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BANGKOK CRAFTS CORPORATION v. VATICANO

July 6, 2005.

BANGKOK CRAFTS CORPORATION, Plaintiff/Counterclaim Defendant,
v.
CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant. CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant, v. TREASURES OF ST. PETER'S IN THE VATICAN LTD., et al., Additional Counterclaim Defendants.



The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

Defendant/Counterclaimant Capitolo di San Pietro in Vaticano ("Capitolo") has moved under Rule 56, Fed.R.Civ.P., for summary judgment on certain of its counterclaims asserted against counterclaim defendants New Renaissance Art, Inc. ("NewRen"), E-21 Global, Inc. ("E-21"), Maxx International, Inc. ("Maxx"), and Craig Franco ("Franco") (collectively, the "Sublicensees").

As set forth below, the motion is granted. Capitolo is entitled to a judgment (1) declaring TSV's sublicense with NewRen terminated and/or expired by its own terms as of February 7, 2001 (Count Two of the Answer and Counterclaims) and (2) finding NewRen liable for false advertising in violation of Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)) (Count Five of the Answer and Counterclaims).

  Prior Proceedings

  Bangkok Crafts Corporation ("BCC") initiated this action against Capitolo in the Supreme Court of the State of New York, County of New York, and it was removed by Capitolo to this Court on January 2, 2003.

  Capitolo moved for partial summary judgment against BCC which was granted by opinion and order of June 23, 2004 declaring a purported August 2000 renewal agreement void and the license between Capitolo and BCC terminated as of February 7, 2001. See Bangkok Crafts Corp. v. Capitolo di San Pietro in Vaticano, No. 03 Civ. 0015 (RWS), 2004 WL 1406076 (S.D.N.Y. June 23, 2004) (the "June 23 Opinion").

  Third-party defendants Gerald P. Colapinto ("Colapinto") and Second Renaissance, LLC ("SRLLC") moved to dismiss the fraud, unfair competition, and unjust enrichment claims of third-party plaintiffs E-21, Franco, NewRen and Maxx, which motion was granted in part by the order and opinion of August 18, 2004. See Bangkok Crafts Corp. v. Capitolo Di San Pietro in Vaticano, 331 F. Supp. 2d 247 (S.D.N.Y. 2004) (the "August 18 Opinion").

  Capitolo also moved to dismiss Count Six of the counterclaims/third party complaint (the "Counterclaim") asserted by additional counterclaim defendants/third party plaintiffs E-21, Franco, NewRen, and Maxx, as amended by third party plaintiffs' first amendment to Count Six of the counterclaim (the "Amendment"). This motion was granted by the order and opinion of September 7, 2004. See Bangkok Crafts Corp. v. Capitolo di San Pietro in Vaticano, No. 03 Civ. 0015 (RWS), 2004 U.S. Dist. LEXIS 25235 (S.D.N.Y. Sep. 7, 2004) (the "September 7 Opinion"). Familiarity with the June 23, August 18 and September 7 Opinions is assumed, and those opinions describe the underlying dispute between Capitolo, BCC and its sub-licensees.

  On February 8, 2005, the parties resolved the present motion with respect to E-21, Franco, and Maxx by way of a stipulation endorsed by the Court. This motion, which was opposed only by NewRen, was heard and marked fully submitted on February 9, 2005.

  The Facts

  The facts are set forth in Capitolo's Local Civil Rule 56.1 statement and are not controverted by NewRen except as noted below.

  On or about May 8, 1996, representatives for BCC and Capitolo executed a license agreement under which Capitolo granted to BCC an exclusive right and license, effective as of February 8, 1996, to manufacture and sell reproductions of Capitolo's works of art (the "Reproductions"). (See Declaration of David Dunn dated January 24, 2005 ("Dunn Decl."), at Ex. A) (the "1996 License"). The territory of the 1996 license was defined as the continents of North America, South America, Australia and Asia. The 1996 License permitted BCC to enter into sublicenses with unaffiliated parties, provided that any sublicense did not conflict with the terms or conditions of the license, and obligated BCC to pay royalties to Capitolo equal to five percent of the fees BCC received from its sublicensees.

  BCC conducted its licensing activities under the 1996 License through its affiliate Treasures Of St. Peter's In The Vatican, Ltd. ("TSV"), a legal entity owned by John Loata ("Loata"), to which BCC is purported to have assigned certain rights under the 1996 License. The 1996 License terminated on February 7, 2001 as determined by the June 23 Opinion. Bangkok Crafts Corp., 2004 WL 1406076, at *6.

  BCC had contended that on August 28, 2000 it obtained Capitolo's agreement to a new, vastly expanded license agreement with a term renewable at BCC's election for up to 45 years, notwithstanding Capitolo's position that there would be no renewal and expansion of the 1996 License, and prompt repudiation of the agreement upon first learning of its existence. (See Dunn Decl. Ex. A) (the "2000 License"). The 2000 ...


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