District court addresses Vanderbilt trademark infringement claim against Scholastic over "Read 180" educational software, rules Vanderbilt sufficiently alleged trademark infringement claim but not reverse-passing-off claim under the Lanham Act

Vanderbilt Univ. v. Scholastic, Inc., 382 F. Supp. 3d 734, 743 (M.D. Tenn. 2019).
By means of a License Agreement executed in 1997 (“License”), Vanderbilt University (“Vanderbilt”) and Defendant Scholastic, Inc. (“Scholastic”) joined forces to develop, market, and distribute an educational literacy program called Read 180 based on the cutting-edge work of Vanderbilt Professor Ted S. Hasselbring. 

 Pursuant to the License, Scholastic used certain copyrightable software and related instructional materials, along with other materials it both obtained and created, to develop the “Read 180” program. It was wildly successful. Scholastic distributed Read 180 and paid Vanderbilt royalties under the License until 2015, when Scholastic sold that part of its business and assigned the License to Defendant Houghton Mifflin Harcourt Publishing Company (“HMH”). However, Defendants' public exuberance about their success with Read 180 in connection with this sale led Vanderbilt to became suspicious that it was being exploited by Defendants. 

 Vanderbilt conducted an investigation and now claims that it was deceived by the Defendants and has not been properly compensated for (1) components of Read 180 that are royalty-bearing under the License; (2) programs other than Read 180 that may be royalty-bearing because they are based on Vanderbilt-owned materials (“Derivative Products”); and (3) additional learning products that may have been surreptitiously developed by Hasselbring and Scholastic in violation of the License and Hasselbring's duties to Vanderbilt (“Ancillary Products”).

Vanderbilt brings claims for trademark infringement in violation of § 32(1) of the United States Trademark Act, 15 U.S.C. § 1114(1); unfair competition, in violation of § 43(a) of the United States Trademark Act, 15 U.S.C. § 1125(a); declaratory judgment under the Declaratory Judgment Act, 28 U.S.C. § 2201; as well as numerous Tennessee state law claims. Before the Court are (1) Scholastic and HMH's Motion to Dismiss the Second Through Fourth and Seventh Through Eleventh Counts of the Complaint (Doc. No. 87); and (2) Hasselbring's Motion to Dismiss Counts Nine and Ten of the Complaint (Doc. No. 89).2 Vanderbilt has filed responses in opposition (Doc. Nos. 96; 97), and Defendants have filed replies (Doc. *745 Nos. 100; 101.) For the following reasons, both motions will be granted in part and denied in part.

Opinion Available At:

 https://www.leagle.com/decision/infdco20190529h65

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