National Lampoon, Inc. v. American Broadcasting Cos., Inc.

• Citation: 376 F. Supp. 733
• Decision Date: 01 April 1974
• Docket Number: No. 74 Civ. 646.,74 Civ. 646.
• Parties: The NATIONAL LAMPOON, INC., Plaintiff, v. AMERICAN BROADCASTING COMPANIES, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

376 F. Supp. 733

The NATIONAL LAMPOON, INC., Plaintiff, v. AMERICAN BROADCASTING COMPANIES, INC., et al., Defendants.

No. 74 Civ. 646.

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

April 1, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Coudert Bros. by Gordon T. King, New York City, for defendants.

Botein, Hays, Sklar & Herzberg by Harry I. Rand, New York City, for plaintiff.

FINDINGS AND CONCLUSIONS

BRIEANT, District Judge.

Plaintiff filed its complaint in this action on February 7, 1974, seeking a permanent injunction against defendants' use of the word "Lampoon," alone or in combination with other words, (1) as a title for a "pilot" television program of humor and entertainment, presently scheduled to be telecast on April 5, 1974 by defendant American Broadcasting Companies, Inc. (hereinafter "ABC"), and also (2) to enjoin use of the word should ABC decide to furnish the program to its network affiliates as a series for the 1974-75 season, and thereafter.

Plaintiff asserts causes of action for threatened infringement of its trademark "National Lampoon" under 15 U. S.C. § 1114; for misrepresentation under 15 U.S.C. § 1125(a), and for unfair competition under New York State law.

This Court has subject matter jurisdiction of the federal claims, pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1338(a) and (b), and pendent jurisdiction of the State claim.

By notice dated February 7, 1974, plaintiff moved for a preliminary injunction pursuant to Rule 65, F.R.Civ.P. This Court advanced and consolidated the trial of the action on the merits with the hearing of the application, pursuant to Rule 65(a)(2), F.R.Civ.P. Trial commenced on March 4, 1974, was continued on March 5th and on March 7th and concluded on March 8th. Briefs and post-trial memoranda have been received and considered and the issues were fully submitted on March 25, 1974.

Plaintiff, a New York corporation, is a subsidiary of Twenty-First Century Communications, Inc. (hereinafter "Twenty-First Century"), also a New York corporation. Defendant ABC is a New York corporation; defendant George Schlatter Enterprises, Inc. (hereinafter "Enterprises") is a California corporation. Mr. George Schlatter (hereinafter "Schlatter") is a California resident and the principal of Enterprises.

Plaintiff's Activities

Since April 1970, National Lampoon, Inc. (hereinafter "National Lampoon") has published a magazine entitled "National Lampoon" (hereinafter "Lampoon"). A typical issue of the magazine is comprised of various kinds of materials, including photographs, cartoons, articles, regular columns, all intended to be humorous, and of a nature irreverent, disrespectful, and even offensive. The materials intend to satirize and ridicule various subjects, topics, issues, current events and related aspects of American life.

Generally, each issue of Lampoon is devoted to the incongruities of a single theme, e. g., professional sports (November 1973 issue), strange beliefs (August 1973 issue), racial or religious prejudice (April 1973 issue), death (January 1973 issue), sexual frustration (February 1973 issue), strange sex (February 1974 issue).

The United States Patent Office registered "National Lampoon" as a trademark for magazines on February 2, 1971, Registration No. 907,211.

A magazine known as "Harvard Lampoon", which over the years has also referred to itself simply as "Lampoon", as does plaintiff, was founded in 1876 by undergraduates at Harvard College. It began as a simple magazine of wit and humor of that age, and in recent times has engaged in issuing parodies of other nationally known magazines such as Time, Cosmopolitan, Life, Playboy and Esquire.

The persons who founded National Lampoon were graduates of Harvard College who had worked together as staff members of the Harvard Lampoon. Unwilling to leave their childhood days behind, they came to New York as a group, started a magazine, and made good. They in effect took the Harvard Lampoon public.

On October 8, 1969, plaintiff entered into an agreement with Harvard Lampoon, Inc., which, with minor modifications, remains in effect. National Lampoon agreed thereby to pay royalties of 2% of the net sales price of the magazine to Harvard Lampoon. The Harvard group agreed, subject to certain terms and conditions, that plaintiff would have "the right to use the name and trademark (if any) of `Lampoon' as the name of and tradename and trademark for and in connection with any magazine or other periodical which it may hereafter publish." Certain restrictions were placed upon plaintiff's activities, which also was authorized to publish books and pamphlets using the name.

