UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 CONSULNET COMPUTING, INC., d/b/a

SUCCESS WEBSITE,

Plaintiff

v.

MEGEL DAVID MOORE, et al., 

Defendants

v.

STEVE RAITT, et al.,

Counter-Defendants.

CIVIL ACTION

No. 04-3485

Pollak, J. September 12, 2007

OPINION

This case concerns two companies in the business of creating websites for real

estate agents. In brief, plaintiff ConsulNet Computing, Inc., d/b/a Success Website

(“ConsulNet”), alleges that defendant Megel David Moore posed as a real estate agent

and signed a contract for a ConsulNet website; that Moore copied the ConsulNet website;

and that Moore and his company, defendant Dynamic Investment Group, Inc. (“DIG”),

d/b/a Web Agent Solutions, used the copy to start DIG’s competing business. These

actions, ConsulNet contends, amounted to breach of Moore’s contract with ConsulNet;

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 1 of 31
 Moore was not named as a party in the counterclaim or amended counterclaim. 

1

See Counterclaim ¶ 179 (Docket No. 18); Amended Counterclaim ¶ 179 (Docket No. 56).

 According to the American Heritage dictionary and other sources, “realtor” is a 2

term of art reserved for real estate agents who are affiliated with the National Association

of Realtors. Nevertheless, for brevity’s sake, the court refers to real estate agents as

realtors.

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intentional interference with ConsulNet’s contractual relationships with its clients; and

violations of U.S. and Canadian copyright law.

DIG has brought a counterclaim comprising two claims under the Lanham Act.1

The first claim is based on alleged false advertising by ConsulNet and the second on an

alleged false statement to a DIG client by a ConsulNet employee. DIG has brought these

claims against ConsulNet as well as counter-defendants Steve Raitt, Doug Brajer, and

Murrray Campbell, each of whom is associated with ConsulNet. 

Before the court are the following three motions: a partial motion for summary

judgment filed by the defendants, Docket No. 92; a second partial motion for summary

judgment filed by the defendants, Docket No. 93; and a motion for summary judgment on

DIG’s counterclaim filed ConsulNet, Docket No. 90. For the reasons set forth below, the

court will deny DIG’s two partial motions for summary judgment and grant ConsulNet’s

motion for summary judgment.

I. Background

 ConsulNet is a Canadian company based in Toronto that has been in the business

of Internet-based marketing for real estate agents (or “realtors” ) since approximately 2

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 2 of 31
 “CN” refers to ConsulNet’s “omnibus” brief in response to DIG’s two partial 3

motions for summary judgment. “DIG I” refers to the defendants’ partial motion for

summary judgment on counts one, two, and seven; “DIG II” to their motion on counts

five and six; and “DIG Reply” to their reply. “CN Mot.” refers to ConsulNet’s motion for

summary judgment on DIG’s counterclaim; “DIG Resp.” to DIG’s response to that

motion; and “CN Reply” to ConsulNet’s reply.

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1998. CN exh. B at 185 (Raitt deposition). Specifically, ConsulNet creates and 3

maintains websites for realtors to hold out as their own. The websites may be quite

similar to one another, but are at least partially individualized for each realtor — for

instance, by making reference to the realtor’s geographic location. See CN exh. J. 

Generally speaking, the websites encourage visitors to submit their contact information to

the realtor on a web-based form in exchange for information attractive to potential buyers

and sellers — e.g., tips on how to sell a house. After the website visitor clicks on a link

for one of the articles on the website’s main page, a form appears in which the visitor

must fill his or her contact information before he or she can gain access to the article. 

The realtor can then use the contact information collected by the website to attempt to

gain the website visitor as a client. The so-called “back end” of the website, not visible to

visitors of the website, keeps track of the website’s visitors for the realtor.

The websites created by ConsulNet for realtors make use of marketing strategies

developed by Craig Proctor, a Canadian realtor who since the early 1990s has been giving

seminars to other realtors on how to be successful in the business. See CN exh. A

(Proctor deposition). Pursuant to an agreement between ConsulNet and Craig Proctor

Productions, Inc. (“Proctor”), ConsulNet creates and leases websites that enable realtors

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 3 of 31
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to employ Proctor’s marketing strategies on the Internet, and, in doing so, to make use of

written materials (or “content”) created by Proctor — for instance, the aforementioned

tips on how to sell a house. See CN exh. C. 

ConsulNet’s complaint alleges, and DIG has not disputed, that ConsulNet has

“thousands” of clients. See ConsulNet Complaint ¶ 22 (Docket No. 1); CN exh. H at 9 &

exh. G-1 (damages expert report indicating that ConsulNet had 4,162 clients in its

“database” as of December 31, 2006).

In the late 1990s, defendant Moore founded DIG and had various Internet

businesses, including a website that provided information to stock market traders,

www.theprotrader.com. See CN exh. E at 19-22, 44-45; CN exh. F at ¶ 5. Moore’s

involvement in real estate websites began after one of his employees, Frank Cundari,

created a website for Scott Irvin, who was just entering the real estate business. (Irvin

was formerly a defendant in this case but has been dismissed. See Docket No. 34.)

Irvin states in a sworn affidavit that he attended a conference put on by Craig

Proctor in November 2001. See CN Exh. F ¶ 7. Irvin asked Cundari to create a website

because he considered too expensive the ConsulNet websites promoted by Proctor. Id.

¶ 8. Irvin paid $60 to Cundari for the website. Id. ¶ 10. Irvin states that he provided

Cundari with www.craigproctor.com “[a]s an example of the type of site [he] was looking

for.” Id. The website created by Cundari for Irvin was located at

www.theprotrader.com/si. Id.

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In approximately November 2002, Moore and Irvin agreed that Moore would take

over the project of creating Irvin’s website. Id. ¶¶ 13-15; CN exh. E at 172. Irvin states

that he gave Proctor’s seminar materials to Moore and that in February 2003 Irvin signed

a $5,200 contract with Moore to create Irvin’s website. CN exh. F ¶¶ 15-16. 

