Opinion
Nos. 02-14102-CIV-MIDDLEBROOKS/LYNCH, 02-14283-CIV-MIDDLEBROOKS/LYNCH.
February 10, 2004
ORDER
THIS CAUSE came before the Court upon a bench trial during which the Court heard testimony from the parties. At the conclusion of the bench trial, the Court provided the parties the opportunity to participate in post trial briefing (DE 119). Having now reviewed the parties' post trial submissions and the testimony of the bench trial, the Court is fully advised in the premises.
The trial transcript will be cited by volume and page number. For example, volume one, page eight will be cited as 1:8.
Each party submitted a post trial brief and a post trial response brief. These briefs will be cited by the party's name followed by brief or response and a pin citation to the appropriate page number or paragraph number depending upon the format of the party's submission.
Facts
Maverick Boat Company, Inc. ("Maverick"), American Marine Holdings, Inc. ("AMH"), and Blazer Boats, Inc. ("Blazer") are all manufacturers of recreational boats. Maverick, AMH, and Blazer all sell a type of boat known as the "bay boat." Maverick builds and sells boats under the trademark Maverick and Pathfinder. AMH builds and sells boats under the trademark Pro-Line and Donzi. Blazer makes boats under the trade name Blazer Bay.The Pathfinder 2200 V-Hull Bay Boat was introduced at Maverick's July 1998 dealer meeting. More than thirty of the Pathfinder 2200 V-Hull design boats were sold in 1998. Following the initial sale of the Pathfinder 2200 V-Hull, Maverick became aware of some problems with the Pathfinder tooling. Maverick received information that some customers were complaining about the "sheer line" on the boats being. The sheer line is formed by the intersection of the hull sides with the top of the deck. The person primarily charged with correcting the sheer line at Maverick was Paul Ellig. Ellig testified that irregularities in the Pathfinder's lines were not intended to be present in the original boat, and were the result of mistakes.
Because the sheer line was off, other boat lines including the "style line" and "chine line" were also off. A style line is the offset made on the hull sides to establish a "unique" graphic form or "signature" of the model or brand name. A chine line is the line formed by the intersection of the hull lines with the bottom of the boat. Ellig testified that once an element of a boat is changed because of an irregularity, other aspects of the boat are affected.
Ellig was not sure whether the sheer line was off by more or less than an inch. He could not estimate the difference in the highs and lows of the sheer line, and stated that there was no way to obtain such information. Maverick has no records to quantify the amount of change made to any of the boat lines. Maverick has no internal memoranda, drawings, correspondence or documents of any kind that refer to the "revised design."
After the original mold had been retooled, there was a time when both the "original design" and the "revised design" were both in production. On or about May 4, 1999, Maverick began shipping boats with the new design. The name and model number of the boat remained the same. Maverick advertising never mentioned the design change. For a period of time Maverick sold both the "original design" and the "revised design," and never told its dealers or the public which design they were getting.
Some time in 2000, Maverick's president, D. Scott Deal, directed Jim Leffew, Maverick's Vice President of Manufacturing, to get all the Maverick boats that were applicable registered under the Vessel Hull Design Protection Act ("VHDPA"). The first registration selected by Mr. Leffew was for the Pathfinder 2200 V-Hull Bay Boat. Mr. Deal did not give Mr. Leffew any specific instructions regarding completing the registration for the Pathfinder 2200 V-Hull boat.
On February 27, 2001, Maverick submitted the application for registration number DVH 0049 to the United States Copyright Office. Form DVH 0049 identifies the make and model of the vessel as a "Pathfinder 2200 Bay Boat (V-Hull design)." The type or style of design for which registration is sought is identified as "fiberglass single V-Hull and deck." Under the section requesting a general statement setting forth the salient features of design, Maverick put "hull shape and design and deck shape, design and features." In DVH 0049, Maverick states that the design was made public on February 15, 1999. The photographs accompanying DVH 0049 were taken by Leffew.
In selecting the photographs to accompany DVH 0049, Leffew did not give any thought as to the model year of the boat depicted in the photographs and cannot tell the model year of the boat depicted in the photographs. In February 2001, Maverick did not own any boats of the "original design." Leffew testified that the boat in the photograph "look[ed] like a new boat," but that he could not be sure. The drawing accompanying DVH 0049 was also made by Leffew. The drawing was made from measurements that were taken from boats that were currently in production.
The date of registration/publication for DVH 0049 is March 5, 2001. Maverick admitted in its counterclaim that registration no. DVH 0049 is invalid, because the vessel hull design which is the subject of the registration was made public more than two years prior to the filing of the application which matured into the registration. Furthermore, the alleged "original design" of its bay boats was made public before the October 28, 1998 effective date of the VHDPA.
On April 10, 2001, Maverick submitted a second application for the Pathfinder 2200 V-Hull, registration number DVH 0056 to the United States Copyright Office. The application was also completed by Leffew. This application and registration identify the make and model of the vessel and the type and style of design as "Pathfinder 2200 Bay Boat (V-Hull Design)." The type or style of the design for which the registration was sought is identified as "fiberglass single V hull and deck." The general statement setting forth the salient features of the design identifies "hull design and shape, style line modification." The registration further states the design is a "[n]ew improved version of earlier design. Revised original hull (forward) shape, style line location." The photographs that Leffew submitted with the application for DVH 0056 were taken by Leffew. Leffew did not know the model year of the boat depicted in the photographs submitted.
The date of registration for DVH 0056 is April 19, 2001. DVH 0056 states that May 4, 1999 is the date this "revised design" was introduced to the public. At trial, Maverick did not produce any documents or other tangible evidence to substantiate that May 4, 1999, was the actual date the "revised" design sought to be registered was made public. Testimony at trial established that May 4, 1999 was a "good faith estimate" of when this design was introduced to the public.
AMH began its efforts to develop the Pro-Line 22 Bay Boat in or around October or November 2000. AMH began this process by researching bay boats and assessing whether or not to manufacture its own. AMH acquired a Pathfinder boat to use as a starting point for its bay boat. The Pathfinder acquired by AMH did not contain any design notice as required by the VHDPA. In April of 2001, AMH began building its Pro-Line Bay Boat. Its mold for the boat was completed in June 2001 and manufacture of the boat began no later than June of 2001. AMH sold its first Pro-Line 22 Bay Boat in July 2001.
