Gordon & Breach Science Publishers v. AIP

• Decision Date: 15 August 1994
• Docket Number: No. 93 Civ. 6656 (LBS).,93 Civ. 6656 (LBS).
• Citation: 859 F. Supp. 1521
• Parties: GORDON AND BREACH SCIENCE PUBLISHERS S.A., STBS, Ltd., and Harwood Academic Publishers GMBH, Plaintiffs, v. AMERICAN INSTITUTE OF PHYSICS and American Physical Society, Defendants.
• Court: U.S. District Court — Southern District of New York

859 F. Supp. 1521

GORDON AND BREACH SCIENCE PUBLISHERS S.A., STBS, Ltd., and Harwood Academic Publishers GMBH, Plaintiffs, v. AMERICAN INSTITUTE OF PHYSICS and American Physical Society, Defendants.

No. 93 Civ. 6656 (LBS).

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

August 15, 1994.

COPYRIGHT MATERIAL OMITTED

Orans, Elsen & Lupert (Sheldon H. Elsen, Leslie A. Lupert, Amelia A. Nickles, of counsel), New York City, for plaintiffs.

Covington & Burling (Richard A. Meserve, Bruce A. Baird, T. Jeremy Gunn, of counsel), Washington, DC, for defendants.

OPINION

SAND, District Judge.

This action, a dispute between publishers of scientific journals, raises an issue of first impression: whether a non-profit publisher may be sued for false advertising under the Lanham Act for publishing comparative surveys of scientific journals which, through the employment of a misleading rating system, rate its own publications as superior.

Plaintiffs Gordon and Breach Science Publishers S.A., STBS, Ltd., and Harwood Academic Publishers GMBH (collectively, "Gordon and Breach," or "G & B") are part of an international group of publishers which publish and distribute a wide range of technical, scientific, medical, commercial, and business journals and books. Defendants the American Institute of Physics ("AIP") and the American Physical Society ("APS") are non-profit physics societies; they publish physics journals which share a readership with some of the for-profit journals published by G & B.

G & B brought this action after articles comparing scientific journals by price and value appeared in 1986 and 1988 in two publications published by AIP and APS, Physics Today and the Bulletin of the American Physical Society. The articles, by Henry Barschall, a physics professor and APS officer, undertook to rank selected journals in terms of "cost-effectiveness" (based on the journals' price per thousand characters) and "impact" (based on the frequency with which each journal has been cited in the academic literature). As it happened, journals published by AIP and APS scored near the top in the articles' rankings, and several of G & B's journals were ranked at or near the bottom.

These articles, G & B alleges, constituted the start of a "continuous promotional campaign" waged by AIP and APS against them with the aid of Barschall's survey results. First, G & B alleges, AIP and APS distributed "preprints" of the 1988 survey results to librarians (the primary purchasers of scientific journals) at a conference in June 1988. Since that time, G & B alleges, defendants have continued to disseminate the results of Barschall's surveys to prospective purchasers through press releases, letters to the editor, "electronic mailings," and meetings with librarians ("secondary uses" of the articles). G & B states that its attempts to reach an accommodation with defendants have been fruitless, and that it has been forced to resort to the courts. After filing a series of legal actions in Europe claiming unfair competition, and failing to receive satisfaction in Swiss, German, and French courts, G & B brought this lawsuit in September 1993.

G & B contends that the articles are promotional materials cloaked in the deceptive guise of "neutral" academic inquiry, and thus constitute misleading advertising under the Lanham Act, 15 U.S.C. § 1125(a), and comparable provisions of New York General Business Law. Barschall's studies, G & B contends, far from being neutral, in fact constitute a "cynical promotional campaign" by AIP and APS to deceive librarians and other consumers of scientific journals into thinking that their journals have been "scientifically" proven to be of superior value. G & B contends that discovery is needed to uncover the "internal planning" behind defendants' "campaign" and to show the extent of Barschall's "involvement with defendants." It seeks damages and to enjoin defendants from making further promotional use of Barschall's studies.

Defendants move to dismiss on four grounds: (1) that the suit is time-barred by a three-year statute of limitations; (2) that the 1988 amendments to the Lanham Act, which extended the Act to encompass product disparagement claims, should not be applied retroactively to G & B's claims; (3) that the articles are not "false or misleading" within the meaning of the Lanham Act; and (4) that the articles do not constitute "commercial advertising or promotion" under the Act. We heard oral argument on December 16, 1993, granted a preliminary stay of discovery for the pendency of the motion, and ordered additional briefing on the language of G & B's proposed injunction. We now grant defendants' motion in part and deny in part.

