Dastar prevents misrepresentation of source of IP from being material

Restellini v. Wildenstein Plattner Inst., Inc., 2021 WL
4340824, No. 20 Civ. 4388 (AT) (S.D.N.Y. Sept. 22, 2021)

This is an interesting application of Dastar to preclude certain theories of falsity–I’m not sure materiality is really the right characterization, but ok. Restellini alleged copyright infringement and related claims
in connection with WPI’s digitization of certain material about the artist
Amodeo Modigliani. WPI counterclaimed against Restellini and third-party
Institut Restellini SAS – Documentation Centre alleging copyright infringement and
false advertising. This opinion got rid of the counterclaims.

“In 1997, Restellini and the non-party Wildenstein Institute
(WI), a non-profit organization based in France, began working together to
create a catalogue raisonné of works by Amodeo Modigliani.” (A catalogue
raisonné “is a scholarly work identifying and describing all the known works by
an artist.”) They collaborated for the next 18 years. Restellini allgedly “offer[ed]
his opinions as to whether or not artworks should be included in the planned
catalogue raisonné” in “oral consultation” with WI employees, based on the
information and materials “researched, collected, synthesized, analyzed and
expressed by” the employees. For instance, WI employees “liaised with owners of
artworks being submitted for consideration for inclusion in the planned
catalogue raisonné, and, among other things, researched, compiled and reviewed
provenance materials associated with such artworks,” and “conducted substantive
academic research on exhibitions and provenance of artworks attributed to
Modigliani, including research, compilation and review of relevant information
from museums and other third-party institutions.”

In 2013, things began to go bad as Restellini began
attempting to purchase certain Modigliani material from WI, and in 2015,
Restellini and WI discontinued their collaboration before the catalogue was completed.

In 2017, WI granted WPI an automatically renewable,
exclusive license to use and exploit the content of all of WI’s materials,
including the Modigliani material. “WPI planned to utilize that license to
digitize the information to provide public online access to portions of the
Modigliani Material at no cost, but suspended that plan due to this litigation.”
Meanwhile, “Restellini incorporated the Modigliani Material into correspondence
and avis d’inclusion with third parties and a forthcoming catalogue raisonné by
Restellini, and disseminated the Modigliani Material to third parties.” (Avis
d’inclusion are “notices that a work would be included in the catalogue
raisonné.”) His Institut allegedly charges 30,000 euros per “Modigliani-based
inquiry.” The Institut published on its English-language website the statement

After 18 years of exemplary
collaboration, Marc Restellini and the Wildenstein Institute decided, by a
mutual decision, to part, Marc Restellini wishing to evolve on his own. In
2015, the Catalogue Raisonné Amedeo Modigliani is henceforth transferred to
Institut Restellini, being taken up with new methods, even more modern and
scientifically extensive. It will be enhanced by the drawings, which had been
set aside with the Wildenstein Institute.

Copyright: WPI counterclaimed for infringement of its
collective work, but the counterclaim lacked sufficient specificity. Although
registration isn’t required for a foreign work, the other elements are still
present: the plaintiff must plead which specific works are the subject of the claim,
that it owns those works, and what acts of the defendant infringed. At the
motion to dismiss stage, it isn’t required to allege which elements of an
identified work were infringed. And if a plaintiff is alleging infringement of
a subset of a group of works, it doesn’t need to allege which specific one was
infringed, but it does need to allege an “exhaustive” list of the potentially
infringed copyrighted works to ensure the claims reach all those works. Here,
WPI alleged infringement of the “Modigliani Material,” “all of [WI’s] research
materials that its personnel assembled and analyzed in connection with the
Modigliani Project,” and“the information and materials researched, collected,
synthesized, analyzed and expressed by WI’s employees.” This included certain
dossiers containing “information gathered in relation to individual works
attributed to Modigliani.” It also alleged that it purchased “publications and
archival photographs from third parties to support the Modigliani Project.” It
claimed rights in the work product Restellini attempted to purchase from WI,
but not the preexisting material that Restellini had created prior to his
association with WI.

