Public Documents in the Palace Resort Case against Vacation Store of Miami and Media Insight Group, Inc.

Public documents concerning this lawsuit can be found on PACER in the US District Court for Southern District of Florida – Miami Division Case No. 1:16-cv-20683-FAM (subscription based). 

The Amended Complaint filed against Vacation Store of Miami and Media Insight Group, Inc. is set forth below. 

2016 12 22 (Dkt 44) - Amended Complaint

Defendants’ response to the Amended Complaint is found here:

2017 01 13 (Dkt 50) Def's ANSWER and Affirm Defenses

The Magistrate’s recommendation for an injunction can be found here:

2017 04 27 (Dkt 95) Defendants' Objection to Report and Recommendation

The Trial Court’s Order Adopting Magistrate judge’s Report & Recommendation and Granting the Injunction is found here: 

2017 05 26 (Dkt 97) Order Adopting Magistrate Judges Report and Rec and Granting Plt's Mt for Prelim Inj


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The Single Publication Rule and Statute of Limitations in Defamation Cases

The single publication rule in defamation claims is a rule that prevents a cause of action for defamation from accruing with each additional publication, with some qualifications.  The single publication rule prevents the statute of limitations from restarting each time a defamatory article is published and provides that the statute of limitations runs from the date of first publication.

Generally speaking, a cause of action for defamation accrues whenever a defamatory statement is made, and each repetition of a single defamatory statement constitutes a new cause of action. Restatement (Second) Torts §577A, comment a. The rise of mass publication, however, gave rise to the “single publication rule,” which provides that any one edition of a publication containing the defamatory material shall be deemed to be a single publication. Restatement (Second) Torts § 577A (1977) The cause of action for defamation is deemed to arise on the edition’s original publication date, even if the edition is printed and distributed over multiple dates.

When a book or magazine edition is released, it is deemed a single publication even though its printing may have occurred over the course of several days.  A single edition also exists even if an unaltered reprint of the material is produced shortly after the first printing is exhausted. An initial edition will constitute only one publication, and a cause of action regarding its contents would accrue upon the first date of publication only and not on the publication of subsequent editions.

Nevertheless, if a book, for example, is first issued as a hardcover and later released as a paperback, the paperback would be deemed to be a second publication. A new cause of action would accrue as of the date of the issuance of the paperback edition. Likewise, if the same edition is printed ten years later, long after the first print was exhausted, the second printing is deemed a subsequent publication, with a new statute of limitations because it is designed to reach a new audience.  When an unaltered article containing defamatory material is reissued in a second, paperback or morning/afternoon edition, it is deemed to be a second publication that constitutes a separate cause of action for defamation with its own separate litigation period and so is not covered by the single publication rule.

There have been significant challenges in application of the single publication rule to internet publications as internet publications are markedly different than print publications whose distribution is finite as opposed to internet publications which are arguably infinite in publication as it is “published” anew each time it appears in search results for readers to find and review.

The trend in most jurisdictions in the United States is to apply the single publication rule to internet publications of content weighing the prospect of a statute of limitations without end versus achieving finality for when internet publications which are defamatory remain actionable.

One issue with respect to internet publications and the single publication rule is the issue of when changes or modifications are made to an internet publications will trigger a “republication” so as to avoid the single publication rule and become a subsequent publication with a new cause of action and new statute of limitations.

Does the revamping of a website with a defamatory publication where the posting becomes more prominent or more visible restart the statute of limitations?   Does republishing the same internet article to a new URL that is arguably more visible to search engine results a new publication?  Does changing a headline without changing the content of the original posting which arguably makes an internet posting more visible or searchable a republication designed to reach a new audience a republication in avoidance of the single publication?  Does the analysis of the single publication rule for print in terms of whether the publication is designed to reach a new audience make any sense at all in analyzing internet publications for application of the single publication rule given a new audience appears each time the publication is accessed though a search engine and is accessible for all time?

These issues have recently or are all being litigated in applying the single publication rule to defamatory internet publications.  If you have been defamed on the internet and it is suggested that the statute of limitations has run on your claim under the single publication rule, don’t throw in the towel without consulting an experienced attorney who can assist you in properly analyzing your potential internet defamation claim under the current state of the law.

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Michigan Non-Compete Agreements. Good for the Michigan Economy or Bad?

The debate of whether non-compete agreements are good for a state economy or bad is not a new one but the debate has freshened of late with discussions concerning the best ways to grow the Michigan economy.  Non-compete agreements are valid in Michigan provided the non-compete meets certain requirements.

Specifically, Michigan’s law on non-competes states:

An employer may obtain from an employee an agreement or covenant which protects an employer’s reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited. MCL 445.774a (1).

