Monday, September 29, 2014

selling a book without authorization doesn't violate Lanham Act

Smith v., LLC, No. 1:12-cv-04374, 2014 BL 263099 (S.D.N.Y. Sept. 23, 2014)

Smith wrote a book, Hardscrabble. He contracted with Smashwords, an online ebook distributor, to sell his book. Smashwords distributed Smith’s book to its retail partners, including B&N, to list online for sale.  Smith ended his relationship with Smashwords in 2011, but nobody told B&N. Thus, five months after Smith terminated his contract with Smashwords, the book was still available for sale on B&N’s website. [It’s not clear from this description whether a sale could’ve been completed.]  As soon as Smith notified B&N of the problem, B&N took the listing down, but he demanded cash and B&N declined to pay, so he sued for infringement, contributory infringement, and unfair competition.

B&N didn’t sell any copies of Hardscrabble.  But B&N did provide access to portions of the book.  The various online “see inside” features B&N offered weren’t available for Hardscrabble. B&N’s “Read in Store” feature allows a customer to browse an eBook using the Nook for up to an hour while in a B&N retail store, but discovery revealed that no customer used it for Smith’s book during the relevant period. However, one customer did obtain a sample of the eBook in June 2010, which was stored in the customer’s digital locker on B&N’s servers and was accessed on at least 7 different occasions during the relevant period. [This is another casualty of the first sale doctrine: your backup is B&N’s, and if permission is withdrawn your authorized use disappears—note that the customer chose the sample at a time when its distribution was fully authorized.  In a nondigital space that would be the end of the matter.  And also note that the customer is now allegedly an infringer, liable for statutory damages, because they chose a sample of a book during the period that sample was fully authorized.  I would at least find an implied license for this use to continue post-termination.]

First, the court kicked out the Lanham Act claim.  Dastar teaches that “[t]he words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to consumers.” Claims based on allegedly false representation of affiliation between an author and a distributor are therefore barred.  Smith argued that the continued listing of the book would cause confusion about the origin, sponsorship or approval of Smith’s goods or commercial activities (?).  The court wasn’t having it.  There wasn’t even an alleged misrepresentation of authorship.  The unauthorized use of his name, allegedly diverting traffic away from authorized sites (though not, apparently, sales), was “not one of consequence to consumers.”

However, the court refused to grant summary judgment on direct and contributory copyright infringement claims, which must be annoying to B&N; it said it’d explain later. 

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