Gordon & Breach Science Pub. v. AM. INST. OF PHYS.

• Decision Date: 02 November 1995
• Docket Number: No. 93 Civ. 6656 (LBS).,93 Civ. 6656 (LBS).
• Citation: 905 F. Supp. 169
• 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

905 F. Supp. 169

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.

November 2, 1995.

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

Covington & Burling, Washington, D.C., for Defendants (Richard A. Meserve and Philipp U. Tamussino, of counsel).

OPINION

SAND, District Judge.

This action, part of an ongoing dispute between publishers of scientific journals, explores the reach of the Lanham Act's false-advertising provision, Section 43(a), 15 U.S.C. § 1125(a) (amended 1992), specifically its application to a publisher's dissemination of a comparative survey of scientific journals, which, through the employment of an allegedly misleading rating system, rates the publisher's own journals as superior. In an earlier decision in this case, Gordon and Breach Science Publishers S.A. v. American Institute of Physics, 859 F.Supp. 1521 (S.D.N.Y. 1994), this Court found that the actual publishing of the survey, in two of the non-profit publisher's scientific journals, did not come within the Lanham Act, as the articles encompassing the survey did not constitute "commercial advertising or promotion" pursuant to Section 43(a).

Plaintiffs Gordon and Breach Science Publishers S.A., STBS, Ltd., and Harwood Academic Publishers GMBH (collectively, "G & B") are part of an international group of publishers that 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 that share a readership with some of the for-profit journals published by G & B.

G & B commenced 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 ("Barschall articles" or "Barschall surveys"). The articles, by Henry Barschall, a physics professor and APS officer, ranked 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.

Defendants, pleased with the survey results, naturally sought to share the good news with interested society members — principally physicists — and both current and potential future subscribers — primarily librarians. The dissemination of Barschall's favorable findings took a variety of forms, namely: (1) the distribution of prepublication copies of the 1988 survey results to librarians at a conference in June 1988; (2) presentations of the survey results in November 1988, November 1991, and May 1992 by Harry Lustig, a senior officer of APS, to physicists and librarians; (3) specific references to the 1986 article at a conference of librarians in June 1987 and to the 1988 article at a similar symposium in June 1989; (4) numerous mailings throughout 1987, 1988, and 1989, some of which were merely planned but never effectuated, to members and librarians, in the United States and abroad; the mailings consisted of letters containing promotional references to, and often accompanied by reprints of, the most recent Barschall survey; and (5) advertisements for APS journals, describing the journals in such terms as "the most cost-effective."

Concluding that the articles themselves were more informational than purely commercial,¹ this Court, by decision dated August 15, 1994, granted defendants' motion to dismiss the claims arising from the publishing of the articles, but denied defendants' motion to dismiss all claims related to the subsequent uses of the survey results. Bifurcating discovery, the Court limited it in the first instance to those matters that related to the extent of defendants' contacts with librarians and other prospective purchasers of their journals (the "secondary uses"), in particular whether those contacts were extensive enough to constitute "commercial advertising or promotion" under the Lanham Act.

Having undertaken such discovery, plaintiffs now move for an order vacating the Court's earlier dismissal of part of the complaint, under Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 60(b)(2), and granting plaintiffs leave to amend the complaint, pursuant to Fed.R.Civ.P. 15. Plaintiffs move on the grounds that extensive discovery has yielded new evidence revealing close interaction between Barschall and several senior APS and AIP officers — information previously unknown to plaintiffs and to the Court. Defendants cross-move for summary judgment on two grounds: (1) that final judgments rendered in this matter in Germany and Switzerland preclude plaintiffs from relitigating their claims in this Court; and (2) that the secondary uses are not commercial speech. The Court heard oral argument on June 26, 1995. We now deny plaintiffs' motion and grant defendants' motion in part and deny such motion in part.

FACTUAL BACKGROUND

For a more complete and detailed exposition of the material facts in this action, we direct the reader to the Court's earlier decision, Gordon and Breach, 859 F.Supp. 1521, 1524-27. A brief rendition of the pertinent facts alleged in plaintiffs' complaint and plaintiffs' and defendants' respective memoranda and affidavits, as supported, where relevant, by the accompanying exhibits, follows.

Gordon and Breach Science Publishers S.A. and Harwood Academic Publishers GMBH are Swiss corporations; STBS, Ltd. is a corporation organized and existing pursuant to the laws of England. Together, plaintiffs ("G & B") publish approximately 200 journals in various scholarly disciplines. Subscribers include university and corporate libraries. AIP is a non-profit 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 plaintiffs' 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 claimed revenues from publishing of over $31 million. G & B contends that AIP and APS 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. Compl.Ex. A. Professor Barschall developed his survey of the prices of physics and philosophy journals on the basis of a cost-per-thousand characters figure. He reproduced partial results of the cost survey in tabular form, listing one or two physics publications of each of the major 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 with the lowest cost per thousand characters.

In 1988 Barschall conducted an expanded survey of journal costs, which he published in full in the Bulletin of the American Physical Society, Compl.Ex. C, and in abbreviated form in the July 1988 edition of the Physics Today magazine, as part of an article entitled "The Cost-Effectiveness of Physics Journals," Compl.Ex. B; Pls.' Ex. 37. In the new survey, Barschall not only prepared a cost-per-thousand characters analysis, but also conducted an analysis of the periodicals' comparative "impact." He derived the "impact" figure from the number of times the journals' 1984 and 1985 articles were cited in the 1986 Scientific Citation Index. Barschall combined the cost and impact factors to produce a "cost/impact ratio," which he described as "perhaps the best indicator of a journal's cost-effectiveness." Compl.Ex. B at 56; Pls.' Ex. 37 at 56.

Several patterns emerged from the 1988 survey, in particular one on which G & B focuses: All the publishers with low average costs per character and low cost/impact ratios were non-profit scientific societies, while those with high costs and ratios were commercial publishing houses. Id. at 57. Specifically, as detailed in the two tables summarizing the results, AIP or APS ranked either first — in all eight categories of Table 1 — or near the top, while G & B ranked last in all the areas where its journals were listed. Id. at 58-59. The article concluded with the recommendation:

There is no simple solution, but authors can help physics libraries by publishing their papers in journals that have a low cost per character. In general, articles in such journals also have a greater "impact," so that authors too will benefit by publishing in them.

Id. at 59.

G & B contends that the articles were fundamentally misleading, both in their essential premise and in their execution, and accordingly took several responsive steps.

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