Consider these facts: The co-owner and instructor of a company that teaches review courses to people who are preparing to take the bar examination takes the exam himself – and fails five times in a row. His business partner takes the exam more than a dozen times and does not fare well. The poor failure rate between them doesn’t raise suspicions, but when one is caught carrying a sheet of scratch paper as he leaves the room after the exam – which would be a violation of exam rules – an investigation ensues that leads to an $11.9 million court ruling in a copyright case against them and their company. An intriguing set of facts provides the background for this copyright case that offers a few lessons about copyright law.
The plaintiff, the National Conference of Bar Examiners, provides test materials to more than 50 jurisdictions for a part of each jurisdiction’s bar exam.
Test questions are created in a lengthy process by panels of professors, judges and practicing lawyers. Each test is comprised of both new questions not used before and repeats of previous questions. The repeated questions are used to correct for variations in the difficulty from test to test. The plaintiff goes to great lengths to protect the secrecy of the test questions and answers, and the questions are copyrighted.
The corporate defendant, Multistate Legal Studies, Inc. dba Preliminary Multistate Bar Review (PMBR), competes with other companies in providing bar review courses. Part of the course includes a mock exam. The defendant’s advertisements use testimonials from former students. Consider these testimonials about the mock test and the actual exam:
- “Dozens of nearly identical questions appeared on the actual exam.”
- “Breezed through the exam because [I] recognized so many of the questions from PMBR.”
- “It was Déjà Vu All Over Again.”
The court found that the defendant’s employees took the test nearly every time it was offered and afterward they made notes on the topics covered and sometimes on the specific facts of questions or the answer choices. The owner who failed the exam five times in a row testified that he used those notes when creating questions for the mock test.
The judge concluded that nearly all of 113 mock exam questions that allegedly were copied from the actual exams indeed were substantially similar to the questions from the bar exam. Moreover, the judge found the copying was willful.
The court cited a number of findings in concluding that many of the mock exam questions infringed copyrights on the bar exam questions. Key among them was the substantial similarity. One thing the court referenced was the advertisements. “PMBR advertisements brag about how close its questions are to those to the actual MBE…” the court wrote in discussing liability. When it came to awarding damages, the judge said: “I take into account PMBR’s advertisements and excerpts from Mr. Feinberg’s lectures. The heavy emphasis on similarity between [the mock exam] questions and [actual exam questions] suggests that this is a major selling point for the company…[the mock exam] is clearly the heart of the course.”
Advertising, website promotional material and statements made in sales presentations all can easily end up as evidence in a liability case. Counsel for a plaintiff will focus attention on those materials when they support the plaintiff’s theory of a case, particularly when statements in the materials or presentation are false or misleading.
A good risk management plan will have a company’s own lawyer reviewing advertising and other promotional materials before it is used in an effort to make certain the material is accurate and appropriate.In addition to possibly being used as evidence in a case against a company, advertisements may themselves be the source of the liability, by infringing a trademark or copyright, constituting a false advertisement or constituting some other tort. For that reason, a good risk management plan will include whatever coverage is available in the market for advertising exposures, both through AI/PI coverage on a general liability policy and through appropriate terms in a professional liability policy.