Tri-Star Pictures, Inc. v. Unger, 88 Civ. 9129(DNE).

• Decision Date: 13 July 1998
• Docket Number: No. 88 Civ. 9129(DNE).,88 Civ. 9129(DNE).
• Citation: 14 F.Supp.2d 339
• Parties: TRI-STAR PICTURES, INC., Plaintiff, v. Kurt UNGER, Leisure Time Productions, B.V., Academy Pictures, A.G., and David N. Bottoms and Hon. Raya S. Dreben as Executors of the Estate of Samuel Spiegel, Defendants. LEISURE TIME PRODUCTIONS, B.V., Third-Party Plaintiff, v. COLUMBIA PICTURES INDUSTRIES, INC., Columbia Pictures Entertainment, Inc. and Horizon Pictures, G.B., Third-Party Defendants.
• Court: U.S. District Court — Southern District of New York

14 F.Supp.2d 339

TRI-STAR PICTURES, INC., Plaintiff, v. Kurt UNGER, Leisure Time Productions, B.V., Academy Pictures, A.G., and David N. Bottoms and Hon. Raya S. Dreben as Executors of the Estate of Samuel Spiegel, Defendants.

LEISURE TIME PRODUCTIONS, B.V., Third-Party Plaintiff, v. COLUMBIA PICTURES INDUSTRIES, INC., Columbia Pictures Entertainment, Inc. and Horizon Pictures, G.B., Third-Party Defendants.

No. 88 Civ. 9129(DNE).

United States District Court, S.D. New York.

July 13, 1998.

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Ira S. Sacks, Fried, Frank, Harris, Shriver & Jacobson, New York City, for Plaintiffs.

Jay Cohen, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, William J. Davis, New York City, Allan Zelnick, Richard Lehv, Weiss Dawid, Fross, Zelnick & Lehrman, P.C., New York City, for Defendants.

Jay Cohen, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, William J. Davis, for Third-party Defendants.

Ira S. Sacks, Fried, Frank, Harris, Shriver & Jacobson, for Third-Party Defendants.

OPINION & ORDER

EDELSTEIN, District Judge.

Plaintiffs Columbia Pictures Industries, Inc. ("Columbia") and Academy Pictures A.G. ("Academy") (collectively, "Plaintiffs") brought this action for trademark infringement, unfair competition, dilution and injury to business reputation pursuant to 15 U.S.C. § 1125, Section 360-l of the New York General Business Law, New York Law and the common law against Defendants Leisure Time Productions, B.V. ("Leisure Time") and Kurt Unger ("Unger") (collectively, "Defendants"), in an attempt to permanently enjoin Leisure Time and Unger from releasing, distributing or advertising in the United States, their produced, but unreleased, motion picture entitled "Return from the River Kwai" ("Return") with that title or with any other title containing the words "River Kwai" or any other confusingly similar titles. The case was tried as a bench trial from July 14-16, 1997. Subsequent to the trial, both parties submitted Proposed Findings of Fact and Conclusions of Law and Post Trial Memoranda.

Background

"Bridge on the River Kwai" ("Bridge") was produced in 1956 by Sam Spiegel through two corporations he controlled, Horizon-American Pictures, Inc. ("Horizon-American") and Horizon Pictures Ltd. ("Horizon G.B."). Stipulated Fact ("Stip.Fact") 5.2.1. On April 18, 1956, Albatros Trust ("Albatros"), the predecessor of Plaintiff Academy, entered into an agreement with Horizon-American in which Albatros obtained a 25% royalty interest in revenues generated by the distribution of Bridge in the Western Hemisphere, excluding the United States and Canada. Stip.Fact 5.2.2. An April 25, 1956 distribution agreement gave a predecessor to Columbia¹ the rights to distribute the film in the Western Hemisphere. Stip.Fact 5.2.3. In addition, pursuant to the April 25, 1956 distribution agreement, Horizon-American agreed to obtain the copyrights in Bridge in the Western Hemisphere from Horizon G.B. and assign them to Columbia, while Columbia agreed to hold said copyrights in trust for the joint benefit of Columbia and Horizon-American. Stip.Fact 5.2.4; 5.2.5. Columbia distributed Bridge in the United States, releasing it in 1957 to critical and public acclaim. Stip.Fact 5.3.3. It won several Academy awards, and has since been viewed by millions of people in the United States and abroad. Stip.Fact 5.3.4.

As per the April 25, 1956 agreement, Horizon Pictures, Inc. ("Horizon"), successor to Horizon-American, on January 5, 1959, assigned all right, title and interest of Bridge in the Western Hemisphere to Columbia subject to the already existing rights of Albatros created by the 1956 royalty agreement. Stip. 5.2.6. Subsequently, on February 5, 1959, Columbia entered into an agreement with Albatros to settle existing claims for overdue royalties. This agreement increased Albatros' royalty rates from 25% to 50% of the profits generated by Bridge, plus one half percent of the gross proceeds from the entire Western Hemisphere. Stip. 5.2.7. Albatros, for its part, agreed not to sue Columbia for claims relating to Bridge except for claims arising out of its rights under the agreement, including royalty payments. Stip.Fact 5.2.8.

