New York Racing Ass'n v. Perlmutter Publishing

• Decision Date: 09 April 1997
• Docket Number: No. 95-CV-994 (FJS).,95-CV-994 (FJS).
• Citation: 959 F.Supp. 578
• Parties: NEW YORK RACING ASSOCIATION, INC., Plaintiff, v. PERLMUTTER PUBLISHING, INC., d/b/a Classic Gallery of Sport; Leonard T. Perlmutter; and Jenness Cortez, Defendants.
• Court: U.S. District Court — Northern District of New York

Page 578

959 F.Supp. 578

NEW YORK RACING ASSOCIATION, INC., Plaintiff, v. PERLMUTTER PUBLISHING, INC., d/b/a Classic Gallery of Sport; Leonard T. Perlmutter; and Jenness Cortez, Defendants.

No. 95-CV-994 (FJS).

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

April 9, 1997.

Robin, Bleckler, Daley & Driscoll (Howard Barnaby, Albert Robin, of counsel), New York City, Rice & Justice (Bradley F. Rice, of counsel), Utica, for Plaintiff.

Schmeiser, Olsen & Watts (David M. Lenney, Albert L Schmeiser, of counsel), Albany, Whiteman, Osterman & Hanna (Paul C. Rapp,of counsel), Albany, for Defendants.

MEMORANDUM-DECISION AND ORDER

SCULLIN, District Judge.

Introduction

Presently before the Court is Plaintiff's motion for reconsideration pursuant to Rule 7. 1(g) of the Local Rules of Civil Procedure. Plaintiff asks the Court to reconsider two aspects of its July 19, 1996 Decision and Order in this matter.¹ First, Plaintiff asks the Court to reconsider its decision to declare that images of the Saratoga Race Course do not qualify for trade dress protection when used in connection with Plaintiff's souvenir merchandise.²

Second, Plaintiff seeks reconsideration of the Court's determination that the First Amendment bars some of Plaintiff's trademark infringement and unfair competition claims. Plaintiff moves in the alternative for certification of the Court's July 19, 1996 Decision and Order for immediate interlocutory appeal to the United States Court of Appeals for the Second Circuit, pursuant to 28 U.S.C. § 1292(b).

Also before the Court is a second motion for summary judgment and a renewed motion for attorney's fees by the Defendants.³ The Court will address these motions seriatim.

Discussion

I. Plaintiff's Motion for Reconsideration

Motions for reconsideration are committed to the sound discretion of the district court. Fulton Cogeneration Assocs. v. Niagara Mohawk Power Corp., No. 92-CV-1412 at *1, 1995 WL 293245 (N.D.N.Y. May 10, 1995) (citing McCarthy v. Manson, 714 F.2d 234, 237 (2d Cir.1983)). In general, the three grounds justifying reconsideration are: (1) an intervening change in controlling law, (2) the availability of new evidence, or (3) the need to correct clear error or prevent manifest injustice. Id. (citation omitted). "`The standard for granting a motion for reconsideration is strict in order to dissuade repetitive arguments on issues that have already been considered fully by the Court.'" Id. (quoting Ruiz v. Commissioner of Dep't of Transp., 687 F.Supp. 888, 890 (S.D.N.Y. 1988).

As an initial matter, Plaintiff does not cite to any change in controlling law or submit any new evidence to the Court. Instead, Plaintiff argues that the Court erred in granting the Defendants summary judgment on their fourth counterclaim and on their First Amendment affirmative defense.

A. Fourth Counterclaim

As stated, in its July 19, 1996 Decision and Order, this Court granted the Defendants' motion for summary judgment on their fourth counterclaim and declared that the images observable at the Saratoga Race Course do not qualify for trade dress protection when used in connection with souvenir merchandise such as t-shirts. In determining whether the images were entitled to trade dress protection, the Court first had to determine whether the images were "inherently distinctive" when reproduced on souvenir merchandise.

In determining whether the images were inherently distinctive, the Court applied the Second Circuit's reasoning in Knitwaves, Inc. v. Lollytogs Ltd., Inc., 71 F.3d 996, 1005 (2d Cir.1995) (involving sweater designs). In that case, the Second Circuit set forth a new test for determining whether product features are inherently distinctive, and thus capable of obtaining trade dress protection.⁴ In Knitwaves, the Court evaluated the inherent distinctiveness of the product features at issue using the sole criterion of whether the images were likely to serve primarily as an indicator of source rather than evaluating whether the features were generic, descriptive, suggestive, arbitrary or fanciful. Id. at 1008.

