiff asserting a retaliation claim under Title VII must show that: (1) he engaged in statutorily protected activity; (2) he suffered a materially adverse action; and (3) there was a causal connection between the protected activity and the adverse action.”  Howard v. Walgreen Co., 605 F.3d 1239 (11th Cir. 2010).  Mavricklaw.com has published several articles exploring how employers can prevail on the element of “protected activity.”  Employers may also challenge the element as to whether an “adverse action” occurred.

In the retaliation context, an action is materially adverse when it is “harmful to the point that [it] could well dissuade a reasonable worker from making or supporting a charge of discrimination.” See Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006).  An employee that is fired has incurred an adverse action under retaliation law.  Normally, an employee who resigns cannot show that they have experienced an adverse action, however, an employee can claim that his or her resignation was forced by the employer.  “[W]hen an employee involuntarily resigns in order to escape intolerable and illegal employment requirements to which he or she is subjected because of race, color, religion, sex, or national origin, the employer has committed a constructive discharge.” Morgan v. Ford, 6 F.3d 750 (11th Cir. 1993).

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Section 542.335 of the Florida Statutes permits non-compete agreements arising from: a) the sale of a business, b) an employment, agency, or independent contractor relationship, c) a licensing relationship, or d) a partnership. Contracts that restrain one from exercising a lawful profession, trade, or business, and that do not fall within the exceptions of the statute are generally void.  However, when void non-compete agreement has been incorporated into a final judgment, it may still be enforceable.  Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete agreement litigation,  employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

An example of this circumstance occurred in the case of Miller v. Preefer, 1 So. 3d 1278 (Fla. 4th DCA 2009). John W. Miller (Miller) owned and operated numerous restaurant and bar establishments under the “Ale House” name. Miller and nine associated companies filed a lawsuit against Jay Preefer, Richard Preefer, Jay Starr, and other associated companies (Preefer defendants). Miller’s lawsuit against Preefer defendants alleged trademark and service mark infringement based on Preefer defendants’ use of the name “Ale House.” Miller also alleged that Preefer defendants engaged in a pattern of unfair competition by registering various corporate names that included the words “Ale House,” and by utilizing Miller’s business model and menus.

The parties settled the lawsuit and entered a mediated settlement agreement. The parties agreed, among other things, on a non-compete provision that prohibited Miller from conducting a related restaurant business within a specific geographical area of Palm Beach County, Florida for fifty years. The trial court dismissed the lawsuit with prejudice as to all claims. The trial court entered a final judgment of dismissal which incorporated the settlement agreement. Jay Preefer sued Miller and alleged violations of the settlement agreement. Miller filed a counterclaim seeking a declaratory judgment finding that the non-compete was unenforceable. The parties settled the lawsuit and Miller’s counterclaim was dismissed without prejudice (meaning it can be refiled).

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Companies in business litigation often want to sue persons who make slanderous statements or outright lies about them during legal proceedings. Under Florida’s absolute litigation privilege, a defendant may slander and lie and still be absolutely immune from a later lawsuit for defamation, tortious interference with a business relationship, and some other causes of action, so long as the slander and lies were made in the courtroom or during the formal discovery process and had some relation to the litigation.  Some litigants have tested the limits of what could be considered an act done in the course of or in relation to litigation to avoid liability for such statements. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

An example of this occurred in the case of Arko Plumbing Corp. v. Rudd, 230 So. 3d 520 (Fla. 3d DCA 2017), Arko Plumbing Corporation (Arko) identified cracks in pipes, assisted homeowners in filing claims under their insurance policies, and replaced the damaged cast-iron pipes. Arko used a MotoMon Global Positioning System, an internet-based computer program, that recorded historical and real-time access to the location of Arko’s service vans. John Collucci (Collucci), a former Arko employee possessed a, still-active password to the MotoMon program. Michael Rudd (Rudd) and his law firm, Rudd & Diamond, P.A., represented insurance companies on claims that they breached homeowner’s insurance policies by not covering Arko’s repairs to the homeowners’ damaged pipes. Colluci assisted Rudd and his firm by providing access to the historical location information for eighteen Arko clients. Rudd and his firm issued subpoenas to Arko for its MotoMon information, including information related to location of Arko service vans at specific residences. Rudd and his firm conducted examinations under oath required by the insurance policy and asked questions based information they obtained through the Motomon system concerning Arko’s historical location information of its service vans.

