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TIMES MIRROR MAGAZINES v. FIELD & STREAM LICENSES

June 30, 2000

TIMES MIRROR MAGAZINES, INC., PLAINTIFF,
V.
FIELD & STREAM LICENSES COMPANY AND JEROME V. LAVIN, DEFENDANTS.



The opinion of the court was delivered by: Chin, District Judge.

  OPINION

In this case, plaintiff Times Mirror Magazines, Inc. ("Times Mirror") asserts claims against defendants Field & Stream Licenses Company ("FSLC") and Jerome V. Lavin for breach of contract and trademark infringement arising out of the parties' longstanding concurrent uses of the "Field & Stream" trademark. Both parties, or their predecessors, have been using the Field & Stream mark for nearly a century. In the mid-1980s, the parties formalized their pre-existing concurrent use rights in a co-existence agreement, which was modified by two subsequent agreements in 1991 and 1994 (collectively, the "Co-Existence Agreements"). In addition, the parties entered into a licensing agreement that permitted FSLC to use cover art from Times Mirror's Field & Stream Magazine on apparel (the "1994 Joint Licensing Agreement License"). Finally, in 1995, the parties entered into a settlement agreement (the "Settlement Agreement" or the "1995 Agreement") that purportedly settled all of the outstanding disputes between them.

Plaintiff now contends that defendants have breached their obligations under the Co-Existence Agreements, the 1994 Joint Licensing Agreement License, and the Settlement Agreement. Times Mirror also claims that defendants have infringed upon its rights in the Field & Stream mark by expanding their use of the mark into product areas that the public associates with Times Mirror's Field & Stream Magazine. Plaintiff seeks rescission of all agreements between the parties, the delivery and destruction of all allegedly infringing FSLC products, and the cancellation of many of FSLC's trademark registrations and registration applications, as well as monetary and other injunctive relief.

Defendants move for summary judgment pursuant to Fed.R.Civ.P. 56, arguing that plaintiff has failed to raise any genuine issues of material fact as to (1) whether defendants breached their obligations under any of the parties' agreements and (2) whether defendants have infringed plaintiff's rights with respect to the use of the Field & Stream mark. For the reasons that follow, defendants' motion is granted. Judgment will be entered dismissing the complaint in all respects.

BACKGROUND

A. The Parties

Times Mirror or its predecessor-in-interest, CBS Magazines, a division of CBS, Inc. ("CBS"), has published Field & Stream Magazine (the "Magazine") continuously since 1895. The Magazine focuses on hunting, fishing, and other outdoor themes and products, and has a circulation of approximately 1.75 million monthly subscribers and 12.5 million monthly readers. In addition to featuring articles that discuss or compare the merits of products of interest to hunters, fisherman, sportsmen, and campers, the Magazine also carries numerous advertisements offering products and information of special interest to its readers, such as hunting, fishing, and camping gear, and contains classified advertisements for such products as well. Times Mirror has licensed the Field & Stream mark for use in connection with a variety of products and services related to hunting, fishing, and other outdoor themes, including a television series and radio program based on The Magazine. Times Mirror has registered the Field & Stream mark in the United States Patent and Trademark Office (the "USPTO") for certain goods and services.

FSLC was one of the businesses owned by the Gordon & Ferguson Merchandising Company, which was, in turn, a wholly-owned subsidiary of the Gordon & Ferguson Company (together, "Gordon & Ferguson" or "G & F"), a company that has been in business since 1871. Beginning as early as 1915, Gordon & Ferguson sold goods under the name "Field & Stream," including clothing and other items designed and marketed expressly for use in outdoor activities, such as hunting and fishing. Formed in 1984, FSLC is a family-owned business engaged in licensing the Field & Stream mark to third-parties who manufacture and sell apparel bearing the Field & Stream name. Lavin, a member of the family that owned Gordon & Ferguson, took over the management of the family-owned business in 1976 and is now FSLC's principal. FSLC owns numerous federal trademark registrations for the Field & Stream mark for various goods.

