The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
THE TRADEWELL GROUP, INC.,
a Florida Corporation
Plaintiff,
v. Case No.: 2:21-cv-130-SPC-MRM
JOE AMORE,
Defendant.
/
OPINION AND ORDER1
Before the Court is Defendant Joe Amore’s Motion for Summary
Judgment (Doc. 41).
Background
Plaintiff The Tradewell Group, Inc. owns intellectual property rights to
a type of disposable cutting board, including United States Patent No.
6,164,478 and the trademark CUT & TOSS. In July 2009, Tradewell and
Amore executed an Exclusive Category Information & Patent License
Agreement. (Doc. 17 at 10-37). The purpose of the Agreement was to give
1 Disclaimer: Documents hyperlinked to CM/ECF are subject to PACER fees. By using
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Court is also not responsible for a hyperlink’s availability and functionality, and a failed
hyperlink does not affect this Order.
Amore the exclusive right to sell CUT & TOSS disposable cutting boards at
barbeque events and to barbeque retailers. In exchange, Amore agreed to pay
licensing fees and royalties to Tradewell and to discontinue all sales of the
cutting boards after termination of the Agreement (except to liquidate
remaining inventory).
Amore terminated the Agreement when the ‘478 Patent expired on June
18, 2018. He stopped paying Tradewell license fees and royalties, but he
continued selling the cutting boards (though apparently not under the CUT &
TOSS brand). Tradewell sues Amore for breach of the Agreement. Amore
moves for summary judgment, arguing the Agreement became unenforceable
when the ‘478 Patent expired. Tradewell counters that the Agreement
remains enforceable because it licensed trade secrets in addition to the ‘478
Patent.
Legal Standard
Summary judgment is appropriate only when the Court is satisfied that
“there is no genuine issue as to any material fact” and the moving party is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The initial
burden falls on the movant, who must identify the portions of the record “which
it believes demonstrate the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). A genuine issue of material fact
exists if “the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). To defeat summary judgment, the non-movant must “go beyond the
pleadings, and present affirmative evidence to show that a genuine issue of
material facts exists.” Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir. 2006).
In reviewing a motion for summary judgment, the Court views the
evidence and all reasonable inferences drawn from it in the light most
favorable to the non-movant. See Battle v. Bd. of Regents, 468 F.3d 755, 759
(11th Cir. 2006). But “[a] court need not permit a case to go to a jury…when
the inferences that are drawn from the evidence, and upon which the non-
movant relies, are ‘implausible.’” Mize v. Jefferson City Bd. of Educ., 93 F.3d
739, 743 (11th Cir. 1996). If the moving party demonstrates entitlement to
judgment as a matter of law, the non-moving party must establish each
essential element to that party’s case. Howard v. BP Oil Co., Inc., 32 F.3d 520,
524 (1994).
Discussion
The central issue in this case is whether the Agreement survived
expiration of the ‘478 Patent.2 Analysis of this issue must start with Brulotte
v. Thys Co., 379 U.S. 29 (1964). In Brulotte, the Supreme Court held that “a
patentee’s use of a royalty agreement that projects beyond the expiration date
2 The parties do not dispute the contents of the Agreement or the June 18, 2018 expiration of
the ‘478 Patent.
of the patent is unlawful per se.” 379 U.S. at 32. Justice Kagan later
summarized the Brulotte Court’s reasoning:
To arrive at that conclusion, the Court began with the statutory
provision setting the length of a patent term. Emphasizing that a
patented invention becomes public property once that term
expires, the Court then quoted from Scott Paper: Any attempt to
limit a licensee’s post-expiration use of the invention, whatever the
legal device employed, runs counter to the policy and purpose of
the patent laws. In the Brulotte Court’s view, contracts to pay
royalties for such use continue the patent monopoly beyond the
patent period, even though only as to the licensee affected. And in
so doing, those agreements conflict with patent law’s policy of
establishing a post-expiration public domain in which every person
can make use of a formerly patented product.