Arko filed a lawsuit against Rudd and his firm, and various other defendants, including Collucci. Arko’s claims against Rudd and his firm were based on: (a) their unauthorized access to the MotoMon account, and (b) the questions asked during the examination under oath, which were based on information from the MotoMon system. Rudd and his firm moved for summary judgment based on, among other things, the litigation immunity privilege and because the information on the MotoMon program was not a trade secret under Florida law. The trial court granted the motion for summary judgment. Arko moved for rehearing, but it was denied. Arko immediately appealed.

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Discovery is a powerful tool in litigation which can be used to acquire information necessary to resolve the case.  However, the discovery process is susceptible to abuse.  Parties can request material that is not necessary, simply to increase the costs for their adversary or expose private or embarrassing information.  Whether financial discovery should be ordered is often disputed. A party who is the target of an inappropriate discovery request can block this discovery by seeking a protective order.  A party propounding discovery will often claim that the material is important for the disposition of the case while the party subject to discovery will often argue that it is irrelevant.  Florida employers will benefit from the holding in a recent case before Florida’s Fourth District Court of Appeal, which held that financial discovery may be limited in cases involving the Florida Civil Rights Act (FCRA).  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

Discovery in Florida courts is limited to matters which are relevant to the resolution of the business litigation dispute or could lead to evidence concerning the resolution of the dispute.  Fla.R.Civ.P. 1.280 (describing the bounds of discovery).  In business litigation, special rules apply when financial discovery is requested, such as a party’s tax returns.  Florida recognizes “the disclosure of personal financial information may cause irreparable harm to a person forced to disclose it, in a case in which the information is not relevant.” Friedman v. Heart Inst. of Port St. Lucie, 863 So.2d 189 (Fla.2003).  But, “where materials sought by a party ‘would appear to be relevant to the subject matter of the pending action,’ the information is fully discoverable.” Bd. of Trs. of the Internal Improvement Trust Fund v. Am. Educ. Enters., LLC, 99 So.3d 450 (Fla.2012).  “[T]he general rule in Florida is that personal financial information is ordinarily discoverable only in aid of execution after judgment has been entered, [however], where materials sought by a party ‘would appear to be relevant to the subject matter of the pending action,’ the information is fully discoverable.”  Friedman v. Heart Inst. of Port St. Lucie, Inc., 863 So. 2d 189, 194 (Fla. 2003); see Woodward v. Berkery, 714 So.2d 1027 (Fla. 4th DCA 1998). (“[T]he constitutional right of privacy undoubtedly expresses a policy that compelled disclosure through discovery be limited to that which is necessary for a court to determine contested issues[…]”).

The limitations on financial discovery changes when punitive damages are at issue.  Financial discovery may be proper in business litigation where punitive damages are involved because the court or the jury is permitted to considered how much money the defendant has in its punitive damages analysis.  Under an earlier standard, savvy plaintiffs would claim punitive damages without a basis merely to justify the imposition of financial discovery.  The Florida legislature sought to curb this practice when it enacted § 768.72, Florida Statutes.  This rule requires a plaintiff to first request from the court permission to make a punitive damages claim.  If granted, the plaintiff may then seek financial discovery.

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A person or company must have standing (the legal right to assert a claim) to file a lawsuit at the commencement of the case. In other words, a party cannot file a lawsuit based on a contract until it has been assigned those contractual rights.  Businesses often have multiple corporate entities that act interchangeably, however, only the corporate entity with contractual rights may assert a claim. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

“A party must have standing to file suit at its inception and may not remedy this defect by subsequently obtaining standing.” Matthews v. Fed. Nat. Mortg. Ass’n, 160 So. 3d 131 (Fla. 4th DCA 2015). Standing in business litigation may be established by an assignment of contractual rights prior to the filing of the complaint. In foreclosure lawsuits standing may also be established by show of an equitable transfer of the mortgage before the lawsuit was commenced. In Matthews, the appellate court held that Fannie Mae failed to establish standing at the beginning of the lawsuit because there was no assignment that pre-dated the lawsuit and the promissory note attached to the complaint was not made payable to Fannie Mae. The promissory note also was not endorsed in blank, so that it would be actionable by whomever possessed it. Matthews reversed the final judgment of foreclosure because there were no apparent contractual rights.

