Design piracy case survives Dastar motion to dismiss

Gail Green Licensing & Design Ltd. v. Accord, Inc., 2006 WL 2873202 (N.D. Ill.)

The relevant facts: plaintiffs allege defendants copied its unpublished, copyrighted designs for pet clothing/costumes. The court dismissed the false advertising claim because plaintiffs didn’t compete with defendants. In Johnny Blastoff, Inc. v. Los Angeles Rams Football Co., 188 F.3d 427 (7th Cir. 1999), the Seventh Circuit concluded that a plaintiff that was in the business of creating and marketing cartoon characters lacked standing against a football team, and that rationale applied here.

But the court refused to dismiss the passing off claim. Plaintiffs allege “unauthorized and unlawful uses of pirated copies of Plaintiffs’ original Works on various goods” that omit to state that defendants’ “counterfeits” are unauthorized, which constitutes false and misleading representations that defendants’ goods bear plaintiffs’ authorized designs. This is a clean kill under Dastar, which the court somehow didn’t recognize. The court may have gone off the rails by applying an intervening Seventh Circuit decision discussing the fact that physical products like Ford cars often incorporate the products of other manufacturers, and applying Dastar to hold that there’s no deception if the consumer can tell that the overall finished product comes from the seller. The court thus read the complaint broadly and said plaintiffs didn’t fall within Dastar.

But the Seventh Circuit gloss addresses a different facet of “origin” than the precise issue in Dastar, and in this case: the complaint clearly alleges that defendants produced “copies” of plaintiffs’ designs. As such, those copies have their origins with defendants, because "origin" in the Lanham Act refers to physical provenance, and the complaint cannot fairly be read to say that defendants took plaintiffs’ physical products and incorporated them into new products. Defendants’ argument did not correct this error, perhaps because they argued (correctly but distractingly) that retail products of this sort are the product of many designers’ decisions, not a single creative force. It’s true that selling a t-shirt without naming every designer who contributed isn’t a false statement of origin – but that, under Dastar, is because the designer didn’t physically produce the product.

So this claim that should have been knocked out at the motion stage will have to proceed to summary judgment.