Monday, April 23, 2012

challenge to "innovative" claim isn't barred by Dastar

Abarca Health, LLC v. PharmPix Corp., 2012 WL 1123611 (D. Puerto Rico)
Abarca sued PharmPix and others for copyright infringement, Lanham Act violations/trademark infringement, misuse of trade secrets, and so on.  PharmPix counterclaimed for violation of the Sherman Act and Puerto Rican law; the court dismissed most of the counterclaims, but I’m only going to look at the Dastar aspect of the ruling.  “These claims arise out of a tangled dispute regarding the parties' conduct in the pharmacy benefits industry, touching on their alleged use of computer software, misappropriation of business plans, and communications with prospective customers.”
PharmPix makes web based pharmacy benefit management (PBM) software, for which it has registered a copyright.  Abarca allegedly told various “peers and clients” that it was going to sue for copyright infringement, allegedly to prevent PharmPix from doing business.
PharmPix sought to dismiss the Lanham Act (and coordinate Puerto Rico law) allegations as Dastar-barred.
Although Dastar purported to allow certain false advertising claims, it “did not invite plaintiffs to recast their false authorship claims in the style of false advertising. Courts presented with similar claims post-Dastar uniformly look past the plaintiff's nomenclature and test whether the ‘characteristic’ or ‘quality’ that is allegedly misrepresented is simply the product's creative authorship.”  Abarca’s claim was that PharmPix misleadingly claimed to have an “innovative” “proprietary” software application.  While “proprietary” is just about ownership, Abarca’s challenge to “innovative” could fall outside Dastar, though it might fail at the summary judgment stage.

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