Wednesday, August 19, 2015

Copyright infringement is channeled into (c), not state or Lanham Act claims

Quadratec, Inc. v. Turn 5, Inc., 2015 WL 4876314, No. 13–6384 (E.D. Pa. Aug. 13, 2015)
The parties compete to sell removable soft tops and other aftermarket parts and accessories for Jeep vehicles. Quadratec alleged that it invests substantial resources in the advertising of its products by “creating tens of thousands of unique photographs” and writing descriptions of the photographs, which “differentiate it from all of its competitors in the automotive market.” Except for Turn 5, which allegedly engaged in extensive copying of its images and descriptions (including a Quadratec photo with a superimposed Turn 5 logo on it), despite Quadratec’s demands that it stop.  (Why no 1202 CMI claim?  Although it seems unlikely to have concealed copyright infringement, so quite probably futile, though that doesn't distinguish it from various other claims asserted.)  Further, Quadratec alleged that Turn 5 falsely advertised its Baricade Soft Top products by falsely claiming that they exceeded original equipment manufacturer standards and are made from Black diamond sailcloth material (though this allegation isn’t addressed in this ruling).  Quadratec registered its images and sued.
Copyright infringement: though the complaint alleged that images other than those specifically identified might have been infringed, it also provided sufficient notice about particular registered images, and Quadratec wouldn’t be allowed to base claims on unidentified images. However, statutory damages/attorneys’ fees claims were dismissed because in all cases the infringements began before the registrations; allegations that Take 5 began infringing new parts of the registered work post-registration were insufficient because statutory damages go on a work by work basis.
§43(a)(1)(A): Dastar barred this claim. There was no misrepresentation of the origin of the goods for sale.  Quadratec argued that it was claiming false designation of the origin of the services at issue, here providing catalog services. That is, Take 5’s use of the product presentations was likely to confuse Quadratec’s customers into believing that “identical product presentations in both Plaintiff’s and Defendant’s catalogs” means that the “catalog sources are the same or otherwise affiliated.”
But Dastar precludes this argument.  Neither party is in the business of selling catalog services, only aftermarket Jeep products.  There could be no confusion as to the origin of those goods.  The Lanham Act doesn’t create a cause of action for plagiarism of marketing.
§43(a)(1)(B): Again, this failed because there was no alleged misrepresentation about the products for sale, rather than about the source of the marketing materials used to sell them.
Misappropriation: preempted by the Copyright Act.  The alleged deceit involved was not an extra element because it occurred only by way of reverse passing off, which meant that there was nothing fundamentally different from a copyright infringement claim.
Unjust enrichment: Ditto.  Quadratec alleged that Take 5 received benefits beyond the mere intrinsic value of the Quadratec materials, because it diverted profits and goodwill from Quadratec and saved money on advertising that it could use to lower its prices in competition with Quadratec.  The alleged financial benefit in the form of reduced overhead didn’t make the unjust enrichment claim qualitatively different than the copyright infringement claim.

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