FACTUAL BACKGROUND

The material facts alleged in G & B's Complaint, as supported, where relevant, by the accompanying exhibits, are as follows.

The G & B publishing group publishes approximately 200 journals in various scholarly disciplines. Subscribers include university and corporate libraries. AIP is a nonprofit New York corporation whose members consist of scientific societies in the field of physics and astronomy. APS, a member society of AIP, is a non-profit corporation organized under District of Columbia law with over 43,000 scientist members worldwide. Both AIP and APS publish scientific journals; AIP also assists in publishing the journals of its member societies, including APS. The primary purchasers of defendants' journals include many of the same university libraries that purchase G & B's publications.

AIP, alone and in conjunction with its member societies, publishes approximately 35 scientific journals, distributed to approximately 195,000 subscribers. These journals include the Bulletin of the American Physical Society (an APS publication), and Physics Today, a monthly magazine distributed free to the more than 100,000 members of AIP's member societies, giving it a readership that is the largest of any physics publication. In 1991, AIP (a non-profit) claimed revenues from publishing of over $31 million. AIP and APS, G & B contends, compete directly with G & B for subscribers as well as for editors and contributors of articles.

The first Barschall article, entitled "The Cost of Physics Journals," appeared in the December 1986 edition of Physics Today. Complaint Ex. A. The three-page article noted a recent steep increase in the price of physics journals (which in 1985 had risen to an average of $328 per year) and commented that "the high cost of physics journals is forcing librarians around the country to cut back on subscriptions." Barschall's survey of the prices of physics and philosophy journals drew on the methodology of a 1983 survey by the American Mathematical Society, which had calculated the cost per 1,000 characters of various mathematics journals. Barschall's survey, following the AMS's methodology, used an averaging formula to estimate the number of characters per page in each journal; this figure was then multiplied by the number of pages in that journal for the year, and the subscription price was divided by the result. The resulting figure was multiplied by 1,000 to produce the cost-per-1,000-characters figure.

Barschall reproduced partial results of the cost survey in tabular form, selecting "at random one or two journals published by each of the major physics publishers." The two journals published by G & B were ranked as the most expensive in their respective categories (physics and mathematics), while the four journals published by AIP and APS were at the top of the physics category, displaying the lowest cost per 1,000 characters. The article noted:

While one would expect journals published by not-for-profit publishers to be less expensive than those published by commercial publishers, the cost-per-character ratio of over 40 between the most expensive commercial and the least expensive not-for-profit publication is larger than one might have expected.

Compl.Ex.A.

The article concluded with a passage that G & B characterizes as a naked plug for AIP's journals:

Libraries benefit greatly from the low cost per printed word of journals published by AIP and its member societies. These journals also have larger circulations and wider readerships than commercial journals....

As chairman of our physics department's library advisory committee at the University of Wisconsin, Madison, I have the unpleasant task of advising our librarian on which journal subscriptions to cancel. Obviously the most important considerations are how many people use the journal and whether the journal is available elsewhere on the campus. But I also look at cost, and my opinion is influenced not only by the price of the journal but also by the price per printed word.

Id.

These conclusions, G & B contends in its Complaint, constitute a "two-fold" "advertising message": that the journals of AIP, APS, and other not-for-profit publishers are both less expensive and more scientifically important than those of for-profit publishers such as G & B. After learning of the survey, G & B wrote to Barschall, complaining that the survey contained errors regarding the G & B publications, and asking to be eliminated from future surveys on the grounds that the survey erroneously compared products which are "inherently incapable of comparison."

In 1988, Professor Barschall conducted an expanded survey of journal costs, extending his sample to include more than 200 physics journals. He published the results of his survey in two of defendants' journals — publishing a full discussion of his methodology and results in the Bulletin of the American Physical Society (Compl.Ex.C) and an abbreviated version in the magazine-format Physics Today (Compl.Ex.B). In the new survey, Barschall not only prepared a cost-per-thousand-character analysis, but also conducted an analysis of the periodicals' comparative "impact." A journal's "impact" was measured by the number of times its 1984 and 1985 articles...