Sunday, March 22, 2009

Dastar bars express misattribution claim

Pot Luck, L.L.C. v. Freeman, 2009 WL 693611 (S.D.N.Y.)

A very interesting case in which Dastar was used to bar what I would have thought was a claim for express misattribution not covered by Dastar (though disallowed by other doctrines). Maybe it’s the difficulty of articulating which doctrine ought to apply that made Dastar an attractive explanation for why plaintiff couldn’t win.

Anyway, on to the case: Pot Luck sued defendants to enjoin them from distributing, selling, or marketing the film High Times’ Potluck, to which Pot Luck owns the registered copyright. (The magazine High Times helped produce and finance the film; I take it that Pot Luck bears some relation to the magazine.) The claims: copyright infringement, along with Lanham Act and related state law unfair competition/fraud claims. Pot Luck had granted defendants an exclusive right to distribute the film, first in the US and Canada and later worldwide. Pot Luck alleged that defendants failed to distribute and promote the film as agreed under the licenses, wrongfully denied territorial licenses to third parties who wanted to distribute the film, and failed to pay Pot Luck.

For the copyright claim, the issue was whether Pot Luck’s claims were for infringement or for breach of contract, a question on which there is extensive Second Circuit precedent. The key was whether Pot Luck had rescinded any license to defendants; if so, it could sue for infringement, but if not, its remedies were in contract. Though Pot Luck alleged that it had made multiple demands on defendants, the licenses limit its right to rescind, granting defendants an “irrevocable” license. Such terms have been upheld under New York law. Thus, the court lacked subject matter jurisdiction.

On the Lanham Act claims, defendants argued that plaintiff lacked a protectable mark. The court, however, went in another direction. “Origin of goods” under Dastar means only the producer of the tangible goods, not the author of any idea, concept or communication embodied in those goods. As a result, “[t]he right to copy creative works, with or without attribution, is the domain of copyright, not of trademark or unfair competition. The failure to credit the true author of a copyrighted work is not a false designation of origin, but a violation of copyright.” Contractual Obligation Prod., LLC v. AMC Networks, Inc., 546 F. Supp. 2d 120, 130 (S.D.N.Y.2008) (quoting Freeplay Music, Inc. v. Cox Radio, Inc., 409 F. Supp. 2d 259, 263 (S.D.N.Y.2005)).

You might be wondering why the court is relying on cases about failure to credit when the problem here appears to be credit. This decision about maintaining the copyright/trademark boundary. Because there is no copyright claim, defendants can distribute the film without fear of copyright liability. (We’ll set aside the contract remedies.) That freedom would be unduly constrained if the defendants had to take the name of the film, or the filmmakers, off. In other words, it’s true that the film is High Times’ Potluck. If—which is far from certain—consumers believe that distributors need Pot Luck’s permission to distribute the film because the name itself implies permission, then we will nonetheless disregard that confusion as a matter of law. Any confusion is immaterial to consumers, who want High Times’ Potluck rather than wanting the identical “authorized” High Times’ Potluck. Among other things, the result in this case throws the old Beatrix Potter case, in which public domain images of Beatrix Potter illustrations were held to be protectable as trademarks when used on the cover of Potter books, into significant doubt.

For whatever reason, the court didn’t talk about the copyright/trademark conflict, instead fixating on “origin.” Because defendants were the manufacturers and distributors of the physical copies of the film, the court ruled, consumers wouldn’t be confused about the “origin” of the film. Except that the possessive title High Times’ Potluck doesn’t identify defendant, the actual origin—it (allegedly anyway) identifies plaintiff!

The court compounded the weirdness by distinguishing Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (a pre-Dastar case): in Chambers, the court of appeals allowed a §43 claim against for using musicians’ names and likenesses to promote recordings offered on its site. But, the court here reasoned, wasn’t the “origin” of the musicians’ names and likenesses, because wasn’t the “original producer or distributor” of the musicians’ names and likenesses. That’s kind of shockingly muddled (even setting aside questions as to why the original distributor gets a pass, such that if defendants had been the second group Pot Luck contracted with the allegations would state a claim).

The whole point of Dastar was that if you produced the physical instantiation of a copy, you’re its “origin” for §43(a) purposes. Under this reasoning, perhaps customers’ computers were the origin of the particular instantiations of the names and likenesses at issue in Chambers, but let’s assume that gets saddled with them. is then actually producing the copies of the names and likenesses, just like Dastar in Dastar. The court here is comparing tangibles to intangibles. But the basic reason that the court’s reasoning is so creaky is that the claim in Chambers is false endorsement/affiliation, like Pot Luck’s here. Such a claim might or might not survive Dastar. I don’t think Chambers is so easily distinguishable from the present case. had the recordings to offer, and it’s copyright’s job to police that, not trademark law’s. (If we want to go some sort of nominative fair use route, we might allow the names and not the likenesses, but it depends on the circumstances.)

This decision isn’t wrong; it’s just right for the wrong reason.

Anyway, the court moved on to dismiss Pot Luck’s “unfair competition” Lanham Act claim, reasoning that Pot Luck didn’t sufficiently allege either a trademark or a false advertising claim under that head. With the federal claims all gone, the state-law claims were dismissed for lack of supplemental jurisdiction, and the court denied leave to replead any of the federal claims. Pot Luck was granted leave to replead the state law claims if it could plead diversity jurisdiction, though the court warned that many of the allegations appeared insufficient on their face, and that injunctive relief was barred by the licenses.

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