A Michigan non-compete agreement is valid if it protects a legitimate business interest of the employer (usually a relatively easy threshold to meet) and  is reasonable as to geographic scope and time duration.  Courts vary significantly on what may be reasonable and the caselaw guidance on what is of reasonable time duration in Michigan is generally in the area of one to three years.  A reasonable geographic scope could be world-wide depending on the circumstances….and the judge you draw who is deciding your case.  Another relatively uncommon principle in Michigan is that judges in non-compete cases in Michigan are allowed to “blue-pencil” a non-compete agreement which means the court can rewrite it to make it reasonable in their opinion rather than simply striking a non-compete provision as invalid and unenforceable.

There are those who argue that with a mobile workforce that a stringent non-compete law is a disincentive for workforce talent to locate in Michigan.  It should be noted also that continuing employment has been held to be adequate consideration in Michigan to sustain a non-compete signed after employment begins….meaning the non-compete can be presented to the employer AFTER commencement of emploment and still be valid.  After all, the argument goes, who would leave a good paying job in their field of expertise to come to Michigan and leave their future ability to switch jobs to a judge who will decide, after the fact, whether their non-compete agreement is reasonable?

Given there are states that will not recognize the validity of employee non-competes such as California and Washington there is certainly merit in the discussion over whether the Michigan non-compete law in its current form is providing a disincentive in attracting workforce talent to Michigan.  Although there have been bills in the Michigan legislature that have proposed the elimination of non-competes or changes in the law that would require that a non-compete be presented to an employee in advance of an employment offer none of those bills have garnered much traction and did not pass.

What is your view of whether the current Michigan non-compete law is good or bad for Michigan.  We’d love to hear your comments.

 

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Post M&A IP Reminders and Considerations

Congratulations, you have done your due diligence, navigated all the pre-closing activities and legalities and closed your transaction.  Now operations begin, including post-closing obligations (not to mention successful integration into your business).  One of the most important post-M&A activities relates to intellectual property (IP), including patent, trademark and copyright registrations.  In fact, this also includes pending patent, trademark and (to a lesser extent) copyright applications, both domestic and international.  So now what?

Whether you utilize your outside corporate counsel, an IP and corporate boutique law firm, in-house legal team or an IP service provider, you undoubtedly need a post-closing IP plan.  Here are some reminders and considerations that can assist your organization:

1. List of IP – Assuming a complete and accurate IP Disclosure Schedule as part of the Agreement of Merger, Asset/Stock Purchase Agreement or other controlling document, you should have a list of IP.  Note that you should always check to ensure that no new IP has been filed for between the closing date and the commencement of post-closing efforts; recognizing that any such new filings will need to be included in your efforts.
2. IP Recordals – Recording ownership changes, security interests and other matters with the various registering offices is likely the most time-consuming post-closing activity.  It typically encompasses several things, including potential ownership, address, Attorney of Record (AOR) and correspondent/representative changes.  Nonetheless, filings will need to be made in the United States Patent and Trademark Office (USPTO), United States Copyright Office (USCO) and any and all applicable International IP offices.  Note that recordals typically include the recording of security interests (e.g. lender’s interest as part of a credit facility, including completing supplements to perfection certificates) and are necessary to perfect a security interest.
3. IP Docketing and Maintenance – Given all the resources expended to acquire and secure the various kinds of IP you now own, you must be mindful to effectively docket those trademarks and patents so as to be able to maintain them.  This includes making necessary filings and paying required filing fees with the appropriate governmental bodies.  Note that best practices dictate a dual-calendaring system, and oftentimes credit facilities require maintenance of IP unless certain delineated exceptions are met.
4. IP Monitoring and Enforcement – You are not only well-served to monitor and enforce your IP, but trademark law requires policing your marks or risk potentially losing trademark rights.  Note there are numerous third party software solutions that can monitor and identify potential infringement or other unauthorized use of your IP in domain names, on social media or otherwise, which can then be analyzed by your IP counsel and acted upon, as advised.
5. IP Monetization Strategy – Amidst all of the post-closing obligations, don’t lost sight of the fact that you want to continue to monetize your IP.  This can take many forms, such as licensing, efforts to further preclude third parties from usage or further M&A efforts.  Note that a defined IP monetization strategy plan, prepared in conjunction with your executives, branding, technical and legal team, has proven to be an effective tool.

Ultimately, post-closing activities involving intellectual property, although tedious, can be streamlined, with the goal of being efficiently completed.  Doing so will require communication between your entity and outside legal counsel.  Remember, you saw value in that merger or acquisition, so do not forget to increase that value by properly handling your IP post-closing.

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