VIRGINIA M. HERNANDEZ COVINGTON, District Judge.
This matter comes before the Court pursuant to Plaintiff Dynamic Designs Distribution, Inc.'s Motion for Summary Judgment (Doc. # 35) filed on January 24, 2014. Defendants Nalin Manufacturing, LLC and Andrew Nalin (collectively "Nalin") filed a Response in Opposition to the Motion for Summary Judgment (Doc. # 36) on February 7, 2014, to which Dynamic Designs filed a Reply (Doc. # 37) on February 17, 2014. For the reasons that follow, the Court grants the Motion for Summary Judgment in part.
Andrew Nalin is the President of Nalin Manufacturing. (Nalin Decl. Doc. # 36-1 at ¶ 2). On August 2, 2010, Mr. Nalin designed an aftermarket speaker adapter for Jeep Wrangler automobiles. (
Mr. Nalin filed a copyright application relating to the speaker adapter on February 17, 2012. (Nalin Dec. Doc. # 36-1 at ¶ 41). On July 24, 2012, the United States Copyright Office rejected the copyright application, noting, inter alia: "[b]ecause all of the elements of the work you deposited are either related to the utilitarian aspects or function, or are subsumed within the overall shape, contour, or configuration of the article, there is no physically or conceptually `separable' authorship as such. Consequently, we cannot register this claim." (Doc. # 35-6 at 4).
In May of 2011, Dynamic Designs began selling its Jeep Wrangler aftermarket speaker adapter on eBay. (Horning Aff. Doc. # 35-1 at ¶ 4). Dynamic Designs utilized the seller names "Autoware 302" and "Florida Handmade Creations." (
(Doc. # 36-8 at 2-4).
On February 29, 2012, eBay responded to Mr. Nalin's complaint by removing Dynamic Designs eBay listings under the Autoware302 account. (Doc. # 1-4; Doc. # 35-4 at 3). However, Dynamic Designs "continued selling the subject car speaker adapters under the account name `Florida Handmade Creations.'" (Horning Aff. Doc. # 35-1 at ¶ 16). Then, on February 18, 2013, Dynamic Designs "received a cease and desist letter from Mr. Nalin stating that Mr. Nalin holds the `copyright, trademark, patent pending along with trade dress protection previously recognized and enforced by eBay against user Autoware302.'" (
(Doc. # 1-9; Doc. # 35-12).
In response to the cease and desist letter, "although Plaintiff believed that it was entirely unfounded," Dynamic Designs "took down any and all of the allegedly infringing car speaker adapters being sold under the username, `Florida Handmade Creations,' on eBay" and hired counsel. (Doc. # 1 at ¶ 28; Horning Decl. Doc. # 35-1 at ¶ 15).
On March 20, 2013, Dynamic Designs filed an action for declaratory judgment of non-infringement and invalidity of Nalin's trade dress (count one), for damages based on Nalin's tortious interference with Dynamic Designs' business relationship with eBay (count two) and for damages based on deceptive and unfair trade practices under Florida's Deceptive and Unfair Trade Practices Act, § 501.201 (count three). (Doc. # 1). Nalin filed an Answer on May 10, 2013. (Doc. # 17). Dynamic Designs seeks summary judgment as to each of its complaint counts.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute alone is not enough to defeat a properly pled motion for summary judgment; only the existence of a genuine issue of material fact will preclude a grant of summary judgment.
An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party.
If there is a conflict between the parties' allegations or evidence, the non-moving party's evidence is presumed to be true and all reasonable inferences must be drawn in the non-moving party's favor.
Section 43(a) of the Lanham Act states that:
15 U.S.C. § 1125(a)(1).
As explained in
To succeed on a claim of trade dress infringement, the claimant must demonstrate: "(1) the product design of the two products is confusingly similar; (2) the features of the product design are primarily non-functional; and (3) the product design is inherently distinctive or has acquired secondary meaning."
"The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature."
The first test is "commonly referred to as the traditional test."
The second test is "commonly called the competitive necessity test."
