USDC S.D. New York, May 3, 2010

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  • Court adopts magistrate judge’s recommendation and grants defendants’ partial motion to dismiss Lanham Act and state law claims relating to plaintiffs’ “Ghost Rider” characters and story; court holds that state law claims for “reverse passing off” and tortious interference with business expectancy are preempted by the Copyright Act.

Plaintiffs, Gary Friedrich and Gary Friedrich Enterprises, filed suit against Marvel Enterprises, Marvel Entertainment, and Marvel Studios, alleging copyright infringement, violation of the Lanham Act and several state law claims, relating to the plaintiffs’ “Ghost Rider” characters and story. The defendants moved to dismiss the state law claims and the Lanham Act claims for failure to state a claim. A magistrate judge recommended granting the defendants’ motion. The district court adopted the parts of the magistrate’s recommendation that the plaintiffs did not object to and conducted a de novo review of the parts of the recommendation to which the plaintiffs did object. The district court adopted the recommendation, overruled the plaintiffs’ objections, and granted the defendants’ motion.

The plaintiffs did not object to the magistrate judge’s recommendation to dismiss their Lanham Act claim or the state law negligence claim. When a party does not object to a magistrate’s recommendation, a court reviews the recommendation for clear error. In this case, the district court held there was no clear error and granted defendants’ motion to dismiss these claims.

The plaintiffs did object to the recommendation of dismissal of their state law claims for conversion, trespass to chattels, unfair competition, waste, accounting and right of publicity. The court held that plaintiffs’ made only a general objection to the magistrate judge’s recommendations relating to these claims and that plaintiffs did not “specify how each of these six state law claims protect distinct areas of rights outside the scope of preemption.” Because the court held that the plaintiffs’ did not state an actionable objection to the recommendations relating to these claims, the court reviewed the magistrate’s recommendations for clear error. The court held that the magistrate did not clearly err in recommending dismissal of these claims and the court accordingly granted defendants’ motion to dismiss these claims.

Regarding plaintiffs’ claims for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act, the magistrate judge found that these claims are preempted by the Copyright Act. The court described the plaintiffs’ claims as being premised on a theory of “reverse passing off” in which a party sells the plaintiffs’ products as its own. According to the court, these types of claims are “generally preempted by the Copyright Act.” As the court stated, “Plaintiffs here have alleged extra elements beyond those required for copyright infringement. However, all of these claims ultimately rest on the mere act of unauthorized copying. . . . The fact that the defendants were selling the allegedly infringing works under their own names – and, hence, implicitly misrepresenting the origin of the works or causing confusion in the consuming public – cannot alter the finding of preemption” (internal quotation marks omitted).

Having reviewed the complaint and the record de novo, the court agreed with the magistrate’s conclusion that these claims are preempted by the Copyright Act and granted defendants’ motion on these claims.

The court also agreed with the magistrate’s conclusion that the plaintiffs’ claim for tortious interference with business expectancy is preempted by the Copyright Act because the plaintiffs did not allege any “extra element” apart from the rights protected by copyright law, and that plaintiffs’ claim for tortious interference with right of publicity is preempted because the right of publicity covers only individuals and the plaintiffs failed to allege that defendants’ used Gary Friedrich’s name without his consent.