Some time during summer 2001, Maverick learned that AMH was marketing a boat with a vessel hull that appeared to have been copied from a Pathfinder hull. Maverick then requested Lee Dana, an architect and small craft designer, to analyze the respective hull designs of the Pathfinder and the Pro-Line, and make a determination as to the similarities. On December 3, 2001, Dana sent a letter to Maverick stating, in part, that "it is very probable that the mold for the 22 Pro-Line was `back cast' from a 22 Pathfinder Hull." In August 2001, AMH learned of Maverick's application for copyright registration of the Pathfinder boat when Maverick sent a cease-and-desist letter. In January 2002, Deal, acting on behalf of Maverick sent out letters to dealers ("dealer letters") selling Pro-Line 22 Bay Boats stating that Maverick had evidence that AMH had copied Maverick's design and sales of the Pro-Line 22 Bay Boat would expose dealers to liability under the VHDPA. Shortly thereafter, at least one AMH dealer contacted AMH and cancelled orders for the Pro-Line bay boats.
Maverick's style line has not received any press coverage, nor have any articles been written about the Pathfinder's style line. Maverick has not submitted its style line to any design competitions, nor has its style line won any awards or accolades.
On March 22, 2002, Maverick filed this action for infringement of an original vessel hull design and trade dress infringement. On April 2, 2002, Maverick issued a press release about the action. Other than the letters to dealers and the press release, AMH has not identified any document Maverick made public concerning AMH or the Pro-Line boat.
Vessel Hull Design Protection Act — Validity of Registration 0056
In response to the Supreme Court's decision in Bonita Boats Inc. v. Thunder Craft Boats, Inc., Congress passed the Vessel Hull Design Protection Act ("VHDPA") to provide copyright protection to certain original boat hulls. See Bonita Boats Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989). The VHDPA provides copyright protection for original boat hulls and non-original designs provided "the design is a substantial revision, adaptation, or rearrangement of such subject matter." 17 U.S.C. § 1303.
Maverick attempted to obtain protection for its "original" Pathfinder 2200 V-Hull Bay Boat by submitting an application for registration under the VHDPA in February 2001. This application resulted in registration no. DVH 0049. For reasons discussed in the Court's summary judgment order (DE 75) registration no. DVH 0049 is invalid.
On April 10, 2001, after doubt was expressed as to the validity of registration no. DVH 0049, Maverick submitted a second application for registration of the Pathfinder 2200 V-Hull Bay Boat. This application resulted in registration no. DVH 0056. Registration no. DVH 0056 states the design seeking protection was a "[n]ew improved version of earlier design . . . Revised original hull (forward) shape, style line location." Exh. 12 to Maverick's Brief. Maverick argues that its revised design is a substantial revision entitled to protection pursuant to 17 U.S.C. § 1303. Brief at 7. The validity of Maverick's registration of the "revised" version of the Pathfinder 2200 V-Hull Bay Boat is what is before the Court. After reviewing all the testimony, exhibits, and parties' submissions the Court finds that the boat Maverick registered in registration no. DVH 0056 is not a "substantial revision, adaptation, or rearrangement" of the original Pathfinder 2200 V-Hull Bay Boat as required by 17 U.S.C. § 1303. This statutory language is at the crux of the Court's decision.
The VHDPA is a relatively new piece of legislation. It became effective in October 1998. The parties did not provide the Court with any case law interpreting the VHDPA, nor did the Court find any after its own search. Accordingly, the Court focuses on the language of the statute.
Maverick focused the Court's attention to the burdens placed on the parties in determining the validity of registration no. DVH 0056. The statute provides that a certificate for registration is "prima facie evidence of the facts stated in the certificate." 17 U.S.C. § 1314. Maverick therefore argued that the burden is then shifted to those challenging the validity of the registration to rebut the prima facie presumption established by the statute. While this analysis appears to be an accurate articulation of the parties' burdens under the statute, it is not particularly constructive in deciding this case. The only facts stated on the certificate for registration no. DVH 0056 that appear to be applicable are those mentioned by the Court earlier. In describing how the design has been revised, the certificate states the design is a "[n]ew improved version of earlier design . . . Revised original hull (forward) shape, style line modification." Exh. 12 to Maverick's Brief. The Court's decision does not turn on the veracity of these facts. Instead, the Court looks to the following factors: (1) changes made to the "original" Pathfinder 2200 V-Hull; (2) the similarities between the "revised" version and the "original" version; and (3) the lack of evidence of the revision process, and the lack of evidence outside of the certificate for registration no. 0056. All of which indicate that the change Maverick made to the "original" Pathfinder 2200 V-Hull was not a substantial revision as required by the language of the VHDPA. 17 U.S.C. § 1303.
Changes Made to the Original
There were irregularities in the Pathfinder 2200 V-Hull original ("original") caused by mistakes in craftsmanship. 3:35. The mistakes affected the performance of the original. 3:35. The sheer line was off, which affected a number of lines on the boat. 3:41. Maverick points to eight identifiable changes made to the original. Brief at 7. Four of the eight changes discussed by Maverick were necessarily to be done once Maverick changed the sheer line. Changes to the chine line, the freeboard, the flange, and the stem were all dictated by Maverick's correction of the crooked sheer line. Brief at 8-11. The style line was corrected to make it symmetrical as it should have been from the start. 3:105. These corrections positively impacted the performance of the boat. 3:38.
Similarities Between the Two Boats
AMH and Blazer's expert witness, Augusto Villalon ("Villalon") testified as to the similarities between the two boats. Villalon reported that the changes made to the original were minimal, such as straightening the sheer line, and were not changes in the design of the boat. Villalon Report at 8. Villalon took 16 separate measurements at various dimensions on the two boats, none of which differed between the two boats. Villalon Report at 9. Villalon's Report details the changes made to the original and concludes that these changes did not affect the design of the boat, but merely corrected the result of poor tooling. Villalon Report at 12.
Maverick did not proffer any expert testimony as to the differences between the two boats. Maverick's witnesses did not attempt to secure an original and compare it with a revised Pathfinder 2200, 3:53; 2:37. Maverick did not point to any specific differences between the two boats either apparent to the naked eye or based on specific measurements which would demonstrate the extent of the differences in the two boats.
Lack of Evidence Surrounding the Revision
Maverick has no records that reflect the actual changes between the original design and the alleged revised design. 3:40. There was no change made to the name of the boat or the model number of the boat. 3:49. The two boats were held out to the public as the same boat. 3:51. Nothing in Maverick's advertising indicated that there were an original and a revised design. Both boats were sold simultaneously by Maverick without any connotation that one was an original and one a revised version. The existence of an original design and a revised design was only known to those individuals who worked for Maverick until the validity of registration no. DVH 0049 was questioned. The information contained in registration no. DVH 0056 was obtained in an effort to recreate the substantial revision process of the original Pathfinder 2200 V-Hull. The publication date on registration no. DVH 0056 is a date which Mr. Deal and Mr. Ellig agreed upon after assessing how long it would have taken to make such changes. 3:109. Even those who worked on revising the original design cannot remember or produce any evidence as to when this new design was first shipped, sold, or produced, rather they "determin[ed] manufacturing critical paths." Maverick Brief at 28.
