Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Ga.: Lottery tracking software developer states deceptive practices claims against competitor, (Dec 4, 2015)

By Greg Hammond, J.D.

The creator of a “lottery ticket tracking tool” can proceed with claims that a company purchased the creator’s tool and created a substantively identical product in violation of the Georgia Fair Business Practices and Lanham Acts. In denying the defendants’ motion to dismiss, the federal district court in Macon, Georgia, concluded that the creator stated sufficient claims for unfair competition and deceptive practices that are likely to cause consumer confusion (Abbasi v. Bhalodwala, December 3, 2015, Treadwell, M.).

The creator and owner of the Lottery Tracking System (LTS) registered the software with the U.S. Copyright Office in 2010. After a customer, who was purportedly affiliated with RealTime Networking, Inc., purchased the LTS and signed an End-User Licensing Agreement, the creator learned that RealTime began selling an application that was substantively identical to the LTS. The licensing agreement informed the customer that the software was copyrighted and contained an agreement that the customer would not reverse engineer, decompile, or disassemble the software product. The creator brought claims for violations of the Georgia Fair Business Practices Act (GFBPA) and Lanham Act, as well as claims for copyright infringement, fraud, tortious interference, unjust enrichment, and breach of contract. RealTime moved to dismiss.

Deceptive practices. The defendants argued that the creator failed to allege sufficient facts to support a violation of the GFBPA. The court, however, disagreed, finding the allegations that the defendants’ conduct was deceptive because they passed off their product as the plaintiff’s product, which has caused actual confusion among consumers as to the source of the product, were sufficient to state a claim under the GFBPA.

Unfair competition. The creator also asserted an unfair competition claim for likelihood of confusion under the Lanham Act, arguing that customers would be confused about the source of the program they were purchasing. Finding the allegations sufficient to state a claim for unfair competition, the court determined (1) allegations that the creator has a valid and protectable mark because he has used the mark since February 2010 and the name “Lottery Tracking App” has acquired secondary meaning were sufficient to demonstrate a valid, protectable mark; and (2) allegations that the creator was approached by customers who received information about RealTime’s product were sufficient to demonstrate RealTime’s product was likely to cause confusion or to deceive.

Copyright infringement. The creator stated a valid copyright infringement claim, according to the court, because he sufficiently demonstrated ownership of a valid copyright and copying of constituent elements of the work that are original. With regard to copying, the creator was only required to sufficiently allege that RealTime’s software was “substantially similar,” rather than “strikingly similar,” to his copyrighted software because he adequately demonstrated that he granted the defendants access by providing the actual software directly to them. Considering the allegations that the defendants received access to the LTS, sold an application that performs “substantively identical” functions as the LTS, and used images from the creator’s software in their own program were sufficient to allege “substantial similarity.”

In denying RealTime’s motion to dismiss, the court additionally found that the creator adequately alleged claims for tortious interference with business relations, fraud, unjust enrichment, unjust enrichment, and breach of contract.

The case number is 5:15-CV-115 (MTT).

Attorneys: Thomas J. Mihill (Cannon Mihill & Winkles) for Mohammad Umer Khan Abbasi. Angelina K. Whitaker (Kumar, Prabhu, Patel & Banerjee, LLC) for Jipal P. Bhalodwala.

Companies: RealTime Networking, Inc.

Cases: Advertising StateUnfairTradePractices GeorgiaNews