PITTSBURG TANK & TOWER CO., INC. v. PREFERRED TANK & TOWER, INC.
Filing
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ORDER granting in part and denying in part 82 Motion to Amend/Correct; granted as to Count II but denied as to Counts III and IV; a proper amended complaint should be filed within 10 days of the date of this entry. Signed by Magistrate Judge William G. Hussmann, Jr on 4/18/2011. (SMD)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
EVANSVILLE DIVISION
PITTSBURG TANK & TOWER CO., INC.,
Plaintiff,
v.
PREFERRED TANK & TOWER, INC.,
Defendant.
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3:10-cv-32-JMS-WGH
ENTRY ON PLAINTIFF’S MOTION FOR LEAVE TO FILE
FIRST AMENDED COMPLAINT
This matter is before the court on Plaintiff’s Motion for Leave to File First
Amended Complaint filed February 28, 2011. (Docket No. 82). Defendant filed
its Objection on March 11, 2011. (Docket Nos. 83-84). Plaintiff filed its Reply
on March 17, 2011. (Docket No. 85).
I.
Discussion
Plaintiff, Pittsburg Tank & Tower Co., Inc. (“Pittsburg”), filed this motion
seeking to amend its Complaint. The amendment of pleadings by a party is
governed by Rule 15(a) of the Federal Rules of Civil Procedure. That rule
permits the amendment of a pleading after a responsive pleading has been filed
only upon leave of the court or consent of the adverse party, but notes that
leave should be freely given when justice requires. FED. R. CIV. P. 15.
“Although the rule reflects a liberal attitude towards the amendment of
pleadings, courts in their sound discretion may deny a proposed amendment if
the moving party has unduly delayed in filing the motion, if the opposing party
would suffer undue prejudice, or if the pleading is futile.” Campania
Management Co., Inc. v. Rooks, Pitts & Poust, 290 F.3d 843, 848-49 (7th Cir.
2002).
In this case, Pittsburg claims that it owns a website entitled
www.watertank.com. Pittsburg alleges in its proposed Amended Complaint
that Defendant, Preferred Tank & Tower, Inc. (“Preferred”), took certain items
which appeared on Pittsburg’s website, altered them to remove all references to
Pittsburg, inserted references to Preferred, and sent them out to potential
customers on at least one occasion. The items allegedly “taken” from the
website are:
(1)
“Testimonials” from satisfied customers–which appear to be
all or portions of communications written by customers and
sent to Pittsburg. The testimonial language is arranged in
paragraphs and an applicable graphic logo taken from the
customer is placed next to each paragraph;
(2)
A news story published by the Henderson Gleaner
newspaper which reports that Pittsburg was certified as a
drug-free workplace by the Kentucky Department of
Worker’s Claims;
(3)
Portions of a letter from the New Mexico OSHA Bureau
reflecting that an inspection of a Pittsburg facility in New
Mexico did not find safety violations on the date of a
particular inspection; and
(4)
Photographs of tank projects. It would appear that these
photographs were created by Pittsburgh, but there is no
information to establish by whom the photographs were
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taken or whether or not any other individual claims rights to
the photographs.
Pittsburg claims that Preferred then passed off all of these items as their own.
Pittsburg originally filed its Complaint alleging that Preferred’s actions
amounted to false advertising and unfair competition in violation of the
Lanham Act. Pittsburg now seeks to amend its Complaint to add three new
causes of action: (1) Count II seeks to add a claim of unfair competition
“passing off”; (2) Count III seeks to add a claim of theft; and (3) Count IV seeks
to add a claim of conversion. Preferred does not oppose the addition of Count
II. However, Preferred does argue that amendment of the Complaint should not
be permitted to include Counts III and IV because Pittsburg “does not plead in
its proposed First Amended Complaint that it was deprived of any property.”
(Defendant’s Objection to Plaintiff’s First Amended Complaint at 2). We
interpret this argument as raising the issue of whether it is futile to bring such
claims because they do not state claims upon which relief can be granted.
The question presented by Pittsburg’s attempt to amend its Complaint
and Preferred’s objection is as follows: Can website content be the subject of a
cause of action sounding in theft or conversion? Pittsburg points to Justice
Boehm’s concurring opinion in Conwell v. Gray Loon Outdoor Marketing Group,
Inc., 906 N.E.2d 805, 817-18 (Ind. 2009). This opinion suggests that whether
or not website content is “property” subject to a claim of conversion remains an
open question in Indiana.
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To address this open issue, we believe that we must first examine
whether the Copyright Act preempts Pittsburg from bringing causes of action
sounding in theft or conversion in this case. 17 U.S.C. § 301, the portion of
the federal Copyright Act that discusses preemption of state law, provides that:
On and after January 1, 1978, all legal or equitable rights that are
equivalent to any of the exclusive rights within the general scope of
copyright as specified by section 106 in works of authorship that
are fixed in a tangible medium of expression and come within the
subject matter of copyright as specified by sections 102 and 103,
whether created before or after that date and whether published or
unpublished, are governed exclusively by this title. Thereafter, no
person is entitled to any such right or equivalent right in any such
work under the common law or statutes of any State.