Not all employees of Maverick were even aware that there was an original and a revised version of the Pathfinder 2200 V-Hull. Mr. Leffew, the individual at Maverick responsible for completing the registration process testified that when he completed the application for registration no. DVH 0049 he was not aware that there were two designs. Both times Mr. Leffew took the pictures to accompany the respective applications, he took pictures of available boats on the property without any knowledge as to what model years the boats were, if they were new or back on a warranty claim, or most importantly without any indication that the boat was an original or a revised version. In light of the fact that Maverick's preliminary discussions regarding registering the Pathfinder 2200 V-Hull were in April 2000 and the revised version of the boat was first shipped in May 1999, the Court also has difficulty believing that the pictures Mr. Leffew attached to the application for DVH no. 0049 was actually of the revised version of the Pathfinder 2200 V-Hull.
It appears from the record before the Court that the first time Maverick informed anyone outside of Maverick about the revision to the Pathfinder 2200 V-Hull was when the issue of the validity of registration no. DVH 0049 surfaced. At that time, Maverick was asked if any design changes had been made to the boat. 3:98.
Analysis
The question before the Court is if the design that resulted from Maverick's changes to its original design "is a substantial revision, adaptation, or rearrangement" of its "original" Pathfinder 2200 V-Hull. See 17 U.S.C. § 1303. From the language, it is clear that Congress did not intend to protect any revision to an original design, only a substantial one. Congress' use of broader language in other copyright laws supports this reading of the statute. It is clear that Maverick made changes to its "original" design. What is not as clear, is if the changes rise to the level of substantial, such that Congress intended Maverick's "revised" design to be protected by 17 U.S.C. § 1303.
For example, 17 U.S.C. § 101 provides for protection of a derivative work where "[a] work consisting of editorial revisions, annotations, elaborations, or other modifications [to preexisting work that], as a whole, represent an original work of authorship is a `derivative work.'"
There is a broad range of changes one could make to a design between a change amounting to an ineligible revision and one amounting to a substantial revision. The changes made by Maverick to the original Pathfinder 2200 V-Hull were merely corrections to a mistake. In an effort to obtain protection for the Pathfinder 2200 V-Hull, Maverick has in hindsight detailed the changes made. The Court agrees with Maverick's own witness that the correction of unintended problems is not creating a new design, but merely making the original design what it was always intended to be. 2:116. Simply straightening a crooked line does not create a new design. 2:116.
Maverick argues that the number of changes made to the original and the positive impact of those changes on the boat's performance demonstrate that the changes created a substantial revision of the original Pathfinder 220 V-Hull. The quantity of the changes does not persuade the Court that the revision was substantial. Only eight changes were made. At least four of those were required once an obvious mistake, an asymmetrical sheer line, was corrected. The positive impact those changes had on the boat's performance also does not persuade the Court that they amounted to a substantial revision. The original boat was not performing as Maverick intended it to. Maverick received information that the boat was listing. It was this problem that Maverick was attempting to fix with the changes it made. One would typically not fix a mistake that occurred during the manufacturing process unless such a change would positively affect the product's performance. Where a boat manufacturer corrects mistakes to an original design, does not hold out to the public this corrected version as a revised or improved version, has no evidence regarding the extent and nature of such corrections, such a revised version cannot be found to be the substantial revision Congress intended to be protected by 17 U.S.C. § 1303.
AMH and Blazer's Infringement
The Court now turns to Maverick's infringement claim against AMH and Blazer. The core of this case rested on the validity of Maverick's registration of the Pathfinder 220 V-Hull. Having found Maverick's registration invalid, the Court realizes that Maverick's claim for infringement pursuant to 17 U.S.C. § 1309 cannot lie. However, having heard testimony and reviewed the evidence presented from all parties, the Court finds AMH and Blazer did not infringe on Maverick's design even assuming arguendo the Pathfinder 2200 V-Hull was protected under the VHDPA.The VHDPA protects the "design of a vessel hull." 17 U.S.C. § 1301(a)(2). The VHDPA defines "hull" as "the frame or body of a vessel, including the deck of a vessel, exclusive of masts, sails, yards, and rigging." 17 U.S.C. § 1301(b)(4). 17 U.S.C. § 1309(e) states that "[a] design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design." The infringement question presented by the present case is if AMH and Blazer's boats are "original and not substantially similar in appearance" to Maverick's Pathfinder 2200 V-Hull. See 17 U.S.C. § 1309(e).
There is no dispute that AMH and Blazer used the Pathfinder 2200 V-Hull as a starting point for the development of the allegedly infringing boat. However, this fact alone does not constitute infringement. There are ten differences between the Pathfinder 2200 V-Hull and the Pro-Line 22. Villalon Report at 14-15. Mr. Deal himself testified that there are a number of differences between the decks of the Pathfinder 2200 V-Hull and the Pro-Line 22, 1: 130. These differences include: the cockpit sole was raised by two inches at the aft end, an anchor compartment was added, the aft platform was raised and its compartments redesigned, and the entire deck surface was covered with a special non-skid material. Villalon Report at 14-15. In addition to the differences in the deck, the hull of the Pro-Line 22 is six inches longer than the hull of the Pathfinder 2200 V-Hull. Villalon Report at 14. The language of the statute is clear. 17 U.S.C. § 1301(2) protects the design of a vessel hull. The statutory definition of hull includes the frame or body of a vessel, "including the deck of the vessel." 17 U.S.C. § 1301(4). The changes AMH made in getting from the Pathfinder 2200 V-Hull as its starting point to the Pro-Line 22 demonstrate that the Pro-Line 22 is an original and is "not substantially similar in appearance" to the allegedly protected design of the Pathfinder 2200 V-Hull, particularly where the protected design includes the deck of the vessel. See 17 U.S.C. § 1301(4); See also 17 U.S.C. § 1309(e).
Trade Dress Infringement
Mavericks' claim of trade dress infringement asserts that AMH and Blazer infringed the style line on Maverick's Pathfinder 2200-V bay boat. Maverick Brief at 54. A style line is a raised line running along the hull of a boat, which is typically used to set masking tape for two-toning a boat. Villalon Rep. at 10. Maverick's style line runs along the hull of the boat and has a Z shape formation toward the back of the boat. Maverick argues that its style line "was created as a highly distinctive visual element that would serve to identify the boat as a Pathfinder even if the Pathfinder brand name is not visible." Maverick Brief at 54 (citing Deal NS ¶ 7 and 31). AMH and Blazer's style lines similarly run along the hull of their boats. However, they do not have the Z formation portion of the style line. The Court begins its analysis by noting that the most distinctive feature of Maverick's trade dress is not a part of the alleged infringing style line.