Moore admits that in January 2003 he signed up for a ConsulNet website in his

own name and states that he informed a ConsulNet employee that he was signing up on

behalf of Irvin. CN exh. E at 173-75, 180-85, 189-91. Moore has not disputed the

alleged terms of his contract with ConsulNet, which included (1) that ConsulNet granted

Moore only “a limited, . . . non-transferable license to use the [website] for your personal

use for the purposes of advertising and marketing your own products and services in

connection with your personal real estate agency practice,” and (2) that, upon termination

of Moore’s ConsulNet subscription, he would “not be entitled to use the proprietary

Content for any reason or in any way whatsoever,” “including, but not limited to,

publishing on any website.” CN exh. D ¶ 4 (ConsulNet’s terms as of Oct. 16, 2002); see

ConsulNet Complaint ¶¶ 83-84 (alleging same). 

At the time that Moore developed Irvin’s website, www.scottirvin.com, Moore had

had little or no experience in the real estate business and had not had a business

developing websites for realtors. See CN exh. E at 14-17; CN exh. F ¶¶ 17, 19. After

developing Irvin’s website, or in conjunction with doing so, Moore and his company DIG

entered the business of creating such websites. See id. at 207-10; id. at 259 (first

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 5 of 31
 In the briefing, DIG and Moore imply that Moore is also a counterclaimant. See 4

Docket No. 106 (“Responsive Brief of Defendants in Opposition to the Summary

Judgment Motion of ConsulNet to Dismiss the Amended Counterclaim of Defendants”). 

However, because DIG is the only plaintiff in the amended counterclaim, see Amended

Counterclaim ¶ 179, the court refers to the counterclaim as DIG’s.

These were count three (unfair competition under the Lanham Act); count four 5

(unfair competition under the Canadian Competition Act); count eight (misappropriation

of trade secrets); count nine (commercial disparagement); count ten (unfair competition

under the Canadian Trade-Marks Act); and count eleven (injurious falsehood). Docket

No. 86, at 1 (Jan. 12, 2007). 

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customers signed up in July 2003). It is undisputed that a number of ConsulNet clients

thereafter left ConsulNet for DIG or acquired DIG websites in addition to their ConsulNet

websites. See id. at 259-60 (Moore stating that 80% of his first 40 or 50 clients were

former ConsulNet clients); DIG I exh. H at 97-100 (deposition of former ConsulNet

customer discussing switch to DIG); CN exh. H (ConsulNet’s damage expert’s lost profit

estimates, based on appended client lists).

II. Procedural History

ConsulNet filed its complaint in July 2004. In October 2004, the defendants filed

an answer and DIG’s counterclaim. In February 2006 the defendants filed DIG’s

amended counterclaim. In January 2007, the parties stipulated to dismissal of six of 4

ConsulNet’s eleven claims. The parties also stipulated to paring down ConsulNet’s two 5

copyright infringement counts by eliminating the allegations regarding Exhibits B, C, F,

and G of the complaint.

ConsulNet’s remaining claims are for breach of contract under Pennsylvania law

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 6 of 31
Those counts claimed unfair competition under the Canadian Competition Act 6

(count two), copyright infringement (count three), and tortious interference with

contractual relations (count five).

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(count one); intentional breach of contract and duty of good faith under Canadian law

(count two); copyright infringement under U.S. law (count five – although only with

regard to exhibits A, D, and E of the complaint); copyright infringement under Canadian

law (count six – again only with regard to exhibits A, D, and E); and intentional

interference with contractual relationships under Pennsylvania law (count seven). 

In March 2007, this court denied ConsulNet’s April 2006 motion to dismiss counts

three through five of the defendants’ amended counterclaim, essentially on the ground

that the motion was moot. See Docket Nos. 79, 97. The parties had already stipulated to

the dismissal of counts two, three, and five, and the motion was moot as to count four of 6

the counterclaim because ConsulNet had already filed the instant motion for summary

judgment. Thus, only the Lanham Act claims in counts one and four remain.

III. Standard at Summary Judgment

 Summary judgment should be granted where “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue of material fact and that the moving party is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(c); see IFC Interconsult, AG v. Safeguard Int’l

Partners, L.L.C., 438 F.3d 298, 317 (3d Cir. 2006). A genuine issue of material fact

exists where the jury could reasonably find for the non-moving party. Anderson v.

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 7 of 31
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Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over facts is material where it

could affect the outcome of the case. Belitskus v. Pizzingrilli, 343 F.3d 632, 639 (3d Cir.

2003).

A party seeking the grant of summary judgment carries the initial burden of

informing the district court of the basis for its motion and identifying the portions of the

record that show that there is no genuine issue of material fact. Celotex v. Catrett, 477

U.S. 317, 322 (1986); Belitskus, 343 F.3d at 639. Where the non-moving party bears the

burden of proof — as is the case for all of the claims presently before this court — the

moving party must show that the non-moving party cannot support its case with the

evidence in the record. Celotex, 477 U.S. at 325. In rebuttal, the non-moving party must

then identify facts that create a genuine issue of dispute for trial. Fed. R. Civ. P. 56(e);

Hampton v. Borough of Tinton Falls Police Dept., 98 F.3d 107, 112 (3d Cir. 1996). 

“Credibility determinations, the weighing of the evidence, and the drawing of legitimate

inferences from the facts are jury functions, not those of a judge . . . . The evidence of the

non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” 

Anderson, 477 U.S. at 255.

IV. Discussion

A. DIG’s Motion on ConsulNet’s Contract Claims

Defendants Moore and DIG offer a single argument in their partial motion for

summary judgment on ConsulNet’s claims for breach of contract (count one), intentional

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 8 of 31
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breach of contract and the duty of good faith under Canadian law (count two), and

intentional interference with contractual relations (count seven). The defendants contend

that they are entitled to summary judgment on these claims because, for each of the

claims, ConsulNet has failed to raise a genuine issue of material fact regarding resultant

damages. 