B. The Co-Existence Agreements

For many years, the parties' predecessors, CBS and Gordon & Ferguson, used the Field & Stream mark concurrently with virtually no conflict. G & F confined its use of the mark primarily to items of apparel, while CBS used the mark on the Magazine and hunting, fishing, and other outdoor products that were similar to those featured in the Magazine. According to Times Mirror, the parties' informal understanding with respect to their concurrent use of the mark began to break down shortly after Lavin assumed control of G & F. Times Mirror contends that in 1981, Lavin began expanding G & F's use of the Field & Stream mark beyond items of apparel — at first, steering clear of products that fell within CBS's claimed "domains" of hunting, fishing, and outdoor products, but eventually expanding G & F's licensing activities to a point that brought the parties in direct conflict with one another.

1. The 1984 Agreement

Accordingly, on April 1, 1984, the parties entered into a formal concurrent trademark use co-existence agreement (the "1984 Agreement"). The 1984 Agreement was intended to permit the parties to take mutually acceptable steps to enhance the distinctions between their respective uses of the Field & Stream mark and to set forth "the entire understanding of the parties hereto relating to the subject matter hereof." (Pl.Ex.5, ¶ 16).

The 1984 Agreement specified the products as to which each party would have the exclusive right to use or license the Field & Stream mark:

CBS hereby irrevocably acknowledges, during the term of this Agreement, the exclusive rights, worldwide, of G & F in and to the use of the trademark FIELD & STREAM on and in connection with items of apparel.*fn1 . . .
CBS agrees that it will not hereafter contest the use of FIELD & STREAM by G & F . . . and will not oppose or contest any trademark application therefor, so long as the provisions of this Agreement shall remain in effect.
G & F hereby irrevocably acknowledges, during the term of this Agreement, the exclusive rights, worldwide, of CBS in and to the use of the trademark FIELD & STREAM . . . for magazines and publications in general, and FIELD & STREAM magazine in particular, as well as on and in connection with such other products, related to hunting, fishing and associated outdoor activities, as have been offered and sold by CBS through its FIELD & STREAM magazine under such trademark in the past . . . including by way of example but not limitation figurines, prints, books, and binoculars, but excluding apparel products. It is understood that CBS shall have a period of 6 months from the date of execution of this Agreement in which to expand the list of products contained in the preceding sentence based upon its review of prior offerings through FIELD & STREAM magazine.
G & F agrees it will not hereafter contest the use of FIELD & STREAM by CBS as provided . . . above, and will not oppose or contest any trademark applications therefor, so long as the provisions of this Agreement shall remain in effect.

(Pl.Ex.5, ¶¶ 2(a), (b); 3(a), (b)). G & F also granted to CBS the "irrevocable, royalty-free right and license to use the trademark FIELD & STREAM on and in connection with the sale and distribution" of certain apparel items, namely socks, men's ties, and women's scarves. (Id., ¶ 4(a)). The license was exclusive with respect to socks, but non-exclusive with respect to men's ties and women's scarves. (Id. at ¶ 4(b)).

In addition, the 1984 Agreement identified certain products on which neither party would use the Field & Stream mark:

G & F recognizes and acknowledges the concern of CBS over the use of the FIELD & STREAM trademark on and in connection with the following merchandise which is extensively advertised in FIELD & STREAM magazine, namely, fishing rods, reels, lures, lines, guns, shells and bullets, tents, and sleeping bags. Accordingly, G & F shall cooperate with CBS to the end that such merchandise not be licensed or sold by G & F under the FIELD & STREAM trademark. . . . CBS agrees that it will not manufacture, sell, or license such items.

(Pl.Ex.5, ¶ 12).

