Berlitz Schools of Languages of America, Inc. v. Everest House
| Decision Date | 10 April 1980 |
| Docket Number | No. 647,D,647 |
| Citation | 619 F.2d 211 |
| Parties | The BERLITZ SCHOOLS OF LANGUAGES OF AMERICA, INC. and Berlitz Publications, Inc., Plaintiffs-Appellants, v. EVEREST HOUSE, a division of Ambassador International Cultural Foundation, and Lewis W. Gillenson, Defendants-Appellees. ocket 79-7692. |
| Court | U.S. Court of Appeals — Second Circuit |
Joseph Calderon, New York City (Linden & Deutsch, New York City, David Blasband, New York City, of counsel), for plaintiffs-appellants.
Leslie Gordon Fagen, New York City (Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Edward N. Costikyan, New York City, of counsel), for defendants-appellees.
Before LUMBARD, MANSFIELD and NEWMAN, Circuit Judges.
Plaintiffs, the Berlitz Schools of Languages of America and Berlitz Publications (hereinafter collectively referred to as "Berlitz"), commenced this action in the Southern District against defendants, Everest House and its President, Lewis W. Gillenson, as licensors of Charles Berlitz, seeking equitable and monetary relief for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1051 et seq., and for unfair competition and trademark dilution under New York State law. The suit was triggered by defendants' publication of a series of foreign language instructional books, authored by Charles Berlitz, entitled the "Step-By-Step" series.
Upon commencement of suit the plaintiffs moved, by order to show cause, to enjoin the publication of defendants' "Step-By-Step" series pending a trial on the merits. Judge Brieant found that plaintiffs failed to demonstrate a probability of success on the merits and accordingly denied the motion. Thereafter, defendants moved for summary judgment on the ground that in light of judgments in three prior state court proceedings, brought by plaintiffs against Charles Berlitz, the action was barred under the doctrines of res judicata and collateral estoppel. Judge Brieant granted defendants' motion on these grounds in an unreported opinion dated September 11, 1979.
Plaintiffs now appeal from the denial of injunctive relief and from the entry of summary judgment for defendants. 1 Their principal argument is that their complaint raises factual issues sufficiently different from those necessarily and finally determined in the state court litigations so that the doctrines of res judicata and collateral estoppel do not bar this action. They further argue that the prior state court proceedings could not deprive them of a review of their federal Lanham Act claims since these claims were never presented to the state court.
The salient facts are as follows:
Over one hundred years ago Maximilian Berlitz founded what has come to be known as the Berlitz School of Foreign Languages. Since that time the Berlitz School has operated foreign language instructional schools throughout the world. An integral part of the Berlitz method has been the publication of numerous foreign language instructional books.
For some years prior to 1967 Charles Berlitz, a grandson of the founder of the Berlitz school, and himself an accomplished linguist, was an officer and employee of Berlitz. In 1967, however, Charles Berlitz severed his relationship with the Berlitz schools and became affiliated with other publishing houses. Thereafter, in three separate actions, Berlitz challenged the right of Charles Berlitz, and his publishers, to use his name in connection with the promotion or sale of foreign language books.
The first action, entitled Berlitz Publications, Inc. Berlitz Schools of Languages, Inc. and Berlitz Travel Services Inc. v. Charles Berlitz and Charles Berlitz International Tours, Ltd., (the "1967 action"), was commenced in New York Supreme Court to prevent Charles Berlitz from using his name in competition with plaintiffs.
The second action, entitled Berlitz Publications, Inc. and Berlitz Schools of Languages, Inc. v. Charles Berlitz, Valerie Berlitz and New American Library, Inc., (the "1968 action"), brought in the same court, sought to enjoin the publication of a language book on Vietnamese which bore the name Berlitz.
Eventually, these two actions were consolidated for trial in the Supreme Court. At the conclusion of a twenty-day trial, the 1968 action was dismissed on the merits. A declaratory judgment was issued in the 1967 action which provided, in pertinent part:
1. The name Berlitz has acquired a secondary meaning referring to plaintiffs in the fields of the teaching of languages and publication of texts and other media related thereto.
1a. Defendants may not use nor authorize the use of the name Berlitz as part of the name of a foreign language teaching text or as part of the name of a publishing company which prepares foreign language materials.
2. Charles F. Berlitz may identify himself as the editor or author of books, publications or any other materials on foreign language in any medium, so long as he makes it clear that he is not connected with plaintiffs in any way.
The declaratory judgment was affirmed on appeal to the Appellate Division. 44 A.D.2d 665, 354 N.Y.S.2d 421 (1st Dep't 1974).
Thereafter, in 1974, Berlitz commenced yet a third proceeding in New York State Supreme Court, entitled Berlitz Publications, Inc., Berlitz Schools of Languages, Inc. and Berlitz Travel Services, Inc. v. Charles Berlitz and Charles Berlitz International Tours, Ltd. In this action, plaintiffs, relying upon the 1973 declaratory judgment quoted above, sought to prevent the use of Charles Berlitz's name as author of certain foreign language books, entitled the "Passport" series, despite the following disclaimer which appeared on the cover:
Charles Berlitz, world-famous linguist and author of more than 100 language teaching books, is the grandson of the founder of the Berlitz Schools. Since 1967, Mr. Berlitz has not been connected with the Berlitz Schools in any way.
The trial court found that the cover on the "Passport" series did not violate the declaratory judgment. This decision was affirmed on appeal to the Appellate Division, 45 A.D.2d 826 (1st Dep't 1974), and by the New York Court of Appeals, 37 N.Y.2d 878, 378 N.Y.S.2d 363, 340 N.E.2d 730 (1975).
In 1978 the defendant, Everest House, and Charles Berlitz executed a contract wherein Charles Berlitz agreed to author several foreign language instructional books for publication by Everest. This new series, the "Step-By-Step", series, consisted of four books entitled, "French Step-By-Step", "Spanish Step-By-Step", "German Step-By-Step" and "Italian Step-By-Step".
In anticipation of publication Everest placed a single advertisement of the series in a trade journal, Publishers Weekly. The advertisement featured a picture of the author and further identified him as a world famous linguist and author of "The Bermuda Triangle." The full page advertisement also contained a miniature representation of the proposed cover for the "Step-By-Step" series. Present on the cover, below the author's name, was the identical disclaimer which appeared on the "Passport" series and which was the subject of the third state court proceeding. However, due to the drastic reduction in the size of the cover for purposes of the advertisement, the disclaimer, as reproduced in Publishers Weekly, was illegible.
Plaintiffs commenced suit in the district court charging that defendants publication of the "Step-By-Step" series, and their advertisement thereof, constituted trademark infringement and were violative of the prior declaratory judgment.
In denying plaintiff's request for injunctive relief Judge Brieant found that since there was a serious question as to whether the doctrines of collateral estoppel and res judicata would bar the instant action, plaintiffs had failed to demonstrate a probable success on the merits.
Thereafter, Judge Brieant held that the doctrines of judicial finality did indeed bar the action and accordingly granted defendants motion for summary judgment.
A brief summary of the state court proceedings demonstrates that the factual issues and legal claims presented therein are virtually identical to those in the case at bar. Whatever differences do exist in the legends of the "Step-By-Step" and "Passport" series are so insubstantial that the doctrines of judicial finality were aptly applied by the district court to bar the instant action. Accordingly, we affirm.
Res judicata, a doctrine of claim preclusion, provides that when a final judgment is...
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