Spears v. Consulting

Citation: 338 F. Supp. 3d 1272Docket: Case No: 2:18-cv-286-FtM-38MRM

Court: District Court, M.D. Florida; September 7, 2018; Federal District Court

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Defendants SHK Consulting and Development Inc. (formerly Unified Marine, Inc.) and David B. Nirenberg filed a Motion to Dismiss Counts VI (unjust enrichment) and X (constructive fraud) of the Amended Complaint with prejudice. The plaintiff, Spears, invented a depth gauge for boat trailers and licensed this invention to SHK through a Licensing Agreement, which included a handwritten note indicating that modifications to the patent should be added promptly. Spears believes this grants him ownership rights to future embodiments of his invention. After the agreement, Spears worked for SHK, during which he provided confidential information about improvements that Nirenberg used to file a patent application assigned to SHK. Ultimately, U.S. Patent No. 9,127,940 was issued, naming Nirenberg as the sole inventor and Lake Red Rock as the assignee. Spears sued SHK, Nirenberg, and Lake Red Rock for ten causes of action related to the patent and licensing agreement, but voluntarily dismissed Lake Red Rock and abandoned Count VII.

SHK and Nirenberg's motion to dismiss the unjust-enrichment and constructive-fraud claims relies on Rule 12(b)(6), which requires courts to accept all factual allegations as true and view them favorably to the plaintiff. However, a claim must be facially plausible, meaning the court must be able to infer liability based on the facts presented. The defendants argue that the unjust-enrichment claim is preempted by federal patent law, asserting that it depends on determining the true inventor of the patent, which would undermine congressional objectives regarding patent law.

Spears asserts that his claim regarding patent ownership is not preempted by federal law, as it addresses ownership rather than inventorship. Jurisdiction is grounded in 28 U.S.C. § 1338(a), meaning Federal Circuit law governs the preemption issue. The Supremacy Clause establishes that federal law is paramount over state law. Preemption can occur through express, field, or conflict preemption, with the current argument focusing on conflict preemption—where complying with both state and federal laws is impossible, or where state law obstructs federal objectives.

The federal Patent Act aims to incentivize invention, promote full disclosure, and protect the public domain from state interference. A state tort remedy that aligns with these objectives is not preempted. To evaluate a state law claim, one must examine its elements and factual basis. In Florida, unjust enrichment requires proof that the plaintiff conferred a benefit on the defendant, who accepted it knowingly, and that retaining the benefit would be inequitable.

Spears' unjust enrichment claim alleges that Nirenberg and SHK wrongfully acquired the '940 Patent using confidential information from Spears, violating their Licensing Agreement. The Federal Circuit previously ruled in a similar case that a state unjust enrichment claim was not preempted when a patent was obtained through wrongful appropriation of information. Spears' claim is thus rooted in the alleged misuse of his confidential information, rather than an attempt to enforce patent rights.

Defendants argue for the preemption of Spears' unjust-enrichment claim based on the precedent set in OptoLum v. Cree, where federal patent law was found to preempt state law claims linked to inventorship rights. In OptoLum, the unjust-enrichment claim was dismissed because it depended on the resolution of inventorship issues, which the court deemed preempted. Conversely, Spears' claim is characterized as more akin to that in Thompson v. Microsoft Corp., where the unjust-enrichment claim did not hinge on inventorship but rather on a breach of confidentiality regarding technology. Spears asserts he has a contractual right to ownership of the '940 Patent, independent of his role as the inventor, suggesting that his claim can stand without needing to resolve inventorship issues, thus not frustrating federal patent law.

Regarding the preclusion of the unjust-enrichment claim due to the existence of adequate legal remedies, Defendants cite Florida law, which generally bars unjust enrichment claims when an express contract covers the same subject matter. They argue that Spears’ claims in Count VI and Count III overlap since both relate to an alleged breach of an agreement regarding ownership of inventions. However, Spears contends that the two claims are distinct as they seek different remedies. Florida courts maintain that a quasi-contract claim cannot proceed if a written agreement exists between the parties on the same matter, meaning Count VI is likely barred due to its overlap with Count III, which addresses a breach of contract concerning ownership rights.

The unjust-enrichment claim against SHK is dismissed, while Count VI, concerning Nirenberg, survives because he is not a party to the Licensing Agreement. Under Florida law, agents signing contracts in a corporate capacity are not personally bound. The motion to dismiss Spears' constructive-fraud claim (Count X) is evaluated under Florida's independent tort doctrine, which requires that a tort claim be independent from a breach-of-contract claim. The doctrine is rooted in the economic loss rule, which restricts tort actions when parties are in contractual privity and seek purely economic damages. The Florida Supreme Court has confined the economic loss rule to products liability cases, but it maintained that tort claims must be independent of contract breaches. The 11th Circuit has upheld this independence requirement.

In this case, Spears' claims of constructive fraud and breach of contract stem from the same factual allegations regarding the Licensing Agreement. Since no separate conduct for the constructive-fraud claim is alleged, Count X is barred against SHK but survives against Nirenberg. The court ordered the dismissal of Counts VI and X with prejudice for SHK, while denying the motion for Nirenberg, allowing him until September 21, 2018, to file an answer.