Court’s construe the individual circumstances of each case in business litigation to determine whether standing exists. “Officers, directors, or stockholders of the client, and others not in privity with the [contractual party], lack standing to maintain an action for breach of contract.” Mulligan v. Wallace, 349 So. 2d 745 (Fla. 3d DCA 1977). In Mulligan, after an intracorporate conflict for management of a corporation, the former corporate officers and directors filed a lawsuit against the company’s accounting firm for, among other things, breach of contract. The trial court dismissed the breach of contract count and found that these former officers and directors did not have standing to sue the accounting firm. The former officers and directors immediately appealed and contended that they were third-party beneficiaries of the accounting contract. The appellate court disagreed. The appellate court held that because 1) accountants are liable to their clients, which was the corporation, and 2) the primary injury of the breach of contract was to the corporation, therefore, those former officers and directors’ circumstances did not establish their standing for a breach of contract claim.

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Employees sometimes raid their employer’s trade secrets prior to quitting so that they may have an advantage starting up their own business or in their employment with a competitor.  An aggrieved employer may sue under the Florida Uniform Trade Secrets Act (FUTSA) to recover those trade secrets and for any damages arising from the theft of trade secrets.  However, FUTSA has many requirements that must be met before an employer can prevail on a misappropriation of trade secrets claim.  An important, but easily missed requirement, is that business litigation concerning theft of trade secrets must specify in the complaint what exactly are the trade secrets.  This article is a continuation of a prior article discussing the requirement for the identification of a trade secret.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

The Florida Uniform Trade Secret Act (FUTSA) is nearly identical to the Uniform Trade Secret Act (UTSA) enacted by most states.  To prevail in business litigation concerning trade secret misappropriation, a plaintiff must sufficiently identify its trade secrets.  “The plaintiff must, as a threshold matter, establish that the trade secret exists. To do so, it must disclose the information at issue.”  Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678 (Fla. 2d DCA 2010).  The requirement that a plaintiff identify the particular basis for a trade secret is not explicitly found in the Uniform Trade Secret Act.  Nevertheless, the UTSA necessarily requires that a plaintiff identify a trade secret with particularity, because it is impossible to evaluate whether information fulfills the basic requisite elements of trade secret law without the trade secret being identified.   Altavion, Inc. v. Konica Minolta Sys. Lab., Inc., 171 Cal. Rptr. 3d 714 (Ct. App. 2014) (“‘[U]ntil the content and nature of the claimed secret is ascertained, it will likely be impossible to intelligibly analyze the remaining’ elements that constitute the cause of action”).  Without identifying with particularity the trade secret at issue, it is impossible for the court to make to determine that each of the elements of a trade secret are met: (1) “information”; (2) “derives independent economic value” “from not being generally known”; (3) is “not readily ascertainable by proper means”; and (4) “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”  See §688.02 (4)(a)-(b).

Failing to adequately identify a trade secret can be a fatal error for an employer in a trade secret misappropriation case.  At the pleadings stage of litigation, “[a] party proceeding under Florida’s Uniform Trade Secrets Act need only describe the misappropriated trade secrets with ‘reasonable particularity.’” Textile USA, Inc. v. Diageo N. Am., Inc., 15-24309-CIV, 2017 WL 10187642 (S.D. Fla. July 31, 2017).  “[A plaintiff] cannot state a claim for trade secret protection under UTSA by simply ‘producing long lists of general areas of information which contain unidentified trade secrets.’ Instead he must articulate protectable trade secrets with specificity or suffer dismissal of his claim.”  Nilssen v. Motorola, Inc., 963 F. Supp. 664 (N.D. Ill. 1997); GlobalTap LLC v. Elkay Mfg. Co., 13 C 632, 2015 WL 94235 (N.D. Ill. Jan. 5, 2015) (“[T]o sustain a trade secrets claim a party must do more than simply persist in the blunderbuss statement that ‘[e]verything you got from us was a trade secret’ … That view is wrong as a matter of law”).

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