 That the plaintiff suffered damages as a result of the defendant’s conduct is, of

course, an element of each of ConsulNet’s three claims. See Williams v. Nationwide Mut.

Ins. Co., 750 A.2d 881, 884 (Pa. Super. Ct. 2000) (breach of contract); Pawlowski v.

Smorto, 588 A.2d 36, 40 (Pa. Super. Ct. 1991) (tortious interference with contractual

relations); Dentech Prods. Inc. v. Demed Mfg. Ltd., [2003] 35 B.C.L.R.3d 301 (affirming

dismissal of breach of contract claim because plaintiff failed to show that defendant

caused plaintiff damages). Although courts have articulated distinct legal standards for

causation with regard to each of ConsulNet’s three causes of action, the defendants’

motion draws no such distinctions, and ruling on the motion does not require limning

them.

Nor does ruling on the defendants’ motion require a complete exegesis of the

disputed facts. In short, ConsulNet alleges that Moore breached his January 2003

contract with ConsulNet in two ways: first, by using ConsulNet’s proprietary information

for purposes other than those specified in Moore’s contract with ConsulNet, and second,

by disclosing that proprietary information after cancelling his ConsulNet membership. 

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Cf. DIG I exh. C, D (Moore’s contract for his ConsulNet website). In the count

pertaining to the claim of intentional breach of contract and breach of the duty of good

faith under Canadian law, the complaint alleges that Moore entered into the agreement

with ConsulNet with malice and bad faith and without the intention to abide by the

agreement. ConsulNet’s claim for intentional interference with contractual relations is

based on allegations that Moore and DIG knowingly induced ConsulNet’s clients not to

perform or renew their contracts with ConsulNet. 

The defendants move for summary judgment on these claims on the ground that

ConsulNet has failed to demonstrate a genuine issue of material fact concerning whether

the defendants’ alleged conduct caused ConsulNet actual damages. See DIG I at 24

(“Even assuming . . . that (a) Moore entered into and breached the Consulnet contract,

and (b) Consulnet has entered into contracts with its clients, that DIG knew of those

contracts, that DIG intentionally contacted certain clients of Consulnet, and c) that certain

of the Consulnet clients thereafter cancelled their contracts with Consulnet, . . . . [t]here is

no evidence, indeed, there is no testimony, that Consulnet can point to showing that any

alleged clients who cancelled their Consulnet contracts did so ‘as a result of’ any contact

or action by DIG.” (emphases in original)). In support of their motion, the defendants cite

the affidavits of five former ConsulNet clients and the deposition testimony of two such

former clients, each of whom states that he or she ceased doing business with ConsulNet

due to dissatisfaction with ConsulNet’s product or service. See DIG I at 17-23 & exh. FCase 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 10 of 31
 ConsulNet moves to strike these five affidavits because the defendants filed them 7

four months after the close of discovery without seeking leave of the court to do so. See

CN at 12-16; Fed. R. Civ. P. 37(c)(1). ConsulNet also moves to strike the affidavit of

Rick Brash (exhibit F) on the ground that it is “full of hearsay and improper opinion.” 

CN at 14. Because the affidavits are, at this stage, harmless, the court will deny these

motions to strike as moot, without prejudice to renewing them at a later date. See Schiffer

Publ’g, Ltd. v. Chronicle Books, LLC, 350 F. Supp. 2d 613, 620 (E.D. Pa. 2004).

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J. The defendants contend that the deposition testimony and affidavits show that it was 7

not DIG’s conduct that caused the flight of ConsulNet clients to DIG, but rather

ConsulNet’s own shortcomings. See DIG I at 16. 

In response, ConsulNet points to circumstantial evidence tending to show that the

defendants’ actions did cause ConsulNet damages in the form of lost profits. See CN at

17-23. This evidence includes, but is not limited to: (1) various pieces of evidence

tending to show the similarities between the websites, including comparisons contained in

DIG’s promotional materials; (2) an affidavit from a ConsulNet client named Adam

Robinson stating that in May 2003 he was contacted by a DIG representative who told

him that she was contacting ConsulNet clients to offer them “a competing website

product that included all of the ConsulNet website features, plus some additional ones, for

less money” and that many ConsulNet clients were making the switch, see CN exh. L; (3)

a contemporaneous e-mail from Robinson to a ConsulNet employee describing this phone

call and forwarding correspondence from the DIG representative that apparently

compares DIG’s websites to ConsulNet’s, see id. exh. 1; (4) Moore’s admission that

approximately 80% of his clients in his first year in business were former ConsulNet

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 11 of 31
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clients, see CN exh. E at 259-60; and (5) the report of ConsulNet’s damages expert

detailing alleged lost profits caused by the flight of 175 ConsulNet clients to DIG, see CN

exh. H at 6.

ConsulNet’s evidence is more than sufficient to create a genuine issue for trial. 

That is, assuming that a fact-finder believed that the defendants engaged in the alleged

wrongful conduct, there is sufficient evidence from which the fact-finder could draw a

“legitimate inference[]” that the defendants’ conduct did cause ConsulNet damages in the

form of lost profits due to clients who left ConsulNet for DIG. Anderson, 477 U.S. at

255. ConsulNet has produced evidence that DIG contacted people known to DIG to be

ConsulNet clients concerning DIG’s competing product, and that clients left ConsulNet

for DIG. This evidence suffices to create a genuine issue of material fact regarding

whether the defendants’ alleged wrongful conduct resulted in damages to ConsulNet. 

The court will therefore deny the defendants’ partial motion for summary judgment on

counts one, two, and seven.

B. DIG’s Motion on ConsulNet’s Copyright Claims

The defendants’ second partial motion for summary judgment contends that

ConsulNet’s copyright claims must fail because the allegedly infringed material is a

system, concept, or idea and therefore not protected under U.S. and Canadian copyright

law. DIG II at 8-14.

