UNITED STATES: Foreign ‘Unauthorized Copycat’ Freed from Copyright Act and Lanham Act Claims

A U.S. entity operating a Washington, D.C.-based pizza restaurant was unsuccessful in its copyright and trademark claims, among others, against a Scottish company operating a similar pizza restaurant abroad.

On July 17, 2020, the United States Court of Appeals for the District of Columbia Circuit affirmed the decision of United States District Court for the District of Columbia dismissing all claims by IMAPizza, LLC (IMAPizza) against At Pizza Limited and its individual owners (collectively, “AtPizza”) regarding their allegedly unauthorized version, in Scotland, of IMAPizza’’s Washington, D.C., “&pizza” restaurants. Imapizza, LLC v. At Pizza Limited, No. 18-7168 (D.C. Cir. 2020).

IMAPizza’s claims included infringement under the Copyright Act, and trademark infringement and unfair competition under the Lanham Act, trespass under the common law of the District of Columbia, and “passing off” under UK common law.

Because of the foreign subjects of AtPizza, the Appeals Court first considered the limits of extraterritorial application of the Copyright Act. Analyzing whether a “domestic infringement” occurred, it considered that AtPizza allegedly downloaded the photos from websites having servers in the United States and took pictures at IMAPizza’s restaurants in the United States. For downloading photos, the Appeals Court looked at where the copies were “reproduced for a viewer,” instead of the “transmission … across the internet.” The Appeals Court also noted that photographing an architectural work from a public place is not a basis for domestic infringement. Under the predict act test, the court could not find “an initial infringing act in the U.S.” or an allegation of such. The Appeals Court concluded that no claim was stated because there was no allegation of an infringing act in the United States, and the Copyright Act should not be extended beyond its territorial limits to stop what might be lawful in another country.

As to IMAPizza’s Lanham Act claims, the Appeals Court declined to resolve whether “some” effect or “substantial” effects is the proper test to apply because there was no effect on U.S. commerce where AtPizza’s UK business is local and neither their products nor advertisements reached the United States. IMAPizza also failed to explain how potential confusion abroad among U.S. students and tourists, and one alleged instance of confusion in Scotland would affect IMAPizza’s U.S. business, or how AtPizza’s visits to IMAPizza’s restaurants would cause reputational harm.

The Appeals Court affirmed dismissal of the trespassing claim because IMAPizza failed to allege that AtPizza accessed non-public areas or intellectual property that was not visible to the public.

Finally, although the Appeals Court acknowledged it could now be difficult for IMAPizza to enter the UK market, it nevertheless affirmed the District Court’s judgment.

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