First Amendment bars Lanham Act claim against university article repository

Pellegrini v. Northeastern University, No. 12–cv–40141, 2013 WL 5607019 (D. Mass. Aug. 23, 2013) (magistrate judge)

The magistrate began by characterizing this case as a high-stakes dispute involving “the First Amendment rights of a university and one of its faculty to publish research,” making the outcome clear.  Pellegrini sued Northeastern and Dr. Sun, alleging that a paper Sun wrote, and the university posted on its public digital archive, contained false and misleading information about Pellegrini’s patented technology in violation of the Lanham Act (and related state laws).

Pellegrini commercializes his IP and solicits funding for it through research grants and investments.  Northeastern also commercializes IP on a large scale.  Sun is an Associate Professor of Electrical Engineering who solicited private research grants to the University from Pellegrini. 

Pellegrini alleged: Fundamental to Pellegrini’s patent is the idea that a 20% discrepancy exists in the coupling coefficients of a certain substance, Metglas, which if true would violate standard thermodynamic laws.  Sun allegedly agreed that such a discrepancy existed and told Pellegrini he was going to publish this finding, including its effect on accepted thermodynamics. His draft paper named Pellegrini as co-author.  He allegedly told Pellegrini that these discrepancies allowed a “self-sustaining” energy generator to be built, which he intended to do.  In reliance on these assertions, Pellegrini allegedly sold an interest in his patent to a third party and used the money to finance a research grant to Northeastern, then took an unpaid research position with Northeastern to further the development and commercialization of his IP.

However, Pellegrini alleged, Sun submitted a very different paper to Applied Physics Letters, with a different title.  The paper asserted that the coupling coefficients of Metglas were equal, necessarily implying that no discrepancy existed. Though Pellegrini was listed as a co-author, Sun allegedly never consulted Pellegrini about the changes.  Northeastern posted the paper as published on its publicly-accessible digital archive “to showcase its facilities and personnel to funding sources.”  Pellegrini alleged that the falsehoods in the article would harm the value of his patent to investors.

The magistrate judge found that there was no commercial speech and therefore no commercial advertising or promotion.  Pellegrini largely conceded that the journal publication wasn’t commercial speech, but argued that Northeastern’s use of the paper, plus its alleged purpose of promoting Northeastern’s facilities and personnel as grant recipients, was commercial advertising or promotion. 

Commercial speech is generally defined as speech that does no more than propose a commercial transaction, or expression related solely to the economic interests of the speaker and its audience.  The paper didn’t propose a commercial transaction.  Nor was it aimed at dissuading consumers from buying Pellegrini’s goods or services.  It might imply that no discrepancy in coefficients existed, and thus might influence investors adversely with respect to the patent, but that didn’t satisfy the core requirement of either proposing a commercial transaction or relating solely to the economic interests of the speaker and its audience.

Pellegrini argued, however, that the use of the speech transformed it into commercial speech.  The case law recognizes that this can happen: secondary uses of First Amendment-protected speech in advertising or promotion can be subjected to the Lanham Act, as in Gordon & Breach, when the competitor employs the speech for the express purpose of influencing purchases/proposing transactions.  For example, “a restaurant clearly engages in commercial speech when it posts the New York Times review in its window, and General Motors engages in commercial speech when it announces in a television commercial that its car was ranked first by Consumer Reports.”  To find otherwise would risk leaving too much misleading speech unregulated.

Pellegrini thus contended that Northeastern commercialized the scientific paper by posting it to a “publicly accessible digital archive” that “has as its expressed [sic] purpose to ‘showcase’ NU’s facilities and personnel to ‘funding sources.’”  However, Northeastern didn’t alter the paper in any way, as other speakers found to have been engaged in commercial speech did when they summarized  or otherwise altered the underlying scientific research for promotional purposes.  And Northeastern didn’t post the paper to propose a commercial transaction, even if the purpose of the archive as a whole is to showcase Northeastern’s personnel and facilities.  Although the posting might result in a funder’s decision to give research money to Northeastern, that’s not enough to make the speech commercial, given the importance of avoiding the chill of nonprofits’ participation in public discourse.  Anyway, there was no allegation that the posting targeted sources of research grants or some other relevant consumer group; instead it was open to the public.  That’s different than posting a favorable review in a restaurant window, which “targets consumers making dining decisions.”  This and other examples involved “an express appeal to buy the speaker’s product” (comment: or at least a necessary implication of an appeal).

Even accepting Pellegrini’s disputed allegation that he competed with Northeastern, this wasn’t like other cases that found commercial speech, where the use of scientific papers occurred in the context of a full-scale marketing plan to compete with the relevant plaintiffs.  Given that the dissemination here wasn’t targeted at consumers, and given that defendants were “in the ‘business’ of academia, which is a much more protected field than the business of publishing that was involved in Gordon & Breach,” this case was much more clearly protected than others.

Moreover, the use was not one that related solely to the economic interests of the speaker and its audience.  Even accepting that Northeastern had an economic motive to post the paper, that wasn’t enough.  First, Northeastern is an educational institution, with “substantial, non-commercial purposes for the posting of its academic output: to educate the public, stimulate debate among teachers and students, and promote testing and experimentation. Non-profits and universities are presumed to have a non-commercial purpose for their speech, and are therefore afforded broad protection from regulation.” This protects academic freedom.
Second, the paper’s content was itself noncommercial.  Its subject matter was constitutionally protected, unlike painkillers or motor oil.  (This is kind of nonsensical. An academic paper on painkillers would also be constitutionally protected; it’s not really the subject matter that makes the difference.) 
Third, the paper related to non-economic interests of the audience.  Given its openness, the audience could be presumed to include individuals who were just interested and had no economic motive.  (Note that “relate solely to the economic interests of the speaker and its audience” has a more sensible meaning here than some other courts have given it—of course there will always be reasons for those economic interests, and that shouldn’t convert commercial speech into noncommercial speech.  But a large noncommercially interested audience is a different matter.)
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