For a plaintiff to prevail on a trade dress infringement claim under section 43(a) of the Lanham Act, the plaintiff must prove 1) its trade dress is inherently distinctive or has acquired secondary meaning, 2) its trade dress is primarily non-functional, and 3) the defendant's trade dress is confusingly similar. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000); Ambrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535 (11th Cir. 1986) (internal citations omitted).
Maverick argues that its trade dress has acquired a secondary meaning. Maverick Brief at 55. In the context of a non-word mark, secondary meaning occurs when, "in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself." Samara Bros., Inc., 529 U.S. at 211 ( citing Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851, n. 11(1982)). Such secondary meaning can be proved by direct or circumstantial evidence. Remcraft Lighting Products, Inc. v. Maxim Lighting, Inc., 706 F. Supp. 855, 858 (S.D. Fla. 1989). Maverick did not present any direct evidence that the public identified a boat as a Maverick boat upon seeing its style line. Maverick points to its extensive advertising, which often displays the style line, as circumstantial evidence. Since 1999, Maverick has spent over $800,000 on advertisements which prominently display the style line of the boat. Maverick has only been advertising the Pathfinder 2200 V-Hull since 1999. The only evidence of the style line's secondary meaning is Maverick's unilateral advertising activity over a period of four years. Maverick has not proven that its style line has acquired a secondary meaning.
The Court next turns to the likelihood of confusion element of trade dress infringement. In assessing the likelihood of confusion, the Court should consider the following elements (1) the strength of the plaintiff's trade dress; (2) the similarity of the designs at issue; (3) the similarity of the products at issue; (4) the similarity of retail outlets and purchasers; (5) the similarity of advertising media used; (6) the defendants' intent; (7) actual confusion; and (8) where appropriate the degree of care purchasers are likely to exercise when selecting products of the type sold by the parties. Ambrit, Inc., 812 F.2d at 1538; Bauer Lamp Co. v. Shaffer, 941 F.2d 1165, 1171 (11th Cir. 1991).
The Court finds the dissimilarity of the design at issue is dispositive in this case. Trade dress is a combination of features which involve the total image of a product. John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983). The trade dress at issue involves a line formed by the raised ridge along the hull of a boat. The most distinctive feature of Maverick's style line, arguably the only distinctive feature, is the Z formation located at the back of the boat. AMH and Blazer's style lines are also raised ridges that run alongside the hull of a boat, however, they do not have the Z formation that the Maverick style line contains. Maverick argues that the lack of the Z formation should not be dispositive where the Z formation is "often obscured by water spray when the boat is in motion." Maverick Brief at 65. The Court disagrees based on two premises. First, finding trade dress infringement for the portion of the style line excluding the Z formation would essentially allow Maverick to bring a trade dress infringement claim for any slightly curved raised line that runs along the hull of a bay boat. Second, in a set of eight pictures which the Court reviewed in examining the record, seven of those eight pictures displayed the Z formation of the style line despite the boat's presence in water. Exh. 21 to Maverick's Brief. The difference between the designs is a significant one.
Lastly, the Court analyzes the degree of care purchasers are likely to exercise when purchasing a boat. Maverick argues that an analysis of consumer sophistication leans in its favor where many of the Maverick purchasers are "first time buyers and not sophisticated purchasers." Maverick Brief at 69. Maverick cites Carillon Importers for the proposition that confusion is more likely where consumers are first time purchasers of the product. Carillon Importers, Ltd., 913 F. Supp. 1559, 1565 (S.D. Fla. 1996). The product at issue in Carillon Importers was a $30.00 bottle of vodka. The Court in Carillon Importers noted the likelihood of confusion where two products are sold at the same retailers, often even on the same shelf side by side. Carillon Importers, Ltd., 913 F. Supp. at 1565. The purchase of a boat is not as impulsive as the purchase of a bottle of vodka. Consumers are less likely to be confused by a trade dress where the consumer is (1) spending several thousand dollars to purchase the product and (2) will not purchase the product with frequency. See Am. Television and Communications Corp. v. Am. Communications and Television, Inc., 810 F.2d 1546, 1550 (11th Cir. 1987) (discussing the applicability of the conditions of the sale and the expense of the product).
Based on the lack of evidence of an acquired secondary meaning, the distinct difference in the trade dresses, and the degree of care purchasers of a boat take in purchasing a boat, the Court finds Maverick's claim for trade dress infringement fails.
AMH and Blazer's Counterclaims
AMH and Blazer bring counterclaims against Maverick for product disparagement, unfair competition, defamation, and unfair trade practices. These counterclaims are primarily based on Maverick's conduct in sending out its dealer letter. AMH Exh. 4; Blazer Exh. 62041. The question before the Court is to what extent, if any, the dealer letter is protected by the First Amendment. Should the Court find that the dealer letter is entitled to some level of First Amendment protection, the question then becomes what standard of proof should be utilized to implement such protection.
There were three mediums of speech involved in the present case: (1) the dealer letter stating that Maverick has received evidence that AMH and Blazer splashed its boat, AMH Exh. 4; Blazer Exh. 62041(2) the press release issued by Maverick after the start of this litigation, AMH Exh. 5A; and (3) a statement in a publication made by Mr. Deal regarding AMH's lack of denial as to his infringement claim. The parties' submissions appropriately focus on the dealer letters.
The Court previously found that the press release was factually accurate and purely informative. Order on Summary Judgement at 19. As a result, the Court found there was no inherent falsehood or misleading statement in the press release. Id. The Court finds no reason to revisit this finding. As to Mr. Deal's statement in the publication, the Court heard testimony regarding the existence of such statements. There was, however, a dearth of testimony regarding any injury caused to AMH or Blazer by the statement. Therefore, the Court will not address that statement.
The framework for analyzing the facts presented before the Court is murky to say the least. One thing appears to ring true. Commercial speech merits First Amendment protection, but exactly what level of protection is questionable. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 758 (1976). After retreating from the proposition that commercial speech was not entitled to any protection, the Supreme Court has held that commercial speech is entitled to an intermediate level protection in a variety of government regulation cases, essentially holding that regulations affecting commercial speech need only satisfy the intermediate scrutiny standard. See U.S. v. United Foods, 533 U.S. 405, 409 (2001) (internal citations omitted). The Supreme Court has not addressed how this intermediate level of protection translates into defamation type cases. However, at least two circuits have held that the "subordinate valuation of commercial speech is not confined to the government regulation line of cases," holding that it also applies in private actions brought by a competitor. See Procter Gamble Co. v. Amway Corp., 242 F.3d 539, 548 (5th Cir. 2001); U.S. Healthcare v. Blue Cross, 898 F.2d 914, 932 (3rd Cir. 1990). The Eleventh Circuit has not addressed this issue.
