UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK
May 19, 1981
WARNER BROS., INC., Plaintiff,
GAY TOYS, INC., Defendant
The opinion of the court was delivered by: KNAPP
MEMORANDUM AND ORDER
In this suit based on alleged violations of the Lanham Act and related state claims of unfair competition, plaintiff moves for a preliminary injunction restraining the defendant from marketing toy automobiles that resemble those which form the focal point for plaintiff's television series. Having carefully considered the submissions made by the parties and the arguments of counsel, we deny plaintiff's motion. This memorandum shall constitute our findings of fact and conclusions of law.
Plaintiff, a Delaware corporation having its principal place of business in California, is a well-known producer of movies and television shows. Defendant, a Michigan corporation having its principal place of business in that state, is a leading manufacturer of toys.
Among the television shows produced by plaintiff is a highly successful series known as "The Dukes of Hazzard" which, since January of 1979, has been regularly broadcast on the CBS television network. A prominent feature of this series referred to by plaintiff as the series' "signature" is the "General Lee", a striking orange automobile identified by the words "GENERAL LEE" and a modified confederate flag on its roof, and the number "01" prominently affixed to each side door. This car appears to be a central figure in each episode of the series and the human actors, the "Duke Boys", employ it in a never-ending succession of adventures in which its spectacular performance enables them repeatedly to escape from the clutches of the evil sheriff of fictitious Hazzard County. Because of the car's use in the program and the vast amounts of money plaintiff has spent in advertisements of the series with the "General Lee" prominently featured, it has come about that a substantial segment of the public especially children instantly think of the series when they see the car or a replica of it.
As is customary in the television industry, the plaintiff plans to profit from the "General Lee's" popularity by granting a number of manufacturers licenses to copy it. We are informed by counsel for the plaintiff that again, as is customary in the industry the revenues plaintiff expects to derive from such licenses in 1981 exceed by far the broadcast revenues expected from the series itself for that year.
Defendant has, for some time, sold toy automobiles made in the image of a Dodge Charger, and produced in a number of colors. After plaintiff's "General Lee" demonstrated its appeal, defendant decided to capitalize on its popularity. Having requested and been denied a non-exclusive license from the plaintiff, defendant put out the toy here in issue, an orange Dodge Charger with a confederate flag on its top and the number "10" on each side door. This toy is for all practical purposes identical in appearance to the "General Lee" except that the words "GENERAL LEE" are not written on its roof, and the numbers on its side doors are the reverse of those found on the real "General Lee" ("10" instead of "01"). At the time the defendant placed its toy on the market, neither plaintiff nor any of its licensees had so far as the evidence before us indicates come out on the market with any significant number of toys or other objects associated with the "Duke of Hazzard" program.
After this action had been brought, plaintiff caused a survey to be taken which establishes, to our satisfaction, that a substantial number of children, when holding defendant's car in their hand, immediately think of plaintiff's "General Lee" and "The Dukes of Hazzard" television series.
From this we would infer that many children buy the car (or induce their parents to buy it for them) as a prop for play in which they pretend they are the "Duke Boys" of television fame. However, there is nothing in the survey to suggest that purchasers are in any way concerned with who may manufacture the car, nor is there anything to suggest that purchasers think that plaintiff controls the quality of defendant's toy or in any other way "sponsors" it.
In this lawsuit, plaintiff seeks to have defendant enjoined from marketing its toy copy of the "General Lee".
In so doing, plaintiff does not allege any copyright, design patent, or registered trademark which protects its design per se. It relies exclusively on the facts which we find to be facts that plaintiffs created the design and made it popular by virtue of its broadcasting and advertising activities, that defendant's product is readily identified as resembling plaintiff's creation, and that defendant intentionally designed its product to capitalize on the popularity of plaintiff's "General Lee". Plaintiff now moves for a preliminary injunction barring defendant from marketing its product without first removing the modified confederate flag from its roof and the "10" from its side doors. For the reasons set forth below, that motion is denied.
