Page:Michael Anthony Jewelers v. Peacock Jewelry.pdf/16

 We next consider the possibility that Peacock was deprived of a property interest by MAJ’s alleged scheme to defraud. At first glance, this possibility seems plausible, in that Peacock contends that MAJ’s actions deprived it of the right to manufacture and sell charms designs purchased from the Old Mr. Craftsman. See ¶¶ 105–06. The difficulty with this position, however, is that Peacock has nowhere alleged that it held any property right, such as its own copyright or licensing arrangement, in the charms at issue. Instead, Peacock’s own pleading describes the scheme as one to procure fraudulent copyrights in charm designs “that were rightfully in the public domain, and should be free to all.” ¶ 159 (emphasis added).

In short, Peacock’s amended countercomplaint fails to demonstrate that the allegedly fraudulent scheme had as its object the deprivation of any property interest. The “right” to be free from fraudulent competition is not a cognizable property right for these purposes. Peacock’s mail fraud allegations are deficient and the asserted violations of the mail fraud statute cannot serve as predicate acts. Moreover, because Peacock has failed to plead properly a single predicate act, the RICO counterclaim is dismissed, without prejudice to repleading as will be discussed in greater detail in Part III infra.


 * 3. The Lanham Act Counterclaim.

In the amended countercomplaint, Peacock for the first time asserts a violation of the false advertising prong of the Lanham Act. That statute subjects to civil liability: "Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

(2) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities…."

15 U.S.C. § 1125(a)(2). Peacock claims that MAJ has misrepresented the “nature, characteristics [and] qualities” of its goods by falsely representing that it “is the sole and lawful proprietor of the copyrights in various public domain works” (¶ 186). Peacock further alleges that it has been damaged by these misrepresentations in that customers who “have received MAJ’s claims of originality and exclusivity” will not buy the same charms from MAJ’s competitors “because they will believe that the competitors are engaged in ‘knocking off’ MAJ’s copyrights” (¶ 161).

Although MAJ attacks the sufficiency of the Lanham Act claim on a number of fronts, its primary objection is that Peacock has failed to allege that Michael Anthony has made false statements about its products. Because Peacock concedes that MAJ holds copyright registrations for the charm designs at issue, MAJ contends that any “advertisement” regarding those registrations could not possibly be deemed false.

Despite the surface logic of MAJ’s contentions, there is authority for the proposition that a false designation of copyright may constitute a “false designation of origin” or “false description or representation” that is actionable under the Lanham Act. See Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 37 (2d Cir.1982); Sunset Lamp Corp. v. Alsy Corp., 698 F.Supp. 1146, 1153 (S.D.N.Y.1988).