3. Unfair Competition Claim
AMCC's Third Claim alleges that Turner Entertainment and Turner Classic misappropriated AMCC's exclusive rights to exhibit the licensed films and gave this misappropriated property to Turner Classic in order to permit it to gain an unfair competitive advantage over AMCC. Complaint P 48. This claim appears to be asserted under the misappropriation branch of New York's unfair competition law, which generally "protects against a defendant's competing use of a valuable product or idea created by the plaintiff through investment of time, effort, money and expertise." Mayer, 601 F. Supp. at 1534 (citations omitted).
Courts in this Circuit have consistently held that claims for misappropriation of rights within the scope of copyright brought under New York unfair competition law are preempted. See, e.g., Universal City Studios, 634 F. Supp. at 1475 ("Since the unfair competition complained of here consists simply of misappropriation and reproduction of the style and characters of [the television show] into t-shirt form, the second condition under § 301 is satisfied and plaintiffs' New York unfair competition claim is preempted."); Orth-O-Vision, Inc. v. Home Box Office, 474 F. Supp. 672, 684 (S.D.N.Y. 1979) (claim for misappropriation of right to exhibit films preempted); Mayer, 601 F. Supp. at 1535-36 (claim for misappropriation of snowflake design preempted); Galerie Furstenberg v. Coffaro, 697 F. Supp. 1282, 1291 (S.D.N.Y. 1988) (claim for misappropriation of rights in certain Dali drawings preempted).
The Second Circuit has noted that application of the extra element test "has led to holdings that § 301 preempts unfair competition and misappropriation claims grounded solely in the copying of a plaintiff's protected expression. . . . In contrast, unfair-competition claims based upon breaches of confidential relationships, breaches of fiduciary duties and trade secrets have been held to satisfy the extra-element test and avoid § 301 preclusion." Kregos v. Associated Press, 3 F.3d 656, 666 (2d Cir. 1993) (citing Computer Assocs., supra, 982 F.2d at 717). In Kregos, the plaintiff claimed that the defendant's publication and distribution of a "pitching form" copied from the plaintiff's form misrepresented the authorship of the form and constituted unfair competition. The Second Circuit held, however, that the "unfair-competition and misappropriation claims, based solely on the copying of the protected expression in his forms, are preempted by § 301 . . . the state unfair-competition claim is equivalent to copyright . . ." Kregos, 3 F.3d at 666.
Relying on Kregos and other cases preempting unfair competition claims, defendants contend that AMCC's claim is preempted because the basic act which allegedly constitutes misappropriation of AMCC's rights -- the exhibition of certain films by Turner Classic during AMCC's exclusive exhibition windows -- is the same act which allegedly constitutes copyright infringement. The Court agrees and AMCC appears to concede that unfair competition claims alleging "mere misappropriation" are preempted. See Plaintiff's Mem. at 18-19. AMCC argues, however, that its unfair competition claim is much broader than "mere misappropriation" because it includes elements of "passing off" and deception, pointing to its allegations that defendants' conduct created false impressions and confusion in the marketplace about Turner Classic's ability to exhibit the same movies that air on AMC. AMCC relies on cases distinguishing between "misappropriation-only" claims, which are preempted, and claims including elements of "passing off," which are not preempted. See, e.g., Orth-O-Vision, 474 F. Supp. at 684 n.12; Gemveto Jewelry Co. v. Jeff Cooper, Inc., 613 F. Supp. 1052, 1064 (S.D.N.Y. 1985), vacated on other grounds, 800 F.2d 256 (Fed. Cir. 1986); Princess Fabrics, Inc. v. CHF, Inc., 922 F.2d 99 (2d Cir. 1990); Warner Bros. Inc. v. American Broadcasting Cos., 720 F.2d 231, 247 (2d Cir. 1983).
AMCC's attempt to rescue its unfair competition claim by seizing on the "passing off" cases is unavailing. AMCC's Complaint does not allege any claim based on "passing off," the essence of which is false representation of origin. See, e.g., Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1020 (9th Cir. 1985), cert. denied, 474 U.S. 1059, 88 L. Ed. 2d 778, 106 S. Ct. 802 (1986). In a "passing off" case, the tortfeasor misleads customers into believing that the product he produces emanates from another source. See Orth-O-Vision, 474 F. Supp. at 684 n.12. Here, the defendants are not accused of falsely representing the origin of the films they have exhibited; the movies exhibited were the original copyrighted works, properly identified to their producers. Rather, if any unfair competition claim is asserted, it is of the "reverse passing off" variety -- i.e., that Turner Classic took goods of another and passed them off as Turner Classic's own. See Waldman Publishing Corp. v. Landoll, Inc., 848 F. Supp. 498, 505 (S.D.N.Y.), vacated on other grounds, 43 F.3d 775 (2d Cir. 1994). A claim that a defendant has reproduced the plaintiff's work and sold it under the defendant's name -- even if denominated "passing off" by the plaintiff -- is preempted by the Copyright Act. Id. Professor Nimmer has explained the distinction between "passing off" and "reverse passing off" -- and its effect on preemption analysis -- as follows:
If A claims that B is selling B's products and representing to the public that they are A's, that is passing off. If, by contrast, B is selling B's products and representing to the public that they are B's [when presumably they are A's], that is not passing off. A claim that the latter activity is actionable because B's product replicates A's, even if denominated "passing off," is in fact a disguised copyright infringement claim, and hence preempted.