On April 4, the Western District granted defendant True Value Co.’s motion to dismiss plaintiff MEECO Manufacturing Co., Inc.’s state unfair competition claim based on Copyright Act preemption.
MEECO manufactures and distributes fireplace and stove products bearing MEECO’S RED DEVIL word and design marks. MEECO alleges that True Value is not authorized or licensed to sell MEECO-branded products, but True Value uses and displays images of MEECO-branded products in its electronic catalog. MEECO asserts, however, that when a True Value store owner or other user of True Value’s catalog orders a MEECO-branded product, True Value substitutes a competing product from Imperial Manufacturing Group. MEECO contends that True Value’s substitution of MEECO products has continued even after receiving a cease-and-desist letter, and after MEECO had prevailed in a trademark infringement suit against Imperial.
The Copyright Act preempts a claim if: “(1) the work at issue comes within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103; and (2) the rights granted under the state law are equivalent to the rights contained in 17 U.S.C. § 106, ‘which articulates the exclusive rights of copyright holders.’” See Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134, 1137-38 (9th Cir. 2006).
The court found MEECO’s unfair competition claim met the first element of this test because the work at issue, MEECO’s labels and logo, come within the subject matter of copyright because MEECO has copyright registrations for its product labels, which include MEECO’s logo.
True Value argued that MEECO’s unfair competition claim did not add “an extra element that ‘transforms the nature of the action’ to anything other than a Copyright Act claim.” The court agreed. It noted MEECO’s unfair competition claim seeks an injunction barring True Value from “displaying MEECO-branded products.” It also noted MEECO’s copyright claim “similarly seeks injunctive relief because defendant ‘displayed the MEECO-branded product images,’ which ‘constitute[s] copyright infringement under the Copyright Act.’”
Based on these findings, Western District Judge Robert Lasnik dismissed MEECO’s unfair competition claim without prejudice. The court concluded: “Where, as here, an unfair competition claim is based upon the premise that defendant misappropriated plaintiff’s copyrighted material it is considered to be ‘part and parcel of the copyright claim’ and preemption is appropriate.”
The court also dismissed MEECO’s unjust enrichment claim for similar reasons.