Opinion ID: 389212
Heading Depth: 2
Heading Rank: 2

Heading: General Unfair Competition Statute

Text: 36 California Business and Professions Code sections 17200-17208 (West Supp.1980) establish a remedy for the broad tort of unfair competition. See generally Note, Former Civil Code Section 3369: A Study in Judicial Interpretation, 30 Hastings L. J. 705 (1979). Toho argues that Sears' conduct is actionable under three branches of this tort: (1) passing off, (2) misleading advertising, and (3) misappropriation. 37 Our previous conclusion that Sears' actions pose no likelihood of confusion disposes of Toho's passing off claim. California courts have construed the tort of passing off to require likelihood of consumer confusion as to source or sponsorship. Walt Disney Productions v. Air Pirates, 581 F.2d 751, 760 (9th Cir. 1978), cert. denied, 439 U.S. 1132, 99 S.Ct. 1054, 59 L.Ed.2d 94 (1979). Under California law, unfair competition also includes misleading advertising. See Cal.Bus. & Prof.Code §§ 17200, 17500 (West Supp.1980). The absence of likelihood of confusion, however, precludes acceptance of Toho's assertion that Sears' use of Bagzilla is misleading. 38 Toho's attempt to bring its case under the misappropriation branch of California unfair competition law also fails. The California law of misappropriation draws from the pre-Erie doctrine of federal common law formulated in International News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed.2d 211 (1918). There, the Court held that the International News Service behaved tortiously when it copied the substance of AP's uncopyrightable news stories from AP's newspaper-subscribers on the East Coast and wired the stories to International's West Coast subscribers. The California doctrine of misappropriation prohibits the substantial copying of another's commercial labors even when there is no likelihood of confusion. It has been applied to record and tape piracy. E. g., A & M Records, Inc. v. Heilman, 75 Cal.App.3d 554, 564, 142 Cal.Rptr. 390, 396 (1977), appeal dismissed and cert. denied, 436 U.S. 952, 98 S.Ct. 3063, 57 L.Ed.2d 1118 (1978); Capitol Records, Inc. v. Erickson, 2 Cal.App.3d 526, 536-38, 82 Cal.Rptr. 798, 805-06 (1969), cert. denied, 398 U.S. 960, 90 S.Ct. 2176, 26 L.Ed.2d 545 (1970). There is no similar substantial taking by Sears in this case. The only taking Toho alleges relates to Sears' use of its trademark, and Toho cites no cases extending the misappropriation theory to trademark infringement. We believe that California courts would refuse to make such an extension. See Pagliero v. Wallace China Co., 198 F.2d 339, 341-43 (9th Cir. 1952) (refusing to extend misappropriation doctrine to prohibit copying of design). 39 Toho has failed to allege that Sears has violated any aspect of California unfair competition law. This failure also disposes of Toho's unfair competition claims under federal law, which in this case incorporates state law. 40 Affirmed.