Futuristic Fences, Inc. v. Illusion Fence Corp.

• Decision Date: 30 April 2008
• Docket Number: No. 06-22042-CIV.,06-22042-CIV.
• Citation: 558 F.Supp.2d 1270
• Parties: FUTURISTIC FENCES, INC., Plaintiff, v. ILLUSION FENCE CORP., and Miguel Dominguez, Defendants.
• Court: U.S. District Court — Southern District of Florida

558 F.Supp.2d 1270

FUTURISTIC FENCES, INC., Plaintiff, v. ILLUSION FENCE CORP., and Miguel Dominguez, Defendants.

No. 06-22042-CIV.

United States District Court, S.D. Florida.

April 30, 2008.

COPYRIGHT MATERIAL OMITTED

John H. Faro, Faro & Associates LLC, for Plaintiff.

Albert Bordas, Albert Bordas PA, Miami, FL, Leonardo G. Renaud, Gatesi & Associates, Miami Lakes, FL, for Defendants.

ORDER DENYING PLAINTIFF'S MOTION TO STRIKE DEFENDANTS' AFFIDAVIT; DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGEMENT; DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT; ENTERING SUA SPONTE SUMMARY JUDGEMENT IN FAVOR OF DEFENDANTS AS TO COUNT I

ALAN S. GOLD, District Judge.

THIS CAUSE is before the Court upon: (1) Plaintiff's Motion to Strike Defendants' Affidavit [DE 114]; (2) Defendants' Motion for Summary Judgment [DE 95]; and, (3) Plaintiff's Motion for Summary Judgment as to Count I of the Amended Complaint [DE 102]. The parties have filed responses and replies, as well as affidavits and other summary judgment evidence in support of their arguments. I held oral argument on the subject motions on April 18, 2008. Thereafter, I instructed the parties to file supplemental briefs on the Central District of California's decision in Avery Dennison Corporation v. Acco Brands, Inc., et al, Case No. 99-1877DT, 2000 WL 986995 (C.D.Cal. Feb.22, 2000). Having reviewed the motions and related pleadings, the record, the parties' arguments and the relevant case law, I conclude that Plaintiff's Motion to Strike Defendant's Affidavit and Plaintiff's Motion for Partial Summary Judgment as to Count I of the Amended Complaint must be denied. As to Defendants' Motion for Summary Judgment, while I deny the motion on the grounds raised by Defendants, I find it appropriate to enter sua sponte summary judgment in favor of Defendants as to Count I of the Amended Complaint because the cease and desist letters at issue do not constitute commercial speech as a matter of law.

I. Factual Background

A. Undisputed Facts¹

The following facts are undisputed and supported by evidence in the record:

1. Plaintiff Futuristic Fences, Inc. ("FFI"), a Florida corporation, was formed on October 2004, to manufacture and distribute decorative fence panels. (Piorno Declaration, DE 26 at ¶ 2).

2. Defendant Illusion Fence, Corp. ("IFC"), a Florida Corporation, was formed by Defendant Miguel Dominguez on November 18, 2004, to manufacture and distribute ornamental fence panels. (Plaintiff's Statement of Undisputed Facts, DE 24 at ¶¶ 16-17; Defendant's Statement of Disputed Facts, DE 31 at ¶ 13).

3. Jova Business, incorporated in the State of Florida on February 1999, manufactured and sold decorative fence panels in the United States from approximately February 1999 until October 2004. (Plaintiff's Statement of Undisputed Facts, DE 24 at ¶¶ 3-5). Mr. Lazaro Jova was the owner and president of Jova Business and the designer of the ornamental fence panel which the parties refer to as the "Jova Design" panel. (Jova Declaration, DE 25 at ¶ 1).

4. Mr. Dominguez bought fence panels corresponding to the Jova Design from Mr. Jova from about February 1999, up to and including October 2004. (DE 25 at U 8).

5. On October 2004, Mr. Jova sold the equipment used in the manufacturing of the decorative fence panels to Mr. Matias Piorno, President of FFI. (DE 25 at ¶ 10; DE 26 at ¶ 1). Shortly after acquiring the Jova Business equipment, Mr. Piorno formed FFI. (DE 24 at ¶¶ 9-10).

6. IFC owns U.S. Design Patent D511,218-the '218 Dominguez Patent ("218 Patent" or "Dominguez Patent") and manufactures and distributes fence panels corresponding to the design of the '218 Patent. (DE 24 at ¶ 17). The inventor of the '218 Patent is Mr. Dominguez. (Id. at ¶ 15).

7. There is no prior filed application, to which the '218 Patent application claims priority. (Id. at ¶ 21).

8. Mr. Dominguez was aware of the Jova Design fence panel at the time he submitted his patent application but did not disclose it to the United States Patent Office. (DE 43 at ¶ 10).

