The Preston Partnership, LLC v. ADG Design Studio, LLC
1:17-cv-02846
N.D. Ga.Jan 5, 2018Background
- Preston Partnership (architectural/interior firm) sued ADG Design Studio, Atlanta Design Group, and former Preston principal Chandra Cherry and ADG president Mark Darnell for allegedly presenting Preston projects on ADG’s website as ADG work.
- ADG’s site displayed project photographs created while Cherry worked at Preston, with a small on-image caption reading “Work done while Principal at The Preston Partnership,” which Preston alleges is false, indecipherable in some views, and misleading because ADG had no independent portfolio.
- Preston sent email and counsel’s cease-and-desist demanding removal; Defendants did not remove images and called the demand a “scare tactic.”
- Preston pleaded a Lanham Act § 43(a) reverse-passing-off claim (false designation of origin for services), Georgia Deceptive Trade Practices Act, injunctive relief, and attorneys’ fees; moved for a TRO which the court denied for lack of likelihood of confusion and harm.
- Defendants moved to dismiss Count I arguing (inter alia) Dastar bars protection for the ideas in photographs, Preston failed to plead falsity, likelihood of confusion, and actual harm.
- The court denied the motion to dismiss Count I, finding Preston plausibly alleged (1) the services originated with Preston, (2) a false designation of origin of services, (3) likelihood of consumer confusion, and (4) commercial harm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dastar bars Preston’s Lanham Act claim | Preston asserts claim is about origin of services (design work), not ownership of photographs | ADG contends claim really seeks to protect the photographs/ideas and is foreclosed by Dastar | Court: Dastar does not bar claims about origin of services; claim for reverse passing off of services survives |
| Whether Preston sufficiently alleged false designation | Preston alleges ADG presented Preston’s projects as ADG’s work and disclaimer is false/indecipherable | ADG points to on-image disclaimer and absence of a specific false statement | Court: Allegations that disclaimer is indecipherable and that photos are presented as ADG work are plausible allegations of falsity |
| Whether Preston sufficiently alleged likelihood of confusion | Preston alleges website presentation, flashing images, mobile invisibility of disclaimer, and Defendants’ refusal to remove images show likely confusion and intent | ADG argues sophisticated clients unlikely to be confused and its willingness to redesign undermines intent | Court: At pleading stage, allegations make likelihood of confusion plausible; factual disputes reserved for later stages |
| Whether Preston sufficiently alleged injury | Preston alleges commercial injury and loss of prospective clients due to ADG’s false portfolio | ADG contends no specific lost customers, calls, or concrete harm alleged | Court: Alleged competition and use of Preston’s work to bolster ADG’s portfolio plausibly alleges commercial harm at pleading stage |
Key Cases Cited
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (construed § 43(a) regarding the meaning of the “origin” of goods and limits on using Lanham Act to extend copyright-like protection)
- Gensler v. Strabala, 764 F.3d 735 (7th Cir. 2014) (Lanham Act reverse passing off claim viable for false representation of origin of services)
- Lipscher v. LRP Publishing, Inc., 266 F.3d 1305 (11th Cir. 2001) (elements for § 43(a) false designation claim and relevance of likelihood of confusion factors)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must state a plausible claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)