But “[n]one of these piecemeal allegations identify the work
at issue with sufficient specificity.” In particular, “[a]lthough WPI alleges
that the collective work at issue here is all the research materials assembled
in connection with the Modigliani Project, its allegations consist of a
collection of vague descriptors, which do not give Counterclaim Defendants—or the
Court—notice of the specific individual works merged into the larger collective
work.” The definition “the same work product that Restellini unsuccessfully tried
to buy from WI because he knew he did not already own it” was not enough for
the court to evaluate the claims. “[E]ven when large number of works are
allegedly infringed and the works are identified by category, plaintiffs in
this Circuit are required to give specific, concrete examples of the
copyrighted works.” So you need a list even if you allege specific facts only
as to some of the examples on the list.

WPI argued that the court should consider the procedural
posture: its primary argument is that none of the works over which Restellini
asserts copyright are copyrightable. Therefore, it reasoned, “the subject
matter of the counterclaims will be the amount of the Modigliani Material that
Restellini demonstrates is copyrightable to the Court, but WPI cannot know what
that material is until after the Court resolves the copyrightability question.”
But the court still needed at least “concrete, representative examples” of the
works and an exhaustive list to determine the merit of the claims. WPI could at
least have pled in the alternative to allow the court to determine the extent
of overlap with Restellini’s claimed materials and the alleged contours of the
collective work.

False advertising based on the Institut’s website statement
(emphasis added):

In 1997, invited by Daniel
Wildenstein, Marc Restellini decided to undertake the Catalogue raisonné of
Amedeo Modigliani’s works, imposing new scientific criteria never before used
in the field of research on works of art. After 18 years of exemplary
collaboration, Marc Restellini and the Wildenstein Institute decided, by a
mutual decision, to part, Marc Restellini wishing to evolve on his own. In
2015, the Catalogue Raisonné Amedeo Modigliani is henceforth transferred to
Institut Restellini, being taken up with new methods, even more modern and
scientifically extensive.
It will be enhanced by the drawings, which had
been set aside with the Wildenstein Institute.

WPI alleged that the statement was literally false because
WI “did not transfer the Modigliani Material, or the rights to use that
material to create a catalogue raisonné (or for any other purpose), to
Institut.” The statement didn’t mention the Modigliani Material, nor was there
an extant catalogue raisonné, so there was no literal falsity, though it could
imply falsity. At the motion to dismiss stage, “plaintiffs need only state that
there was confusion and offer facts to support that claim.” But WPI alleged no
facts to support the claim that there was confusion. Can pleading deceptive
intent substitute for that? Yes, sometimes, where the conduct was egregious.
WPI alleged that the Institut (1) knew that the Modigliani Material was not
transferred to the Institut, (2) made the statement to cause confusion, and (3)
intended to influence “potential purchasers and sellers of Modigliani art,
scholars and researchers of Modigliani, and the public in general to believe
that the important information contained within the Modigliani Material is
exclusively owned by, accessible through, and available from Institut,” as
opposed to it being publicly accessible through WPI. “Although a close call,
the Court concludes that these allegations are sufficient to plead that the
Institut made the Statement knowing it would be impliedly false, and did so for
commercial motives. Moreover, there is no indication that the Institut changed
its website when the possibly misleading implications came to light.” Thus,
deceptiveness was plausibly alleged.

But not materiality! WPI argued that it misrepresented the
materials as Restellini’s product, but that was a Dastar-barred
misrepresentation of authorship. Alleged misrepresentation of the materials as
copyrightable again “centers around the ownership and authorship of the ideas
in the Modigliani Materials, not any statements about the physical product
which contains those ideas” and was Dastar-barred.

The most persuasive argument was that the website misrepresented
Restellini and the Institut “as exclusive possessors of the Modigliani Material
in order to force individuals to pay them for access, when in fact WPI has the
right to make it known as well.” But WPI’s allegations still went to contested
ownership of the information contained in the Modigliani Material, rather than
the Modigliani Material as a physical product. “Although consumers may care
about who may provide access to that information, it is a distinction sounding
in copyright: whether the information is in the public domain, is WPI’s, or is
exclusively Restellini’s. And under Dastar, such a statement is not
actionable under the Lanham Act.” Cases about false advertising of the source
of “services” were inapposite. “[T]he Statement’s alleged falsity derives from
the transfer of the Modigliani Material, rather than any services Restellini
provided. And to the extent it derives from contesting who performed the work
in creating the Modigliani Material, that is, in essence, a debate over
authorship—and thus foreclosed by Dastar.”

Therefore, the statement, though plausibly false, wasn’t
material under the Lanham Act.

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