In this Circuit, a plaintiff seeking preliminary injunctive relief must make a showing of irreparable harm and, in addition, demonstrate either a likelihood of success on the merits or the existence of sufficiently serious questions going to the merits to make them a fair ground for litigation. In the latter situation (fair ground for litigation), it must also establish that the balance of hardships tips decidedly in its favor. Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Co. (2d Cir. 1979) 604 F.2d 755, 758-59. Assuming arguendo that plaintiff has established irreparable harm, we turn to an examination of plaintiff's substantive position.
The basic inquiry in an unfair competition action in this forum is whether the public is likely to be misled into believing that the defendant is distributing products manufactured or vouched for by the plaintiff.
Thus, in American-Marietta Co. v. Krigsman (2d Cir. 1960) 275 F.2d 287, Judge Hand observed (at 289):
"The whole basis of the law of "unfair competition' ... is that no one shall sell his goods in such a way as to make it appear that they come from some other source."
Accord: Vitarroz Corp. v. Borden, Inc. (2d Cir. 1981) 644 F.2d 960; Perfect Fit Industries, Inc. v. Acme Quilting Co. (2d Cir. 1980) 618 F.2d 950, 953; American Footwear Corp. v. General Footwear Co. (2d Cir. 1979) 609 F.2d 655, 663, cert. denied, 445 U.S. 951, 100 S. Ct. 1601, 63 L. Ed. 2d 787 (1980); McGregor-Doniger, Inc. v. Drizzle Inc. (2d Cir. 1979) 599 F.2d 1126, 1130; Mushroom Makers, Inc. v. R. G. Barry Corp. (2d Cir. 1978) 580 F.2d 44, 47, cert. denied, 439 U.S. 1116, 99 S. Ct. 1022, 59 L. Ed. 2d 75 (1979); Societe Comptoir de l'Industrie Cotonniere Etablissements Boussac v. Alexander's Dept. Stores, Inc. (2d Cir. 1962) 299 F.2d 33, 36; Joshua Meier Co. v. Albany Novelty Mfg. Co. (2d Cir. 1956) 236 F.2d 144, 147; Triangle Publications v. Rohrlich (2d Cir. 1948) 167 F.2d 969, 972; Yale Electric Corp. v. Robertson (2d Cir. 1928) 26 F.2d 972, 973; Crescent Tool Co. v. Kilborn & Bishop Co. (2d Cir. 1917) 247 F. 299, 300. See also Shaw v. Time-Life Records (1975) 38 N.Y.2d 201, 379 N.Y.S.2d 390, 305, 341 N.E.2d 817.
In the case at bar, however, it seems unlikely that any purchaser of defendant's products will be misled into believing they are manufactured or vouched for by the plaintiff. Plaintiff has, as yet, established no reputation in this field. Neither it nor its licensees have put out any significant number of "Dukes of Hazzard" products bearing the "mark" of the "General Lee", cf. Universal City Studios, Inc. v. Montgomery Ward & Co. (N.D.Ill.1980) 207 U.S.P.Q. 852, 855; DC Comics, Inc. v. Powers (S.D.N.Y.1978) 465 F. Supp. 843, 847; Wyatt Earp Enterprises, Inc. v. Sackman, Inc. (S.D.N.Y.1958) 157 F. Supp. 621, 624-25; Warner Bros. Inc. v. Road Runner Car Wash, Inc. (TTAB 1976) 189 U.S.P.Q. 430, 430-31, nor has defendant advertised its product so as to suggest it is an "official" replica of the "General Lee." Cf. American Broadcasting Co. Merchandising, Inc. v. Button World Mfg., Inc. (N.Y.Sup.Ct., N.Y.Co.1966) 151 U.S.P.Q. 361; Wyatt Earp, supra, 157 Supp. at 625. While we readily infer that purchasers of defendant's toy use it as a prop to act out recreations of the "Dukes of Hazzard" show, there is nothing in this, nor in any other evidence adduced by plaintiff, to suggest that such purchasers are at all concerned with who manufactures the toy or with whether its manufacturer is sponsored by the producer of the television series.