In response to CBS's concern about the similarity between the parties' logos, G & F agreed to "make such changes in its logo and ampersand . . . as will make the two logos dissimilar in appearance." (Pl.Ex.5, ¶ 7(a)). The parties further agreed that "if and when either party plan[ned] to make changes in the form of its logo or ampersand in the future, such party [would] show the other party the proposed changes prior to their adoption so as to allow the other party to comment on the proposed new logo or ampersand; it being understood that the intention of the parties at all times [was] to make their respective logos dissimilar and sufficiently distinctive to avoid a likelihood of confusion." (Id., ¶ 7(b)).

In January of 1987, FSLC acquired from Gordon & Ferguson all of the trademarks then owned by G & F, including the Field & Stream marks and in particular, the right to use the Field & Stream mark on certain apparel items. Thereafter, in 1989, FSLC filed five federal intent-to-use ("ITU") trademark registration applications for various products and services, including hunting knives, hunting seats, and utility boxes; retail sporting goods and services; flashlights, clocks, watches, and desk accessories; sunglasses; and retail clothing store services. (Compl., ¶ 13).

2. The 1991 Agreement

Times Mirror objected to FSLC's ITU applications, and accordingly, the parties revisited their prior agreement and entered into a second agreement on October 17, 1991 (the "1991 Agreement"). The 1991 Agreement reconfirmed most of the 1984 Agreement, explicitly stating that the terms of the prior agreement were binding on FSLC and Times Mirror, as successors to G & F and CBS, respectively, with certain exceptions. (Pl.Ex.13, ¶ 1).

First, the 1991 Agreement deleted the 1984 provision that allowed Times Mirror to use the Field & Stream mark on and in connection with men's ties and women's scarves; Times Mirror retained the right to use the mark on socks. (Pl.Ex.13, ¶ 1(a)). Second, the provision in the 1984 Agreement that prohibited both parties from using the Field & Stream mark on fishing rods, reels, lures, lines, guns, shells and bullets, tents, and sleeping bags was amended to grant to Times Mirror the exclusive right to license such products, with the exception of tents and sleeping bags; these two products remained off-limits to both parties. (Id., ¶ 1(b)). Third, FSLC agreed to amend three of its five trademark registration applications and withdraw another one entirely,*fn2 in exchange for Times Mirror's withdrawal of its opposition to the three amended applications and its promise not to oppose the remaining unamended application. (Id., ¶¶ 4, 5).

On November 17, 1993, FSLC filed an additional 22 ITU trademark registration applications encompassing 165 separate products or product categories as to which FSLC claimed it intended to use the Field & Stream mark; some of the products listed in the applications related to hunting, fishing, and similar outdoor activities.

3. The 1994 Agreement

To resolve the dispute precipitated by FSLC's ITU applications, Times Mirror and FSLC entered into a third agreement on March 18, 1994 (the "1994 Agreement"). In the 1994 Agreement, Times Mirror and FSLC again confirmed the validity of the 1984 Agreement, as amended by the 1991 Agreement, and confirmed that they were to continue to be bound by its terms and conditions except as further amended by the 1994 Agreement. (Pl.Ex. 18 at 1).

Like the 1991 Agreement, the 1994 Agreement modified several provisions of the 1984 Agreement. The 1994 Agreement deleted Times Mirror's right to license the Field & Stream mark for use on socks (Pl.Ex.18, ¶ 1(a)), but reserved to Times Mirror the exclusive right to use the Field & Stream mark in connection with tents and sleeping bags, products that had previously been off-limits to both parties, in addition to those products on which it had previously been granted the exclusive right to use the Field & Stream mark in the 1991 Agreement — namely, fishing rods, reels, lures, lines, shells and bullets. (Id., ¶ 1(c)).