Kimble v. Marvel Entm’t, LLC, 576 U.S. 446, 452-53 (2015) (cleaned up).
The parties of course disagree on the impact Brulotte has on the
Agreement. And while the parties do not dispute the contents of the
Agreement, they emphasize different aspects to support their positions. In the
Agreement, Tradewell promised to make available to Amore two categories of
information. First, Tradewell provided “LICENSED TECHNICAL
INFORMATION”—defined as “such patterns, drawings, specification and
other technical information shown in the [‘478 Patent] or that [Tradewell] may
update by written amendment.” Because there were no amendments, Amore
argues the Agreement is a pure patent licensing agreement. But that ignores
the second category of information provided, which Tradewell considers its
trade secrets: “designated raw material supplier(s), manufacturer/converter(s),
packager(s), [and] approved logo specifications for the [CUT & TOSS]
BRAND.” (Doc. 17 at 11-14).3
There is no doubt that trade secret agreements are governed by state
law—they are not subject to preemption by federal patent laws. See Aronson
v. Quick Point Pencil Co., 440 U.S. 257 (1979) and Kewanee oil Co. v. Bicron
Corp., 416 U.S. 470 (1974). Contracts that license both patent rights and trade
secrets—“hybrid” agreements—require a more nuanced analysis. The
Eleventh Circuit provided a framework in Pitney Bowers, Inc. v. Mestre, 701 F.
2d 1365 (1983). The Pitney court rejected the argument that Brulotte does not
apply to hybrid agreements for two reasons. First, the contract at issue in
Brulotte involved non-patent considerations, but the Supreme Court “cut off
both the patent and non-patent royalties,” and dicta in Aronson further
suggested a willingness to terminate royalty rights in a hybrid agreement.
Pitney, 701 F.2d at 1371-72. Second, while Aronson and Kewanee—two cases
Tradewell relies on—support enforcement of trade secret law against federal
preemption, neither case involved information covered by a patent. Id. at 1372.
Having found Brulotte applicable to hybrid agreements, the Pitney court
turned to the contract at issue. It found two aspects of the contract controlling.
3 It is not necessary to determine whether this information fits any legal definition of “trade
secret.” Amore does not challenge Tradewell’s characterization of the information as trade
secrets, and the Court will use the term for the sake of simplicity.
“First, the ‘exclusive rights’ granted under the agreement applied equally
before and after the expiration of the patent.” Id. at 1373. “Second, the
agreement required Pitney Bowes to pay royalties at the same rate and on the
same basis after the patents expired that it paid while the patent was in effect.”
Id. The Eleventh Circuit inferred from these clues “’that the licensor was using
the license to project its monopoly beyond the patent period.’” Id. (quoting
Brulotte, 379 U.S. at 32).4
The Agreement here contains the same key features the Eleventh Circuit
found controlling in Pitney. The exclusive license of patent rights and trade
secrets provided to Amore remained unchanged after expiration of the ‘478
Patent. And the Agreement required Amore to pay the same license fees and
royalties before and after expiration of the patent. The Agreement therefore
impermissibly extends Tradewell’s monopoly beyond the patent period, and it
became unenforceable when the ‘478 Patent expired. As in Brulotte and Pitney,
the non-patent consideration Amore received in the Agreement does not save
it from federal supremacy.
Accordingly, it is now
ORDERED:
4 The Pitney opinion suggests that a hybrid agreement might survive Brulotte if it allocates
payments between trade secrets and patent rights because separate payments for trade
secrets would not necessarily conflict with patent law. Pitney, 701 F.2d at 1372 n.12. The
Agreement here contains no such allocation.
Defendant Joe Amore’s Motion for Summary Judgment (Doc. 41) is
GRANTED.
1. The Treadwell Group’s Amended Complaint (Doc. 17) is DISMISSED
with prejudice.
2. The Clerk is DIRECTED to enter judgment, terminate pending
motions and deadlines, and close this case.
DONE and ORDERED in Fort Myers, Florida on November 19, 2021.
UNITED STATES DISTRICT JUDGE
Copies: All Parties of Record