“To establish a claim of copyright infringement, a plaintiff must establish: (1)

ownership of a valid copyright; and (2) unauthorized copying of original elements of the

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 12 of 31
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plaintiff’s work.” Dun & Bradstreet Software Servs., Inc. v. Grace Consulting, Inc., 307

F.3d 197, 206 (3d Cir. 2002). “Copying refers to the act of infringing any of the

exclusive rights that accrue to the owner of a valid copyright, as set forth at 17 U.S.C.

§ 106, ‘including the rights to distribute and reproduce copyrighted material.’” Kay

Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 207 (3d Cir. 2005) (quoting Ford Motor

Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 291 (3d Cir. 1991)). “It may be

demonstrated by showing that the defendant had access to the copyrighted work and that

the original and allegedly infringing works share substantial similarities.” Id. at 207-08. 

Determining whether the works share “substantial similarities” entails two

considerations. First, the fact-finder must determine “whether there is sufficient

similarity between the works so as to conclude that the alleged infringer ‘copied’ the

work.” Dam Things from Denmark v. Russ Berrie & Co., 290 F.3d 548, 562 (3d Cir.

2002). At this stage, expert testimony regarding actual copying may aid the fact-finder. 

Id. “Second, the fact-finder is to determine whether a ‘lay-observer’ would believe that

the copying was of protectible aspects of the copyrighted work.” Id. Thus, although

direct evidence of copying is relevant, it is not sufficient: “The trial court . . . must still

consider whether the copying is actionable, viewing the item through the lay person’s

eyes, focusing on whether the substantial similarities relate to protectible material.” Id. 

In deciding whether copying was of “protectible aspects” of the work, “a fact-finder must

determine whether the later work is similar because it appropriates the unique expressions

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 13 of 31
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of the original author, or merely because it contains elements that would be expected

when two works express the same idea or explore the same theme.” Kay Berry, 421 F.3d

at 208. 

“Because ‘[n]o easy rule of thumb can be stated as to the quantum of fragmented

literal similarity permitted without crossing the line of substantial similarity,’ whether

works are substantially similar is ‘a classic jury question.’” Jacobsen v. Deseret Book

Co., 287 F.3d 936, 943 (10th Cir. 2002) (quoting 4 Melville B. Nimmer & David

Nimmer, Nimmer on Copyright § 13.03[A][2], at 13-46 and n.96 (2001)). 

“It is a fundamental premise of copyright law that an author can protect only the

expression of an idea, but not the idea itself.” Kay Berry, 421 F.3d at 208. The U.S.

Copyright Act does not extend copyright protection to “any idea, procedure, process,

system, method of operation, concept, principle, or discovery.” 17 U.S.C. § 102(b). 

Likewise, under Canadian law, “[i]t is . . . an elementary principle of copyright law that

an author has no copyright in ideas but only in his expression of them.” CCH Canadian

Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339 ¶ 8 (quoting Moreau v. St.

Vincent, [1950] 3 D.L.R. 713 ¶ 8). 

Defendants contend that they are entitled to summary judgment on ConsulNet’s

copyright claims because ConsulNet is seeking copyright protection for a system or

concept rather than expression. DIG II at 2. In support of their motion, the defendants

point to numerous places in the record where experts and lay witnesses discuss the

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 14 of 31
 Courts sometimes describe the substantial similarity test as an inquiry into 8

whether the works share an “overall look and feel” or “total concept and feel.” See

Stromback v. New Line Cinema, 384 F.3d 283, 297 (6th Cir. 2004); Cavalier v. Random

House, Inc., 297 F.3d 815, 822 (9th Cir. 2002); Boyds Collection, Ltd. v. Bearington

Collection, Inc., 360 F. Supp. 2d 655, 664 (M.D. Pa. 2005). 

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common concept behind the ConsulNet and DIG websites. See DIG II at 9-14 (collecting

numerous uses of the words “system” and “concept”). 

ConsulNet responds that the record contains other evidence tending to show that

DIG infringed protected aspects of ConsulNet’s websites — specifically, by copying or

only slightly altering written content from ConsulNet webpages and presenting that

content in DIG websites with a substantially similar “look and feel.” CN at 25-26. In 8

addition to expert and lay assessments of the similarities between the ConsulNet and DIG

websites’ appearances, see CN exh. B at 197 (Raitt deposition); CN exh. S at 24-25

(Campbell deposition); exh. T at 3, 18-19 (Deale expert report), this evidence includes an

alleged DIG webpage presenting written content that bears obvious similarities to the

alleged ConsulNet webpage contained in exhibit E of ConsulNet’s complaint. Compare

CN exh. P (DIG webpage headed “Don’t sign another lease until you have read this

special report!”) with CN exh. Q (ConsulNet webpage headed “Don’t Pay Another Cent

in Rent to Your Landlord Before You Read This FREE Special Report”) and ConsulNet

Complaint exh. E. 

The defendants cannot prevail on their motion. ConsulNet’s copyright claims are

not based on alleged infringement of ConsulNet’s marketing system or concept, per se. 

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 15 of 31
 ConsulNet also relies on direct evidence of copying in the form of code 9

underlying DIG webpages that, according to ConsulNet’s expert Michael Deale, is

obviously copied from a ConsulNet webpage. See CN at 26. Deale states that the

copying is obvious because the code relates to a function that exists on many of

ConsulNet’s websites, but does not exist on DIG’s. That is, the code appears to be a

vestige of prior copying that was never erased by DIG. See CN exh. V at 8

(supplementary report of expert Deale). DIG contends that Deale’s supplementary report

should be stricken because it was not submitted until January 9, 2007, months after the

expert reports were due on August 11, 2006. DIG Reply at 5-6. (The supplementary

report is styled as a further response to questions posed by DIG’s counsel to Deale at his

November 28, 2006 deposition. See CN exh. V at 2.) DIG also contends that DIG is not

responsible for any copying of code that occurred, and that any such copying is de

minimus. DIG Reply at 6-9. Ironically, DIG attaches new affidavits supporting its

contentions. See DIG Reply exh. 1, 4, 5, 6. In turn, ConsulNet objects to these affidavits

in a letter to the court. The court finds it unnecessary to delve into the subject of the

alleged direct copying of code for purposes of ruling on the instant motion; ConsulNet’s

evidence suffices to defeat summary judgment even without evidence of direct copying. 

