final until disposition of any timely and authorized motion
under Fla. R. App. P. 9.330 or 9.331.
appeal from the Circuit Court for Leon County. Terry P.
J. Padovano of Brannock & Humphries, Tallahassee; Kelly
Overstreet Johnson and Russell B. Buchanan of Baker Donelson
Bearman Caldwell & Berkowitz, PC, Tallahassee, for
Peoples, Assistant General Counsel, Tallahassee, for
Appellees Florida Department of Transportation and Florida
Turnpike Enterprise; W. Douglas Hall and Peter D. Webster of
Carlton Fields, Tallahassee, for Appellees Neology, Inc., and
case came before the trial court on the parties'
cross-motions for summary judgment. The parties were then-and
still are-fully in agreement regarding the material facts.
They disagree, however, as to the legal conclusions to be
drawn from the undisputed facts. The matter, therefore, was
appropriately disposed of by summary judgment. On appeal,
Kapsch TrafficCom IVHS, Inc. ("Kapsch") argues that
the trial court erred in not granting summary judgment in its
favor. We disagree and affirm.
case centers on a patent license agreement
("Agreement") entered into between the Florida
Turnpike Enterprise acting on behalf of the Florida
Department of Transportation (collectively,
"FDOT"), and Neology, Inc. and its parent company,
Smartrac, N.V. (collectively, "Neology"). Under the
terms of the Agreement, FDOT paid $7 million to Neology for
the nonexclusive right to use technology owned by Neology,
namely, Neology's patented 6C technology. The 6C
technology would allow FDOT's automated toll collection
"readers" to communicate not just with
Florida's Sun Pass® system transponders,
but with all transponders or "tags" on passing
vehicles from any state, in order to assess a
filed suit in the trial court claiming the license agreement
was illegal because FDOT failed to follow the competitive
bidding process dictated by section 287.057, Florida
Statutes. That section applies when a state agency seeks to
procure "commodities" or "contractual
services" costing more than $35, 000. § 287.057(1),
Fla. Stat. (referencing the "threshold amount provided
for CATEGORY TWO in s. 287.017"). The trial court
expressly noted that Kapsch did not contend that the
Agreement is one for services, and it duly observed that
nothing in the agreement requires Neology to deliver a
argued that a patent license is a "commodity"
because it is a type of intangible personal property, and
"personal property" is specifically listed in the
definition of "commodity" in section 287.012(5),
Florida Statutes. It also attempted to place the license
agreement within the purview of Article IX of the Uniform
Commercial Code ("UCC"), as codified in section
679.1021, Florida Statutes, because, in a UCC comment,
"general intangibles" are defined as a residual
category of personal property, including, for example, a
license for the use of intellectual property; hence, a patent
license. The trial court rejected both contentions. It
observed that "[t]he definitions and comments in Article
IX of the UCC  serve a different purpose than those in
section 287.057." It further explained that "[i]f
such a broad, sweeping interpretation were given to the term
'personal property' urged by [Kapsch], there would be
no reason to list the several examples in [section
287.012(5)]. The term 'personal property' would
necessarily include all others."
the trial court was "more persuaded" by the cases
cited by FDOT and Neology describing "the nature of a
nonexclusive patent license as a covenant not to sue or a
grant of immunity from suit for patent infringement, "
thereby giving the licensee, FDOT, no property right in the
patent itself. See Gen. Talking Pictures Corp. v. W.
Elec. Co., 304 U.S. 175, 181 (1938) (citation omitted)
(holding that a company was "a mere licensee under a
nonexclusive license, amounting to no more than 'a mere
waiver of the right to sue'"); U.S. Philips
Corp. v. Int'l Trade Comm'n, 424 F.3d 1179, 1189
(Fed. Cir. 2005) ("A nonexclusive patent license is
simply a promise not to sue for infringement.");
Pub. Varieties of Miss., Inc. v. Sun Valley Seed
Co., 734 F.Supp. 250, 252 (N.D. Miss. 1990) ("A
license merely grants a party permission to do something
which would otherwise be unlawful; it grants immunity from
suit rather than a proprietary interest in the
patent."); see also TransCore, LP v. Elec.
Transaction Consultants Corp., 563 F.3d 1271, 1275 (Fed.
Cir. 2009) ("[A] patentee, by license or otherwise,
cannot convey an affirmative right to practice a patented
invention by way of making, using, selling, etc.; the
patentee can only convey a freedom from suit."); W.
Elec. Co. v. Pacent Reproducer Corp., 42 F.2d 116, 117
(2d Cir. 1930) (citations omitted) ("In its simplest
form, a license means only leave to do a thing which the
licensor would otherwise have a right to prevent. Such a
license grants to the licensee merely a privilege that
protects him from a claim of infringement by the owner of the
patent monopoly. . . . He has no property interest in the
monopoly of the patent, nor any contract with the patent
owner that others shall not practice the invention.").
trial court then turned to the actual wording of the
Agreement between Neology and FDOT. In Article 2.1, the
Agreement grants FDOT "a nonexclusive, perpetual,
nontransferable, license under [the] respective Patent
Rights." Applying the logic of the foregoing federal
decisions, the trial court concluded "as a matter of
law" that "the Agreement does not constitute a
purchase of personal property, tangible or intangible. It
merely gives FDOT permission to use the 6C technology
patented by Neology without risking liability to Neology for
patent infringement." The trial court went on to explain
that even were the license to be considered a form of
personal property, "its very nature makes it impossible
to be procured by competitive bid. The right to use
technology protected by a particular patent can only be
obtained from the patent owner. No amount of competitive
bidding can change that."
the trial court addressed Kapsch's claim that paragraph
2.8 of the Agreement, which gave FDOT a credit equal to $7
million-the amount of the license fee-against future
purchases of products from Neology, brings the agreement
within the purview of section 287.057. However, as the trial
court determined, that issue is moot due to the fact that
FDOT and Neology voluntarily amended the license agreement
prior to the instant suit being filed to remove paragraph 2.8
from the Agreement. The Agreement contains a severability
clause in paragraph 7.8 that permitted the severance of the
credit clause without affecting the rest of the Agreement.
This is so because, as the trial court rightly decided,
paragraph 2.8 "did not go to the essence of the
agreement." See, e.g., Lamaritata v.
Lucas, 823 So.2d 316, 316 n.3 (Fla. 2d DCA 2002)
(applying the severability clause to sever the unenforceable
portion of the contract, while the remainder of the
contractual provisions remained valid and in force);
Brevard Cty. Bd. of Cty. Comm'rs v. Williams,
715 So.2d 1100, 1101-02 (Fla. 1st DCA 1998) (holding that the
invalid provision of a settlement agreement should have been
severed pursuant to the severability clause rather than
declaring the entire agreement unenforceable). New Prod.
Corp. v. City of N. Miami, 241 So.2d 451 (Fla. 3d DCA
1970) (holding that "the obligation to perform certain
covenants in addition to conveyance of the property (which
are for the benefit of the purchaser) are severable, "
and, "even though the covenants may not be performed or
would be illegal they are not integral parts of the contract
and the purchaser may require specific performance of the
remaining valid portions of the agreement").
it bears repeating that no factual dispute exists regarding
FDOT's prime motivation to enter into the Agreement. It
desired to obtain a patent license, not to purchase
commodities or services from Neology. Therefore, the credit
provision was properly severed from the Agreement.
upon the foregoing discussion and the trial court's
well-reasoned analysis, we hold that summary final judgment
was properly entered in ...