In
The design features of the speaker adapter that Nalin contends are non-functional are (1) the presence of three mounting holes, (2) utilization of rounded corners, and (3) steel construction. The Court determines that each of these features is primarily functional and not entitled to trade dress protection.
As to Nalin's use of three holes for mounting the speaker adapter, Dynamic Designs posits that "three holes are frequently used in the speaker adapter industry for the same functional purpose for which [Nalin] use[s] them." (Doc. # 37 at 3). Dynamic Designs has filed advertisements for numerous speaker adapters, all utilizing three holes for mounting.
Dynamic Designs also asserts that "[t]he reason for using three holes in close proximity to one another is a purely functional choice" because "[s]ome speakers may have their mounting tabs in slightly different locations such that the middle of the three holes would fit; whereas other speakers may need to be mounted on the inner-most mounting holes." (Doc. # 35 at 11). Nalin Manufacturing's responses to Dynamic Designs' interrogatories lend support to Dynamic Designs' position.
Specifically, Dynamic Designs requested that Nalin Manufacturing describe "the specific features of Defendant's car speaker adapter which are the basis of the Defendant's legal contention that trade dress protection exists." (Doc. # 35-8 at 6). In response, Nalin Manufacturing did not state that using three holes was a unique non-functional feature. Instead, with respect to the three holes, Nalin Manufacturing indicated: "Due to the popularity, advertisements, industry recognition, warranty, and visible success of the Nalin Manufacturing, LLC brand, many companies have since improved upon their design to better compete
Dynamic Designs' discussion of Nalin Manufacturing's three hole pattern, which follows, is supported by Nalin Manufacturing's aforementioned discovery responses:
(Doc. # 35 at 12). Nalin has not provided any evidence tending to show that inclusion of three holes on the Nalin speaker adapter is a non-functional characteristic entitled to trade dress protection.
The Court further finds that Nalin's use of rounded corners, as opposed to sharp corners, is also a functional characteristic. Nalin Manufacturing's interrogatory answers indicate that "[r]ounding the edges is non-functional and serves no utilitarian purpose. It was done with the purpose of separating Nalin Manufacturing, LLC from any and all competitors so that customers could easily recognize and identify the highly advertized item." (Doc. # 35-8 at 7). However, Dynamic Designs points out that "common sense dictates that the use of rounded edges would be much safer to the installer than sharp or angular edges, such that competitors would be put at a competitive disadvantage if they were not allowed to use rounded edges." (Doc. # 37 at 4). Dynamic Designs also notes that "sharp edges on steel are hazardous to . . . the wiring that will necessarily be in close proximity to the speaker adapter's edges." (Doc. # 35 at 13). In further support of its contention that the utilization of rounded edges on the Nalin speaker adapter is a functional characteristic that is not entitled to trade dress protection, Dynamic Designs also points to numerous speaker adapters featuring rounded corners. (Doc. # 35-9). As the proponent of trade dress protection for a non-registered product, Nalin bears the burden of demonstrating non-functionality.
The Court also reaches the conclusion that Nalin's choice to fabricate the speaker adapter from steel is functional. In
Here, Nalin has offered no competent evidence that these characteristics (three mounting holes, rounded corners, and steel fabrication) serve a source-identifying function, or that the sum of these parts combine to become source-identifying.
The required elements of a claim for tortious interference with a contractual or business relationship under Florida law are: "(1) the existence of a business relationship that affords the plaintiff existing or prospective legal rights; (2) the defendant's knowledge of the business relationship; (3) the defendant's intentional and unjustified interference with the relationship; and (4) damage to the plaintiff."
Here, "Defendants do not dispute that they were aware of Plaintiff's relationship with eBay through the Autoware302 entity." (Doc. # 36 at 16). The evidence supports Nalin's awareness of Dynamic Designs' relationship with eBay because Nalin contacted eBay and accused Dynamic Designs of offering a counterfeit product. In addition, Nalin sent Dynamic Designs multiple items of correspondence with reference to Dynamic Designs' eBay sales, including a cease and desist letter directed to the Florida Handmade Creations account. (Doc. # 1-9). Thus, the first and second elements of the tort — Dynamic Designs' business relationship with eBay of which Nalin was aware — have been satisfied.
