Selchow & Righter Co. v. Goldex Corp., 84-8264-Civ-Paine.

• Decision Date: 20 February 1985
• Docket Number: No. 84-8264-Civ-Paine.,84-8264-Civ-Paine.
• Citation: 612 F. Supp. 19
• Parties: SELCHOW & RIGHTER COMPANY, Plaintiff, v. GOLDEX CORPORATION, John A. Ishmael, and 800 Marketing, Inc., Defendants. GOLDEX CORPORATION, Counter-plaintiff, v. SELCHOW & RIGHTER, COMPANY, Horn Abbot, Ltd., Walter D. Ames, Warson, Cole, Grindle & Watson and John Does 1-50, Defendants.
• Court: U.S. District Court — Southern District of Florida

612 F. Supp. 19

SELCHOW & RIGHTER COMPANY, Plaintiff, v. GOLDEX CORPORATION, John A. Ishmael, and 800 Marketing, Inc., Defendants.

GOLDEX CORPORATION, Counter-plaintiff, v. SELCHOW & RIGHTER, COMPANY, Horn Abbot, Ltd., Walter D. Ames, Warson, Cole, Grindle & Watson and John Does 1-50, Defendants.

No. 84-8264-Civ-Paine.

United States District Court, S.D. Florida.

February 20, 1985.

COPYRIGHT MATERIAL OMITTED

Walter Ames, Kathy Klock, Miami, Fla., for plaintiff.

Charles Wender, Boca Raton, Fla., Robert Stone, Edward Joffe, for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW AND ORDER

PAINE, District Judge.

This cause is before the Court for consideration of the plaintiff, Selchow & Righter Company's Motion for Summary Judgment, or alternatively, for a Preliminary Injunction (DE # 20). A hearing on this motion was held on October 26, 1984. After reviewing the record in this cause, the various submissions of the parties and considering argument of counsel, this Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

The plaintiff, Selchow & Righter Company ("S & R") is a New York Corporation which manufactures family games. Horn Abbot, Ltd. ("Horn Abbot"), a Canadian corporation, is the originator of the Trivial Pursuit-brand games which have achieved amazing popularity in the United States and Canada. In conjunction with its plan to sell and distribute these games in the United States, Horn Abbot obtained and is the legal owner of the following trademarks, design patents, and copyrights covering Trivial Pursuit-brand games:¹

1. "Trivial Pursuit" — U.S. Registered Trademark No. 1,236,540.

2. Game Board Design — U.S. Design Patent No. 270,741.

3. Game Board — U.S. Copyright Registration No. U.A. 95-532.

4. Rules and Cards — U.S. Copyright Registration No. TX 846-925.

On November 19, 1982, Horn Abbot executed an exclusive license agreement whereby Horn Abbot granted the exclusive right to manufacture, use and sell Trivial Pursuit-brand games in the United States, its territories and possessions to S & R. This agreement also provides that these rights are exclusive even as to Horn Abbot.²

Trivial Pursuit-brand games (Genus Edition) manufactured by S & R in the United States consist of a playing board, rules and card sets, plastic playing pieces, a die and an advertising brochure. Additional card sets printed in the United States, for example the Silver Screen and Baby Boomer editions, contain only the rules, the card sets, and the advertising brochure. Games manufactured in Canada are identical to those manufactured in the United States with some exceptions: (1) The S & R wheel logo does not appear on the boxes of games manufactured in Canada, except those manufactured by Chieftain Products, discussed infra at p. 22; (2) complete game sets (i.e. complete with playing board, card sets, playing pieces, etc.) are manufactured in Canada for several editions (e.g. Genus edition, Baby Boomer edition, Silver Screen, etc.) whereas only one edition (Genus edition) is manufactured in the United States as a complete set. All other editions manufactured for the United States market (e.g. Baby Boomer edition) are available only as additional card sets; (3) several questions and/or answers in the Canadian version were deemed by S & R to be offensive and unsuitable for family participation. Accordingly, games manufactured in the United States contain some different subject matter, and/or different words or phrases; (4) games manufactured in Canada do not contain a S & R advertising brochure.

S & R maintains a manufacturing plant in Holbrook, L.I., N.Y. In addition to manufacturing games there, S & R hires "printing brokers", who act as agents of S & R, to manufacture the games as well. One of these printing brokers hired by S & R is Cornacchia Press, Inc. ("Cornacchia"). When S & R first began manufacturing Trivial Pursuit games in November, 1982, Cornacchia was hired to print and collate the card sets for S & R. In turn, Cornacchia subcontracted with Banta Company in Menasha, Wisconsin to do the actual printing and collating of the cards Cornacchia deposition, DE # 75; pp. 13-18. The finished card sets were delivered to S & R's manufacturing plant in Holbrook, Long Island.

