Monday, October 04, 2021

Dastar prevents misrepresentation of source of IP from being material

Restellini v. Wildenstein Plattner Inst., Inc., 2021 WL 4340824, No. 20 Civ. 4388 (AT) (S.D.N.Y. Sept. 22, 2021)

This is an interesting application of Dastar to preclude certain theories of falsity--I'm not sure materiality is really the right characterization, but ok. Restellini alleged copyright infringement and related claims in connection with WPI’s digitization of certain material about the artist Amodeo Modigliani. WPI counterclaimed against Restellini and third-party Institut Restellini SAS – Documentation Centre alleging copyright infringement and false advertising. This opinion got rid of the counterclaims.

“In 1997, Restellini and the non-party Wildenstein Institute (WI), a non-profit organization based in France, began working together to create a catalogue raisonné of works by Amodeo Modigliani.” (A catalogue raisonné “is a scholarly work identifying and describing all the known works by an artist.”) They collaborated for the next 18 years. Restellini allgedly “offer[ed] his opinions as to whether or not artworks should be included in the planned catalogue raisonné” in “oral consultation” with WI employees, based on the information and materials “researched, collected, synthesized, analyzed and expressed by” the employees. For instance, WI employees “liaised with owners of artworks being submitted for consideration for inclusion in the planned catalogue raisonné, and, among other things, researched, compiled and reviewed provenance materials associated with such artworks,” and “conducted substantive academic research on exhibitions and provenance of artworks attributed to Modigliani, including research, compilation and review of relevant information from museums and other third-party institutions.”

In 2013, things began to go bad as Restellini began attempting to purchase certain Modigliani material from WI, and in 2015, Restellini and WI discontinued their collaboration before the catalogue was completed.

In 2017, WI granted WPI an automatically renewable, exclusive license to use and exploit the content of all of WI’s materials, including the Modigliani material. “WPI planned to utilize that license to digitize the information to provide public online access to portions of the Modigliani Material at no cost, but suspended that plan due to this litigation.” Meanwhile, “Restellini incorporated the Modigliani Material into correspondence and avis d’inclusion with third parties and a forthcoming catalogue raisonné by Restellini, and disseminated the Modigliani Material to third parties.” (Avis d’inclusion are “notices that a work would be included in the catalogue raisonné.”) His Institut allegedly charges 30,000 euros per “Modigliani-based inquiry.” The Institut published on its English-language website the statement that:

After 18 years of exemplary collaboration, Marc Restellini and the Wildenstein Institute decided, by a mutual decision, to part, Marc Restellini wishing to evolve on his own. In 2015, the Catalogue Raisonné Amedeo Modigliani is henceforth transferred to Institut Restellini, being taken up with new methods, even more modern and scientifically extensive. It will be enhanced by the drawings, which had been set aside with the Wildenstein Institute.

Copyright: WPI counterclaimed for infringement of its collective work, but the counterclaim lacked sufficient specificity. Although registration isn’t required for a foreign work, the other elements are still present: the plaintiff must plead which specific works are the subject of the claim, that it owns those works, and what acts of the defendant infringed. At the motion to dismiss stage, it isn’t required to allege which elements of an identified work were infringed. And if a plaintiff is alleging infringement of a subset of a group of works, it doesn’t need to allege which specific one was infringed, but it does need to allege an “exhaustive” list of the potentially infringed copyrighted works to ensure the claims reach all those works. Here, WPI alleged infringement of the “Modigliani Material,” “all of [WI’s] research materials that its personnel assembled and analyzed in connection with the Modigliani Project,” and“the information and materials researched, collected, synthesized, analyzed and expressed by WI’s employees.” This included certain dossiers containing “information gathered in relation to individual works attributed to Modigliani.” It also alleged that it purchased “publications and archival photographs from third parties to support the Modigliani Project.” It claimed rights in the work product Restellini attempted to purchase from WI, but not the preexisting material that Restellini had created prior to his association with WI.

