1990. See Albert Feb. 28 Affid. ¶ 3; Transcript of March 21
Hearing (hereinafter, "Tr. at ___") at 34-35. In further support
of the motion, Licensing noted "that these latest defaults are
merely a continuation of [plaintiff's] prior actions in disregard
of its obligations," Albert Feb. 28 Affid. ¶ 18, and set forth
the history of plaintiff's alleged violations under the licensing
agreements since Licensing had succeeded Murjani as licensor.
Thus, it contends, plaintiff has "continually violated
Licensing's rights to monitor the use of its Trademark under the
License Agreements" by flouting the licensing agreements'
approval requirements. Albert Feb. 28 Affid. ¶ 19; see also
Mem. at 4 ("From the outset of its relationship with Licensing,
[plaintiff] has flouted its obligations and displayed an outright
disregard for Licensing's rights as licensor and owner of the
As examples of plaintiff's chronic disregard of these
requirements, the motion lists 101 styles of garments for which
plaintiff never sought approval, but in its quarterly royalty
statements nevertheless reported to Licensing that it had sold.
Exh. 8, Albert Feb. 28 Affid. A breakdown of that list reveals
that more than two-thirds of those styles were reported sold in
1989, i.e. before, or within five months after, the
commencement of this litigation. The motion also sets forth
instances when plaintiff has submitted styles for approval, but
has done so either after the garments were shipped for resale or
so soon before that time that Licensing was deprived of any
meaningful opportunity to monitor and control the quality of the
garments. Albert Feb. 28 Affid. ¶¶ 21-24. An over-whelming
majority of those instances occurred in 1989. Exhs. 9-12, Albert
Feb. 28 Affid. Moreover, the motion asserts, plaintiff has
reported sales of items which Licensing expressly disapproved.
Albert Feb. 28 Affid. ¶ 25. Sixty five of the 97 instances of
such reported sales occurred in 1989. Exh. 12, Albert Feb. 28
On March 5, plaintiff filed its cross-motion for summary
judgment on the question of whether or not its licenses are
exclusive. On March 21, we heard oral argument on all motions,
and thereafter granted the parties' successive requests for leave
to submit additional materials, the last of which were received
in chambers on April 22.*fn1
The conduct prompting the demand for a preliminary injunction
falls into three categories: plaintiff's recent non-payment of
royalties; its failure timely to report sales for the fourth
quarter of 1990; and its failure otherwise to comply with the
licensing agreements, including its sale of unapproved garments.
With respect to the non-payment of royalties, it seems clear
that, although the motion is timely, the failure to pay money
— certainly by one who is solvent defendant — does not constitute
irreparable harm. See, e.g., Tucker Anthony Realty Corp. v.
Schlesinger (2d Cir. 1989) 888 F.2d 969, 975; Loveridge v.
Pendleton Woolen Mills, Inc. (2d Cir. 1986) 788 F.2d 914,
917-18; Jackson Dairy, Inc. v. H.P. Hood & Sons (2d Cir. 1979)
596 F.2d 70, 72.
With respect to the second category (as to which defendant's
motion also is timely), we cannot say — all other things being
equal — that plaintiff's failure promptly to make appropriate
reports would denigrate the Mark or otherwise cause irreparable
As to the third category, such misconduct — if proved — would
certainly constitute a basis for concluding that plaintiff had
misused the Mark and violated Licensing's rights therein.
However, as has already been observed, the vast preponderance of
this misconduct is claimed to have occurred in 1989, and the
balance — as Licensing itself asserts — merely constitutes a
continuation of the same. Accordingly, by
no stretch of the imagination can it be said that this category
supports Licensing's claim that it is in urgent need of speedy
action to protect its rights. To the contrary, its failure
promptly to move for enforcement of those rights indicates a
reduced need for such immediate, drastic relief. As the Court of
Appeals has noted, "[s]ignificant delay in applying for
injunctive relief . . . tends to neutralize any presumption that
infringement alone will cause irreparable harm pending trial, and
such delay alone may justify denial of a preliminary injunction."
Citibank, N.A. v. Citytrust (2d Cir. 1985) 756 F.2d 273, 276
(preliminary injunction vacated where movant filed motion more
than ten weeks after learning that the allegedly infringing
activity had commenced and more than nine months after receiving
notice that the alleged infringer intended so to act); see,
e.g., Gear, Inc. v. L.A. Gear California, Inc. (S.D.N.Y. 1986)
637 F. Supp. 1323, 1332 (three and one-half month delay in seeking
relief after one-year delay in filing suit).
Here, given the recitation of grievances in its termination
notices of August 9, 1989 and the allegations in its answer to
the complaint filed one week later, Licensing must concede that
it is now seeking emergency relief on the basis of a course of
conduct claimed to have begun over a year and a half ago.
Assuming arguendo that the period attributable to settlement
negotiations should be excluded from the calculation of delay —
which would seem doubtful where, as here, that period exceeded a
year — Licensing's delay from the time of the November 7, 1990
conference, at which the parties announced to us that the
possibility of settlement had been exhausted, until its March 1,
1991 motion for a preliminary injunction, vitiates any
presumption that it will suffer irreparable harm in the absence
of preliminary relief. Licensing had by then twice issued notices
of termination to plaintiff, had maintained for well over a year
that plaintiff was denigrating its Mark by, inter alia, failing
to comply with approval procedures, and had indicated more than a
year earlier that it intended to move for a preliminary
injunction to enjoin such conduct. It nevertheless saw fit to
delay an additional sixteen weeks before bringing the instant
motion on March 1. Having countenanced plaintiff's alleged
misconduct for that period of time, it stretches credulity for
Licensing now to assert that the prospect that plaintiff will
continue so to act while the litigation proceeds warrants the
emergency measure of a preliminary injunction.
In its submissions, Licensing fails to address the effect of
its delay. Instead, citing Church of Scientology Intn'l v.
Elmira Mission (2d Cir. 1986) 794 F.2d 38, it contends that it
is entitled to a finding of irreparable harm as a matter of law.
In that case, the defendants ran a religious mission that had
obtained a franchise from the Church of Scientology to propagate
the Church's teachings in the region of Elmira, New York. The
defendants, after a dispute with the Church, renounced the
franchise but continued to purport to propagate its faith. The
Church — without delaying or doing anything else that might
indicate that it had acquiesced in defendants' unauthorized
conduct — sought a preliminary injunction. The Court of Appeals
noted that the "unauthorized use of a mark by a former licensee
invariably threatens injury to the economic value of the goodwill
and reputation associated with a licensor's mark." Id. at 43.
In so stating, it had no occasion to consider whether such injury
must be presumed where, as here, the licensor had notice of the
uses complained of for over a year and a half before it requested
preliminary injunctive relief.
In sum, Licensing's application for a preliminary injunction
must fail because its delay vitiates any claim of irreparable
harm, "the single most important prerequisite for the issuance of
a preliminary injunction," Bell & Howell: Mamiya Co. v. Masel
Supply (2d Cir. 1983) 719 F.2d 42, 45. Indeed, on the facts
before us, it would appear that the status quo — which a
preliminary injunction is intended to preserve, see Guiness &
Sons v. Sterling Pub. Co. (2d Cir. 1984) 732 F.2d 1095, 1099 —
would best be maintained by the denial of such relief.
For the reasons stated, defendant G.V. Licensing, Inc.'s motion
for a preliminary injunction is denied. We decide no other