The holding that commercial speech was totally exempt from First Amendment protection was articulated by the Supreme Court in both Valentine v. Chrestensen, 316 U.S. 52 (1942) and Breard v. Alexandria, 341 U.S. 622 (1951). The Court has gradually retreated from this position as discussed in the Court's opinion.
Even if the Eleventh Circuit adopted this position, it is not clear that such a decision would impact this Court's ruling. First, the Court must decide if the speech at issue is commercial or not. The analysis one undertakes to decide if speech is commercial or not is to be a "common sense distinction between speech proposing a commercial transaction . . . and other varieties of speech." Zuaderer v. Office of Disciplinary Counsel, 471 U.S. 626, 637 (1985) (quoting Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447 (1978)). "[T]he speech whose content deprives it of protection cannot simply be speech on a commercial subject." Va. State Bd. of Pharmacy, 425 U.S. at 761. Where the speech at issue does more than propose a commercial transaction, the Supreme Court has said that the commercial speech exception may not apply. Va. State Bd. of Pharmacy, 425 U.S. 748, 760 (1976). An advertisement is the classic example of commercial speech, although it does not automatically translate into a finding that such speech is commercial. Va. State Bd. of Pharmacy, 425 U.S. at 759; Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 66 (1983) (stating that even where pamphlets were conceded to be advertisements such fact does not compel the conclusion that such speech is commercial). While the finding that the speech is an advertisement is not determinative, such a finding would arguably provide a clearer picture than the speech at hand The speech at issue in the present action is not an advertisement.
The dealer letter was a letter sent by Mr. Deal to boat retailers stating that he had evidence that AMH and Blazer had infringed on Maverick's protected boat design. The Court acknowledges there are similarities between Mr. Deal's letter and an advertisement. For example, the person responsible for placing an advertisement is typically motivated by a desire to sell more products and consequently make a profit. Similarly, the Court assumes Mr. Deal, president and CEO of Maverick Boat Company, a private business enterprise, is also interested in making a profit from his products. The Court finds that this existence of an economic interest alone should not deprive the speech of constitutional protection. See Va. State Bd. of Pharmacy, 425 U.S. at 762 (discussing the First Amendment protection in labor disputes where parties often have an economic interest) (internal citations omitted). Furthermore, drawing a line based on a party's economic interest in making the speech, and thus possibly taking the speech out of the First Amendment's protection on such a basis, is not a satisfying distinction. Va. State Bd. of Pharmacy, 425 U.S. at 762.
Instead of basing its decision solely on the presence of an economic interest, the Court returns to the rationale for providing less protection for commercial speech to determine if such rationale is advanced by labeling the dealer letter commercial speech. "The First Amendment's concern for commercial speech is based on the informational function of advertising." Central Hudson Gas Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 563 (1980). Advertising appears to be the primary focus for the label of commercial speech. However, there is no black letter rule that advertising is the only communication which is commercial speech. To the contrary, the definition of commercial speech has been expanded beyond advertisements. For example, in a situation analogous to the one at hand, the Eight Circuit found a communication informing five recipients that a competitor's product was a clone of the speaker's product to be commercial speech. See Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1121 (8th Cir. 1999) (involving competing manufacturers of filters used in medical and other industries). The Fifth Circuit has also addressed the question of if a non-advertisement communication was commercial. Procter Gamble, 242 F.3d 539 (involving satanic rumors spread about a competitor via a telephone message to its distributors and some distributors subsequently disseminating fliers stating "we offer you an alternative").
While there may be rationales other than protecting the consumer, the Court's research did not find any other articulations of such. See Kozinski Banner, Who's Afraid of Commercial Speech, 76 Va. L. Rev. 627, 628 (1990) (discussing the early commercial speech cases where courts struggled to justify the distinction before it became such an axiom that it can be stated without justification). The Supreme Court has justified the distinction on propositions such as commercial speech is more verifiable, more durable, and less likely to be chilled by regulation, however all of these appear to revolve around advertising as well. Va. State Bd. of Pharmacy, 425 U.S. at 772 n. 24 (1976).
The Fifth Circuit addressed the issue, however it was not able to make a determination on the record. In its application of the Bolger facts, the Fifth Circuit found it necessary to remand for a determination of whether or not those spreading rumors had economic motivations. Procter Gamble, 242 F.3d at 552. However, the Fifth Circuit was careful to point out that it was not "repackaging the "actual malice" requirement as a requirement of economic motivation," but that this was the linchpin where all other Bolger elements were present. Procter Gamble, 242 F.3d at 552 n. 26.
Both cases turned to the Bolger factors to determine if the speech in question was commercial. See Bolger, 463 U.S. at 66-67. In deciding if informational pamphlets should be characterized as commercial speech, the Supreme Court looked to the three factors: (1) whether the communication was an advertisement; (2) whether it referred to a specific product; and (3) whether the speaker had an economic motivation for the speech. Id. While these factors aided the Supreme Court in making the determination in the Bolger case, the Supreme Court continues to "characteriz[e] the proposal of a commercial transaction as " the test for identifying commercial speech." " City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 423 (1993) ( citing Bd. of Trustees of State of Univ. of N.Y. v. Fox, 492 U.S. 469 (1989)). Given the continued reliance on this definition, the Court finds that such definition provides the guiding principle in determining if certain speech is commercial for First Amendment purposes. The Bolger factors may elucidate the determination under different facts, however under the present facts the Court finds it would be in the same quandary.
The dealer letter is not an advertisement, however it does refer to a specific product. Therefore these two factors balance each other out. Accordingly, the Court is left with a determination that will hinge on Mr. Deal's economic motivation. This is precisely the economic interest distinction the Court previously expressed its discomfort with.
Taking the common sense approach to determining if the communication was proposing a commercial transaction, the Court finds that it was not. The dealer letter expressed Mr. Deal's concern to "maintain the integrity of a product line and to protect one's business interest." The dealer letter did refer to one product. However, it did not discuss any details of purchasing a such product, such as price or qualities. Instead, Mr. Deal informed his audience that there was a possibility that AMH and Blazer may be liable for infringement of a protected boat design. The dealer letter also informed the audience that it may be held liable if a dealer was found to have sold an infringing product. One cannot deny that the natural import of this letter may have deterred dealers from carrying the AMH and Blazer boat at issue in the letter. However, the speech was not proposing a commercial transaction. Denying speech First Amendment protection based on the possibility of an economic windfall to the speaker once again takes the Court back to the unsatisfactory distinction discussed above. The Court finds that the dealer letter was not proposing a commercial transaction and therefore is not commercial speech.
