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Kenneth P. Shaw, et al v. Broad and Cassel

December 20, 2011


The opinion of the court was delivered by: Cecilia M. Altonaga United States District Judge


THIS CAUSE came before the Court upon the Motion to Dismiss Amended Complaint with Prejudice . . . ("Motion") [ECF No. 9] filed by Defendants, Broad and Cassel, Broad and Cassel, P.A. (collectively "Broad and Cassel"), Mark F. Raymond, Mark F. Raymond, P.A. ("collectively Raymond"), Rhett Traband, Rhett Traband, P.A. (collectively "Traband"), and Juancarlos Sanchez ("Sanchez"), on November 7, 2011. Defendants seek to dismiss Plaintiffs, Kenneth P. Shaw ("Shaw") and Shaw Rose Nets, LLC's (Shaw Rose Nets['s]") Amended Complaint [ECF No. 1-2] under Federal Rule of Civil Procedure 12(b)(6). The Court has carefully considered the parties' written submissions and the applicable law.


In 1995, Shaw, a grower and exporter/importer of commercial grade roses, developed a method to substantially enhance the growth and size of rose heads by using nylon mesh nets. (See Compl. ¶¶ 11--12). To protect his invention, Shaw filed a patent application with the United States Patent and Trademark Office ("USPTO") on January 15, 1996. (See id.¶ 13). On June 16, 1998, the USPTO awarded Shaw U.S. Patent No. 5,765,305 (the "patent") titled, "Method of Increasing the Size of a Rose Head During Growth." (Id.).

At all times relevant, Broad and Cassel held itself out to be a full-service law firm with substantial experience and expertise in intellectual property law. (See id. ¶ 18). Mark F. Raymond is a lawyer who practices law at Broad and Cassel through Mark F. Raymond, P.A.; Rhett Traband is a lawyer who practices law at Broad and Cassel through Rhett Traband, P.A.; Sanchez is a lawyer who was an associate at Broad and Cassel. (See id. ¶¶ 5--7).

In 2006, Shaw contacted Broad and Cassel to discuss enforcement of the patent after Shaw notified a number of U.S. importers of (1) the patent, and (2) that they infringed upon it when importing roses grown with the method described and claimed in the patent. (See id. ¶¶ 14, 16--17). Raymond advised Shaw that he practiced intellectual property law and was qualified and experienced in patent infringement litigation. (See id. ¶¶ 5, 19). In reliance on Defendants' representations of their experience and expertise, Shaw retained Defendants as counsel in connection with the enforcement of the patent. (See id. ¶ 20). Shaw Rose Nets also retained Broad and Cassel as counsel in connection with its interests in the patent. (See id. ¶ 21).

Broad and Cassel sent cease and desist letters to various alleged infringers who imported significant quantities of infringing roses into the United States. (See id. ¶ 22). These letters demanded that the importers cease their infringing activities or negotiate a license. (See id.). On January 25, 2007, the importers sought a declaratory judgment in federal court that the patent was invalid and unenforceable. (See December 10, 2008 Order Granting Plaintiffs' Motion for Summary Judgment, in Del. Valley Floral Grp., Inc. v. Shaw Rose Nets, LLC, Case No. 07-20199-CIV-Jordan, Ex. E, at 1 ("2008 Summary Judgment Order") [ECF No. 1-6]). Broad and Cassel then filed counterclaims against the importers for patent infringement on behalf of Shaw and Shaw Rose Nets. (See Compl. ¶ 25).

During the Delaware Valley litigation, the importers deposed Shaw. (See id. ¶ 27). Prior to the deposition, Defendants did not review with Shaw key dates, events, and issues. (See id. ¶ 30). Rather than meeting with Shaw, the Defendants gave Shaw their file and asked him to review it alone in a firm conference room. (See id.). At his deposition, Shaw was unaware of the significance of the first date he sold roses grown with his patented method, and mistakenly testified that he had begun exporting to the United States roses grown with his patented method in 1994. (See id. ¶¶ 27, 31). Indeed, Shaw first conceived and exploited his invention in 1995, not 1994. (See id. ¶ 29). Shaw traveled many times to South America in both 1994 and 1995, and incorrectly relied on a 1994 passport entry in giving his testimony. (See id. ¶ 31). Shaw alleges he gave this mistaken testimony because the Defendants did not prepare him for deposition. (See id. ¶ 29). Further, Traband and Sanchez, the lawyers who represented Shaw at the deposition, failed to make any attempt to correct Shaw's testimony on cross-examination despite the fact that Shaw, in interrogatory answers given prior to his deposition, had identified 1995, not 1994, as the year in which he began to exploit his invention. (See id. ¶ 32).

