By Robert Margolis, J.D.
District court properly dismissed claims by United States pizza chain, finding no infringing acts in the United States.
Neither the Copyright Act nor the Lanham Act apply extraterritorially to claims by a United States pizza chain against a pizzeria in Edinburgh, Scotland, which allegedly copied the architectural design, and the look and feel of the chain’s United States restaurants, a the U.S. Court of Appeals in Washington, D.C., has held. The appellate court affirmed the district court’s dismissal of all claims (IMApizza, LLC v. At Pizza Ltd., July 17, 2020, Ginsburg, D.).
Copycat pizzeria. From its D.C. headquarters, IMAPizza operates "&pizza," the "anti-establishment establishment" pizza chain, in Washington, D.C., and elsewhere on the East Coast. At Pizza Limited operates "@pizza," a single pizza restaurant in Edinburgh, Scotland, and its owners reside in, and are citizens of, the United Kingdom. According to IMAPizza, the At Pizza owners took numerous trips to D.C. to visit the IMAPizza locations, masquerading as customers, and studied the restaurants, took extensive photos, accessed all the areas of the restaurants to observe their designs. They returned to Scotland and used this copyrighted information to establish a copycat pizzeria in Edinburgh. IMAPizza also claimed that At Pizza downloaded photos of &Pizza restaurants from websites operating on American servers. IMAPizza claimed that these downloads included at least three photos for which IMAPizza owns the copyrights in the pictures themselves, as well as to the architectural and interior designs they depict.
IMAPizza sued At Pizza, bringing five causes of action, including (1) At Pizza’s infringement of IMAPizza’s copyrights in the architectural works and three photos; (2) "passing off" under U.K. common law, improperly trading on the goodwill associated with IMAPizza’s distinctive trademark and other features; (3) and (4) for trademark infringement and unfair competition under the Lanham Act; and (5) trespass under District of Columbia law when they entered &pizza restaurants without permission for the purpose of stealing IMAPizza’s intellectual property. At Pizza moved to dismiss under Rules 12(b)(2) and 12(b)(6). After indicating that IMAPizza made a prima facie showing of personal jurisdiction, the court granted At Pizza’s motion to dismiss as to the copyright, trademark infringement, unfair competition, and trespass claims. IMAPizza appealed.
Copyright infringement. This case caused the D.C. Circuit to revisit the extraterritorial reach of the Copyright Act. In a 2018 decision, the Court held that "the Copyright Act has no extraterritorial application." Spanski Enters., Inc. v. Telewizja Polska, S.A., 883 F.3d 904, 913 (D.C. Cir. 2018). The test that the court applied was, that even when conduct crosses international borders, it will be permissible to apply the Copyright Act only if "conduct relevant to the statute’s focus occurred in the United States." Spanski, 883 F.3d at 913. Thus, the question was not whether At Pizza infringed IMAPizza’s rights under the Copyright Act, but whether it did so in the United States. IMAPizza alleged what it claims to be two acts of "domestic infringement": (1) downloading its copyrighted pictures of &pizza restaurants from websites on servers located in the United States, and (2) taking pictures of &pizza restaurants in the United States.
Picture reproduction. With the reproduction of a picture, the question under Copyright Act § 106(1) is where was the copy made? The district court held that under the circumstances, "copy" does not mean the "ephemeral transmission of a picture across the internet," but rather the copy becomes "fixed" when the picture is reproduced for the viewer. In this case, there were no allegations that any such reproduction occurred in the United States, the appellate court held. By contrast, in Spanski, where the case concerned transmission of Polish television shows over the internet in Poland onto computer screens in the United States, reproduction occurred in the United States.
The appellate court also rejected IMAPizza’s argument that the copying occurred on a server located in the United States. As the court pointed out, IMAPizza provided "no technical, legal, or other support" for its position that downloading a picture from a United States server creates a copy in the United States.
Taking picture. The appellate court also rejected IMAPizza’s argument that taking a picture at the restaurant in Washington, D.C., for purposes of creating a copycat restaurant constitutes an infringing act in the United States. The Copyright Act does not allow a copyright holder in an architectural work to prevent taking pictures of the work if the building is "ordinarily visible from a public place." 17 U.S.C. §120(a). That this taking of a picture culminated in the copying of an architectural work in Scotland does not give rise to an infringement claim in the United States, the court held.
Predicate act. Finally, the court held that IMAPizza could not rescue its infringement claim by asserting that the downloading and taking of pictures as described above were "predicate acts," permitting a claim under the Copyright Act for foreign infringements due to the initial infringing act in the United States. For the reasons given above, neither act alleged was an infringing act in the United States, so the "predicate act" theory did not apply.
Lanham Act. Similarly, the court found that the Lanham Act did not apply extraterritorially to At Pizza’s conduct (though it noted that the Supreme Court has held that it does apply extraterritorially). The court reviewed tests that other circuit courts have applied from the Supreme Court’s decision, Steele v. Bulova Watch Co., 561 U.S. 247 (2010)—that the Lanham Act applies territorially to acts that have either "some effect" on United States commerce (Ninth Circuit) or a "substantial effect" on United States commerce (First Circuit). The D.C. Circuit did not choose a test, however, holding that under either test, insufficient effect on United States commerce was alleged. It was not enough that United States tourists and students who may visit Edinburgh may see @Pizza and confuse it with &Pizza restaurants in the United States, the court held. And neither the fact that a potential investor in IMAPizza was confused nor that the defendants visited the United States to research their alleged infringement sufficed, since neither showed any actual harm to IMAPizza.
This case is No. 1:17-cv-02327-TJK.
Attorneys: David Barmak (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.) for IMApizza, LLC. Matthew J. Dowd (Dowd Scheffel PLLC) for At Pizza Ltd.
Companies: IMApizza, LLC; At Pizza Ltd.
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