In addition, the 1994 Agreement expressly stated that:

[t]he acknowledgment of rights contained in paragraph 1., above [relating to the parties' respective rights to use the Field & Stream mark in connection with the enumerated products]: (a) shall be limited to the products specifically referred to in paragraph 1., above; (b) shall not be deemed to create or limit any rights to the trademark Field & Stream with respect to any other product, including, without limitation, other camping products; and (c) shall not be used in any dispute between Times Mirror and [FSLC] to expand or limit the rights of Times Mirror or [FSLC] to the trademark Field & Stream with respect to any other product, including other camping products.

(Id., ¶ 11).

4. The 1994 Joint Licensing Agreement

In early 1994, Lavin and FSLC sought to develop apparel items, such as sweatshirts, bearing the art from covers of the Magazine. Times Mirror apparently approved of the idea, and, accordingly, on July 1, 1994, the parties entered into a letter agreement by which Times Mirror agreed to license certain cover art to defendants for use on certain items of apparel. (See Pl.Ex. 19).

The 1994 Joint Licensing Agreement contained three parts. First, Times Mirror agreed to license certain Magazine cover art and logos to FSLC for use in connection with certain items of apparel to be sold by The Orvis Company, Inc. ("Orvis") in a single issue of its mail-order catalog. (Id. at 1-3). Second, Times Mirror agreed to allow FSLC or one of the companies it controlled to use certain Magazine covers on sweatshirts, knit shirts, and T-shirts for a five-year period, with no restriction on the retailers to whom such products could be sold. (Id. at 3-4). Third, Times Mirror granted to FSLC a five-year license for the use of certain Magazine covers on approved apparel products and related packaging by companies not controlled by FSLC; in other words, FSLC could license the right to use the Magazine's cover art on apparel to unaffiliated licensees and/or sublicensees. (Id. at 4-5).

In return, Times Mirror would receive royalty payments based on a percentage of net sales of the products sold by Orvis or by FSLC and its associated companies and an equal share of the licensing fees received by FSLC from the unaffiliated licensees or sublicensees for products bearing Magazine covers. In addition, Times Mirror had certain approval rights with respect to all products produced under the Joint Licensing Agreement.

5. The Settlement Agreement

Apparently still concerned about the trademark registration applications filed by defendants in November 1993, Times Mirror entered into yet another agreement with FSLC on June 6, 1995, the Settlement Agreement. (Pl.Ex.24). This agreement, entitled "Field & Stream ITU and Related Matters Settlement Agreement," was intended to resolve the dispute over FSLC's 21*fn3 pending ITU trademark applications and related matters and to produce "a permanent resolution of the conflicting uses of the FIELD & STREAM mark." (Compl., ¶ 17).

First, the Settlement Agreement allocated specific products listed in the ITU applications to either Times Mirror or FSLC. Paragraph 1 of the Settlement Agreement specified which party would receive the exclusive right to use the Field & Stream mark in connection with certain products listed in FSLC's pending ITU trademark registration applications. A particular product would either be reserved exclusively to Times Mirror, in which case FSLC agreed to delete that product from its application, or to FSLC, in which event the application for those products would remain unaltered. (See Pl.Ex. 24, ¶ 1). For example, trolling motors for watergoing craft were reserved exclusively to Times Mirror, and FSLC was required to delete that product from its ITU application; electric blankets were reserved exclusively to FSLC, and its corresponding application would remain unchanged.*fn4 (Id., ¶ 1(b), (d)).

If, on the other hand, the party sought to invoke the first use provision on the basis of licensing the Field & Stream mark to a third party, different notification requirements applied. If a party commenced negotiations with a third party to license a product covered by the first use provision, it was required to notify the other party of such negotiations, and for a 90-day period thereafter, the negotiating party would have the exclusive right to consummate a license with the third party.*fn5 Within 30 days of the execution of any license agreement, the licensing party was required to (1) provide the other party with a copy of the license agreement; and (2) certify to the other party that the licensee was (a) not an "affiliate"*fn6 of the licensing party, (b) had an operating business, and (c) was in the product business for the goods to be licensed or had the qualifications to be in such business. (Pl. Ex.24, ¶ 3(c)). Furthermore, upon written request of the nonlicensing party, the licensing party had to provide certain items, if available, to demonstrate the bona fide nature of the license agreement, including (1) product designs, samples or prototypes of the product licensed; and (2) samples of product sales material or advertising. (Id.).

