The opinion of the court was delivered by: EUGENE H. NICKERSON
NICKERSON, District Judge:
Plaintiff, a New York corporation with offices in Brooklyn, New York, brought this action against defendant Kolinor Optical Enterprises & Consultants, S.R.L. (Kolinor), its licensee, for breach of a licensing agreement for a vision device, tortious interference with contractual relations, unfair competition, trademark infringement, and false designation of origin. Kolinor is an Italian company with headquarters in Florence, Italy, and the original complaint was based on diversity jurisdiction.
On May 3, 1990 the court enjoined Kolinor and anyone acting in concert with it from, among other things, developing a vision training device in competition with plaintiff's trainer in violation of confidentiality and non-competition clauses in a distribution agreement between Kolinor and plaintiff.
By Memorandum and Order dated June 26, 1991, familiarity with which is assumed, the court dismissed the RICO counts as to all defendants, with leave to replead. The court held that the amended complaint did not allege adequately an "enterprise."
On October 28, 1991 plaintiff filed a Second Amended Complaint (the Complaint) which now names 20 defendants in addition to Kolinor and which alleges the following facts about each of them.
Defendant George Jordan, a resident of Florence, Italy is the president of Kolinor.
Defendants Allessandro Fossetti and Marco Vespa, both residents of Italy, are principals and officers of Kolinor.
Defendant Christopher K. Kuehn, a New York lawyer, provided legal counsel to Kolinor initially while an associate at Cutner & Rathkopf and, later, as a private practitioner. He subsequently also provided legal counsel to defendants WRS Manufacture, Inc. and WRS Vision, Inc.
Defendant Filippo Pratesi is the president of defendant Chimitec S.A.S. and is believed to reside in Florence, Italy. He and Fossetti disassembled a Biofeedtrac vision trainer and developed the prototype of a competing trainer, known as the "Enlightener."
Defendant Reagan Dees, a resident of London, England, is the chairman of defendant, Essinar, Ltd. (Essinar), a foreign corporation with offices in London, England. Kolinor had an agreement with Essinar, granting it the exclusive right to distribute the Biofeedtrac trainer in the United Kingdom.
Defendants Ramon Codina (Codina) and Maria Codina, reside in Barcelona, Spain. They are, respectively, the president and an officer of Biotec, S.A. (Biotec), which, like Essinar, had an exclusive agreement with Kolinor to distribute the Biofeedtrac trainer in Spain and Portugal.
Defendant Worldwide Regulation Services, Ltd. (Worldwide), a foreign corporation formed in the United Kingdom, is in the business of assisting manufacturers of electrical and medical equipment in meeting equipment standards so that the equipment may be imported into various countries. Worldwide maintains offices in Tucson, Arizona, and at the time of the actions alleged in the Complaint, it maintained offices in Bohemia, New York.
Defendants WRS Manufacture, Inc. and WRS Vision, Inc., Delaware corporations with offices in Tucson, Arizona, were established, respectively, to manufacture and market the Enlightener vision trainer.
Defendant Worldwide Regulation Services, Inc. is a New York corporation which, at certain relevant times, had offices in New York.
Defendant Patrick G. McGarry is the managing director of Worldwide and the president of the other Worldwide and WRS companies. At the time of the actions alleged in the Complaint he apparently resided in New York State and in England. Defendant Wendy McGarry is or is believed to be an officer, director or shareholder of these companies.
Defendant Richard C. Lanzillotto, a New York resident, is an officer of Worldwide and Worldwide Regulation Services, Inc.
Defendant Dov Gottesman (Gottesman) resides in Geneva, Switzerland and intended to or did invest in the scheme to manufacture and market the Enlightener. His son, defendant Noam Gottesman, resides in London, England.
The parties have conducted substantial discovery since 1990 and have submitted affidavits, deposition testimony, and documentary evidence in support of the various motions. The papers show the following.
A. The Biofeedtrac-Kolinor-Essinar-Biotec distribution network
Plaintiff manufactures and holds patents in the United States and the United Kingdom for a vision training device which, using the principles of biofeedback, allows a patient to learn how to control a muscle in the eye and, thus, improve visual focusing ability. The vision trainer is reportedly effective in reducing myopia and in improving other vision impairments. Dr. Joseph N. Trachtman is both the inventor of the Biofeedtrac trainer and the president of the company.
On November 6, 1987 Dr. Trachtman and Jordan executed a distribution agreement whereby Kolinor would have the exclusive right, until December 31, 1989, to distribute the Biofeedtrac trainer in the European Economic Community, Israel, and North Africa.
In 1988 Kolinor entered into sub-distribution agreements with Essinar and Biotec, granting them exclusive rights to distribute Biofeedtrac trainers, respectively, in the United Kingdom and in Spain and Portugal.
Beginning in 1988 Dr. Trachtman, Jordan, and Gottesman, an investor, began to negotiate a deal whereby Jordan and Gottesman would acquire the worldwide distribution rights to the Biofeedtrac trainer. These negotiations broke down in January 1989 when Dr. Trachtman insisted that Gottesman pay $ 6 million up front to proceed with the venture.
B. The Jordan-Kuehn-McGarry-Gottesman scheme
By mid-1989 business relations between Dr. Trachtman and Jordan apparently began to deteriorate. Dr. Trachtman was evidently uncertain that he would renew the agreement with Kolinor that would expire at the end of the year.
Jordan, too, had doubts that Kolinor would continue to purchase vision trainers from plaintiff after the distribution agreement expired. On July 18, 1989 Kuehn wrote a letter at Jordan's request to Gottesman. In it he explained that Kolinor needed to find a new supplier for vision trainers because plaintiff was "incapable of supplying functioning units" or providing after-sales warranty service. He also indicated that he would ask an acquaintance, McGarry, for assistance in an effort to replace the Biofeedtrac trainers.
By December 3, 1989 the Jordan-Kuehn-Gottesman plan had taken a more definite form. On that date Kuehn sent a facsimile transmission to Jordan explaining that Kolinor would stretch out negotiations with plaintiff on a new distribution contract. The transmission said:
5. Ultimately, a new contract is not in Kolinor's interest, since any such contract will, by definition, contain non-competition and confidentiality clauses. . . .
6. The vision training device which is being developed will use some of the technology and method which was used in the Biofeedtrac AVT. At this time, it is not clear whether this technology and method is the property (through patents) of Biofeedtrac or simply the application of other, previously known technology. . . .
11. The reaction of the Trachtmans upon learning of the new vision training device can only be guessed at and the procedure and outcome of any litigation they might commence can only be the subject of speculation. . . .
a. In order to evaluate their options, the Trachtmans would first have to purchase one of the new vision training devices which will not be easy to do, since this is a very controlled market. . . .
Gottesman admits that he received this transmission (indeed, it was produced in discovery by Gottesman and not by the less-forthcoming Kuehn), but says that he does not remember reading it. He adds that at the time he received the communication, "the subject of vision trainers had stopped being of interest to me."
By February 1990 Gottesman's flickering interest in vision trainers was rekindled. He says he met with Jordan and McGarry in Florence and, in the following several months, ...