The Court's holding acknowledges the commercial speech distinction that has been drawn in First Amendment jurisprudence and follows the precedent accordingly. However, the Court does not find the commercial speech distinction for First Amendment purposes a satisfying one, particularly given the broadening definition of commercial speech and the lack of constitutional basis for providing commercial speech less protection under the First Amendment. See Kasky v. Nike, Inc., 45 P.3d 243, 268 (Cal. 2002) (J. Brown dissenting); 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 518 (J. Thomas concurring).
In addressing whether or not the statements at issue are commercial for purposes of § 43(a) of the Lanham Act and therefore actionable, there is some dispute as to whether the First Amendment definition is dispositive. See Fuente Cigar Ltd. v. Opus One, 985 F. Supp. 1448, 1454 (M.D. Fla. 1997) (discussing the "apparent schizophrenia" evidenced by the legislative history of the Lanham Act). Given the Court's opinion regarding the First Amendment's role in this case, it is not necessary that the Court reach this particular question.
Having found that the dealer letter is not commercial speech and thereby is entitled to First Amendment protection, the next question before the Court is how such protection is implemented under the present facts. Balancing First Amendment protection with the state's interest in compensating individuals for injury to reputation, the Supreme Court held that a public official cannot recover damages for a defamatory falsehood unless he proves that the false statement was made with actual malice, actual knowledge of falsity or reckless disregard for the statement's falsity. New York Times Co. v. Sullivan, 376 U.S. 254, 280 (1964). Since the Supreme Court's articulation of the actual malice standard in New York Times v. Sullivan, the factual scenarios to which the standard is applicable have expanded. See Dunn Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 755 (1985). The Court has held that the actual malice standard is applicable to libels of not just public officials but also public figures. See Curtis Publ'g Co. v. Butts, 388 U.S. 130 (1966). After expanding the actual malice standard to libels of any individuals where the statements at issue involved a matter of public interest, the Supreme Court retreated to where it stands today holding that the actual malice standard does not apply merely because of the presence of a public issue but that the courts must look at the allegedly defamed individual's involvement in the particular controversy. Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) (discussing the Supreme Court's retreat from its holding in Rosenbloom v. Metromedia, Inc., 403 U.S. 29 (1971)).
The actual malice standard has been used in product disparagement cases, but there is no binding precedent which directly supports such an application. See Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485 (1984). Bose was a product disparagement case in which the district court ruled that the actual malice standard from New York Times Co. v. Sullivan applied. In arguing that the actual malice standard is inapplicable to the instant facts, AMH asserts that in Bose, "the actual malice standard was assumed to apply in a product disparagement case." AMH Brief at 32; See Bose Corp., 466 U.S. 485. AMH correctly points out that the Supreme Court in Bose did not hold that the actual malice standard must be applied in a product disparagement case. See Bose Corp., 466 U.S. at 515. The Court's holding in Bose was a procedural one. However, in dicta the Supreme Court stated "[t]he statement in this case represents the sort of inaccuracy that is commonplace in the forum of robust debate to which the New York Times rule applies." Bose Corp., 466 U.S. at 512. Furthermore in discussing whether "the record in a defamation case is of the convincing clarity required to strip the utterance of the First Amendment protection," the Supreme Court stated "[j]udges, as expositors of the Constitution, must independently decide whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of "actual malice."" Bose Corp., 466 U.S. at 511.
AMH also argues that if the Court were to find that it is a public figure, its counterclaims would still succeed where they have proved actual malice. AMH Brief at 42. The Court addresses AMH's evidence on actual malice in its discussion of Mr. Deal's knowledge of falsity.
The clearly erroneous standard of FED. R. CIV. P. 52(a) did not prescribe the standard of review to be applied in reviewing a determination of actual malice in a case governed by New York Times Co. v. Sullivan. Bose Corp., 466 U.S. at 515.
In at least one other district, the actual malice standard has also been held to apply in a libel action brought by a corporation. Martin Marietta Corp. v. Evening Star Newspaper Co., 417 F. Supp. 947, 954 (D.C. 1976) (holding that where a corporation brought a libel suit the rule announced in Metromedia is the proper standard for determining the applicability of the actual malice standard). However, there is no federal common law rule that corporations as a class are public figures for purposes of the First Amendment. See Bruno Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583 (1st Cir. 1980). At least one state's law provides that corporations are public figures and accordingly the actual malice standard must be satisfied to establish a defamation claim brought by a corporation. See Porous Media Corp., 173 F.3d at 1116 ( citing Jadwin v. Minneapolis Star Tribune Co., 367 N.W.2d 476, 487 (Minn. 1985)); See also Northwest Airlines v. Astaea Aviation Services, 111 F.3d 1386, 1393 (8th Cir. 1997). Florida has no such rule. See Long v. Cooper, 848 F.2d 1202, 1205 (11th Cir. 1988) (holding that a corporation was a private figure where the record was devoid of evidence of unusual advertising practices). With no established rule regarding corporations, the Court turns to Maverick's argument that AMH and Blazer are limited public figures and therefore must prove actual malice to succeed on their counterclaims.
The Eleventh Circuit has adopted the Waldbaum test as the standard to determine if a plaintiff is a limited public figure. Silvester v. Am. Broad. Companies, 839 F.2d 1491 (11th Cir. 1988) ( citing Waldbaum v. Fairchild Publ'n, Inc., 627 F.2d 1287 (D.C. Cir. 1980)). "Under the Waldbaum analysis, the court must (1) isolate the public controversy, (2) examine the plaintiffs' involvement in the controversy, and (3) determine whether "the alleged defamation [was] germane to the plaintiffs' participation in the controversy." " Silvester, 839 F.2d at 1494(internal citations omitted). A public controversy need not be the topic in the current news, but its impact must involve individuals beyond the immediate participants in the debate. Mile Marker, Inc. v. Petersen Publ'g, L.L.C., 811 So.2d 841, 846 (Fla.Dist.Ct.App. 2002). While the Court will use the Waldbaum test to determine if AMH and Blazer are limited public figures, the Court's analysis is tempered by the balance which the Supreme Court relied on in expanding the scenarios to which the actual malice standard is applicable and the First Amendment's need for `breathing room'. See Gertz, 418 U.S. at 341-342 ( quoting National Ass'n for Advancement of Colored People v. Button, 371 U.S. 415, 433 (1964)).
