Florida Virtual School spent $1 million-plus in tax dollars on federal lawsuit it lost

The Florida Virtual School lost a long-running trademark dispute that it spent more than $1 million to pursue when a federal judge ruled last week that it had shown “no credible evidence” that a competitor had infringed on trademarks or confused parents looking for virtual classes for their children.

The virtual public school’s “prosecution of this lawsuit seems more akin to a ‘trademark bully’ harassing a competitor than a party seeking reasonable redress for any harm,” wrote Judge Gregory Presnell of the U.S. District Court in Orlando in his Jan. 2 order.

Although it sought “millions” in damages, Presnell wrote, the school made a “feeble” claim. In a footnote, the judge also wrote that the state’s virtual school registered some of its trademarks with the U.S. Patent and Trademark Office under “dubious circumstances.”

The virtual school spent more than $1.4 million for two of the four outside law firms that worked on the lawsuit against K12, a Virginia-based online education company that rebranded as Stride Inc in late 2020 but is still referred to as K12 in the court documents.

That money paid for the services of the Luther Law firm in Orlando and Thomas Bishop, a Jacksonville attorney. Two other law firms also worked on the case, but the virtual school said it could not provide their total fees until next week.

In losing the case, the publicly funded virtual school could be required to pay attorney’s fees for K12, which plans to seek those payments this month.

The lawsuit “has been a painful – and avoidable – experience for Stride, which was forced to spend a king’s ransom to defend itself from FLVS’s meritless claims,” said Steven Hollman, the company’s lead attorney in the case, in an email. “Stride will be asking the Court for an award of attorneys’ fees to deter this type of trademark bullying.”

Stride called the lawsuit “frivolous” and “a complete waste of taxpayer money” in an unsigned, emailed statement.

Hailey Fitch, a spokeswoman for the virtual school, said in an email that the school was reviewing its legal options after the judge’s decision.

The virtual school, considered a national pioneer in online education, serves more than 240,000 students, most of them using FLVS as a part-time option, often to take online classes that are not available at their schools or do not fit into their school-day schedules. It is headquartered in Orlando and operates on more than $300 million in taxpayer money.

The lawsuit was part of what the judge called a “marathon trademark dispute” between the two online schools that began 12 years ago.

Florida’s virtual school won its initial lawsuit against K12, reaching a settlement with the private company in 2015 that meant K12 had to stop marketing its Florida Virtual Academy/Program and its acronym FLVA/P, which the virtual school said was too similar to its name and FLVS acronym.

The virtual school said it sued again in 2020 because it thought K12 breached that 2015 agreement when it started a virtual program called the Florida Online School with the small Hendry County school district in southwest Florida in 2019. In filing the lawsuit, FLVS noted that K12 was advertising “Florida virtual schooling” on its website, which it viewed as a violation of the previous agreement, and using a blue color scheme similar to the virtual school’s on its website.

The virtual school, Fitch said, is required by law to protect its intellectual property. It filed the 2020 lawsuit “to protect against K12’s repeated infringement on FLVS trademarks, which deliberately blurred the lines between the two organizations and caused confusion for Florida students and families,” she wrote.

But in his order, Presnell wrote that FLVS produced no evidence of confusion, except that all online education providers operate in a “muddled marketplace replete with generically and descriptively named participants.”

The judge also noted that when the virtual school complained to K12, the company renamed the Hendry school the Digital Academy of Florida. The virtual school still sued, however.

“It was not enough that Defendants completely rebranded their entire online school,” Presnell wrote. The virtual school “now insists that Defendants—who operate an online school in Florida—must not use those words anywhere on their websites.”

The state virtual school “does not retain exclusive rights to the phrase, “Florida online school,” when it is used to simply describe … available online schooling options in Florida,” he added.

FLVS’ trademarks are also “inherently weak,” the judge concluded, calling them  “generic” and “descriptive,” which makes it hard to argue K12 was guilty of infringing on them.

Presnell also said the two company graphics were different, as the Florida Online School used a drawing of a panther and gray, tan and dark blue. Florida Virtual School’s graphic is bright blue with only text, he noted.

After it was sued, K12 filed a counterclaim, arguing the virtual school committed fraud on the federal patent office with false sworn statements that said FLVS had offered elementary school classes years before the Florida Legislature authorized such an operation.

The virtual school began as an online high school in 1997 and later added middle school courses and then elementary school options.

In court filings, K12 noted that in 2010 and 2016 the virtual school submitted documents to the patent office that claimed that “as early as 2002” it had elementary online programs, though those were not yet authorized by the Florida Legislature.

FLVS’ former attorney Frank Kruppenbacher signed the 2010 document. Kruppenbacher resigned from the school in 2018 amid accusations of bad behavior and inappropriate spending. He recently agreed he violated a state ethics law by having a school employee do work for his private business, a matter that will be before the Florida Ethics Commission on Jan. 26.

In December, Presnell ruled against K12 on that trademark claim, saying there was “no evidence of nefarious intent remotely rising to the level of fraud.”

But in his January order, the judge still criticized FLVS on that topic, as he referred to the  “dubious circumstances” that included “at least one material misrepresentation” to the federal patent office.

Fitch wrote that the virtual school was “working to understand this statement” in light of the judge’s December ruling, which went against  K12 and its effort to cancel FLVS’ trademarks.