The opinion of the court was delivered by: SWEET
Plaintiff CCS Communication Control, Inc. ("CCS") and defendant Law Enforcement Associates, Inc. ("LEA") have crossed-moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P. on the grounds that there are no genuine issues of material fact disputed by the parties, and that each is entitled to judgment as a matter of law. Because there are no disputed facts which require a trial on the merits, and because CCS has failed to establish the validity of its claim of trademark infringement under the Lanham Trademark Act, 15 U.S.C. § 1051 et seq. (hereinafter "Lanham Act"), LEA's motion for summary judgment is granted.
CCS commenced this action in the Southern District of New York on February 23, 1984 claiming that LEA had engaged in trademark infringement, copyright infringement and unfair competition with respect to its marketing and advertising of an executive telephone system manufactured by CCS. CCS then withdrew its claims of trademark and copyright infringement with prejudice, leaving only the claim of unfair competition described in Counts II and IV of CCS' complaint. Subsequent to this filing, CCS commenced three substantially identical actions against corporations wholly owned or controlled by LEA in California, Illinois, and Texas which were transferred to the Southern District of New York. By order of November 16, 1985, this court consolidated these actions and pleadings.
At the second status conference in this action on November 22, 1985, this court enjoined CCS from filing any further actions against LEA based on the same charges, and gave LEA until December 6, 1985 to file a motion for summary judgment. On December 6, 1985 LEA filed its motion for summary judgment, and on December 17, 1985 CCS gave notice and filed its cross-motion.
The following facts are undisputed by the parties. In early 1983, LEA received one of CCS' products as a trade-in, an executive telephone with voice-mask and scrambler, labeled Model No. CC-800 (hereinafter the "CC-800") which LEA photographed and placed in its 1983-84 catalog which was compiled by the Carl Lande, the former president of LEA. The CC-800 appeared at page 10 of the LEA 1983-84 catalog [Exhibit E] in a photograph too small to reveal any markings of the manufacturer. An examination of a different photograph of the CC-800 reveals that all of CCS' markings, including its name, are still affixed to the product. Larger photographs of other merchandise on page 11 of the catalog display the product manufacturers name.
In September, 1983, Spencer Lawrence ("Lawrence"), current vice-president and chief executive officer of LEA, received a telephone call from Jim Barker of Playboy Magazine, who informed him that the magazine wanted to do a follow-up story on executive security devices which it had published the previous year. Lawrence agreed to lend Barker any products he wished to use for the article and instructed his vice president for U.S. Sales, Philip Rosen ("Rosen"), to ship any items which Playboy requested. According to Rosen, whose affidavit is uncontroverted, Barker selected eight items from the LEA catalog to be shipped without consulting LEA about the items, one of which was the CC-800. Of the eight items shipped to Playboy, only two were selected for the article - the CC-800 and a cigar humidor bug detector - both of which were photographed by Playboy and returned to LEA. Accordingly to the Lawrence affidavit, neither he nor Rosen saw the text of the article before it was published.
The article appeared in the March, 1984 issue of the magazine and was entitled 'The Executive James Bond," and the CC-800 Executive Communications Security System briefcase appeared on a page with four other security devices. The caption beside the photograph of the CC-800 stated that it was "from LEA," and the two photographs above had captions ending in "by Wilson Jones Company" and "by Research Electronics." Because of the small size of the photograph and the fact that the briefcase lid was hinged over the components, the CCS identification markers were not visible on the item.
Accordingly to Rosen, the CC-800 generated approximately twelve telephone inquiries, six of which occurred prior to the publication of the Playboy article. Rosen asserts that he never stated that LEA manufactured the Executive Communication System but rather advised inquirers that the component parts of the communication system could be purchased at a much lower cost using equivalent or superior components. rosen indicated that CCS' price for its CC-800 was $7,800.00, whereas the components integrated into one case by LEA would have sold for approximately $3,500.00.
LEA never sold its single CC-800 and the photograph has been marked "discontinued" in LEA's catalog. LEA never sold a comparable assembled unit of its own component part. The Lawrence affidavit attests that LEA's sales of component parts of an executive communication system for the twelve month period prior to and after publication of the article were substantially as follows:
Telephone Scrambler, Model 3100 115 86
Anti-Spy Telephone, Model 4400 30 24
Voice Mask, Model 3600-001 4 5
The remaining two components of the system, the tape recorder and line control switch, are sold in volume and cannot be correlated to the purchase of executive communications systems.
The remaining elements of CCS' claim are contained in Counts II and IV of the complaint, which alleged unfair competition by LEA in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Paragraphs 5, 10 and 11 of the complaint allege the LEA falsely described or represented the CC-800 as its own products in its catalog, that LEA caused this misrepresentation to be circulated in the media through the Playboy article, and that LEA copied and sold a unit similar to the CC-800. In addition to these claims, CCS argues in its memorandum of ...