382 F. Supp. 3d 734
M.D. Tenn.2019Background
- Vanderbilt owned faculty-created software and instructional materials (Read 180 Materials) under its Technology Policy and employed Prof. Ted Hasselbring, who led development of Read 180.
- Vanderbilt licensed Read 180 exclusively to Scholastic in 1997 for royalties; Scholastic later sold and assigned the License to HMH in 2015.
- After publicity around the sale, Vanderbilt audited Scholastic/HMH and alleged underpayment of royalties and unreported products (Derivative and Ancillary Products) that incorporate Vanderbilt-owned technology.
- Vanderbilt alleges Hasselbring entered undisclosed consulting agreements with Scholastic/HMH, failed to disclose conflicts of interest, and received royalties directly, depriving Vanderbilt of compensation.
- Vanderbilt sued for breach of contract, trademark infringement, Lanham Act unfair competition, declaratory judgment of ownership, tortious interference, consumer-protection violations, fraud, unjust enrichment, and accounting; defendants moved to dismiss several counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lanham Act § 32 trademark infringement (Count 3) | Vanderbilt: Scholastic/HMH used Vanderbilt marks and Vanderbilt-linked statements in marketing Derivative/Ancillary Products, creating affiliation confusion | Scholastic/HMH: Uses were non‑trademark (identifying Hasselbring) and thus not actionable | Denied — complaint plausibly alleges trademark use likely to cause affiliation confusion |
| Lanham Act § 43(a) unfair competition / reverse passing off (Count 4) | Vanderbilt: Defendants falsely associated products with Vanderbilt and misappropriated Vanderbilt-origin material | Defendants: § 43(a) does not protect authorship/ideas; Dastar bars claim that targets origin of creative content rather than producer of tangible goods | Granted — claim precluded by Dastar and Sixth Circuit precedent (cannot use § 43(a) to assert rights in creative content) |
| Declaratory judgment of ownership / co-ownership (Count 2) | Vanderbilt: Allegations and concealed consulting agreements support an inference defendants intended joint works and Vanderbilt co-ownership | Defendants: Vanderbilt fails to plead requisite intent to create a joint work | Denied — court exercises discretion to hear claim; allegations suffice at pleading stage to raise co-ownership issue |
| Tortious interference with contract (Count 7) | Vanderbilt: Scholastic/HMH knowingly used disguised consulting agreements to induce Hasselbring to breach Vanderbilt policies and contracts | Defendants: Allegations lack specific facts showing intent and malice to induce breach | Denied — Vanderbilt pleaded plausible facts supporting intent and malice to induce breach |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausibility requirement)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility and Twombly standard)
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (§ 43(a) does not apply to origin of creative content; protects producer of tangible goods)
- Kehoe Component Sales Inc. v. Best Lighting Products, Inc., 796 F.3d 576 (6th Cir. 2015) (applies Dastar: Lanham Act protects brand origin, not ideas/innovations)
- Sazerac Brands, LLC v. Peristyle, LLC, 892 F.3d 853 (6th Cir. 2018) (discusses trademark use threshold and likelihood-of-confusion analysis)
- Wrench LLC v. Taco Bell Corp., 256 F.3d 446 (6th Cir. 2001) (preemption analysis under Copyright Act; extra-element test)
- Brainard v. Vassar, 561 F. Supp. 2d 922 (M.D. Tenn. 2008) (applies Dastar and § 301 preemption principles)