As the Seventh Circuit has explained, the Copyright Act sets forth two
conditions that must be met in order for there to be preemption. “First, the
work in which the right is asserted must be fixed in tangible form and come
within the subject matter of copyright as specified in § 102. Second, the right
must be equivalent to any of the rights specified in § 106.” Baltimore Orioles,
Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663, 674 (7th Cir. 1986).
Section 102 includes protection for “original works of authorship fixed in any
tangible medium of expression, now known or later developed, from which they
can be perceived, reproduced, or otherwise communicated, either directly or
with the aid of a machine or device . . . .” 17 U.S.C. § 102. This protection
extends to such things as literary, pictorial, and graphic works. 17 U.S.C. §
102. The protection also extends to compilations and derivative works. Id. §
103.
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An analysis of the website content at issue in this case reveals that all of
the material allegedly taken by Preferred is covered under either section 102 or
103. First, the “Testimonials” section of Pittsburg’s website, as well as the “In
the News” section that included the newspaper article and the New Mexico
OSHA letter, constitute a compilation. Pittsburg arranged these items in an
original manner, placing graphics beside each item to indicate its source. Even
though this arrangement of testimonials and other materials could rightly be
characterized as expressing a minimal amount of creativity, copyright law still
protects such creations. “These choices as to selection and arrangement, so
long as they are made independently by the compiler and entail a minimal
degree of creativity, are sufficiently original that Congress may protect such
compilations through the copyright laws.” Feist Publications, Inc. v. Rural
Telephone Service Co., Inc., 499 U.S. 340, 348, 111 S. Ct. 1282, 113 L.Ed.2d
358 (1991). Second, as for the photographs of tank projects, it appears that
they have been produced by Pittsburg, and Pittsburg admits that the
photographs were placed on Pittsburg’s website as a form of advertisement. It
appears that the photographs meet the definition of 17 U.S.C. § 102 as they are
“pictorial” and are “original works of authorship fixed in any tangible medium
of expression.” The Magistrate Judge, therefore, concludes that photographs
allegedly taken from Pittsburg’s website are subject to the protection of
copyright laws.
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The second issue to be addressed is whether claims of theft and
conversion meet the Copyright Act’s second requirement for preemption: that
the rights Pittsburg asserts under Indiana law are equivalent to the rights
specified in section 106. There are five such exclusive rights that the Copyright
Act provides: (1) reproduction; (2) adaptation; (3) publication; (4) performance;
and (5) display. 17 U.S.C. § 106. “[T]o avoid preemption, a state law must
regulate conduct that is qualitatively distinguishable from that governed by
federal copyright law – ie., conduct other than reproduction, adaptation,
publication, performance, and display.” Toney v. L’Oreal USA, Inc., 406 F.3d
905, 910 (7th Cir. 2005). Therefore, as then District Judge David Frank
Hamilton has explained, in order to avoid preemption of state law claims of
theft and conversion, a plaintiff “must show that those claims include an ‘extra
element’ that changes the nature of the state law action so as to make it
qualitatively different from a federal copyright infringement claim.” DIRECTV,
Inc. v. Beecher, 296 F.Supp.2d 937, 944 (S.D. Ind. 2003). In this case, what
Pittsburg alleges is that Preferred has removed pictures, testimonials, and
other items from its website and reproduced or adapted those items by
removing any references to Pittsburg and replacing the name Preferred.
Pittsburg further alleges that these reproduced or adapted works have been
published/displayed by Preferred. It does not appear from the face of the
Amended Complaint that Pittsburg alleges any “extra element.” Therefore,
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Pittsburg’s Motion for Leave to File First Amended Complaint to add Counts III
and IV must be DENIED.
II.
Conclusion
For the reasons outline above, Pittsburg’s Motion for Leave to File First
Amended Complaint is GRANTED as to Count II, but it is DENIED as to
Counts III and IV. A proper Amended Complaint should be filed within ten (10)
days of the date of this Entry.
SO ORDERED.
__________________________
William G. Hussmann, Jr.
United States Magistrate Judge
Southern District of Indiana
Dated: April 18, 2011
Electronic copies to:
Todd C. Barsumian
BARSUMIAN LAW
todd@barsumianlaw.com
Robert W. Rock
JONES WALLACE LLC
rrock@joneswallace.com
Angela L. Freel
RUDOLPH FINE PORTER &
JOHNSON LLP
alf@rfpj.com
Ross E. Rudolph
RUDOLPH FINE PORTER &
JOHNSON
rer@rfpj.com
David L. Jones
JONES WALLACE, LLC
djones@joneswallace.com
Paul J. Wallace
JONES WALLACE LLC
pwallace@joneswallace.com
Julia B. Langerak
JONES WALLACE LLC
jlangerak@joneswallace.com
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