Vernon Hill II
Vernon Hill II ()

Commerce Bank founder Vernon Hill II can proceed with his counterclaim, in a copyright infringement case, that the bank’s new owners, TD Bank, improperly had his best-selling book detailing his formula for success removed from store shelves.

U.S. District Judge Robert Kugler on Monday denied a motion to dismiss Hill’s bid for a declaratory judgment that he and the bank are joint owners of the manuscript and that the bank sent improper copyright infringement notices to online sellers of Hill’s book.

Hill founded Cherry Hill-based Commerce Bank in 1973 and built it into a 425-branch behemoth by the time he was ousted in 2007 amid heavy scrutiny from the Office of the Comptroller of the Currency over the bank’s real estate deals with entities related to Hill.

TD Bank, a Toronto-Dominion Bank affiliate, acquired Commerce Bank in 2008.

Hill’s book, Fans, Not Customers: Creating Super-Growth in a No-Growth Industry (Portfolio-Penguin, 2002), describes how Commerce Bank grew rapidly through unusual practices like Sunday hours, coin-counting machines and pens that weren’t chained to desks.

The book soon placed fourth on Amazon’s list of best-selling books about retailing, sixth among books about customer service and ninth in books about banks and banking.

But in late November 2012, Amazon and Barnes & Noble discontinued sales after TD Bank sent them letters stating the book infringed on a copyright.

TD Bank claims that the book as published contains many pages lifted verbatim from a manuscript provided to it by Hill in 2007. It claims Hill signed an unconditional guaranty that names Commerce Bank as the owner of the 2007 manuscript and stating that it is a “work made for hire,” or prepared in the course of the author’s job, and thus belonging to the employer.

Hill, for his part, contends that he never ceded his rights to the 2007 manuscript and that he and his co-author, Robert Andelman, completed it largely away from Commerce Bank facilities and outside of working hours. He also claims that authoring a manuscript was clearly outside the scope of his work as the bank’s chief executive officer.

Kugler, sitting in Camden, held those allegations sufficient to survive a motion to dismiss. Further, Hill’s claim that he and Commerce Bank intended to have joint ownership of the manuscript “makes it more plausible than not that Mr. Hill is entitled to relief,” Kugler said.

Also surviving a dismissal motion is Hill’s claim that TD Bank violated the Digital Millenium Copyright Act by misrepresenting to Amazon and Barnes & Noble that the book infringed the bank’s copyright. He claims the bank knew that his status as co-author allowed him to use the manuscript as he saw fit. That is sufficient to state a claim under the DMCA, Kugler said.

Kugler did dismiss Hill’s claim that TD Bank engaged in tortious interference in prospective economic advantage. Because the notices to booksellers to remove the book from their shelves were sent after TD Bank sued Hill for copyright infringement, they were protected under the litigation privilege, he held.

Hill’s lawyer in the case, Louis Barbone of Jacobs & Barbone in Atlantic City, did not return a call about the case.

TD Bank’s lawyer, William Tambussi of Brown & Connery in Westmont, declined comment, as did TD Bank spokeswoman Rebecca Acevedo.

Besides the dispute over the book, Hill sued the bank over its decision to withhold a $12 million severance payment he claimed he was owed under his employment contract. Last May, a federal jury in Camden denied that claim after trial, in Hill v. Commerce Bancorp.

The bank filed a separate suit against Hill in 2008 over his use of Commerce Bank logos and trademarks in a PowerPoint presentation he put on at a banking conference. That case, Commerce Bancorp. v. Hill, was dismissed in 2011.