ClicknClear Moves to Dismiss Amended Tresóna Lawsuit

Photo Credit: Katrina Berban

The ugly Tresóna v. ClicknClear legal battle isn’t through yet: Now, ClicknClear is pushing to dismiss Tresóna’s amended false advertising and copyright infringement complaint.

Co-defendants ClicknClear (CnC), CEO Chantal Epp, and director/investor David Walsh just recently moved to toss Tresóna’s retooled action, which itself arrived in April. Furthermore, the dismissal development marks the newest twist in a marathon dispute between the “niche” licensing specialists.

(What niche are we talking about? Even this seemingly straightforward question is best answered with direct quotes. Tresóna’s complaint mentions its and CnC’s shared focus on licensing “scholastic, community, and professional organizations.” And per its website, CnC deals in “Music and Compliance Technology for Choreographed Sports, and Performing Arts.”)

Previously, we exclusively broke down said marathon dispute, the resulting suit, and pressing investor concerns about ClicknClear’s operations.

And while the convoluted episode is inherently difficult to summarize – or cover at all; DMN is alone in doing so – the concise version is that Tresóna is taking aim at CnC’s alleged false advertising and alleged consumer deception.

As described in the amended complaint, this refers specifically to the defendant company’s alleged misrepresentations about its “License Verification System” (LVS), which, in keeping with its name, purportedly determines whether customer-uploaded licenses are valid for certain usages.

Put briefly, Tresóna maintains that its legitimate licenses are automatically slapped with unlicensed “red” results by the LVS; on the other hand, CnC’s licenses purportedly receive “green” approval results at once. And customers (i.e., athletes, band directors, etc.) have allegedly been deceived by the allegedly misleading information.

“Rather, [the LVS] is a tool created by a competitor to improperly obtain its competitors’ licensing documentation and information and then convert its competitors’ customers to using its own services and products under false pretense,” Tresóna’s amended suit sums up.

“Simply put, it is an illegitimate conversion and anti-competitive tool disguised as a legitimate document management tool with properties and abilities it does not and cannot possess.”

As for CnC’s retort, claims about the Licensing Verification System’s capabilities are allegedly “nonactionable opinion,” and Tresóna’s red-results example “cannot support any false advertising claim” because the plaintiff, not an actual customer, uploaded the “licensing documentation” in question.

“Tresona’s claims also fail because the Terms of Use to which users must agree before using LVS specifically warn users not to rely on the LVS results,” CnC’s dismissal motion continues, proceeding to emphasize the presence of terms imploring users to “NOT RELY ON INFORMATION ON THIS SITE.”

What about the highly complex topic – one we explored in our aforementioned coverage – of precisely which rights ClicknClear licenses provide?

In CnC’s view, related claims are barred by a Supreme Court decision because whether it “possesses the authority to license these rights is a copyright issue” as opposed to a Lanham Act false advertising issue.

There’s plenty more to break down on this front, but in the interest of relative brevity, those angles will have to wait for future coverage. An alleged lack of customer deception and harm likewise supports dismissal, per CnC.

“Although Tresona’s claims should be dismissed for failure to allege any false or misleading advertising, Tresona’s claims also fail because it has not alleged that any customers—whether they are federations or performers—were actually misled by the challenged statements,” a relevant section reads.

“At best, Tresona’s allegations suggest that some customers found LVS cumbersome to use, felt pressure from their federations to use LVS, or were frustrated by the process of licensing music in general.”

Much of the remainder of the dismissal motion seeks to refute examples of alleged customer harm stemming from CnC’s alleged misrepresentations.

The Winter Olympics Minions licensing debacle, for instance, “had no connection to any customers in the United States” and therefore “cannot support a false advertising claim under the Lanham Act or” New York General Business Law, according to the defendant.

Finally, Tresóna is accusing CnC of copyright infringement to boot, claiming that its (Tresóna’s) in-house license agreements and certificates are being reproduced without permission in the License Verification System.

However, “[e]ven if ClicknClear used Tresona’s licenses or certificates in an unauthorized manner, that use is fair,” the dismissal motion states before diving into sub-arguments in support of the position.

With that, all eyes are on the court’s forthcoming dismissal decision, which we’ll cover after it’s handed down. More immediately, given the many moving parts associated with Tresóna v. ClicknClear, it probably won’t come as a shock that quite a lot is happening behind the scenes as well.

In short, investors (note the plural) remain dissatisfied with ClicknClear’s financials, overall positioning, and representations about its core offerings, per documents and communications shared with DMN.

Though this won’t come as a shock to those who’ve read our CnC deep dive, evidence suggests that the corresponding scrutiny might be disrupting key elements of the company’s model.

(The latter centers on inking agreements with sports federations, cutting the federations in on their athletes’ CnC licensing payments, and then making CnC use mandatory in the long term, investor presentations and internal documents show.)

To name one example, it was only on April 9th that Ice Skating Australia (ISA) “engaged ClicknClear as the platform for members to verify their music and confirm that an appropriate licence has been obtained for its use in competitions and other performances that may be held.”

From there, ISA “strongly” encouraged “athletes, parents, coaches, club committees, and ISA Member Boards/Councils to attend” a virtual CnC “information session” about the ins and outs of licensing.

Finally, one of the two sessions was abruptly canceled “[d]ue to unforeseen circumstances,” and subsequently, ISA kicked off May by announcing that it had “formally withdrawn” from a late-March “Music Verification and Copyright Compliance Policy” involving CnC.