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Integrative Nutrition, Inc. v. Academy of Healing Nutrition

January 29, 2007

INTEGRATIVE NUTRITION, INC. D/B/A INSTITUTE FOR INTEGRATIVE NUTRITION, PLAINTIFF,
v.
ACADEMY OF HEALING NUTRITION; HOLISTIC HEALTH AND HEALING NUTRITION, L.L.C. D/B/A THE ACADEMY OF HEALING NUTRITION; ROGER GREEN; MARISE HAMM; WILLIAM TARA, DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge

OPINION AND ORDER

The defendants move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the plaintiff's complaint on the grounds that the claims are preempted by Section 301(a) of the Copyright Act, 17 U.S.C. § 301(a), or other federal law. The plaintiff, Integrative Nutrition, Inc., initially brought this action in state court claiming that the defendants had fraudulently obtained and illegally used the plaintiff's "intellectual property," which the plaintiff allegedly owned in aspects of its holistic nutrition education program. In the complaint, the plaintiff asserts state law causes of action for unfair competition, fraud and misrepresentation, and trespass. The defendants*fn1 removed the action to federal court, asserting that the Court has original jurisdiction of the action pursuant to 28 U.S.C. §§ 1331 and 1338 because the state law claims are preempted by the Copyright Act. Shortly thereafter, the defendants filed the present motion to dismiss, also on preemption grounds.

The plaintiff has filed a cross-motion to remand the action to state court for lack of subject matter jurisdiction and, in the alternative, for leave to amend the complaint. The plaintiff argues that its state law claims are not preempted, and therefore this Court lacks subject matter jurisdiction.

Both motions thus turn on the pivotal question of whether any or all of the plaintiff's claims are preempted by Section 301(a) of the Copyright Act or other federal law. For the reasons set forth below, the Court finds that only the plaintiff's first cause of action for unfair competition is preempted and must be dismissed.

I.

For the purposes of the pending motions, the following facts alleged in the complaint are accepted as true. The plaintiff Integrative Nutrition is a New York corporation with its principal place of business in New York. (Compl. ¶¶ 1--2.)

The plaintiff, among other things, operates an institute with a program dedicated to educating and enlightening students and improving health and wellness on physical, emotional, sexual, and spiritual levels. (Id. ¶ 4.) The plaintiff teaches dietary perspectives ranging from ancient traditions of macrobiotics, ayurveda, and traditional Chinese medicines to the current trend toward raw foods, live foods, juicing, and fasting. (Id. ¶ 5.) This teaching emphasizes the multicultural, political, and ecological dimensions of diet and the world food supply. (Id.)

As part of its business, the plaintiff has devised and used a "business formula" designed to increase enrollment, reduce administrative costs and inconvenience, work with alumni, and streamline the institute's operations. (Compl. ¶ 8.) Part of this business formula includes original marketing and promotional materials, such as a website and promotional brochure; retention of visiting lecturers; and a flexible tuition payment program, which provides tuition discounts based on factors such as travel distance and enrollment of friends and family members. (Id.) These aspects of the plaintiff's business, among other things, constitute what the plaintiff has deemed its "protectible intellectual property." (See id. ¶¶ 22-- 27.)

The defendants, all allegedly citizens of New York, consist of a sole proprietorship, the Academy of Healing Nutrition ("AHN"), a limited liability company, Holistic Health and Healing Nutrition, LLC, and individuals alleged to be the owners and founders of these companies. (See Compl. ¶¶ 9--21.) In June 2005, the individual defendants, Roger Green and Marise Hamm, attended an orientation for prospective students of Integrative Nutrition. (Id. ¶ 28.) Green and Hamm represented themselves as prospective students and did not identify themselves as competitors. (Id. ¶ 29.) However, according to the plaintiff, these defendants used the June orientation to gain access to Integrative Nutrition's intellectual property. (Id. ¶¶ 30-32.) Green, Hamm, and the third named individual defendant, William Tara, then allegedly decided to exploit the plaintiff's intellectual property "for the purpose of creating and operating AHN and Holistic Health as a competitive business, based, not upon their original thinking" but upon Integrative Nutrition's intellectual property. (Id. ¶ 34.) The individual defendants created AHN shortly thereafter. (Id. ¶ 35.) The defendant Holistic Health and Healing was formed as a limited liability company on January 11, 2006. (Id. ¶ 41.)

According to the plaintiff, the defendants launched a website "that plagiarized the Integrative Website, by copying text and language and using similar or the same formats, style, quotes, concepts, fonts, hypertext placement, banner location, and other qualities as those included in Integrative Website and Integrative Brochure."*fn2 (Compl. ¶ 37.) The plagiarized website incorporated in full the plaintiff's flexible tuition program. (Id. ¶ 38.) The defendants also attempted to hire Integrative Nutrition's former managing director, allegedly to obtain additional access to the plaintiff's intellectual property. (Id. ¶ 36.)

Based on these events, the plaintiff asserts three state law causes of action against the defendants. First, the plaintiff claims that the defendants' "unauthorized use of Integrative's Intellectual Property constitutes common law unfair competition." (Compl. ¶ 47.) Specifically, according to the plaintiff, "[t]he similarities between Integrative's Intellectual Property and the Plagiarized Website are so striking that there is a substantial likelihood that Defendants' use of Integrative's Intellectual Property will cause confusion among the public." (Id. ¶ 45.) For the unfair competition claim, the plaintiff seeks compensatory and punitive damages and a permanent injunction against the defendants. (Id. ¶¶ 49--52.) Second, the plaintiff claims that the defendants obtained access to Integrative Nutrition's intellectual property through fraud and misrepresentation and again seeks relief in the form of compensatory and punitive damages and a permanent injunction.

(See id. ¶¶ 53--63.) Third, the plaintiff claims that Green and Hamm trespassed on Integrative Nutrition's premises and obtained the plaintiff's intellectual property as a result of the trespass. (Id. ¶ 65.) For this third cause of action, the plaintiff seeks only compensatory and punitive damages. (Id. ¶¶ 69--70.)

II.

...


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