Sometime in 1983, Cornacchia began manufacturing and assembling complete game sets for S & R (the actual production of these games was done by Banta Company; Cornacchia supervised the production) Cornacchia deposition, DE # 75; pp. 23-25. In order to meet increased demand for the game, Cornacchia also subcontracted with Chieftain Products, a Canadian printing broker, and Western Publishing Co. of Wisconsin to manufacture complete game sets for S & R. Cornacchia deposition, DE # 75; pp. 26-27 and p. 30. Apparently, Chieftain Products was also the manufacturer utilized by Horn Abbot to produce the Canadian games Cornacchia deposition, DE # 75, p. 31. The method utilized for payment consisted of Chieftain billing Cornacchia per game. Cornacchia would pay Chieftain. Thereafter, Cornacchia billed S & R. Cornacchia deposition, p. 43. The games manufactured by Chieftain for Cornacchia comprise 15% of all the games manufactured for S & R. In other words, 15% of all Trivial Pursuit games sold by S & R in the United States and its territories are manufactured in Canada.

The defendants Goldex Corporation ("Goldex"), John Ishmael ("Ishmael") and 800 Marketing, Inc. are Florida residents. Ishmael is an officer of both corporations. The stock of Goldex is owned by a family trust; Ishmael's family members are the beneficiaries of the trust and Ishmael is the trustee. Each company operates what is essentially a "mail order" business. That is, they offer goods for sale through magazine and newspaper advertisements, obtain goods from different sources, and mail or ship the goods per customer order.

Due to the enormous popularity of the game "Trivial Pursuit", S & R has had difficulty in supplying retail outlets in the United States to meet customer demand. Seizing on this short supply, Goldex (acting through Ishmael) contacted a representative of S & R to inquire about obtaining a large supply of games to distribute through his mail order businesses. S & R referred him to a Miami "jobber". Further inquiry elicited the information that this "jobber" could not supply him with the quantity desired. Ishmael also made inquiries in Canada, directed to Horn Abbot and Chieftain. Both companies refused to supply him with any games and informed Ishmael of the exclusive license agreement. Ishmael then made arrangements with a Canadian corporation, Goldex of Canada, to buy the Canadian versions of Trivial Pursuit-brand games. Evidence submitted by Ishmael (Def. Ex. 1) shows that he checked with U.S. Customs before importing any games into the United States; U.S. Customs informed him that the Trivial Pursuit trademark had not been registered with U.S. Customs by Horn Abbot or anyone else.

Ishmael states that he sells approximately .001% of all Trivial Pursuit games, most of which are Baby Boomer editions. He admits that most of "his" games are shipped from Canada and, occasionally, he buys games from local retailers/wholesalers. His major medium for advertising is USA Today. Exhibits of advertisements submitted by both parties (Def.Ex. # 2; Pl.Ex. # 2) show that, in addition to the Genus and Baby Boomer editions, the defendants offer such games as "Sexual Trivia", "Junior Trivia" and "Bible Trivia", all of which are under the heading "Trivial Pursuit". The ads also show "Goldex-800" as the offeror. Ishmael testified that he offers a "100% money-back guarantee", however, no mention of guarantee is contained in the ads for Trivial Pursuit games.

Mr. Selchow, president of S & R, testified that the games imported from Canada are causing his company to lose advertising clout (since they do not contain a S & R advertising brochure), and generate dissatisfaction among S & R distributors (who cannot import the game from Canada and who are in consistently short supply) as well as S & R customers because of the sale of "Sexual Trivia". S & R concludes that, as a manufacturer of family type games, its reputation is injured by the sale of "Sexual Trivia".

CONCLUSIONS OF LAW

Fed.R.Civ.Pr. Rule 56(c) provides that on motion for summary judgment, the moving party must demonstrate that there exists no genuine issue of material fact and that he is entitled to judgment as a matter of law. Once the moving party has made this showing, the burden shifts to the opposing party to come forward with significant probative evidence demonstrating a triable issue of fact. American Viking Contractors, Inc. v. Scribner Equipment Co., 745 F.2d 1365 (11th Cir.1984).

There being no genuine issue or dispute between the parties as to the foregoing findings of fact or, no proof to the contrary being offered or elicited, the Court's first inquiry must be whether those uncontroverted facts establish a claim entitling the plaintiff to judgment as a matter of law.

PLAINTIFF'S CASE

The plaintiff S & R is the assignee in the United States of registered U.S. trademarks, design patents and copyrights owned by Horn Abbot, Ltd. (See, this Court's order of August 27, 1984). These registrations are presumptively valid.³ The defendants admit that they are importing Trivial Pursuit-brand games from Canada and are selling them in the United States by mail order. The imported games are those manufactured and distributed by Horn Abbot in Canada. The plaintiff has not given the defendants permission to sell these Canadian games in the United States.

I. Statutory Trademark Infringement

"The primary and proper function of a trademark is to identify the origin or ownership of the article to which it is affixed" Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916). As such, 15 U.S.C. § 1114(1) (the Lanham Trademark Act § 32(1)) provides, in pertinent...