The Gerson Institute v. Huntington, 3:09-cv-01429

Background

Gerson Institute sues Huntington for federal trademark and copyright claims and related state-law claims arising from Huntington's role as a marketing and sales agent.
Huntington was hired as Resource Development Specialist with broad authority to promote, market, and sell Gerson’s products online, with access to passwords and financial accounts and limited supervision.
Gerson alleges Huntington set up PayPal and PayLoadz accounts in Gerson’s name and redirected proceeds to himself, and used Gerson’s mark as meta-tags to drive traffic to his sites.
Gerson alleges Huntington misattributed authorship, redirected funds post-employment, and continued infringing activity after termination.
The court previously dismissed the complaint for lack of jurisdiction and allowed an amended complaint; the FAC adds alleged continued post-employment infringement and attempts to address jurisdiction.
Key jurisdictional issue: whether the federal claims and supplemental state claims remain viable given alleged post-employment misconduct and whether the court should exercise jurisdiction over them.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal jurisdiction exists over the claims	Gerson contends federal questions confer jurisdiction over copyright/trademark claims with supplemental state claims.	Huntington argues post-employment conduct may not implicate federal claims and jurisdiction is unwarranted absent ongoing infringement.	Jurisdiction limited; federal claims viable only for alleged ongoing or post-employment infringement if proven.
Whether Huntington’s authority during employment forecloses infringement	Gerson asserts Huntington lacked authorization to market/products for his own benefit, constituting infringement.	Huntington acted as Gerson’s agent with broad authority; selling products during employment was authorized.	During employment, Huntington’s sales were authorized; post-employment liability depends on continued unauthorized acts.
Whether post-employment infringement claims are ripe and actionable	Gerson alleges continued infringement after termination and seeks jurisdiction over such acts.	Post-employment acts may be unripe absent imminence; evidence insufficient at pleading stage.	Claims may be viable to the extent of post-termination infringement; otherwise, they may be dismissed absent discovery support.
Whether attribution and misattribution claims are adequately pleaded	Gerson alleges misattribution of authorship and use of Health Matters as author attribution.	The web-page evidence shows seller attribution, not necessarily misattribution within the Registered Works; pleading insufficient.	Attribution claim not adequately pleaded; fails under Twombly/Iqbal standards.
Whether unregistered works preclude copyright claims while allowing trademark claims	Gerson asserts ownership of multiple works and seeks infringement claims for registered and unregistered works.	Copyright claims require registration for the unregistered works; trademark claims may still proceed with unauthorized use.	Unregistered works cannot support copyright infringement; trademark infringement claims remain viable for unauthorized use.

Key Cases Cited

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading requires plausible grounds for relief, not mere allegations)
Conley v. Gibson, 355 U.S. 41 (U.S. 1957) (note that pleading standards have evolved since)
Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) (Rule 12(b)(6) standard in Ninth Circuit)
Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530 (9th Cir. 1984) (dispositional dismissal under Rule 12(b)(6))
Neitzke v. Williams, 490 U.S. 319 (U.S. 1989) (allowing dismissal on an appropriately dispositive legal issue)
Reed Elsevier, Inc. v. Muchnick, 559 U.S. 143 (U.S. 2010) (copyright registration prerequisite; registration matters affect liability)
City of Santa Clara v. Watkins, 984 F.2d 1008 (9th Cir. 1993) (legal conclusions vs. factual allegations; distinction between agreement and interpretation)
Tegg Corp. v. Beckstrom Elec. Co., 650 F. Supp. 2d 413 (W.D. Pa. 2009) (conversion does not equal copyright infringement)
United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (U.S. 1966) (supplemental jurisdiction framework for related claims)