9. Plaintiff's products are sold and offered for sale to retail customers throughout the State of Florida. (Plaintiff's Statement of Uncontested Facts, DE 103 at ¶ 1). Plaintiff also sells its products through distributors, who in turn offer Plaintiff's products for resale throughout Florida. (Id. at ¶ 2). The distributors also offer Plaintiff's products for export to South and Central American countries. (Id. at ¶ 3). On at least one occasion, the Plaintiff sold its fence panels to an individual for installation at a residence in North Carolina. (Id. at ¶ 4).

10. Plaintiff's current and former distributors include: World of Tube Corp.; Anchor Fence Manufacturing Corp.; Fence City, Inc.; and, Orange Steel & Ornamental Supply, Inc. (Id. at ¶ 9).

11. According to Fence City Inc.'s Vice President, Rolando Torres, Fence City Inc. has been purchasing and distributing fence panels corresponding to the Jova Design prior to October 2004, and has continued to purchase and distribute these fence panels, manufactured by FFI, from and after October 2004, up to and including the present time. (Torres Declaration, DE 112 at ¶¶ 3-4). All of the products distributed by Fence City Inc. are advertised and offered for sale in Florida, and for export from the State of Florida. (Id. at ¶ 5).

12. Plaintiff's products are advertised in various media in Florida which exposes its products to customers in international markets, including the markets of the countries of South and Central America. (Id. at ¶ 5). In addition, Plaintiff advertises its products in electronic yellow page listings on the internet, where FFI is listed as a supplier offence panels by websites that feature and identify businesses by product description. (Id. at ¶ 6). In Plaintiff's case, the products are identified under the categories of "fence", "fence panels," and/or "metal fences." (Id.).

13. IFC fence panels at issue in this case have never being sold outside of the State of Florida. (Dominguez Declaration, DE 95 at Ex. A). Defendants do not conduct any business outside of the State of Florida. (Id.).

14. Plaintiff and Defendants are competitors. (DE 103 at ¶ 7). They promote and/or sell their products to the same distributors within Florida. (Id. at ¶ 8).

15. On March 1, 2006, Defendants' counsel sent four cease and desist letters to: World of Tube Corp.; Anchor Fence Manufacturing Corp.; Fence City, Inc.; and, Orange Steel and Ornamental Supply, Inc. (Am. Compl., Composite Ex, 4). The letters stated, in pertinent parts,

Please be advised that we represent Illusion Fence Co.... in connection with the above-referenced matter [Re: Infringement of United States Patent No. D511,218]. It has come to our client's attention that your company [sic] in cooperation with Futuristic Fences, Inc.... and Mr. Matias Piorno, are manufacturing and/or distributing and/or selling fence panels, infringing our client's patent rights.

...

Your company must immediately cease and desist from manufacturing and/or distributing and/or selling the fence panel patented under the above-referenced United States Patent.

Unless a reply is received within ten (10) days from the day you receive this letter, we will resort to legal remedies.

(Id.).

16. On August 15, 2006, FFI filed the instant action [DE 1]. The initial complaint plead claims for Unfair Competition and Trade Libel under the Lanham Act, and sought a judicial declaration of non-infringement and injunctive relief. Defendant IFC brought a counterclaim for willful infringement.

17. On September 27, 2007, following a Markman Hearing and oral argument on Plaintiff's motion for partial summary judgment, I issued an Order granting summary judgment in favor of Plaintiff as to Count II of the Complaint, seeking a declaration of non-infringement, and as to the sole counterclaim. (See Order dated Sept. 27, 2008, DE 59). I also granted Plaintiff leave to file an amended complaint adding Mr. Miguel Dominguez as a Defendant and asserting a new claim for Unfair Competition under the Lanham Act, based on patent misuse. (See Am. Compl., DE 90). On November 19, 2007, I denied Plaintiff's Motion for Injunctive Relief [DE 84].

18. On December 19, 2007, Defendants moved for summary judgment as to all counts of the Amended Complaint [DE 95]. On January 11, 2008, Plaintiff moved for summary judgment as to Count I of the Amended Complaint (Unfair Competition, False Advertising/Misrepresentation).

II. Legal Standard for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure authorizes summary judgment when the pleadings and supporting materials show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Johnston v. IVAC Corp., 885 F.2d 1574, 1577 (Fed.Cir.1989). The court's focus in reviewing a motion for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 252, 106 S.Ct. at 2512.

The moving party bears the initial burden under Rule 56(c) of demonstrating the absence of a genuine issue of material fact. Avia Group Int'l, Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1560 (Fed.Cir.1988). Once this burden is satisfied, the burden shifts to the party opposing the motion to go beyond the pleadings and designate "specific facts showing that there is a genuine issue for trial." Celotex v. Catrett, All U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Thus, a non-movant "must do more than present some evidence on an issue it asserts is disputed." Avia Group Int'l, Inc., 853 F.2d at 1560. A factual dispute is genuine only if the evidence is such that a reasonable fact finder could return a verdict for the non-moving party....