Raymond, the senior lawyer on Shaw's file, did not represent Shaw at the deposition. (See id.). Rather, Shaw was represented by Traband, a lawyer inexperienced in patent law, and Sanchez, a junior lawyer also unqualified in patent law. (See id.). Traband had also left the deposition mid-course. (See id.).

Raymond, Traband, and Sanchez did not take any action after Shaw's deposition testimony had been transcribed and had become available for review. (See id. ¶ 33). None of these attorneys timely appreciated the significance of Shaw's testimony in light of 35 U.S.C. § 102(b),*fn2 which requires an inventor to file a patent application within one year of beginning to commercially exploit his invention to be valid. (See id. ¶¶ 28, 33). Had Defendants understood the significance of Shaw's error, they could have (1) asked Shaw questions during the deposition to correct his testimony, (2) "notice[d] the continuation" of Shaw's deposition to allow Shaw the opportunity to correct his testimony, or (3) submit[ted] an errata sheet seeking to correct his testimony within thirty days from the date the deposition transcript became available. (See id. ¶ 34). Conversely, had Defendants understood the significance of Shaw's testimony and believed the testimony to be correct, they should have ceased prosecuting Shaw's counterclaims because they would have understood that there was no longer a good faith basis for maintaining suit as the patent was unenforceable and invalid. (See id. ¶ 35). Yet, because Defendants were ignorant of the mistake and the import of Shaw's testimony, Defendants did nothing. (See id. ¶ 36).

After the thirty-day window for submitting an errata sheet had passed, the importers served Shaw a motion for sanctions under Federal Rule of Civil Procedure 11, requesting that Shaw dismiss his case with prejudice in view of his testimony. (See id. ¶ 37). After the Defendants informed the importers that Shaw's testimony was merely a mistake and that they had no intention of taking a dismissal, the importers filed a motion for summary judgment, which asked that the district court declare the patent invalid pursuant to 35 U.S.C. § 102(b) based on Shaw's deposition testimony. (See id. ¶¶ 37--38).

Notably, Shaw's deposition had merely been adjourned, not concluded. (See id. ¶ 39). Thus, even after the importers filed their motion for summary judgment, Defendants could still have noticed the continuation of the deposition, cross-examined Shaw during the continuation, and elicited testimony correcting his prior mistake. (See id.). Instead, Defendants submitted an untimely errata sheet, attempting to correct Shaw's testimony, in order to oppose the importers' motion for summary judgment. (See id.).

Defendants also submitted a declaration from Govind Muthiah ("Muthiah"), an employee who began working for Shaw in 1995, that stated Shaw began exporting roses grown by the patented method in 1995. (See id. ¶ 41). Defendants knew of two other prior employees of Shaw, David A. Sperber ("Sperber") and Pedro Salzedo ("Salzedo"), who had worked for Shaw in 1994 and who had personal knowledge that Shaw's conception and exploitation of his invention first occurred in 1995, not 1994. (See id. ¶ 45). However, Defendants did not submit sworn declarations from these employees with Shaw's opposition brief to the importers' motion for summary judgment. (See id.). Defendants advised Shaw that Sperber's and Salzedo's declarations were not needed to defend against the motion. (See id.).

Had the Defendants timely corrected Shaw's erroneous testimony regarding the date he first sold roses grown using his patented method, Shaw would have been able to demonstrate the existence of a disputed issue of material fact, thus avoiding entry of summary judgment. (See id. ¶ 40). Instead, the district court judge held that he could not consider (1) the errata sheet because it was untimely, nor (2) Muthiah's declaration because as a matter of law, "'[w]hen the non-movant has testified to events, [the Court does] not (as urged by Plaintiffs' counsel) pick and choose bits from other witnesses' essentially incompatible accounts (in effect, declining to credit some of the non-movant's own testimony) and then string together those portions of the record to form the story that we deem most helpful to the non-movant.'" (2008 Summary Judgment Order 13 (citing and quoting Evans v. Stephens, 470 F.3d 1272, 1278 (11th Cir. 2005) (internal citations omitted)); see Compl. ¶ 43). The district court added that Muthiah's declaration also could not be considered because Muthiah did not have personal ...

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