The opinion of the court was delivered by: Edelstein, District Judge:
On July 23, 1986, Tri-Star entered into an agreement with
Leisure Time to distribute the movie "Return From The River
Kwai" in the United States and Canada. Academy Pictures A.G.
("Academy") has alleged trademark rights to the movie "Bridge
On The River Kwai" and asserts that the title "Return From The
River Kwai" infringes the trademark in the title of its movie.
Tri-Star is in the middle of this dispute. If Tri-Star refuses
to release "Return From The River Kwai," it will be sued by
Leisure Time for breach of contract. If Tri-Star releases the
movie, it will be sued by Academy for trademark infringement.
Tri-Star has moved for summary judgment on its claim that
Leisure Time breached an express warranty in the 1986
agreement which provided that the film would be delivered to
Tri-Star free of all claims against it. Leisure Time has
cross-moved for summary judgment claiming that no such
warranty exists and, in the alternative, that the warranty was
not breached because Academy does not have a valid trademark
infringement claim and did not comply with the provisions of
the contract relating to such a breach. Leisure Time has moved
for summary judgment on Academy's trademark infringement
claim. Leisure Time has also moved for summary judgment on its
counter-claims against Tri-Star and cross-claims against
Columbia Pictures, Inc. and Columbia Pictures Entertainment,
Inc. ("Columbia") and Academy for tortious interference of
contract based on the false assertion of Academy's trademark
For the reasons stated below, Tri-Star's motion for summary
judgment against Leisure Time is granted. Accordingly, Leisure
Time's cross motion for summary judgment is denied. Leisure
Time's motion for summary judgment on Academy's trademark
infringement claim is denied. Leisure Time's motion for
summary judgment on its counterclaims against Tri-Star and
cross-claims against Columbia and Academy for tortious
interference of contract is also denied.
There are two series of events relevant to this dispute. The
first involves the release of the movie "Bridge On The River
Kwai." The second involves the planned release of the movie
"Return From The River Kwai."
"Bridge On The River Kwai" was produced in 1956 by Sam
Spiegel. The corporate vehicles through which Mr. Spiegel
produced "Bridge On The River Kwai" were Horizon-American
Pictures, Inc. and Horizon G.B. Ltd. ("Horizon"). Columbia was
On April 18, 1956, Albatross Trust, the predecessor of
Academy, entered into an agreement ("the 1956 royalty
agreement") with Horizon in which Albatross Trust obtained a
25%, royalty interest in revenues for the motion picture
"Bridge on the River Kwai" in the Western Hemisphere,
excluding the United States and Canada. "Bridge On The River
Kwai" was released in 1957 and has since been viewed by
millions of people in the United States and abroad.
Almost twenty years later, in 1978, Leisure Time registered
the title "Return From The River Kwai" with the Motion Picture
Association of America ("MPAA") pursuant to a set of MPAA
rules which requires its members to register the prospective
titles of movies they plan to release. When a prospective
title for a movie is filed, the MPAA is then charged with the
duty of notifying interested members of the MPAA of the
prospective title. Under the MPAA's rules, any member of the
MPAA with a complaint then has seven days to protest the
title. Leisure Time registered "Return From The River Kwai,"
but Columbia's protest to the title was not received by the
MPAA until after the seven day time limit and was therefore
In July, 1986, Tri-Star and Leisure Time entered into an
agreement ("the 1986 distribution agreement") whereby Leisure
Time granted Tri-Star exclusive distribution rights for the
movie "Return From The River Kwai" in the United States and
Canada. Unbeknownst to Tri-Star, before the 1986 agreement, a
dispute had arisen regarding the title "Return From the River
Kwai." Academy and Columbia had communicated to Leisure Time
their position that as a result of the widespread exposure
received by the motion picture "Bridge On The River Kwai," the
title and the geographic term "River Kwai" had attained
secondary meaning and were therefore entitled to trademark
On December 17, 1987, after the execution of the 1986
agreement, Tri-Star and Columbia Pictures merged and became
"sister" companies as wholly owned subsidiaries of Columbia
Pictures Entertainment, Inc.. Since that time, Columbia has
not asserted any of the trademark claims it believes it has
against "Return From The River Kwai."
Upon learning of the title dispute, Tri-Star requested that
Leisure Time change the name of "Return From The River Kwai"
to avoid potential liability. In early November 1988, Leisure
Time offered to change the title to "March From The River
Kwai" and to add a disclaimer disassociating the motion
picture from "Bridge On The River Kwai." This offer was not
acceptable to Academy. By a letter dated November 17, 1988,
Academy advised Tri-Star that any use of the name "River Kwai"
would be met with a lawsuit to protect Academy's rights in the
On December 5, 1988, Tri-Star wrote Leisure Time notifying
them of Academy's trademark infringement claim. In the letter,
Tri-Star stated that because of Academy's claim, Tri-Star
considered Leisure Time in breach of its warranty to deliver
the movie free from claims against it and therefore considered
itself free to terminate the agreement. In response, Leisure
Time threatened to sue for breach of contract if Tri-Star
terminated the agreement.
On December 27, 1988, Tri-Star then filed the instant
declaratory judgment action, 88 Civ. 9127 (DNE), and the
companion declaratory judgment action, 88 Civ. 9129 (DNE).
Tri-Star moved for summary judgment in the first action
claiming that Leisure Time had breached its warranty in the
1986 distribution agreement that the movie "Return From The
River Kwai" would be delivered free of all claims against it.
Leisure Time cross-moved for summary judgment against
Tri-Star, but also (1) moved for summary judgment on its
claims for tortious interference of contract against Columbia
and Academy, and (2) moved for summary judgment on Academy's
trademark infringement claim. Columbia moved pursuant to
Federal Rule of Civil Procedure 11 ("Rule 11") for the
imposition of sanctions on Leisure Time for Leisure Time's
motion for summary judgment on its claim against Columbia for
tortious interference of contract. Academy also moved pursuant
to Rule 11 for the imposition of sanctions on Leisure Time for
both Leisure Time's motion for summary judgment on its claim
against Academy for tortious interference of contract and
Time's motion for summary judgment on Academy's claim for
trademark infringement. After this Court held a hearing on the
Rule 11 motions, the parties were able to settle the issue of
A party moving for summary judgment must establish "that
there is no genuine issue as to any material fact" and that it
"is entitled to judgment as a matter of law." Fed.R.Civ.P.
56(c). The moving party has the initial burden of establishing
the absence of a genuine issue of material fact. Adickes v.
S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26
L.Ed.2d 142 (1970). The non-moving party then has the burden of
coming forward with specific facts showing that there is a
genuine issue for trial. Fed.R.Civ.P. 56(e). In meeting this
burden, the non-moving party may not rely on speculation and
conjecture as to the true nature of the facts. Knight v. U.S.
Fire Insurance Co., 804 F.2d 9, 12 (2d Cir. 1986), cert.
denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). To
avoid summary judgment, there must be enough ...