The court will therefore deny the parties’ respective motions to strike as moot, without

prejudice.

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See CN at 23-27. Rather, each of the two copyright counts alleges that (1) “[t]he

language of the [defendants’] websites is substantially similar to and/or derived from

[ConsulNet’s]” and (2) “[t]he look and feel of [the defendants’] websites is substantially

similar to websites [ConsulNet] has designed for its customers.” ConsulNet Complaint ¶¶

117-18, 130-31 (emphasis added). With the evidence briefly described above, ConsulNet

has created a genuine issue of material fact concerning these “protectible aspects” of its

works — that is, the content that appears on ConsulNet websites, as opposed to the

marketing ploy behind the website. The court therefore will deny the defendants’ partial

motion for summary judgment on ConsulNet’s two copyright claims.9

C. ConsulNet’s Motion for Summary Judgment on the Counterclaim

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 16 of 31
 Three counts from DIG’s five-count amended counterclaim of February 15, 10

2006, are no longer before the court. DIG voluntarily dismissed the copyright

infringement claim. See Docket No. 79 (May 10, 2006). After ConsulNet filed the

instant motion for summary judgment and memorandum in support in January 2007, the

parties jointly stipulated to the dismissal of the claims of unfair competition under

Canadian law and tortious interference with contractual relations under U.S. law. Docket

No. 97 (Feb. 28, 2007). ConsulNet’s motion for summary judgment on these counts will

therefore be denied as moot.

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ConsulNet moves for an order granting summary judgment in its favor on DIG’s

counterclaim. The counterclaim comprises two claims under § 43(a) of the Lanham 10

Act. The first claim is based on alleged false advertising by ConsulNet and the second on

an alleged false statement to a DIG client by counterclaim defendant Steve Raitt. 

1. False Advertising

Section 43(a) of the Lanham Act provides in pertinent part:

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 . . . 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, shall be liable in a civil action by any person who believes

that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1)(B). In an action under this section, a plaintiff’s complaint usually

must allege: “‘1) that the defendant has made false or misleading statements as to his own

product [or another’s]; 2) that there is actual deception or at least a tendency to deceive a

substantial portion of the intended audience; 3) that the deception is material in that it is

likely to influence purchasing decisions; 4) that the advertised goods traveled in interstate

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commerce; and 5) that there is a likelihood of injury to the plaintiff in terms of declining

sales, loss of good will, etc.’” Ditri v. Coldwell Banker Residential Affiliates, Inc., 954

F.2d 869, 872 (3d Cir. 1992) (quoting U.S. Healthcare v. Blue Cross of Gr. Philadelphia,

898 F.2d 914, 922-23 (3d Cir. 1990)) (alteration in Ditri).

However, a plaintiff’s burden differs depending on whether the plaintiff alleges

that the advertisement is “(1) literally false or (2) literally true or ambiguous, but has the

tendency to deceive consumers.” Novartis Consumer Health, Inc. v. Johnson & JohnsonMerck Consumer Pharm. Co., 290 F.3d 578, 586 (3d Cir. 2002). A claim for misleading

advertising requires a plaintiff to show “that there is actual deception or at least a

tendency to deceive a substantial portion of the intended audience” and “that the

deception is material in that it is likely to influence purchasing decisions.” Id. at 590. 

However, “[i]f a plaintiff proves that the challenged commercial claims are ‘literally

false,’ a court may grant relief without considering whether the buying public was

actually misled.” Id. at 586.

“In analyzing whether an advertisement or product name is literally false, a court

must determine, first, the unambiguous claims made by the advertisement or product

name, and second, whether those claims are false.” Id. “A ‘literally false’ message may

be either explicit or ‘conveyed by necessary implication when, considering the

advertisement in its entirety, the audience would recognize the claim as readily as if it had

been explicitly stated.’” Id. at 586-87 (quoting Clorox Co. v. Proctor & Gamble

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 18 of 31
 Accordingly, the court does not address ConsulNet’s argument concerning 11

DIG’s putative misleading advertising claim. See CN Mot. at 28-30. DIG’s response to

ConsulNet’s motion (a) states, or at least strongly implies, that DIG is relying solely on

the Lanham Act’s “false” prong and (b) does not respond to ConsulNet’s contention that

DIG’s misleading advertising claim must fail for lack of evidence on actual deception or

the tendency to deceive. See DIG Resp. at 15-16 (noting, in section titled “DIG’s False

Advertising Count,” that where advertisement is shown to be literally false, no evidence is

required that consumers were misled); id. at 16-20 (addressing the alleged falsity and

misleading quality of ConsulNet’s advertising, but not pointing to evidence of its

tendency to deceive or of actual deception).

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Commercial Co., 228 F.3d 24, 35 (1st Cir. 2000)). “Regardless, only an unambiguous

message can be literally false.” Id. at 587.

DIG is apparently proceeding under the theory that ConsulNet’s advertisements are

literally false. Three alleged false statements by ConsulNet form the basis of DIG’s 11

claim: (1) that ConsulNet’s websites obtain a 10.5% response rate, i.e., that 10.5% of

visitors submit identifying information to the website; (2) that ConsulNet’s websites, once

established, are “worry-free” and “automatic”; and (3) that ConsulNet websites make it

“possible to triple your real estate sales while working no more that a standard 40-hour

week.” See DIG Resp. at 6, 16-20.

a. Response Rate

The amended counterclaim alleges that ConsulNet’s statement that certain

ConsulNet websites achieve a response rate of 10.5% is false, and that “Consulnet’s

branded sites, on average, have response percentages are [sic] far below 10.5%.”

