Origin of services claims covered by Dastar

Thomas Publishing Co., LLC v. Technology Evaluation Centers, Inc., 2007 WL 2193964 (S.D.N.Y.)

Plaintiff publishes a directory for software products, apparently via a website. It sued defendant for copying, either wholesale or with superficial changes, substantial portions of its directory, and for misrepresenting that defendant developed, created or owned the directory and that defendant’s directory was unique or original. Thus the claims: copyright infringement, false designation of origin and false advertising under the Lanham Act, and common law unfair competition.

The district court granted defendant’s motion to dismiss the Lanham Act claims, following Dastar, and the common law unfair competition claims as preempted by § 301. Plaintiff vainly tried to distinguish Dastar by arguing that, here, the issue was the origin of a “service,” and customers don’t receive a tangible product. In effect, plaintiff argued, defendant “‘bought some of [plaintiff’s] videotapes and merely repackaged them as its own,’” (quoting Dastar, 539 U.S. at 32). But the essential holding of Dastar, the court reasoned, was that the origin of ideas and concepts is not the “origin” of which §43(a)(1)(A) speaks. This applies equally to “service” claims.

As for the false advertising claim, defendant argued that it was another disguised copyright infringement claim; all the alleged misrepresentations were about origin or authorship. Plaintiff responded that its allegations went beyond infringement, because its claim was that defendant “affirmatively and falsely represented in commercial advertising and promotional materials that [it] originated the works containing the Copyrighted Materials … and that those works are unique to [it].” The court agreed with defendant that all that was alleged was a failure to attribute authorship to plaintiff, and that was precluded by Dastar.

Maybe this could be resolved by the advertising itself, if it was attached to the complaint, but as I’ve said before I am troubled by the vigor with which courts have applied Dastar to false advertising claims. A claim that a product is “unique and proprietary” can harm consumers by making them think that they have no choice but to get the product (or service) from the advertiser. And this really has very little to do with the misattributions of authorship that the Court thought should be dealt with, if at all, through copyright. Origin and uniqueness are not the same things, though they may be related in cases of alleged copying.

Courts have allowed false advertising claims to go forward based on allegedly false claims about patent status, because of the potential harm to the consumer. If Dastar really is as expansive as courts have said, though, I don’t see why false patent claims survive it any more than false authorship claims. (Or, to take an example from another recent case, what if an advertiser claimed that its drug had unique properties, but in fact it was the same as other, cheaper drugs?) If, in order to enforce Dastar and kick cases out on the pleadings without parsing exactly what was said, we want to bar false advertising claims when the allegedly false claim concerns uniqueness, then that’s fine. But we should be conscious of where we’re setting the boundaries.

Likewise, the state law claim lacked the additional element that would save it from preemption under §301. Plaintiff argued that the additional elements were misappropriation (obviously insufficient), misrepresentation of authorship (also insufficient), and likely confusion (sometimes an extra element, but not here where the alleged confusion was over origin, not sponsorship). Conflict preemption would also have worked, by the logic of Dastar; compare Dastar’s reasoning to that of one of the cases relied upon by the district court, Daley v. Firetree, Ltd., 2006 WL 148879, at *5 (M.D.Pa. Jan. 19, 2006) (“The fact that patients may have been misled as to the author of the literary works does not make the unfair competition claim qualitatively different from the copyright claim; both rest squarely on the unauthorized act of copying and distributing.”).