Tuesday, August 28, 2012, 2:39 PM

State Agency Appeals Ruling that it Lacks Standing to Bring Suit Under Lanham Act

Florida VirtualSchool ("FLVS"), an agency of the state of Florida, has appealed a ruling by Judge Gregory Presnell of the Middle District of Florida dismissing its trademark infringement action for lack of standing to bring suit under the Lanham Act.

FLVS is an educational institution that provides online courses to students throughout the United States and foreign countries.  FLVS became an agency of the State of Florida in June 2000 pursuant to Section 1002.37 of the Florida Statutes, which provided in relevant part:
The board of trustees ... may acquire, enjoy, use and dispose of patents, copyrights, and trademarks and any licenses and other rights or interests thereunder or therein.  Ownership of all such patents, copyrights, trademarks, licenses, and rights or interests thereunder or therein shall vest in the state, with the board having full right of use and full right to retain the revenues derived therefrom.
Fla. Stat. 1002.37(2)(c).   Since 2002, FLVS has continuously operated under the names "Florida VirtualSchool" and "FLVS" and, in 2010, it registered those marks with the USPTO.  The marks were assigned registration numbers 3,830,765 and 3,873,393, respectively.

In 2003, the State of Florida authorized a program through which private online education providers could offer education services to Florida students.  K12, Inc. and K12 Florida, LLC (collectively, "K12") joined the program and adopted the name "Florida Virtual Academy" in documents filed with the state.  FLVS filed this suit alleging that K12's use of Florida Virtual Academy amounted to infringement of its registered trademarks under the Lanham Act.  K12 moved to the dismiss the complaint on the basis that FLVS lacked standing to bring the action due to the express statutory language vesting ownership in the State of Florida.

Judge Presnell of the Middle District of Florida issued a decision granting K12's motion to dismiss on July 16, 2012.  The Court noted that for "standing to exist under the Lanham Act, the plaintiff must be the owner of the mark in question or an exclusive licensee."  Judge Presnell held that the plain language of the statute "clearly vests 'ownership' of the marks in the State of Florida -- an entity separate and distinct from FLVS" and that the legislature's evident intent was to grant FLVS "specific, limited intellectual property rights."  FLVS argued that, at a minimum, it is an exclusive licensee such that it could bring the suit, but the Court noted that the statute's language also contemplated multiple licensees and that the licensor, the state of Florida, retained exclusive ownership.  As a result, Judge Presnell found that FLVS lacked standing to bring the lawsuit and dismissed the action without prejudice.

On August 17, 2012, FLVS filed a notice of appeal with the Eleventh Circuit.  The case is Florida Virtualschool v. K12, Inc., et al., No. 12-14271, on appeal from Case No. 6:11-cv-831-Orl-31KRS (M.D. Fla.).  

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