Plaintiff takes issue with the Court's decision to apply the Knitwaves test in this case. Specifically, Plaintiff argues that Knitwaves should be limited to its facts, and that this Court should have applied the reasoning in the Supreme Court's seminal trade dress decision Two Pesos Inc. v. Taco Cabana Inc., 505 U.S. 763, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (involving the interior designs of two restaurants). In that case, the Supreme Court held that inherently distinctive trade dress, like an inherently distinctive trademark, is entitled to protection under the Lanham Act without proof of secondary meaning. Id. at 773, 112 S.Ct. at 2759. Plaintiff argues that, in its decision, the Supreme Court implicitly adopted and approved of the Abercrombie category analysis as the appropriate method for determining inherent distinctiveness in trade dress cases.

Plaintiff further argues that under the Abercrombie category analysis, it has created a genuine issue of fact on the issue of inherent distinctiveness. Plaintiff maintains that through the affidavit of Mr. Gerald Lawrence, a former NYRA employee, it has submitted evidence that the design of the grandstand at the Saratoga Race Course is a valuable source of licensing revenue, and that in Lawrence's opinion, the roof line of the grandstand is the second most recognizable structure among horse racing fans, after the twin spires at Churchill Downs.

As an initial matter, the Court finds that the Plaintiff has presented a false dichotomy. In this case, the Court was not faced with applying either Knitwaves or Two Pesos. The Court had to apply both. Like the sweater designs at issue in Knitwaves, the Plaintiff in this case seeks to protect an aesthetic product feature, namely, images of the Saratoga Race Course reproduced on souvenir items such as t-shirts. Therefore, pursuant to both Two Pesos and Knitwaves, this Court first had to determine whether the images were "inherently distinctive" when reproduced on souvenir merchandise in order to determine whether the images could obtain trade dress protection absent a showing of secondary meaning. In making this determination, however, the Court was bound to apply the Second Circuit's reasoning in Knitwaves and ask whether the images are likely to serve primarily as an indicator of source.⁵

Other than the conclusory affidavit of Mr. Lawrence, Plaintiff did not submit any evidence indicating that images of the Saratoga Race Course, as they allegedly appear on Plaintiff's products, are likely to serve, were intended to serve, or currently do serve, primarily as an indicator of the source of the products (i.e., NYRA or its licensees).⁶ Thus, in light of the evidence that was presented to the Court, and even after drawing all reasonable inferences in Plaintiff's favor, the Court could not find that the lone affidavit of a former NYRA employee was sufficient to create a genuine issue of material fact on this issue.⁷ See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986) (stating that the non-movant must do more than present evidence that is merely colorable, conclusory, or speculative to survive the motion for summary judgment).

Therefore, there being no new evidence submitted nor change in controlling law cited, the Court finds that it was not clear error to declare that Plaintiff does not currently possess any trade dress rights in images of the Saratoga Race Course reproduced on souvenir merchandise such as t-shirts.⁸

B. First Amendment

Plaintiff also seeks reconsideration of this Court's decision to dismiss some of Plaintiff's claims under the First Amendment. In its July 19, 1996 Decision and Order, the Court applied the balancing test set forth in Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir.1989). That test requires that the Lanham Act be narrowly construed so as to apply to artistic works "only where the public interest in avoiding consumer confusion outweighs the public interest in free expression." Id.

On the record presented, the Court found that the Defendants' use of Plaintiff's marks in the titles of Defendants' paintings serves the artistically relevant purpose of describing the scene depicted in the paintings, and that the use of Plaintiff's marks in Defendants' paintings where the mark actually appears in the scene depicted serves the artistically relevant purpose of accurately depicting the scene (realism). The Court also found that the need to avoid consumer confusion in this case is negligible. As a result, the Court held that the Lanham Act should not apply to the Defendants' shirts that display reproductions of these paintings because the interest in free expression outweighs the need to avoid consumer confusion.⁹ Plaintiff seeks reconsideration of these findings.

1. Titles

First, Plaintiff argues that the Court erred in its finding that the Lanham Act does not apply to the Defendants' t-shirts that display reproductions of paintings that use Plaintiff's trademarks in the title. Plaintiff claims that this finding is premised upon a misunderstanding of Plaintiff's admission that the titles of the Defendants' paintings do not function as trademarks. Plaintiff asserts that this admission applied only to Defendants' artwork, not to reproductions of that artwork on souvenir merchandise such as t-shirts. Plaintiff also argues that the Court's application of the First Amendment was overly broad.¹⁰ The Court disagrees.

As an initial matter, the Court's findings in this case were clearly limited to the record presented to the Court. More importantly, however, the Court found that the likelihood of consumer confusion was negligible in this case because the average consumer viewing Defendants' t-shirts would realize that the shirts display reproductions of original paintings and their titles. For example, as outlined in the Court's previous...