Plaintiff agreed that it would not "harm, misuse or bring into disrepute the name `Lampoon'," and agreed not to include any editorial or advertising materials objectionable to the Harvard Lampoon, because "the nature of the material included, or of the goods or services advertised thereby, would or would be likely to constitute a criminal offense . . . expose plaintiff to any action or judicial or governmental proceeding . . . or would cause a reasonable parent to make the particular issue inaccessible to a minor; or . . . discourage a reasonable businessman . . . from association with any advertiser. . . ."

Defendants claim that despite Harvard Lampoon's reservation of quality control over National Lampoon's publications, the agreement is a "naked license" and confers no rights, because Harvard Lampoon has in fact not supervised National Lampoon's publications.

A formal agreement is not a necessity, nor is its mere existence sufficient.

"The critical question . . . is whether the plaintiff sufficiently policed and inspected its licensees' operations to guarantee the quality of the products they sold under its trademarks to the public." Dawn Donut Company v. Hart's Food Stores, Inc., 267 F.2d 358, 367 (2d Cir. 1959).

I find that the steps taken by the parties to implement Harvard Lampoon's reserved rights and powers under the agreement were sufficient to assure that the quality of plaintiff's product would be satisfactory to Harvard Lampoon.

The Harvard Lampoon was to be furnished all editorial and advertising content in advance of printing to permit the Harvard group to state its objections within 48 hours following receipt. The mechanics of these provisions appear to have been modified by mutual assent, and the Harvard Lampoon, Inc. now exercises its reserved powers by inspection of each issue after printing, but five days prior to distribution. Because plaintiff's present editor, and most of the creative personnel are graduates of the Harvard Lampoon, the reserved supervision of quality standards by the Harvard Lampoon has not created a practical problem; only once was criticism of a particular issue proffered by Harvard, and that criticism was withdrawn after discussion.

The nature and extent of the rights conferred by the Harvard Lampoon upon plaintiffs, and the modification of the agreement of October 8, 1969 by the practical construction of the parties, is not such as to cause Harvard Lampoon to forfeit such common law trademark rights as it may have in the word Lampoon, as would be the case in the event of issuance of an unqualified or general license.

I do not find that the 1969 agreement, as drafted or as administered, constitutes a naked license, and conclude that Harvard Lampoon has taken affirmative action to maintain quality and prevent dilution of the mark, and to the extent that it, and its predecessors had a common-law right in the name almost a century old, this right has not been lost. Pike v. Ruby Foo's Den, 98 U.S.App.D.C. 126, 232 F.2d 683 (1956).

To the extent that Harvard Lampoon has a vested right in the mark by prior usage, it has consented to and approved maintenance of this litigation by plaintiff to protect such rights, as well as plaintiff's own rights.

The Harvard Lampoon and plaintiff, in referring to themselves internally, and even in advertising their various publications, occasionally use the word "Lampoon" without use of the word "National", or "Harvard", as applicable. In practically all circumstances, however, the word is used at least once in any particular situation coupled with the modifying description "National" or "Harvard" as the case may be.

For many years, plaintiff and its parent company have worked in close cooperation with the Harvard Lampoon, assisting it in preparation and national distribution of its parodies of national magazines previously mentioned. Upon superficial examination, these parody issues appear to be genuine, but on closer inspection it is apparent that they are works of humor and satire created by the Harvard Lampoon. One of these parody issues, Cosmopolitan, was co-published by Harvard Lampoon and Twenty-First Century, and distributed by Twenty-First Century. Plaintiff assisted in production aspects of the remaining special parody issues of Harvard Lampoon. It was out of this relationship that the idea for National Lampoon magazine grew. For many purposes, plaintiff may be regarded as an offshoot or affiliate of the Harvard Lampoon, united in interest with it insofar as concerns the use of the mark.

Plaintiff's magazine is distributed through Independent News Company, throughout the United States and Canada by 70,000 news dealers (Tr. p. 149), and is also sold by mail subscription. Circulation of the Lampoon rose from approximately 167,000 copies per issue sold in 1970 to more than 700,000 in 1973 (Tr. p. 39). Sales for 1974 are estimated at 1,000,000 copies of each issue (Exhibit 7). Newsstand sales of the magazine from 1970 to 1973 increased by 471% (Tr. p. 154; Exhibit 16). Subscription sales amount to about 10% of all sales. Lampoon is second in terms of rate of growth among nationally circulated magazines in the United States (Tr. p. 154). Only "OUI", a voyeurists' publication, has grown faster.

In common with other nationally known...