Paragraph 3 further provided that each party would have alternating 12-month periods within which to attempt to license certain products — namely, row boats, speed boats, canoes, inflatable boats, boat trailers, canoe paddles, boat oars, boat ladders, maps, boat covers, and nontrolling motors for water going craft — to third parties. Times Mirror was to get the first twelve-month period, commencing with the date of execution of the agreement; if Times Mirror did not license any or all of the listed products within that time period, Licences would then have twelve months to attempt to license any unlicensed product, and the parties would continue to alternate every twelve months thereafter. (Id., ¶ 3(d)).

With respect to future applications filed with the USPTO, the parties agreed not to file any intent-to-use trademark registration applications in the future; all future trademark registration applications would be based on actual use or licensing of a particular product. (Pl.Ex.24, ¶ 4(b)). Further, each party agreed that it would not oppose a use application filed by the other party unless the application was "confusingly similar" to a product for which the opposing party had already filed a use application or obtained a trademark registration. In addition, each party agreed that it would use its "best efforts not to use, license, or apply for registration of the [Field & Stream mark] for a product that is confusingly similar to a product used, licensed, or registered by the other party" under the mark. (Id., ¶ 4(c)). Times Mirror also agreed to withdraw the oppositions it had already filed with the USPTO and further promised not to oppose any of the remaining ITU applications. (Id., ¶ 4(a)).

Paragraph 2 of the Settlement Agreement addressed how any future disputes between the parties arising out of the use or licensing of products covered in the agreement would be handled. Specifically, the agreement provided:

If a party hereto has a product specified in paragraph 1 above or other parts of this Agreement to be reserved exclusively to that party (the "Use Party"), the other party ("Other Party") and any person, firm or entity claiming or deriving rights from the Other Party shall not at any time file any opposition or cancellation with the U.S. Patent and Trademark Office ("PTO"), commence any civil proceeding for damages or injunctive relief, or make any other legal claim that directly or indirectly would hinder the Use Party's use of the [Field & Stream mark] for a product reserved exclusively to the Use Party or prevent the PTO from issuing a trademark registration to the use Party based upon an application for the [Field & Stream mark] for such products or from renewing any such trademark registration obtained by the Use Party for the [Field & Stream mark].

(Pl.Ex.24, ¶ 2(c)).

Finally, the Settlement Agreement contained a merger clause:

This Agreement constitutes the complete and exclusive statement of agreement between the parties hereto with respect to [FSLC's 21] ITU Applications and related subject matter hereof and supersedes all prior written and oral agreements or statements by and between the parties hereto. No representation, statement, condition or warranty not contained in this Agreement will be binding on the parties hereto or have any force or effect whatsoever.

(Pl.Ex.24, ¶ 10).

C. FSLC's Actions After the Settlement Agreement

In or around June 1995, FSLC gave notice to Times Mirror that it had entered into negotiations with a prospective licensee, National Buying Syndicate ("NBS"), to manufacture and/or sell 32 products under the Field & Stream mark, pursuant to the first use provision of the Settlement Agreement. (Pl.Mem. at 21).

Next, during a three-month period beginning in July 1995, and also pursuant to the first use provision, FSLC entered into a series of five licensing agreements with six companies — Bimini Bay Outfitters ("Bimini"), Folsom Corporation ("Folsom"), Casual Lifestyles ("Casual"), Adventurous Products ("Adventurous"), A Sporting Frame of Mind ("Sporting Mind"), and Waldoch Crafts ("Waldoch") — for more than 35 different products, including furniture, toys, vehicles, and a ...


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