The Court agrees with the analysis in Martin Marietta regarding the difference in protection of reputation between an individual and a corporation. A corporation does not have a private life such that was intended to be protected in this balance. The very existence of a corporation is public, beginning with the public laws which allow for its existence and continuing with a variety of public filings. A corporation's life does not include personal events such as marriage and divorce Martin Marietta Corp., 417 F. Supp. at 956.
First the Court must look at the whole record to determine if the defamatory speech addresses a matter in which the public may have a legitimate concern. Silvester, 839 F.2d at 1493. The debate must be one that is not an essentially private concern, but instead is "more than merely newsworthy." Silvester, 839 F.2d at 1494(internal citations omitted). The debate at issue involves three competitors in the bay boat industry. Comparisons of these three boats have been published in publications including Boating World, Soundings, and Shallow Water Angler. AMH Exh. 60; 5:10. Furthermore the specific content of the debate, the alleged splashing of Maverick's boat and subsequent infringement liability under the VHDPA was also discussed in Soundings and Bass Walleye Boats. 5:54; Maverick Exh. 25. The letter at issue was sent to boat dealers around the country. AMH even felt the impact of the dealer letter at boat shows around the country where the public would inquire about the dispute. 5:50. It is clear that their performance and design protection of bay boats is an issue of concern that goes beyond the parties to this action. See Mile Marker, Inc., 811 So.2d at 846 (stating that the proper inquiry is "whether a reasonable person would have expected persons beyond the immediate participants in the dispute to feel the impact of its resolution"). Having found that the ramifications of the resolution of this issue will be felt outside of the parties to this litigation, the Court turns to the next step in the Waldbaum analysis.
The Court must examine AMH and Blazer's involvement in the debate about bay boat performance and the protection of such boats under the VHDPA. See Silvester, 839 F.2d at 1494 (internal citation omitted). To satisfy this second prong of the Waldbaum test, a plaintiff must either purposefully at least tried to influence the outcome of the dispute or because of plaintiff's position in the controversy it could have been expected to have an impact. Id. at 1496. What is clear from the facts is that Blazer and AMH did not retreat from this debate, either in regards to the performance of their particular products or the VHDPA segment of the debate. AMH and Blazer attended boat shows across the country, displaying their bay boats to the public. AMH extensively advertised its bay boat in many boating magazines, including Boating Salt, Water Sportsman, Florida Sportsman, and Sport Fishing. There is sufficient evidence in the record to indicate that not only is AMH well known in the boating industry, but its advertising practices rise to the level of allowing one to have an impact in the bay boat market. See Long, 848 F.2d at 205 (discussing the impact of the lack of evidence of unusually concentrated advertising efforts in making the determination that a corporation was not a limited public figure); See also Bruno, 633 F.2d 583. Both plaintiffs fielded phone calls from their dealers and made accommodations in an effort to cast a favorable light on the dispute. Blazer petitioned the United States Copyright office for the cancellation of Maverick's registrations at issue under the VHDPA. Blazer Exh. 62083. Both plaintiffs took affirmative steps to influence the public's perception of their product and their role in the alleged splashing.
The last prong under the Waldbaum test is to determine if the statements at issue were germane to the plaintiff's participation in the controversy. Silvester, 839 F.2d at 1494. The dealer letter's specific concern dealt with the Plaintiff's bay boat and the fact that it was allegedly splashed from Maverick's Pathfinder 2200 V-Hull. The comparison of these three boats and the alleged infringement defines the debate at issue, accordingly, the dealer letter was central to the debate.
Having determined that all three prongs of the Waldbaum test are satisfied, the Court finds that AMH and Blazer are limited public figures and the actual malice standard is therefore applicable. Accordingly, AMH and Blazer must present clear and convincing evidence that Maverick acted with actual malice to succeed. See Silvester, 839 F.2d at 1498. To establish that a defendant acted with actual malice, a plaintiff must prove that the defendant acted with knowledge that its statements were false or with reckless disregard of whether they were false. New York Times, 376 U.S. at 279-80; See also Silvester, 839 F.2d at 1498 (stating that determining if one acted with reckless disregard is a subjective test that requires a plaintiff to establish that the defendant had serious doubts as to the truth of the facts at issue) (internal citation omitted).
Mr. Deal's letter stated that he had evidence that AMH and Blazer splashed the Pathfinder 2200 V-Hull which was protected by the VHDPA. Mr. Deal's letter went on to state that "we recognize that [an unknown retailer who provided AMH a copy of Maverick's boat] probably provided the boat [that was allegedly "splashed," or copied] to Pro-Line without knowledge of Pro-Line's intentions to copy Maverick's registered design." Splashing is the practice of making an identical mold of a boat by spraying an existing boat hull with fiberglass. AMH and Blazer argue that the dealer letters implied that AMH and Blazer splashed the Pathfinder 2200 V-Hull. A statement AMH and Blazer assert is factually false. It is clear that the process of making this mold is called splashing. What is not as clear is if one can be said to have splashed a boat, only where the resulting boat is an exact copy or if the term is applicable where the resulting boat is the end result of a process which began with splashing. AMH and Blazer may arguably have begun their process by splashing a Pathfinder 2200 V-Hull. The imprecision of the term which is the crux of the statement at issue could lead to the type of inaccuracy discussed in Bose. See Bose Corp., 466 U.S. at 512. The import of Mr. Deal's statements displays a similar level of latitude as was present in the statements at issue in Bose. See Id. (stating "the difference between hearing violin sounds move around the room and hearing them wander back and forth fits easily within the breathing space that gives life to the First Amendment"). Despite the imprecision of the term splashing, the record demonstrates that in the boat manufacturing industry one does not refer to a boat as splashed unless it is an exact copy. Having found that the boats at issue are not even substantially similar, there is no evidence that they were exact copies. Accordingly, the Court finds that Mr. Deal's statements are false.
The dealer letter also went on to inform the retailer that it may be held liable should it be found to have sold an infringing product. Taken as a whole, the contents of the letter are also protected by Florida's general common law privilege in defamation cases. Where one makes a communication in good faith on a subject in which the speaker and its audience share a corresponding interest, such communication is privileged. A plaintiff must show by a preponderance of the evidence that the speaker's primary motive for making the statement was to injury plaintiff where a Florida common law privilege is found to be present. Plaintiffs have not made such a showing in the instant case See Magre v. Charles, 729 So.2d 440, 443 ( citing Nodar v. Galbreath, 462 So.2d 803 (Fla. 1984)).