However, there is a disputed issue of material fact regarding whether Nalin intentionally interfered with Dynamic Designs' relationship with eBay without justification. As explained in
"Whether interference with a business relationship is privileged depends upon a balancing of the importance of the objective advanced by the interference against the importance of the interest interfered with, considering all circumstances among which the methods and means used and the relation of the parties are important."
Here, Nalin corresponded with Dynamic Designs through eBay in September of 2011, and in such correspondence, Nalin indicated that Dynamic Designs was improperly selling an "exact replica" of Nalin's speaker adapter. (Doc. # 35-2). In addition, on November 11, 2011, Nalin submitted a VeRO complaint to eBay that Dynamic Designs was counterfeiting Nalin's product. (Doc. # 35-3). However, each of Nalin's communications with eBay concerning Dynamic Designs occurred prior to the USPTO's Notice of Abandonment issued on December 23, 2011, and the July 24, 2012, rejection of Nalin's copyright application. Thus, at the time of Nalin's correspondence to eBay, Nalin's intellectual property applications had not yet been rejected or otherwise adversely determined.
At this juncture, it is undisputed that Nalin has no trademark or copyright protection, and by issuance of the present Order, the Court finds that Nalin also lacks trade dress protections. However, there is a genuine issue of material fact as to whether, in September and November of 2011, Nalin authored his communications to eBay about these rights in good faith. "When there is room for different views, the determination of whether the interference was improper or not is ordinarily left to the jury, to obtain its common feel for the state of community mores and for the manner in which they would operate upon the facts in question."
In assessing the evidence bearing on the intentional tort of tortious interference with a business relationship, the jury, rather than the Court, should decide whether Nalin's conduct falls within the competition privilege, or whether he employed an improper and tortious campaign against Dynamic Designs. Summary Judgment is therefore inappropriate.
Last, Dynamic Designs contends that Nalin violated Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201, et seq. ("FDUTPA"). FDUTPA makes it unlawful to engage in "unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce." Fla. Stat. § 501.204(1). "To state a claim under FDUTPA, a party must generally allege: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages."
A deceptive act is "an act that is likely to mislead consumers."
Dynamic Designs' FDUTPA count, asserted in count three of the Complaint, alleges inter alia that "Defendants were aware that its product was not protected by any valid trade dress, design patent or copyright when it contacted eBay through its VeRO program, but did so intentionally to have Plaintiff's listing taken down and to harm Plaintiff's business." (Doc. # 1 at ¶ 61).
In support of the Motion for Summary Judgment, Dynamic Designs argues, "It is undisputed that Defendants contacted Plaintiff's sales marketplace (eBay) and made false statements concerning intellectual property protection." (Doc. # 35 at 23). Nalin characterizes this argument as "incredible" and asserts: "Defendants are at a loss at how it could possibly be undisputed that Defendants made false statements to eBay. The evidence shows Defendants' statements to eBay simply alleged the Dynamic Designs' speaker adapter infringed Defendant's rights ..." (Doc. # 36 at 18).
To a large extent, Dynamic Designs' FDUTPA claim is predicated on the same allegations as its tortious interference claim. In essence, in both counts, Dynamic Designs asserts that Nalin made intentionally false statements to eBay with reference to the speaker adapter with the purpose of harming Dynamic Designs. Dynamic Designs' tortious interference and FDUTPA claims are inextricably intertwined. Consistent with the Court's determination that summary judgment is not appropriate as to the tortious interference claim due to the presence of genuine issues of material fact, the Court likewise determines that Dynamic Designs is not entitled to summary judgment as to its FDUTPA claim.
Accordingly, it is
Plaintiff Dynamic Designs Distribution, Inc.'s Motion for Summary Judgment (Doc. # 35) is