Amended Counterclaim ¶¶ 235-36.

The 10.5% claim appears in a four-page ConsulNet advertisement attached to the

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 19 of 31
 “Branded” websites are those that, to visitors, are obviously websites belonging 12

to and promoting particular realtors. “Unbranded” websites are those that appear to be

simply informational websites for potential buyers and sellers. See DIG Resp. exh. D at 2

(“The only difference [between the two kinds of websites] is that on the unbranded site

we’ve removed anything that made it look like a typical real estate agent site.”).

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defendants’ response as exhibit D. The advertisement’s first page contains a table listing

nine ConsulNet websites, four of them marked as “branded” and five of them as

“unbranded.” The table is introduced by the sentence: “Here is what I found amongst 12

our top performing sites in a recent month.” The table lists a response rate for each of the

nine websites. The bottom three rows of the table list average response rates for the

branded websites (10.5%), the unbranded websites (30.5%), and the “Industry Average”

(0.5% to 2%). Toward the end of two columns of text on page two, the advertisement

states: “Most realtor sites average a response percentage of between 0.5% and 2%, if

they’re lucky. A response rate of 5% is usually considered to be outstanding. The

average response percentage of our SuccessWebsites is roughly 10.5%.”

ConsulNet’s motion for summary judgment contends that this 10.5% figure quite

obviously relates to the “top performing sites” referred to by ConsulNet in the table on

page one and that DIG is “attempt[ing] to create confusion where none exists.” CN Mot.

at 28. In support, ConsulNet cites deposition testimony from counterclaim defendant

Murray Campbell that the 10.5% figure seemed to Murray an accurate approximation of

the top-performing sites’ average response rate. Id. (citing CN Mot. exh. J at 54-55, 75-

76). 

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 20 of 31
 ConsulNet objects to the court’s considering the Kinder affidavit on the ground 13

that DIG failed to disclose Kinder in accordance with Fed. R. Civ. P. 26(a) or 26(e)(1). 

See ConsulNet Reply at 2-3; Fed. R. Civ. P. 37(c)(1) (“A party that without substantial

justification fails to disclose information . . . . is not, unless such failure is harmless,

permitted to use as evidence . . . on a motion any witness or information not so

disclosed.”). The court finds DIG’s failure to disclose harmless at this stage and denies

ConsulNet’s motion to preclude without prejudice to renewing it at a later date.

-21-

DIG does not deny that the 10.5% figure appears to relate to the table on page one. 

Indeed, DIG contends that ConsulNet’s 10.5% claim “is literally false because the 10.5%

rate appears to selectively [sic] calculated by using only 3 or 4 of the top Consulnet

clients’ branded websites.” DIG Resp. 7 (emphasis in original). In support of its

argument that the average response rate for all branded ConsulNet websites is not 10.5%,

DIG cites a single piece of evidence: the affidavit of Jay Kinder, a current DIG client and

former ConsulNet client. See DIG Resp. exh. E ¶ 6. Kinder avers that, in her 13

experience, “my branded websites have never achieved a response rate near 10%.” Id. ¶

10. “Moreover,” she adds, “I have never heard of any Consulnet member achieving a

response rate for a branded website approaching 10%.” Id. 

ConsulNet’s 10.5% claim on page two of the advertisement cannot support DIG’s

claim for false advertising. As both ConsulNet and DIG note, see CN Reply at 6; DIG

Resp. 7, the objected-to reference to 10.5% on the second page apparently refers back to

the table of top-performing sites. The court must examine the 10.5% “in full context,”

which includes the table on page one. Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d

Cir. 1993). Taken in context, the 10.5% statement on page two cannot qualify as an

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 21 of 31
 DIG’s ellipses serve to omit, inter alia, the advertisement’s claim that new 14

ConsulNet clients’ websites will be “up and running on the Internet, in one week.” DIG

Resp. exh. B at 12. 

-22-

“unambiguous claim” that the average ConsulNet website — as opposed to a “top

performing” website — achieves 10.5%. Cf. Novartis Consumer Health, 290 F.3d at 586-

87 (stating that “a court must determine, first, the unambiguous claims made by the

advertisement” because “only an unambiguous message can be literally false”). The court

therefore finds that the alleged false statement is not actionable as false advertising under

the Lanham Act.

b. “Worry-Free” and “Automatic” Website

The second alleged false statement by ConsulNet, as stated by DIG in its response

memorandum, is:

You don’t need to know anything about computers or the Internet! We take care

of everything . . . site maintenance . . . . Once it’s online, you don’t need to worry

about the site. You simply follow-up on the HOT prospects that are automatically

generated for you.

DIG Resp. 18 (altering by omissions a ConsulNet advertisement appearing at DIG Resp.

exh. B at 11-12). ConsulNet contends that this portion of the advertisement, as altered 14

by DIG, cannot be the basis for a false advertising claim, because the quoted portion is

mere puffery. CN Reply 8-9.

“Puffery” is not actionable under the Lanham Act. Castrol Inc. v. Pennzoil Co.,

987 F.2d 939, 945 (3d Cir. 1993). “Puffery is an exaggeration or overstatement expressed

in broad, vague, and commendatory language,” “distinguishable from misdescriptions or

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 22 of 31
 The copy of the Wall affidavit contained in the exhibits attached to DIG’s 15

memorandum is not signed or notarized. DIG has petitioned the court to substitute a

signed and notarized copy. Docket No. 107 (Mar. 13, 2003). ConsulNet has not opposed

this motion. The court will grant it.

 As noted above, supra n.13, ConsulNet objects to the court’s considering the 16

late-disclosed Kinder affidavit; however, the court finds the affidavit harmless.

-23-

false representations of specific characteristics of a product.” Id. “The ‘puffing’ rule

amounts to a seller’s privilege to lie his head off, so long as he says nothing specific.” Id.

