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Atrium Group de Ediciones y Publicaciones, S.L., et al. v. Harry N. Abrams, Inc., et al.

Plaintiffs, publishers of several architecture and design books, asserted that the defendant, also a publisher, infringed and misappropriated plaintiffs’ intellectual property by copying, publishing and distributing several of plaintiffs’ copyrighted books after the negotiation of several licensing agreements fell through. The defendant brought a motion to dismiss plaintiffs’ claims for misappropriation, unjust enrichment and false designation of origin under the Lanham Act. The defendant did not move to dismiss with respect to plaintiffs’ claim for copyright infringement. The district court granted defendant’s motion to dismiss as to each of the three claims.

The court dismissed with prejudice plaintiffs’ claims for unjust enrichment and misappropriation, holding that both state law claims were preempted by the Copyright Act. The court stated that “Congress laid out a test for determining when the Copyright Act exclusively governs a claim: 1) When the claim seeks to vindicate rights that are equivalent to one of the exclusive rights protected by section 106 of the Copyright Act, and 2) when the work falls within the type of works protected by sections 102 and 103 of the Copyright Act.” The court held that plaintiffs’ claims satisfy the two-pronged test, because the rights that plaintiffs ultimately seek to vindicate through their claims for unjust enrichment and misappropriation are the rights to “reproduce . . . publish, publicly display, offer for sale and distribute the Works.” The court rejected plaintiffs’ argument that the defendant’s alleged deception constituted the extra element necessary to avoid preemption, stating that according to the Second Circuit, “the only ‘extra element’ that avoids preemption for a state created cause of action is something that is ‘required instead of or in addition to the acts of reproduction, performance, distribution or display.’” The court concluded that allegations of deception would not save the claims from preemption because the Second Circuit has found that awareness or intent alters the scope of an action but not its nature. Similarly, the court held that plaintiffs’ reliance on Ulloa v. Universal Music and Video Distribution Corp., 2004 U.S. Dist. LEXIS 6755 (S.D.N.Y. Apr. 19, 2004), for their argument that their claims of unjust enrichment and misappropriation should be treated as “belt and suspender” alternative pleadings under Rule 8(d)(2) of the Federal Rules of Civil Procedure, was misplaced. In Ulloa, the district court allowed the plaintiff to plead these claims in the alternative because they arose from two distinct theories, while in the instant case, there is only one theory – defendant misappropriated plaintiffs’ works, published derivative versions without permission and profited thereby. As such, “[t]here is no alternative theory, because there is no uncompensated labor or ‘sweat equity” for which compensation might be owed.” Accordingly, these claims were preempted by the Copyright Act.

The court dismissed plaintiff’s claim of false designation of origin under the Lanham Act without prejudice holding that the Lanham Act claim “is no more than a claim of copyright infringement dressed up in the guise of the Lanham Act.” The court cited to Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), and explained that the “origin” of goods is the manufacturer of the goods, the publisher of a book, as opposed to its author, whereas for copyright purposes, “originator” refers to the author/owner of the copyright. The court explained that in Dastar, the Supreme Court dismissed a Lanham Act claim for false designation of origin because defendant Dastar had in fact produced and distributed the tangible goods in question -- a set of videos entitled, "World War II Campaigns in Europe." In this case, the court held that the defendant, like Dastar , acquired a copy of an optical disk containing plaintiffs’ works, published books alleged to be practically identical to plaintiffs’ works, and designated itself as the originator of the books that it sold. Accordingly, the court held that while plaintiffs do own the copyright for the content of the books, the defendant did in fact produce the book, and as such a claim for false designation of origin does not lie on the facts as alleged. The court, citing to Silverstein v. Penguin Putnam, Inc., 522 F. Supp. 2d 579 (S.D.N.Y. 2007), rejected plaintiffs’ argument that Dastar should be limited to cases in which the underlying material at issue is in the public domain. The court noted that a number of courts have recognized that the rule set forth in Dastar applies to both copyrighted and uncopyrighted material. Finally, the court held that the plaintiffs are free to use their “of right” amendment to assert a new theory of Lanham Act liability involving infringement of their “series title.” However, the court reminded plaintiffs of their counsel’s obligations under Rule 11.