On April 28, 1960, Albatros entered into an agreement with a predecessor to Academy whereby Albatros assigned its rights to Western Hemisphere profits and proceeds to the predecessor of Academy for $590,000. Stip.Fact 5.2.9. Thus, both Columbia and Academy own interests in Bridge. Indeed, Columbia still regularly remits to Academy payment representing Academy's share of proceeds resulting from the distribution of Bridge in the Western Hemisphere. Stip. Fact 5.2.12.

In early 1978, Defendant Unger became aware that Joan and Clay Blair, Jr. were writing a non-fiction book concerning some experiences of Allied prisoners of war held by the Japanese in the late stages of World War II. Stip.Fact 5.6.1. Specifically, the Blairs' book pertained to some of the Allied prisoners who were forced to build a Japanese railway through the jungles of Burma and Thailand, and were subsequently to be shipped to Japan to help alleviate a shortage of labor in Japan's mines and war production factories. Stip.Fact 5.6.2.

Unger considered the Blairs' book a possible sequel to Bridge. Stip.Fact 5.6.3. Indeed, when Unger first approached the Blairs' agent, he asked if Sam Spiegel, whom Unger considered the "natural" person to produce a motion picture based on the Blairs' book, was interested in the rights to their book. Stip.Fact 5.6.4. Upon learning that Mr. Spiegel was not interested in the rights to the Blairs' book, Unger and his company Screenlife Establishment ("Screenlife"), on April 20, 1978, secured an option to purchase the motion picture and television rights to the Blairs' book, then, tentatively named, "Return from the River Kwai." Stip.Fact 5.6.5. After completing the book, the Blairs, pursuant to an agreement dated July 24, 1978, assigned certain rights in the book to Screenlife. Stip.Fact 5.6.7. In a separate agreement dated the same day, Screenlife employed the Blairs to write a screenplay, based on their book, for a motion picture Screenlife planned to produce. Stip.Fact 5.6.7.

In discussions about the initial screenplay for the motion picture Return, Unger and the Blairs contemplated a "story link" between the motion picture Bridge and the screenplay for Return. Stip.Fact 5.6.9; Trial Transcript ("Tr.") at 122-23. In fact, in the Blairs' first draft of the story line for Return, there were several links to Bridge that were not in the Blairs' book. Tr. at 123-24. For instance, the draft included using "The Colonel Bogey March," the tune the prisoners whistled in Bridge, on three separate occasions. Tr. at 124-25. Additionally, the beginning of the initial draft refers to the final scene from Bridge in that it had the prisoners hearing an explosion and shouting "[t]hey blew up the bridge! The bridge and the train!." Tr. at 125.

At this time, Unger allegedly considered that Return would be a sequel to Bridge. Indeed, he intended to open Return with a film clip of the last few minutes from Bridge,² expecting that people would probably recognize the clip as being from Bridge. Tr. at 126-27.

In May 1978, after acquiring the option to purchase the motion picture and television rights to the Blairs' book, and pursuant to a set of Motion Picture Association of America, Inc. "MPAA" rules which requires its members to register the prospective titles of movies they plan to release, Leisure Time, using its trade name "The Film Pact," registered the title "Return from the River Kwai" with the Title Registration Bureau of the MPAA. Stip.Fact 5.7.1. Leisure Time's registration of the title Return was listed in the MPAA's daily Title Registration Report on May 9, 1978.³ Id.

Under the MPAA's rules, any member with a complaint of a registered title could file a protest within seven days of receiving notice of the registration. Stip.Fact 5.7.4. Columbia protested the registration of Return on the ground of harmful similarity to the title Bridge. Stip.Fact 5.7.5. However, the protest was not considered by the MPAA because it was received after the seven day time limit. Defendants allege that they spent over $500,000 in preproduction costs from 1978 to 1984, Tr. at 179-180, including approximately $10,000 advanced to them from Columbia. Stip.Fact 5.8.5.

In late 1983 and early 1984, Unger entered into negotiations with Columbia to distribute Return outside the United States and Canada. Stip.Fact 5.8.1. During the course of these negotiations, Columbia stated that before entering into an agreement with Leisure Time to distribute Return, Unger first needed to obtain permission or a waiver from the producer of Bridge to use the title Return. Defendants' Exhibit ("Defs.Ex.") 108. Unger, by counsel, responded that Horizon's consent of his title was not required, as the words "River Kwai" denoted an actual geographical area and thus were available for use by anyone as long as the rest of the title did not make the two titles confusingly similar. Defs.Ex. 112. On March 20, 1985, Columbia terminated its negotiations with Leisure Time for acquiring the foreign distributions rights to Return. Defs.Ex. 122.

On July 23, 1986, Tri-Star and Leisure Time entered into a distribution agreement whereby Leisure Time granted Tri-Star exclusive distribution rights for Return in the United States and Canada. Plaintiffs' Exhibit ("Pls.Ex.") 104; Stip.Fact 5.9.1. Pursuant to the distribution agreement, Leisure Time represented and warranted that it would provide Return for distribution free of any claims that "can or will impair or interfere with the rights of Tri-Star." Pls.Ex. 104; Stip.Fact 5.9.3. Additionally, the distribution agreement provided for the termination upon Leisure Time's breach of any warranty which materially affected Tri-Star's rights thereunder. Pls.Ex....