(quoting W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 109, at 756-57

(5th ed. 1984)). That is, puffery consists of “hyperbolic statements one would [not] take

or be intended to take literally.” Toro Co. v. Textron, Inc., 499 F. Supp. 241, 253 n.23 (D.

Del. 1980). Claims that are “specific and measurable” are not puffery. Castrol, 987 F.2d

at 946.

In support of its contention that the statement constitutes false advertising, DIG

cites affidavits from former ConsulNet clients, attesting to worrying about their

ConsulNet websites. See DIG Resp. exh. F ¶ 9 (Kinder affidavit); id. exh. E ¶ 9 (Wall

affidavit ); id. at 19 (referring also to the affidavits concerning ConsulNet’s poor 15

customer service appended to DIG’s partial motion for summary judgment on the contract

claims). ConsulNet contends that its statement is non-actionable puffery. CN Reply 8- 16

9.

The promise that ConsulNet’s websites will alleviate “worry” by generating leads

is not an objectively measurable claim about ConsulNet’s product. Rather, the promise is

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 23 of 31
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“broad, vague, and commendatory.” Castrol, 987 F.2d at 945. Castrol, 987 F.2d at 945. 

The court finds that ConsulNet’s alleged false statement is indeed mere puffery and

therefore not actionable under the Lanham Act. See id. Cf. Leykin v. AT & T Corp., 423

F. Supp. 2d 229, 247 (S.D.N.Y. 2006) (statement that company would “not have to worry

in the near term about financing” was “mere generalized expression[] of puffery and

optimism” not actionable under security laws); Catalano v. N.W.A., Inc., No. PI 98-7768,

1998 WL 777023, at *9 (D. Minn. Sept. 15, 1998) (“worry-free” language in vacation

brochure was “mere puffery and not a guarantee” sufficient to support claim for fraud or

misrepresentation). 

c. Tripling Real Estate Sales

The amended counterclaim alleges that ConsulNet’s statement that “[o]ur members

have learned that it really is possible to triple your real estate sales while working no more

than a standard 40-hour week” is false because, “[u]pon information and belief . . . few if

any of Consulnet’s clients have ever experienced a tripling affect [sic] in their business as

a direct result of using a Consulnet website.” Amended Counterclaim ¶¶ 217-18. In

response to ConsulNet’s motion for summary judgment contending that DIG has not

produced any competent evidence of the falsity of the tripling statement, see CN Mot. 26,

DIG cites only two pieces of evidence: the Kinder and Wall affidavits produced for the

first time along with DIG’s response to ConsulNet’s motion. Each affidavit states, “My

direct experience after using a Consulnet website, indeed any website, is that I did not and

could not triple my business while still working a 40-hour week.” DIG Resp. exh. E ¶ 8

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 24 of 31
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(Kinder affidavit); id. exh. F (Wall affidavit). 

The Kinder and Wall affidavits, standing alone, are insufficient to create a genuine

issue for trial. DIG has not come forth with evidence of the results generally achieved by

ConsulNet’s thousands of clients. Such evidence is necessary to show whether it is

indeed not “possible” to triple one’s sales while working a 40-hour week. No reasonable

fact-finder could find the advertisement false — i.e., that it is impossible for a ConsulNet

client to triple sales while working a 40-hour week, or that no ConsulNet client has — on

the basis of the evidence before the court: that two of these thousands of ConsulNet

clients state without further elaboration that they themselves were unable to achieve such

results. Cf. Anderson, 477 U.S. at 248 (“[S]ummary judgment will not lie if . . . the

evidence is such that a reasonable jury could return a verdict for the nonmoving party.”).

d. Conclusion

In sum, the court will grant ConsulNet’s motion with regard to DIG’s false

advertising claim (count one of the counterclaim) because neither the “10.5%” statement

nor the “worry-free” statement is actionable under the Lanham Act, and because DIG has

not created a genuine issue of material fact regarding the falsity of the “tripling sales”

statement.

2. False Statement

ConsulNet contends that it is entitled to summary judgment on DIG’s second claim

under § 43 of the Lanham Act because DIG’s allegations fail to state a cognizable claim

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 25 of 31
 DIG’s counterclaim was initially also based on an additional allegation that 17

ConsulNet hacked into DIG’s website. See DIG Amended Counterclaim ¶ 295. It appears

from DIG’s response brief, which contains no defense of this alleged basis for the

Lanham Act claim, that DIG has abandoned it. Cf. CN Mot. 35-36 (addressing hacking

allegation). 

-26-

under either 15 U.S.C. § 1125(a)(1)(A) or (B). See CN Mot. 33-35; CN Reply 10-13. 

17

Broadly speaking, “§ 43(a) prohibits attempts to pass one’s goods or services off

as those of a competitor and attempts to misrepresent the nature and quality of goods or

services brought to the market.” BIEC Intern., Inc. v. Global Steel Services, Ltd., 791 F.

Supp. 489, 533 (E.D. Pa 1992). “Examples of such uncompetitive practices include: the

unauthorized use of a competitor’s trademark, the unprivileged imitation of a

competitor’s trademark, service mark, logo, or trade dress, and the publication of false or

misleading advertisements.” Id.; see also Green v. Fornario, 486 F.3d 100, 103 (3d Cir.

2007) (stating that “§ 1125 creates civil liability for misdescribing goods in commerce,

importing mislabeled goods, diluting the value of a famous mark, and cybersquatting”). 

Cf. 15 U.S.C. § 1125(a)(1)(A) (creating cause of action against one who “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 . . . is likely to cause confusion, or to cause mistake, or to

deceive as to the affiliation, connection, or association of such person with another

person, or as to the origin, sponsorship, or approval of his or her goods, services, or

commercial activities by another person”); id. § 1125(a)(1)(B) (cause of action for false

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 26 of 31
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advertising discussed above).

