Friday, February 01, 2013

Lanham Act claims against textbook replacement not Dastar-barred

Pearson Educ., Inc. v. Boundless Learning, Inc., --- F.Supp.2d ----, 2013 WL 357631 (S.D.N.Y.)

Boundless makes textbooks that it advertises can be used in place of much more expensive, popular textbooks.  Plaintiffs sued Boundless for direct and secondary copyright infringement, as well as unfair competition, false designation of origin, and false advertising.  Boundless moved to dismiss the non-copyright claims, and the court denied the motion.

Plaintiffs alleged that the unfair competition and false advertising came from (1) alleged copying of the selection, coordination and arrangement of topics and concepts from plaintiffs' textbooks (okay, that’s preempted by copyright!); (2) including the titles and covers of plaintiffs' textbooks in advertising for the Boundless textbooks (comparative advertising); and (3) advertising the Boundless textbooks as “versions” of plaintiffs’ textbooks or as “equivalent” to them. The use of covers and titles would purportedly cause consumers to believe that Boundless was authorized to produce its alternatives, and also Boundless allegedly misrepresented the nature, characteristics, and qualities of its textbooks.

Boundless alleged that Dastar barred these claims.  But Dastar only covered §43(a)(1)(A), not §43(a)(1)(B).  Did anyone tell the Antidote court?  This holding is interesting if you care about personal rights v. corporate rights—plaintiffs here apparently win because they allege misrepresentation of “source” but not “authorship.”  Which is kind of weird, since Dastar was also about a misrepresentation of “source.”  If the alleged misrepresentation comes just from defendants saying "hey, we have the same content," then Dastar does seem implicated, and as Mark McKenna has noted one should not be able to plead around Dastar by adding in the idea that identifying the thing you copied inherently conveys a sponsorship/authorization message.
The court held that “Dastar does not preclude a Lanham Act claim based on deceptive and confusing advertising of the tangible product in which the creative content is embodied.”  Plaintiffs had alleged that the titles of their textbooks were inherently distinctive and had secondary meaning.  The complaint went beyond alleging copying: plaintiffs pleaded that Boundless falsely represented that it offers a digital version of Plaintiffs' textbooks or something equivalent. That was actionable under §43(a)(1)(B).  (Since the court refuses to dismiss any of the claims, it seems to be sustaining the §43(a)(1)(A) claims too—Boundless is falsely claiming to have authorization to produce versions (§43(a)(1)(A)), or it is falsely claiming to have comparable products that aren’t in fact good enough to substitute for the assigned textbooks (§43(a)(1)(B)).  This fits into standard Lanham Act law, but I’d flag the issue of protecting comparative advertising generally.)

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