Fergon sued Oakley for copyright infringement for exceeding its license
to use Fergon’s architectural works. The
contract allegedly allowed Oakley to build one home from each design and
required Oakley to credit Fergon as the designer in any promotional materials.
Oakley allegedly took credit for the designs, not just construction, and built
additional homes based on the designs.
The magistrate judge declined to dismiss the copyright
claims at this stage. The allegations
that Oakley infringed by “making unauthorized copies and reproductions of”
Fergon’s home designs, “selling copies of those designs to third parties,”
“preparing derivative works based on those designs,” and “constructing houses
based on those designs” were sufficiently specific, even without things like
named individuals or dates.
The next count was styled “false advertising,” but
unfortunately the magistrate judge didn’t evaluate it that way (where there’s
at least some possibility of focusing on the right issues—commercial advertising
or promotion, and materiality). Instead,
the magistrate said that this case involved “reverse passing off,” which occurs
when a “producer misrepresents someone else’s goods or services as his own.” Dastar. Comment: No! No, this case does
not involve that! Origin of designs (as in, copyrightable material) is not
origin of goods or services, or Dastar
would have come out the other way! The
magistrate found that Fergon had properly pled that it was the “origin” of the
home designs depicted in Oakley’s promotional materials, “because although it
did not construct the homes, it conceived of the architectural designs and it
owns the copyrights in the designs.”
(Aaaargh. This is the exact same claim Fox had, that it
was the “source” of the expression, even though Dastar made the copies at issue.) Fergon also alleged that Oakley took credit
for the designs by “touting its architectural and design prowess” and stating
that it has “mastered the process of taking a custom home from idea to
reality,” all while featuring homes designed by Fergon. And it alleged that
consumers were likely to be confused, and that it was harmed.
The state-law claims for deceptive trade practices/unfair
competition were preempted, though. The element
of “consumer confusion” wasn’t a sufficient additional element to make the
claim qualitatively different from an infringement claim. “Consumer confusion and deception have been
held to be inherently present in any copyright action and are therefore not
considered extra elements that qualitatively alter the nature of a claim where
they are asserted.” The state-law claims here were, in essence, that Oakley
represented someone else’s work as its own—“that conduct lies at the heart of
the Copyright Act.” (Which is why Dastar
bars the reverse passing off claim!) Since the gravamen of each of the state-law
claims was that Oakley passed off Fergon’s designs as its own by “failing to
properly disclose Fergon as the actual designer,” “misleadingly holding itself
out as a design/build firm and the designer of the Fergon Home Designs,” and
engaging in “unauthorized use of the Fergon Home Designs in its commercial
advertising,” the claims were preempted.
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