IP Law Daily Tennessee distributor liable for unauthorized sale of some counterfeit textbooks; must face trial regarding others
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Friday, January 8, 2021

Tennessee distributor liable for unauthorized sale of some counterfeit textbooks; must face trial regarding others

By Pamela C. Maloney, J.D.

Evidence supported summary finding that distribution of a limited number of textbook titles obtained from Amman-based counterfeiting ring violated copyright and trademark rights of an educational publisher.

An educational publisher presented sufficient admissible, relevant evidence to prove, as a matter of law, that certain textbooks that had been obtained them from a known counterfeiting ring based in Amman, Jordan, were distributed by a Tennessee-based company without authorization in violation of the publisher’s copyrights and registered trademarks, the federal district court in Nashville ruled, granting the publisher’s motion for summary judgment. However, there was insufficient evidence that copies of other textbooks were counterfeit or that the distributor had sold those copies to retailers and, thus, the court refused to grant summary judgement on claims relating to those textbooks (Pearson Education, Inc. v. C&N Logistics, Inc., January 7, 2021, Richardson, E.).

Pearson Education Inc., an educational publisher that develops, markets, distributes, licenses, and sells a comprehensive range of traditional and digital educational content and tools to professionals and students, filed a lawsuit alleging that C&N Logistics, Inc. distributed hundreds of counterfeit copies of Pearson’s textbooks without authorization. Pearson further alleged that these counterfeit copies bore Pearson’s registered trademarks. According to Pearson, C&N had acquired allegedly counterfeit copies of 43 titles in which Pearson or another publisher held copyrights from an international counterfeiting ring based in Amman, Jordan. In the lawsuit, Pearson and the other publishers set forth claims for copyright infringement, secondary copyright infringement, false designation of origin, and trademark counterfeiting against C&N. Pearson moved for summary judgment on all claims.

Copyright ownership. The complaint contained a declaration by Pearson and each of the publishers stating that they were the owner or holder of the exclusive rights under copyright for each of the textbook titles at issue, along with copies of the relevant copyright registrations for each title. Given this evidence, the district court concluded that the publishers had carried their burden of showing that there was no issue of material fact as to whether the publishers owned copyrights in the works at issue.

Copyright infringement. Based on C&N’s own admissions and an examination of copies sold or distributed by C&N to a number of retail and online sellers, the court found that Pearson and the other publishers had established through relevant evidence that, as a matter of law, copies of copyrighted textbooks had been obtained from the Amman-based counterfeiting ring and that those copies were counterfeit. Thus, the court granted summary judgment in favor of the publishers as to those titles.

However, Pearson and the other publishers failed to offer relevant, admissible evidence that copies of textbooks sold through several other retailers, including online sellers, and to unnamed purchasers, were distributed by C&N after being acquired from the Amman-based counterfeiting ring or that the copies were counterfeits. Therefore, the district court denied summary judgement as to those copies.

Trademark claims. The publishers also met their burden of proving ownership in the trademarks that appeared on the allegedly counterfeit copies of the textbooks. Their declarations set forth facts establishing their ownership in the titles at issue and there was no dispute that copies of the trademarked titles were bought, sold, and distributed in interstate commerce. Thus C&N also was liable for trademark infringement but only in relation to those titles for which the evidence had established that the publishers’ copyrights had been infringed, the court determined.

Chain of custody defense. Testimony by Pearson that the copies of the allegedly infringing works surrendered to it had been inspected by experts who determined that the copies were, in fact, counterfeit was sufficient to overcome C&N’s claim that Pearson and the other publishers failed to present sufficient evidence that the copies inspected and declared to be counterfeit were the same copies shipped by C&N and, thus, that there was no proof of chain of custody. In addition, C&N failed to present competing experts or reports by its own export reports challenging the experts proffered by Pearson or the validity of their findings. Thus, C&N’s chain of custody defense failed as a matter of law.

Joint and several liability. The district court also found that the individual named in the complaint as owner, president, and registered agent for C&N was jointly and severally liable for any copyright and trademark infringement attributed to the company. The individual admitted that he was involved with receiving, processing, analyzing, transporting, shipping, and selling copies of the books at issue and was paid to do so. Furthermore, there was no evidence that C&N acted at anyone else’s direction or under anyone else’s supervision but that of the named corporate office. This evidence was sufficient to meet the publishers’ burden of showing that there was no question of material at as to whether the named individual met the two-part test of establishing joint and several liability, the court concluded in granting summary judgment as to this individual’s liability for valid copyright and trademark infringement claims.

However, a second individual who admitted that he had a business association with C&N and that he had worked with the company’s president on the sale of some textbooks that had been sold in violation of the publishers’ copyrights and trademark registrations, was not jointly and severally liable for valid copyright and trademark claims because there was no evidence that he was a corporate officer or that he had directed any of the company’s business activities. Thus, this individual could be liable only for his own actions in relation to those claims.

This case is No. 3:18-cv-00438.

Attorneys: John J. Griffin, Jr. (Kay Griffin, PLLC) for Pearson Education, Inc., McGraw-Hill Global Education Holdings, LLC., Cengage Learning, Inc. and Bedford, Freeman & Worth Publishing Group, LLC.

MainStory: TopStory Copyright Trademark GCNNews TennesseeNews

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