AP’s Lanham Act Claims Against All Headline News Corp. Dismissible – NY District Court

Holding:

The U.S. District Court for the Southern District of New York dismissed plaintiff Associated Press’ (“AP”) complaint that defendant All Headline News Corp. (“AHN”) infringed its trademarks in “AP,” “Associated Press,” and the “The Associated Press,” in connection with AHN’s news service. In so ruling, the district court rejected AP’s argument that AHN’s news articles mislead readers into believing that they are issued by plaintiff by using phrases like “(a)ccording to an AP report.” The district court held that such allegations were merely conclusory and not supported by factual assertions. Additionally, the district court found no merit in AP’s unfair competition claim under the Lanham Act. Assuming the truth of plaintiff’s allegation that AHN labels itself a “news service” but employs no reporters, the district court could not hold AHN liable under this claim because the statute does not render such conduct unlawful.

Detailed Summary:

This action arose out of the activities of AHN, an online venture that disseminates news reports to customer web sites, including reports of breaking news.

In its amended complaint, AP described itself as “one of the world’s oldest and largest news organizations” and “the ‘gold standard’ of objective journalism.” Opinion, p. 1.

AP brought this action alleging that defendants engaged in “free riding” on the AP’s news articles. Specifically, it alleged that defendants have unlawfully copied and altered AP news stories in violation of the federal Copyright Act, 17 U.S.C. §§ 106, the Digital Millennium Copyright Act, 17 U.S.C. § 1202, and the Lanham Act, 15 U.S.C. §§ 1114 & 1125(a), among others.

Pursuant to Rule 12(b)(6), Fed. R. Civ. P., defendants moved to dismiss the claims.

By way of background, AP focuses on providing reports of timely, breaking news.  It makes its news available to a variety of subscribing publications and licenses its stories to clients with internet web sites. It alleged in its amended complaint that it offers various licensing options for its clients, who pay a subscription fee and agree to terms and limitations on their use of AP stories.

AP’s amended complaint alleged that defendant AHN does not undertake any original reporting. According to AP, AHN hires individuals to find news stories on the internet and prepare them for republication under the AHN banner, either rewriting the text or copying the stories in full.

Among other allegations, AP’s amended complaint stated that the Associated Press trademark has been infringed under section 32 of the Lanham Act, 15 U.S.C. § 1114(1). According to the amended complaint, plaintiff has valid registered trademarks in “AP,” “ASSOCIATED PRESS,” and “THE ASSOCIATED PRESS.” AP alleged that defendants infringed upon the marks by using them in connection with the sale and offering for sale of the AHN’s news service, thereby causing confusion and mistake among clients and potential clients.

In dismissing this claim, the district court cited Dow Jones & Company, Inc. v. International Securities Exchange, Inc., 451 F.3d 295, 307 (2d Cir. 2006).  In Dow Jones, the Second Circuit concluded that a trademark claim “fails under even the liberal standard of Rule 12(b)(6)” when a complaint “consists of conclusory allegations unsupported by factual assertions.” Id., p. 12.

Here, the memoranda of law indicated that AP’s claim was based on a theory that AHN’s articles mislead readers into believing that they are issued by the plaintiff, by using a phrase such as “(a)ccording to an AP report.” Id. However, the district court explained that the amended complaint consisted entirely of “conclusory allegations” that lacked factual support, and that the theory of liability stated in plaintiff’s opposition to the motion to dismiss is of the type that the Dow Jones court concluded must fail as a matter of law. Id., citing Dow Jones, 451 F.3d at 307-08.

Based on the foregoing, the district court dismissed plaintiff’s trademark infringement claim made under the Lanham Act.

Additionally, the district court dismissed AP’s unfair competition claim under the Lanham Act, 15 U.S.C. § 1125(a). In its amended complaint, AP alleged that defendants falsely indicated that AHN maintains a “news division” when it does no original reporting; that AHN falsely implied that it has permission to republish Associated Press articles; and that AHN wrongfully deletes information that would identify sources of the reports that it publishes.

The district court rejected all these assertions.  The district court explained that AHN’s self-described status as a news-gathering organization is an inadequate basis for a Lanham Act claim. As framed here, this claim would require a court or a jury to sit in judgment of whether a self-described news service is required by the Lanham Act to do “original reporting.” Id., p. 14.

Assuming the truth of plaintiff’s allegation that AHN labels itself a “news service” but employs no reporters, the statute does not render such conduct unlawful. The Second Circuit has held that puffery (defined in part as “subjective claims” not susceptible to being proved true or false) is not actionable under the Lanham Act, and “‘amounts to a seller’s privilege to lie his head off, so long as he says nothing specific.’” Id., citing Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 159 (2d Cir. 2007).

As to the plaintiff’s allegation that consumers and potential AP customers could mistakenly believe that AHN was affiliated with the AP, the district court held that conclusory assertions made in AP’s opposition to the motion to dismiss are not a substitute for plausible allegations in a complaint.

Accordingly, the district court dismissed AP’s Lanham Act claims.

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