individuals alleged to have made the misrepresentations, and amplifies the allegations with facts sufficient to raise a serious question about TBWA's actions. The motion to dismiss the claim of fraud against TBWA is denied.
However, Noble does not meet the requirements of Rule 9(b) with regard to Great Brands. Noble makes only one mention of Great Brands in his fraud claim, alleging that Great Brands paid TBWA's $ 8,500 invoice for use of the images in Russia and Finland. There is no allegation that Great Brands knew of or participated in a scheme to defraud Noble. The motion to dismiss the fraud claim against Great Brands is granted, without leave to replead.
2. Violation of the Lanham Act
Count III of the Complaint alleges that the Defendants attempted to appropriate Noble's photographic images by placing an erroneous copyright protection notice on the images which appeared in the Russian and Finnish magazines in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).
Noble has attached photocopies to his affidavit which show that a copyright notice appears in the bottom right-hand corner of the Russian advertisement. See Noble Aff., Ex. 2. The notice reads "(c)1995 Great Brands of Europe." Id. Noble contends that by placing this notice on his photographic image, the Defendants falsely attributed the origin of the image and falsely described its source.
Among its prohibitions, Section 43(a) bans two types of misrepresentations regarding the source of a product: false advertising and what has become known as "passing off" or "palming off."
See Waldman Pub. Corp. v. Landoll, Inc., 43 F.3d 775, 780 (2d Cir. 1994). Section 43(a) also prohibits "reverse passing off," where "X" sells "Y's" product under "X's" name. See id.. In Waldman, the Second Circuit held that the Lanham Act "prevent[s] 'the misappropriation of credit properly belonging to the original creator' of the work" in the context of a written work. Id. at 781, citing Restatement (Third) of Unfair Competition § 5, cmt. (c). Though the work in this case involves photographic images, the same principle is applicable.
The wrong which the Lanham Act aims to prevent is, as the Waldman court pointed out, the "misappropriation of the artistic talent required to create the work . . . ." Waldman, 43 F.3d at 781. The examples of false designation of origin and misrepresentations provided in Waldman are instructive. The court pointed out that the Lanham Act prohibits "the relabeling of a printed work, as by tearing the cover off a book and selling it with a false cover, but also the reproduction of a work with a false representation as to its creator." Id. These wrongs are precisely the type of wrongs which Noble alleges in his Complaint. Noble asserts that TBWA and Great Brands caused his work to be published, and deceptively passed off the images as those of Great Brands.
Defendants argue that the Lanham Act claim must be dismissed because the act complained of, alleged false designation of copyright ownership of a photo published in a Russian magazine, does not affect interstate commerce. See Supplemental Memorandum of Law in Support of Defendants' Motion to Dismiss at 7. This argument fails to consider Noble's allegations that the photographic images were published in Cosmopolitan magazine, whose main office is in New York City, and that the magazine is actually printed in the state of Tennessee. See Noble Aff. at 2. Such allegations, taken as true at this stage of the litigation, defeat the argument that the alleged false designation of origin does not affect interstate commerce. The motion to dismiss the Lanham Act claim is denied.
3. Unfair Trade Practices and Unfair Competition
Count IV of Noble's Complaint alleges that the Defendants have engaged in unfair trade practices and unfair competition. Unfair competition under New York law is "the bad faith misappropriation of the labors and expenditures of another, likely to cause confusion or to deceive purchasers as to the origin of the goods." Computer Assocs. Int'l, Inc. v. Computer Automation, Inc., 678 F. Supp. 424, 429 (S.D.N.Y. 1987). Moreover, a "plaintiff must show either actual confusion in an action for damages or a likelihood of confusion for equitable relief." Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 35 (2d Cir. 1995) (emphasis added). Additionally, there must be "some element of bad faith." 815 Tonawanda Street Corp. v. Fay's Drug Co., 842 F.2d 643, 649 (2d Cir. 1988).
Given these authorities, it is clear that Noble's Complaint sufficiently pleads a cause of action for unfair competition and unfair trade practices under New York common law. See Part III.B.2 supra.
Defendants' motion to dismiss the Complaint for lack of subject matter jurisdiction is denied. The motion to dismiss Noble's claims of copyright infringement (Count I), violation of the Lanham Act (Count III), and unfair trade practices and unfair competition (Count IV) is denied. The motion to dismiss the fraud claim (Count II) is granted as to Great Brands and denied as to TBWA. A conference is scheduled for Friday, January 17, 1997 at 4:30 p.m.
Shira A. Scheindlin
Dated: New York, New York
December 17, 1996