But “[n]one of these piecemeal allegations identify the work at issue with sufficient specificity.” In particular, “[a]lthough WPI alleges that the collective work at issue here is all the research materials assembled in connection with the Modigliani Project, its allegations consist of a collection of vague descriptors, which do not give Counterclaim Defendants—or the Court—notice of the specific individual works merged into the larger collective work.” The definition “the same work product that Restellini unsuccessfully tried to buy from WI because he knew he did not already own it” was not enough for the court to evaluate the claims. “[E]ven when large number of works are allegedly infringed and the works are identified by category, plaintiffs in this Circuit are required to give specific, concrete examples of the copyrighted works.” So you need a list even if you allege specific facts only as to some of the examples on the list.

WPI argued that the court should consider the procedural posture: its primary argument is that none of the works over which Restellini asserts copyright are copyrightable. Therefore, it reasoned, “the subject matter of the counterclaims will be the amount of the Modigliani Material that Restellini demonstrates is copyrightable to the Court, but WPI cannot know what that material is until after the Court resolves the copyrightability question.” But the court still needed at least “concrete, representative examples” of the works and an exhaustive list to determine the merit of the claims. WPI could at least have pled in the alternative to allow the court to determine the extent of overlap with Restellini’s claimed materials and the alleged contours of the collective work.

False advertising based on the Institut’s website statement (emphasis added):

In 1997, invited by Daniel Wildenstein, Marc Restellini decided to undertake the Catalogue raisonné of Amedeo Modigliani’s works, imposing new scientific criteria never before used in the field of research on works of art. After 18 years of exemplary collaboration, Marc Restellini and the Wildenstein Institute decided, by a mutual decision, to part, Marc Restellini wishing to evolve on his own. In 2015, the Catalogue Raisonné Amedeo Modigliani is henceforth transferred to Institut Restellini, being taken up with new methods, even more modern and scientifically extensive. It will be enhanced by the drawings, which had been set aside with the Wildenstein Institute.

WPI alleged that the statement was literally false because WI “did not transfer the Modigliani Material, or the rights to use that material to create a catalogue raisonné (or for any other purpose), to Institut.” The statement didn’t mention the Modigliani Material, nor was there an extant catalogue raisonné, so there was no literal falsity, though it could imply falsity. At the motion to dismiss stage, “plaintiffs need only state that there was confusion and offer facts to support that claim.” But WPI alleged no facts to support the claim that there was confusion. Can pleading deceptive intent substitute for that? Yes, sometimes, where the conduct was egregious. WPI alleged that the Institut (1) knew that the Modigliani Material was not transferred to the Institut, (2) made the statement to cause confusion, and (3) intended to influence “potential purchasers and sellers of Modigliani art, scholars and researchers of Modigliani, and the public in general to believe that the important information contained within the Modigliani Material is exclusively owned by, accessible through, and available from Institut,” as opposed to it being publicly accessible through WPI. “Although a close call, the Court concludes that these allegations are sufficient to plead that the Institut made the Statement knowing it would be impliedly false, and did so for commercial motives. Moreover, there is no indication that the Institut changed its website when the possibly misleading implications came to light.” Thus, deceptiveness was plausibly alleged.

But not materiality! WPI argued that it misrepresented the materials as Restellini’s product, but that was a Dastar-barred misrepresentation of authorship. Alleged misrepresentation of the materials as copyrightable again “centers around the ownership and authorship of the ideas in the Modigliani Materials, not any statements about the physical product which contains those ideas” and was Dastar-barred.

The most persuasive argument was that the website misrepresented Restellini and the Institut “as exclusive possessors of the Modigliani Material in order to force individuals to pay them for access, when in fact WPI has the right to make it known as well.” But WPI’s allegations still went to contested ownership of the information contained in the Modigliani Material, rather than the Modigliani Material as a physical product. “Although consumers may care about who may provide access to that information, it is a distinction sounding in copyright: whether the information is in the public domain, is WPI’s, or is exclusively Restellini’s. And under Dastar, such a statement is not actionable under the Lanham Act.” Cases about false advertising of the source of “services” were inapposite. “[T]he Statement’s alleged falsity derives from the transfer of the Modigliani Material, rather than any services Restellini provided. And to the extent it derives from contesting who performed the work in creating the Modigliani Material, that is, in essence, a debate over authorship—and thus foreclosed by Dastar.”

Therefore, the statement, though plausibly false, wasn’t material under the Lanham Act.

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