Nor can plaintiff find support in those cases, stemming from the Supreme Court opinion in International News Service v. Associated Press (1918) 248 U.S. 215, 39 S. Ct. 68, 63 L. Ed. 211, which seek to prevent one from misappropriating the skill, expenditures, and labors of another. In all such cases that have come to our attention, the prevailing plaintiff has been able to point to the abuse of a confidential or fiduciary relationship or to some element of fraud or deception. See, e.g., Flexitized, Inc. v. National Flexitized Corp. (2d Cir. 1964) 335 F.2d 774, 782, cert. denied, 380 U.S. 913, 85 S. Ct. 899, 13 L. Ed. 2d 799 (1965); Electrolux Corp. v. Val-Worth, Inc. (1959) 6 N.Y.2d 556, 190 N.Y.S.2d 977, 986, 161 N.E.2d 197; Reiner v. North American Newspaper Alliance (1932) 259 N.Y. 250, 181 N.E. 561; Madison Square Garden Corp. v. Universal Pictures Co. (1st Dep't 1938) 255 App.Div. 459, 7 N.Y.S.2d 845, 849-50, appeal denied, 256 App.Div. 807, 9 N.Y.S.2d 895; Dior v. Milton (Sup.Ct.N.Y.Co.1956) 9 Misc.2d 425, 155 N.Y.S.2d 443, 454, aff'd mem. (1st Dep't) 2 A.D.2d 868, 156 N.Y.S.2d 996; Metropolitan Opera Ass'n. v. Wagner-Nichols Recorder Corp. (Sup.Ct.N.Y.Co.1950) 199 Misc. 786, 101 N.Y.S.2d 483, 489, aff'd, 279 App.Div. 632, 107 N.Y.S.2d 795 (1951). There is here no possibility of fraud; we find no deception; and no confidential fiduciary relationship has been demonstrated.
We therefore conclude that plaintiff is unlikely to prevail on the merits under either the New York common law or the Lanham Act as that Act has heretofore been construed in this Circuit.
There is, however, a relatively recent Fifth Circuit decision which tends to support the plaintiff's position. Boston Professional Hockey Ass'n, Inc. v. Dallas Cap & Emblem Mfg., Inc. (5th Cir. 1975) 510 F.2d 1004, cert. denied, 423 U.S. 868, 96 S. Ct. 132, 46 L. Ed. 2d 98 (1976). There the Fifth Circuit, observing that it was dealing with a case of "first impression" (Id. at 1008), and coming to a decision that it felt might "tilt the trademark laws" (Id. at 1011), held that the owner of a professional hockey team could prohibit any unlicensed person from manufacturing or selling shoulder patches bearing the team's emblem, whether or not such emblem had been registered as the team's trademark.
We do not believe our Circuit would agree that such an extension of heretofore accepted concepts should at least on the facts at bar be accomplished by judicial, rather than legislative fiat.
There is no evidence before us to indicate whether plaintiff's television program causes the sale of a single extra automobile by the toy industry as a whole, or whether it simply diverts purchasers from one design to another. Furthermore, assuming that the program in fact creates a new or additional market for toys, it seems to us that it should be a legislative decision whether a television producer should have arbitrary control over which of competing manufacturers can benefit from the incidental fall-out from its broadcasting activities, or whether its legitimate economic interests may be adequately protected by some sort of compulsory licensing system which would permit any manufacturer so to benefit upon payment of a reasonable royalty.
Although, as indicated, we do not believe that the plaintiff on the basis of any facts now before us is likely to prevail on the merits, we must recognize that it has presented a question providing a fair ground for litigation. However, we are satisfied that the defendant clearly prevails on the balance of hardships test. An injunction would prohibit defendant from making sales readily available to it at this time, whereas it is difficult to see what if any economic loss plaintiff would suffer from such sales. Indeed, it is obvious that the plaintiff's primary purpose in bringing this action is not to stop the sale of a few toy automobiles, but to validate its entire licensing program. A temporary injunction would not assist it in this endeavor.
Plaintiff's motion for a preliminary injunction is accordingly denied and the stay heretofore granted (and extended by stipulation) is vacated. The parties are directed to communicate with Chambers within two weeks from the date of this order to establish an expedited schedule looking toward a final judgment on the merits of the complaint.