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AMERICAN EXPRESS TRAVEL RELATED SERVS. CO. v. ACCU

April 5, 1994

AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., Plaintiff,
v.
ACCU-WEATHER, INC., Defendant. v. THE WEATHER CHANNEL, INC., Additional Defendant.


SWEET


The opinion of the court was delivered by: ROBERT W. SWEET

Sweet, D.J.

 American Express Travel Related Services Co., Inc. ("AMEX") and The Weather Channel, Inc. ("Weather Channel") have moved, pursuant to Rule 56, Fed. R. Civ. P. ("Rule 56"), for an order granting summary judgment on their request for a declaratory judgment that defendant Accu-Weather, Inc. ("Accu-Weather") does not own the mark 1-900-WEATHER, that an agreement between AMEX and Accu-weather (the "Agreement") was properly terminated, that AMEX validly assigned the mark and telephone number 1-900-932-8437 to Weather Channel, that the use of that mark and number by Weather Channel does not infringe any right of Accu-Weather, that any application by Accu-Weather to register that mark is void, and dismissing all claims and counterclaims by Accu-Weather against AMEX and Weather Channel in this action.

 Accu-Weather has moved, pursuant to Rule 56, for an order granting summary judgment in favor of Accu-Weather on all counts of Accu-Weather's Amended Complaint and awarding damages, holding that the mark 1-900-WEATHER and the underlying telephone number are the property of Accu-Weather and enjoining AMEX and Weather Channel from all further use of that mark and number, directing Weather Channel to transfer the underlying telephone number to Accu-Weather, holding that AMEX and Weather Channel have engaged in unfair competition against Accu-Weather and enjoining such unfair competition, holding that Weather Channel tortiously interfered with Accu-Weather's contract rights under the Agreement, and scheduling a hearing to determine that amount of any additional damages suffered by Accu-Weather.

 For the following reasons, AMEX's motion is granted in part and denied in part, and Accu-Weather's motion is denied.

 Parties

 Accu-Weather is a Pennsylvania corporation with offices located in State College, Pennsylvania. AMEX is a New York corporation with an office in New York City. Weather Channel is a Virginia corporation with offices located in Atlanta, Georgia.

 Prior Proceedings

 AMEX filed a complaint for a declaratory judgment in this Court on September 25, 1991. In February 1992, Accu-Weather filed an answer and counterclaims, naming Weather Channel as an additional defendant on the counterclaims. Accu-Weather also filed an action against AMEX and Weather Channel in the Court of Common Pleas in Centre County, Pennsylvania. *fn1" AMEX removed the Pennsylvania action to the United States District Court for the Middle District of Pennsylvania, and then moved to transfer it to the Southern District of New York. The District Court for the Middle District of Pennsylvania granted AMEX's motion, and the Pennsylvania action, 92 Civ. 705, is now pending in this court, where it has been consolidated with the instant action, 91 Civ. 6485.

 The Present motions were heard on December 21, 1993, and were considered fully submitted as of that date.

 Facts

 This dispute involves the ownership and operation of an audiotext information service *fn2" (the "Audiotext Service") associated with the mark 1-900-WEATHER. Sometime in 1988, AMEX and Accu-Weather began meetings related to the formation of the Audiotext Service, which meetings eventually resulted in the signing of the Agreement, dated February 28, 1989.

 In October 1988, AMEX contacted AT&T to request the telephone number 1-900-932-8437, which corresponds to 1-900-WEATHER. However, "900" numbers are assigned to various telephone carriers, such as AT&T, by a central clearinghouse. AMEX was unable to have the number 1-900-WEATHER assigned to it by AT&T until AT&T itself was assigned the block of numbers beginning with "932," which did not take place until June of 1989.

 The Audiotext Service, described in the Agreement, worked in the following way. A caller to 1-900-WEATHER would hear the introductory statement: "Welcome to 1-900-WEATHER brought to you by American Express." The caller would then be given the option of hearing weather information for a particular city by pressing the area code in which the city is located (for U.S. cities) or the first three letters of the city's name (for foreign cities). The caller would then hear current time and weather conditions for that city, plus "the Accu-Weather forecast" for the city. The caller could, during the same telephone call, also access travel information for different cities, such as visa requirements and currency restrictions.

 The caller was charged a set fee per minute for the call, which appeared on the caller's telephone bill. The service was available to the general public, not just to AMEX card members or purchasers of AMEX Travelers Cheques.

 The AMEX computers in Salt Lake City contained software that enabled the computer to answer incoming telephone calls with pre-recorded introductory remarks, to give initial instructions, and to respond to instructions from the customer entered on the customer's touch tone key pad by providing the appropriate pre-recorded response. The AMEX software also enabled the computer to convert into spoken words the coded weather information arriving from Accu-Weather's computer or travel information for different countries and cities supplied by AMEX. The call ended with the statement "thank you for calling 1-900-WEATHER, and remember to take along American Express Travelers Cheques when you travel."

 A "pilot" or test phase of the Audiotext Service was conducted in the Chicago area in March of 1989 using the mark WORLDWIDE WEATHER LINE. The Audiotext Service was launched on a national basis in August of 1989 once the 1-900-WEATHER telephone number had been obtained.

 Each month, American Express received a report from AT&T stating how many calls were placed to that number, giving the duration of the calls, the amount charged by AT&T to callers for those calls, and other information. With these statements, AT&T remitted to AMEX the amount charged to customers for these calls, less AT&T's own charges, taxes, and certain other deductions.

 Pursuant to the terms of the Agreement, AMEX paid Accu-Weather a monthly fee for providing weather information and forecasts. This monthly fee would increase above a minimum amount if call volume exceeded a specified level.

 AMEX employees operated its computers in Salt Lake City and administered the Audiotext Service from the headquarters of the American Express Travelers Cheque Group in New York City. AMEX addressed complaints from the public about the service, and selected, retained, and paid the professional announcer who made the recordings heard on the audiotext service.

 AMEX was responsible for advertising and promoting the Audiotext Service. Both AMEX and Accu-Weather were referenced in the advertising, although references to both of these entities did not appear on all advertising.

 AMEX was not pleased with the profitability of the audiotext service. In 1991, representatives of AMEX met with representatives of Weather Channel, which operates an audiotext weather service under the service mark THE WEATHER CHANNEL CONNECTION.

 Weather Channel expressed an interest in obtaining the rights to the telephone number 1-900-932-8437 and the mark 1-900-WEATHER, as well as certain assets of the service. In September of 1991, AMEX concluded an agreement with Weather Channel, and on the same date, sent Accu-Weather a Notice of Termination, purportedly in compliance with P 27 of the Agreement. AMEX notified AT&T to transfer the number 1-900-932-8437 to Weather Channel's service bureau, and at ...


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