Gail Green Licensing & Design Ltd. v. Accord, Inc., No. 05 C 5303, 2006 WL 2873202 (N.D. Ill. Oct. 5, 2006) (St. Eve, J.).

Judge St. Eve dismissed plaintiffs’s Lanham Act false advertising claim, but refused to dismiss plaintiffs’s breach of contract claim, among others.  Both claims are based upon defendants’s receipt of plaintiffs’s copyrighted designs for pet clothing and accessories pursuant to a Non-Disclosure and Confidentiality Agreement (the "NDA") and defendants’s subsequent alleged sale of  goods based upon plaintiffs’s copyrighted designs.

The Court dismissed the false advertising claim for lack of standing.  In order to bring a false advertising claim, plaintiffs must compete with defendants in the same business.  In this case, however, plaintiffs develop, acquire and license pet clothing and accessories, while defendants manufacture and/or sell pet clothing and accessories.  Because plaintiffs neither manufacture nor sell the pet clothing and accessories, they lacked standing to bring a false advertising claim against defendants.

Defendants also sought dismissal of plaintiffs’s breach of contract claim.  Because the alleged breach was the use of plaintiffs’s copyrighted designs, defendants argued that the claim was preempted by the copyright laws.  The Court denied defendants’s motion for two reasons.  First, the Court held that contract claims are not within the general scope of the copyright laws because:

"A copyright is a right against the world.  Contracts, by contrast, generally affect only their parties; strangers may do as they please, so contracts do not create ‘exclusive rights.’"

ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996).  Second, plaintiffs did not allege that defendants breached the NDA by infringing the copyright.  Rather, defendants allegedly breached the NDA by breaching their duty of confidentiality when they allegedly disclosed the copyrighted works, which could have been done without infringing any copyrights.