Where a plaintiff brings an action under § 1125(a)(1)(B) claiming that the

defendant made disparaging remarks that harmed the plaintiff’s business, those remarks

must qualify as “commercial advertising or promotion,” in accordance with that section’s

language. See id. § 1125(a)(1)(B) (“[a]ny person who . . . in commercial advertising or

promotion, misrepresents . . . ”). The “touchstone of whether a defendant’s actions” so

qualify is whether “the contested representations are part of an organized campaign to

penetrate the relevant market.” Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc.,

314 F.3d 48, 57 (2d Cir. 2002). Thus, “[p]roof of widespread dissemination within the

relevant industry is a normal concomitant of meeting this requirement,” and “isolated

disparaging statements do not have redress under the Lanham Act.” Id.

DIG’s second Lanham Act claim is based counterclaim defendant Steve Raitt’s

alleged statement to Richard Wall, a former ConsulNet client who had switched to DIG,

that Wall was about to be “‘dumped’ by DIG.” Amended Counterclaim ¶ 249 (alleging

that Raitt made such a statement to multiple clients); CN Mot. exh. L at 75 (Moore

clarifying in deposition testimony that he had identified only Wall as a person to whom

Raitt made the statement). Wall testified in his deposition that Raitt said to Wall at a

ConsulNet seminar: “You know what, you better come back before you’re dumped.” 

DIG Resp. exh. H at 102. Wall interpreted this comment as “insinuating that [Raitt] was

going to put [DIG] out of business.” Id. at 103.

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 27 of 31
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 After canvassing cases describing the scope of the Lanham Act, ConsulNet’s

motion asserts that “[n]othing in the case law suggests that a single stray remark, such as

the one allegedly made by Steve Raitt, could give rise to a Lanham Act claim for false

designation or false advertising under Section 1125(a).” CN Mot. at 35. 

In response, DIG recites the elements of a claim for false or misleading advertising

under § 1125(a)(1)(B) and asserts that Wall’s deposition testimony is on its own sufficient

evidence to support a claim under either § 1125(a)(1)(A) or § 1125(a)(1)(B). DIG Resp.

20-21.

DIG makes no attempt to explain how Raitt’s alleged statement is actionable under

§ 1125(a)(1)(A), which pertains to false designation of origin, nor is any such theory

apparent. Accordingly, the court finds that DIG has failed to state a claim under

§ 1125(a)(1)(A).

Nor has DIG presented evidence supporting a false advertising claim under

§ 1125(a)(1)(B). Raitt’s single comment to Wall is not sufficient to raise a genuine issue

of material fact that the counter-defendants engaged in “commercial advertising or

promotion” within the meaning of § 1125(a)(1)(B). That is, the remark is, without more,

insufficient as a matter of law to establish “an organized campaign to penetrate the

relevant market” or “widespread dissemination within the relevant industry.” Fashion

Boutique, 314 F.3d at 57; see Allen Neurosurgical Assocs., Inc. v. Lehigh Valley Health 

Allen Neurosurgical Associates, Inc. v. Lehigh Valley Health Network, No. 99-4653, 2001

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 28 of 31
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WL 41143 (E.D. Pa. Jan. 18, 2001) (holding that dissemination of disparaging statement

to two patients did not qualify as advertising or promotion).

Because DIG has not come forth with evidence sufficient to maintain a claim

under § 1125(a)(1)(A) or (B), the court will grant ConsulNet’s motion with regard to this

second Lanham Act claim.

Conclusion 

For the reasons stated above, the court will deny the two partial motions for

summary judgment filed by DIG and Moore; the court will grant ConsulNet’s motion for

summary judgment on the counterclaim; and the court will deny as moot, without

prejudice, the parties’ various motions to strike and preclude evidence. An appropriate

order follows. 

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 29 of 31
-30-

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 CONSULNET COMPUTING, INC., d/b/a

SUCCESS WEBSITE,

Plaintiff

v.

MEGEL DAVID MOORE, et al., 

Defendants

v.

STEVE RAITT, et al.,

Counter-Defendants.

CIVIL ACTION

No. 04-3485

Order

AND NOW, this 12th day of September, 2007, upon consideration of the two

partial motions for summary judgment filed by defendants Dynamic Investment Group

and Moore (Docket Nos. 92, 93), the brief in opposition thereto by plaintiff ConsulNet

Computing (Docket No. 104), and the defendants’ reply (Docket No. 112); and upon

consideration of counterclaim defendant ConsulNet Computing’s motion for summary

judgment on the amended counterclaim (Docket No. 90), the brief in opposition thereto

filed by counterclaimant Dynamic Investment Group (Docket No. 106), and ConsulNet’s

reply (Docket No. 109), as well as the subsequent filings in this case, IT IS ORDERED:

1. For the reasons stated in the accompanying memorandum, the two partial

motions for summary judgment filed by defendants Dynamic Investment

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 30 of 31
-31-

Group and Moore (Docket Nos. 92, 93) are DENIED;

2. Counterclaim defendant ConsulNet’s motion for summary judgment

(Docket No. 90) is GRANTED in part and DENIED in part:

a. For the reasons stated in the accompanying memorandum,

ConsulNet’s motion is GRANTED on counts one and four of the

amended counterclaim;

b. The parties having jointly stipulated to the dismissal of counts two

and five of the amended counterclaim (Docket No. 97), Consulnet’s

motion is DENIED as MOOT on counts two and five;

3. For the reasons stated in the accompanying memorandum, the unopposed

petition of counterclaimant Dynamic Investment Group to substitute a

signed, notarized copy of the Tracy Wall affidavit (Docket No. 107) is

GRANTED;

4. For the reasons stated in the accompanying memorandum, the parties’

motions to strike or preclude the supplementary report of Michael Deale

and the affidavits of Jay Kinder, Rick Brash, Richard Machado, Jeff

Thompson, Warren Cleveland, and Steve Saunders are DENIED as MOOT

without prejudice to renewing them at a later date.

/s/ Louis H. Pollak

_______________

Pollak, J.

Case 2:04-cv-03485-CDJ Document 113 Filed 09/12/07 Page 31 of 31