Mr. Deal testified that splashing is commonly understood as "occur[ing] when a boat manufacturer creates a boat by spraying the hull of an existing boat with fiberglass to create a mold which is then used to produce the finished fiberglass boats." 5:136. However, he also testified that there are three different methods that one can use to achieve the same result all of which can be referred to as splashing. 5:131.
Under Florida law, a statement is not defamatory, unless the gist of the statement is defamatory. Levan v. Capital Cities, ABC, Inc, 190 F.3d 1230, 1240 (11th Cir. 1999).
The Court now turns to Mr. Deal's conduct surrounding his knowledge of the statements' falsity. There are two such issues at hand
First the Court addresses whether or not Mr. Deal knew that AMH and Blazer had not splashed the Pathfinder 2200 V-Hull boat or acted with reckless disregard as to whether such statement was false. AMH argues that Mr. Deal "consciously ignored the plain fact that the Pro-Line hull is not an exact copy of the Pathfinder hull." AMH Brief at 43. At the time Mr. Deal wrote the dealer letter, he had information from a naval expert that it "was very probable that the mold for the 22 Pro-Line was "back cast" from a 22 Pathfinder hull." Maverick's Brief Exh. 4. Producing this mold is in effect splashing. The Court recognizes that it does not automatically follow that the Pro-Line and Blazer boat were splashed from the Pathfinder. In fact given the dissimilarity of the boats in question, the Court grapples with how one would think the Pro-Line was splashed from the Pathfinder 2200 V-Hull. Mr. Deal's testimony revealed his belief that a manufacturer could be said to have splashed an original design even where the manufacturer made a minor change to the hull before spraying it with fiberglass. Mr. Deal fervently believed that AMH and Blazer were copying his boat. The imprecision of the term splashing, particularly as defined by Mr. Deal, causes the Court to determine that this leeway in interpretation is precisely the `breathing space' that the First Amendment protects. The Court does not find that Mr. Deal acted with reckless disregard given his testimony and the record he acted upon at the time he wrote the dealer letter.
Mr. Deal demonstrated this belief to the Court wherein he explained that one can be said to have splashed a cup where one has placed a nickel on the bottom of a cup and sprayed the cup and the nickel with fiberglass, alluding to the cup as the boat design and the nickel as a minor change. 5:135.
Breathing space was a term coined in the Supreme Court's discussion of the First Amendment in National Ass'n for Advancement of Colored People v. Button, 371 U.S. 415, 433 (1964) and later quoted by the Court in Gertz v. Robert Welch, 418 U.S. 323, 342 (1974).
The Court recognizes that other methods have been suggested in reconciling the tension between the law of defamation and private actions for false commercial speech. See Procter Gamble, 242 F.3d at 557-59 (discussing Professor Langvardt's suggestion that a negligence standard should be used under such facts).
Last, the Court must examine under the same standard, Mr. Deal's statements as to the Pathfinder 2200 V-Hull being protected under the VHDPA. AMH and Blazer argue that Maverick must have at least had serious doubts regarding the validity of its registration of the Pathfinder 2200 V-Hull. The record before the Court does demonstrate an attempt by Maverick to repackage the facts of its revision to the Pathfinder 2200 V-Hull in an effort to obtain protection under the VHDPA. The second application was only submitted once there were doubts that registration no. DVH 0049 may be invalid. At that point, Mr. Deal and Mr. Ellig worked together in determining dates needed by Mr. Leffew to complete the second registration application. Maverick was forced to use estimates as to the revised boat's publication date, length of time it took to make the changes, and the extent of the changes as it had no contemporaneous evidence of these facts. This conduct does demonstrate a carelessness on behalf of Mr. Deal, who perhaps had himself convinced that the registration would be valid, but should have acted with more caution before acting upon his belief. Despite the Court's finding that an ounce of investigation would have been prudent, it was not until after an analysis of the fully developed record that the Court was able to legally determine the validity of Maverick's protection. Accordingly, the Court does not find that Maverick acted with knowledge of falsity or reckless disregard for the truth in stating that its Pathfinder 2200 V-Hull was protected under the VHDPA. Based on the foregoing, Maverick's dealer letter constitutes protected speech beyond the reach of AMH and Blazer's counterclaims.
The doubts cast on registration no. DVH 0056 provide the basis for AMH's argument that actual malice exists on the record. AMH Brief at 42.
Having found that Plaintiffs' defamation claims are barred by the First Amendment, the Court finds no need to address each cause of action. See Fridovich v. Fridovich, 598 So.2d 65, 69-70 (stating that one cannot escape a defamation privilege by repleading other causes of action based on the same facts).
Conclusion
"In an action for infringement under this chapter, the court may award reasonable attorney's fees to the prevailing party." 17 U.S.C. § 1323(d). The language of the statute does not require that the Court find the presence of bad faith or that the case is an exceptional one. Where Congress has given the Court statutory authority to shift fees, the Court may find a party is a prevailing party where said party has been awarded by the Court relief on the merits of at least some of its claims. See Smalbein ex rel. Estate of Smalbein v. City of Daytona Beach, 353 F.3d 901, 905 (11th Cir. 2003) (discussing the applicable standard under 42 U.S.C. § 1988(b) which uses similar language). AMH and Blazer each sought to have the Court find that registration no. DVH 0056 was invalid. This relief has been granted. AMH and Blazer have prevailed in an infringement claim brought under the VHDPA. Thus, AMH and Blazer are both prevailing parties in this litigation. The Court does not imply that any time a party brings an action to invalidate a registration under the VHDPA and is successful that an award of fees must follow. However, given Maverick careless conduct surrounding registration no. DVH 0056, its decision to turn a blind eye to reasonable doubts surrounding validity of registration no. DVH 0056, and the evidence before the Court regarding the impact of Maverick's conduct on AMH and Blazer's businesses, an award of reasonable attorneys' fees is warranted pursuant to 17 U.S.C. § 1323(d).Accordingly, it is hereby
ORDERED AND ADJUDGED that
1. The Court in its previous Order on Summary Judgment dated August 21, 2003 deemed Maverick's registration for DVH 0049 invalid. Accordingly, the Court orders the cancellation of registration DVH 0049 pursuant to 17 U.S.C. § 1324.
2. Having found that the design which is the subject of registration no. 0056 was not entitled to protection under 17 U.S.C. § 1303, the Court orders the cancellation of registration DVH 0056 pursuant to 17 U.S.C. § 1324.
3. This order is certified to the Administrator to ensure that the appropriate entries are made in the record pursuant to 17 U.S.C. § 1324.
4. AMH and Blazer shall submit documentation of their attorney's fees to the Court within 20 days of the entry of this order.
DONE AND ORDERED.