United States District Court, M.D. Florida, Orlando Division
ANTOONI II United States District Judge
OCR Solutions, Inc. (OCR) and Defendants CharacTell, Inc. and
CharacTell, Ltd. (collectively, CharacTell) filed claims and
counterclaims against one another regarding OCR's use of
identification card-reading software called
"idCliQ." CharacTell claims that it solely owns
idCliQ and that OCR was merely a reseller of its product.
CharacTell is currently preventing OCR from reselling idCliQ
despite OCR's claims that it co-owns the product under an
oral joint venture agreement. OCR now seeks a preliminary
injunction to provide it access to the idCliQ software, which
would enable it to provide support to its existing clients
and to obtain new clients during the course of the
litigation. (Mot. Prelim. Inj., Docs. 45 &48,
at25). OCR also seeks to prevent CharacTell from
luring away OCR's clients under a signed Mutual
Confidentiality Agreement. (Id.). After considering
the motion, CharacTell's response in opposition, (Doc.
51), the parties' argument at a June 9, 2017 hearing,
(Mins., Doc. 59), and the parties' evidence, (Docs. 47,
49, 49-1, 49-2, 51-1, 51-2, 51-3), the motion must be denied.
obtain a preliminary injunction the movant must establish
"(1) a substantial likelihood of success on the merits;
(2) that irreparable injury will be suffered if the relief is
not granted; (3) that the threatened injury outweighs the
harm the relief would inflict on the non-movant; and (4) that
entry of the relief would serve the public interest."
Schiavo ex rel. Schindlerv. Schiavo, 403 F.3d 1223,
1225-26 (11th Cir. 2005). '"[A] preliminary
injunction is an extraordinary and drastic remedy not to be
granted unless the movant clearly establishe[s] the
"burden of persuasion"' as to each of the four
prerequisites." Siege I v. LePore, 234 F.3d
1163, 1176 (11th Cir. 2000) (quoting McDonald's Corp.
v. Robertson, 147 F.3d 1301, 1306 (11th Cir. 1998)).
Likelihood of Success on the Merits
motion for a preliminary injunction is premised on the
likelihood that it will ultimately establish that (1) there
was a valid oral agreement between the parties establishing a
joint venture in the creation, marketing, and sale of idCliQ,
and (2) the Mutual Confidentiality Agreement signed by the
parties is enforceable.
Joint Venture Agreement
joint venture is a special relationship of two or more
parties to engage in and carry out a single business venture
for joint profit." Winey v. William E. Dailey,
Inc., 636 A.2d 744, 751 (Vt. 1993) (internal citation
and quotation marks omitted). Under both Massachusetts law
and Vermont law,  a joint venture agreement can be made
orally. Mass. Prop. Ins. Underwriting Ass'n v.
Georgaklis, 931 N.E.2d 995, 999 (Mass. 2010);
Misloskv v. Wilhelm, 286 A.2d 267, 271 (Vt. 1971).
The crucial issue in deciding whether a joint venture existed
is whether the parties intended to associate as
joint venture partners. Georgaklis, 931 N.E.2d at
999; Mislosky, 286 A.2d at 271. Additional factors
to consider include whether the parties each (1) shared in
the profits and losses; (2) contributed money, assets, or
talents, to a common undertaking; (3) had a "joint
property interest in the subject matter of the venture";
and (4) had "a right to participate in the control of
the venture." Georgaklis, 931 N.E.2d at 999
(citation and quotation marks omitted); accord
Winey, 636 A.2d at 751 ("[T]here must be an
agreement to share in profits and losses, joint control or
right to control, a joint proprietary interest in the subject
matter and a community of interest in the performance of the
strongest argument in favor of the existence of a joint
venture agreement is a February 2, 2015 email from Eya!
Barsky, OCR's president, to Paz Kahana, president of both
CharacTell entities, in which Barsky states that he
"never received the joint venture agreement that you
spoke about before my move [to Florida]." (Ex. E to
Third Barsky Deck, Doc. 49-1 at 32). In response, Kahana stated,
"You are correct, I drafted it while I was in
Israel." (jdj. In late February or early March 2015, the
agreement drafted by Kahana was sent by Ofer Comay, vice
president of CharacTell, Ltd., to Barsky. (Third Barsky
Decl., Doc. 49, ¶ 25; Kahana Deck, Doc. 51-1, ¶
29). The proposed agreement included the following general
1. idCliQ technology is based on technology [CharacTell] has
already developed and as such belongs entirely to
2. [CharacTell] is free to sell any of its technologies or
the entire company without hindrance.
3. OCR is licensed to sell [CharacTell] products which
includes idCliQ from [CharacTell] at most favorable terms.
4. OCR may-with prior consultation . . . and approval by
[CharacTell-] offer to sell [CharacTell] technology to its
clients. In such case, if [CharacTell] accepts this offer.. .
OCR will get [a] percentage of the sale.
to Third Barsky Decl., Doc. 49-1 at 33). With regard to
CharacTell's "Stand-Alone Products"-which
included idCliQ-the proposed agreement specifically stated:
1. OCR will have exclusive sales rights during 2015.
2. OCR will continue to have exclusive rights in 2016 if
net income in 2015 is above 800K ....
3. OCR will continue to have exclusive rights in 2017 if
net income in 2016 ...