Swift v. Medicate Pharm., Inc.

Docket Number: 12-3774
Judge: Williams
Opinion Date: October 7, 2013

Swift, Schaltenbrand, and Siddle entered into an informal partnership arrangement to operate a mail-order pharmacy, divide the profits from that business, and eventually sell the book of customers to another pharmacy. After some initial success, the partners began taking profit distributions that far exceeded agreed‐upon percentages. Swift eventually filed lawsuits against Schaltenbrand and Siddle. The district court listened to 14 days of testimony before ruling against Swift on most of his claims. The court invalidated a copyright registration that Swift’s marketing company obtained for a logo used by the partnership, finding that Swift knowingly misrepresented a material fact in the application to register a copyright in the logo. The Seventh Circuit affirmed in part, agreeing that Swift failed to prove Schaltenbrand and Siddle breached their obligation to provide him with a share of profits. Swift waived fraud claims by declining to include them in the final pretrial order. The district court erred by invalidating the copyright registration without first consulting the Register of Copyrights as to the significance of the inaccurate information. The Copyright Act requires courts to perform this “curious procedure” before invalidating a registration based on a fraud on the Copyright Office.

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