Colonial Williamsburg Foundation v. Kittinger Co.

• Citation: 792 F. Supp. 1397
• Decision Date: 20 May 1992
• Docket Number: Civ. A. No. 3:91CV00055.
• Parties: The COLONIAL WILLIAMSBURG FOUNDATION, Plaintiff, v. The KITTINGER COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

792 F. Supp. 1397

The COLONIAL WILLIAMSBURG FOUNDATION, Plaintiff, v. The KITTINGER COMPANY, Defendant.

Civ. A. No. 3:91CV00055.

United States District Court, E.D. Virginia, Richmond Division.

May 20, 1992.

Douglas Wayne Kenyon, Hunton & Williams, Raleigh, N.C., Ray Vinton Hartwell, Jr., George H. Gromel, Jr., Hunton & Williams, Richmond, Va., for plaintiff.

J. William Boland, Alexander H. Slaughter, McGuire, Woods, Battle & Boothe, Richmond, Va., Robert F. Wagner, Steven B. Larchuk, Dickie, McCamey & Chilcote, Pittsburgh, Pa., for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

RICHARD L. WILLIAMS, Senior District Judge.

This matter is before the Court on the motions of the plaintiff, The Colonial Williamsburg Foundation ("Colonial Williamsburg"), for a finding of civil contempt against The Kittinger Company ("Kittinger"), Michael P. Carlow ("Carlow"), and Nicholas J. DeFino ("DeFino"), and for sanctions for violations of the Consent Judgment entered by this Court on February 25, 1991, and the Court's February 19, 1992, Discovery Order. Following a hearing on these issues on May 4 and 5, 1992, the Court now makes the following Findings of Fact and Conclusions of Law, pursuant to Fed.R.Civ.P. 52.

I. FINDINGS OF FACT

1. Colonial Williamsburg is a non-stock corporation organized and existing under the laws of the Commonwealth of Virginia, with its principal place of business in Williamsburg, Virginia. Plaintiff's Exhibit 2, February 25, 1991, Consent Judgment, § III (hereinafter Consent Judgment).

2. Among its various functions, Colonial Williamsburg operates a museum reproductions program ("the Reproductions Program"), pursuant to which Colonial Williamsburg licenses selected manufacturers to make and sell, under the trademarks and trade names of Colonial Williamsburg, reproductions and adaptations of certain antiques within Colonial Williamsburg's collection. The Reproductions Program includes among its items certain designated pieces of furniture.

3. Colonial Williamsburg has adopted and has continuously used, both in the United States and many other parts of the world, certain trademarks and service marks to identify and distinguish its goods and services, which marks, through their use, have become well-known. Colonial Williamsburg's marks include: the words WILLIAMSBURG and COLONIAL WILLIAMSBURG; the letters CW and WF (as designations for furniture reproductions and adaptations, respectively); and the design, known as the "Hallmark," consisting of the words WILLIAMSBURG REPRODUCTIONS, the letters CW, and an elongated "4" ending in a double "XX," all enclosed in an oval. Colonial Williamsburg also has adopted and continuously used in the United States and many other parts of the world the trade name WILLIAMSBURG and COLONIAL WILLIAMSBURG. Colonial Williamsburg is the sole owner of all right, title, and interest in and to these marks and names, and of the goodwill that accompanies them. See Consent Judgment, §§ III-IV.

4. Kittinger is a corporation organized and existing under the laws of the State of North Carolina. Its principal place of business is Buffalo, New York. Kittinger is qualified to do, and is doing, business in Virginia. Consent Judgment, § III.

5. Carlow is Chairman of the Board of Kittinger, having been elected to that office on February 28, 1992. Plaintiff's Exhibit 38. As reflected in Kittinger's By-Laws, Carlow's duties and responsibilities as chairman include serving as the company's chief executive officer. Plaintiff's Exhibit 37.

6. From June 22, 1990, until February 28, 1992, Carlow served as president of Kittinger. Plaintiff's Exhibit 38. Carlow's duties and responsibilities as president included serving as the company's chief operating officer and supervising and controlling the management of the company. Plaintiff's Exhibit 37.

7. Because Kittinger had no chairman until Carlow's election in February of 1992, Carlow has at all relevant times been Kittinger's highest ranking officer. Plaintiff's Exhibits 37 & 38.

8. DeFino is president of Kittinger, having been elected to that office on February 28, 1992. Plaintiff's Exhibit 38. From July 1990 until his election as president, DeFino was Vice-President of Operations. Plaintiff's Exhibit 39.

Background and Procedural History

9. For a period of more than fifty years Colonial Williamsburg and Kittinger maintained a licensing and business arrangement involving the collaborative design, manufacture, and sale of reproductions and adaptations of certain pieces of antique 18th century furniture, specimens of which are a part of Colonial Williamsburg's collection.

10. In early 1990, after frequent changes of ownership at Kittinger, Colonial Williamsburg became increasingly concerned that continued financial hard times would necessitate Kittinger's closing. Accordingly, the Licensing Agreement¹ with Kittinger was terminated on or about February 26, 1990, see Consent Judgment, § III, and Colonial Williamsburg negotiated a licensing agreement with Baker Furniture Company.

11. In June of 1990, 100% of Kittinger's common stock was acquired by USC Industries, Inc., a holding company that is majority owned by a second, Carlow controlled company. See Carlow Deposition, at 3-6, 15-16.

12. During the summer of 1990, Carlow and others met in Williamsburg to negotiate the termination of the Licensing Agreement between Kittinger and Colonial Williamsburg.

13. In late 1990, Kittinger filed suit in the Western District of New York, Buffalo Division,² seeking a declaratory judgment that certain provisions of the License Agreement were unenforceable under the patent and copyright laws of the United States and that certain of Colonial Williamsburg's trademarks were also unenforceable. See Plaintiff's Exhibit 1, Settlement Agreement, at 1-2 (hereinafter Settlement Agreement).

14. On January 25, 1991, Colonial Williamsburg filed the instant action alleging breach of contract, federal trademark infringement and false designation of origin, and related Virginia statutory and common law violations. See Consent Judgment, § II.

15. On February 19, 1991, Colonial Williamsburg and Kittinger entered into a Settlement Agreement that provided for the dismissal of the New York action and the entry of a Consent Judgment in the instant action. Settlement Agreement, at 2.

16. The Settlement Agreement also provides that "any party seeking to enforce its rights pursuant to this Settlement Agreement or the attached Consent Judgment and who substantially prevails in enforcing those rights shall be paid by the party against whom such enforcement is sought any fees or costs incurred, including reasonable attorneys' fees, as a result of such enforcement." Settlement Agreement, at 4-5.

17. This Court entered the Consent Judgment, in accordance with the Settlement Agreement, on February 25, 1991. The Court's jurisdiction, however, was expressly retained to allow "the parties to apply to this Court for such further orders as may be necessary or appropriate for the construction, implementation, modification, or enforcement of this Consent Judgment, and for punishment of any violation of this Consent Judgment." Consent Judgment, § XVII.

18. Section VI of the Consent Judgment enjoins Kittinger, as of April 1, 1991, from using Colonial Williamsburg's various marks and names or any marks or names "likely to cause confusion, or to cause mistake, or to deceive." Additionally, section VI prohibits Kittinger from,

in connection with the sale of its products, referring directly or indirectly to Colonial Williamsburg, to Kittinger's former status as a licensee of Colonial Williamsburg, to specific items in the collections of Colonial Williamsburg, or to the restoration of Virginia's Colonial capital in Williamsburg, Virginia; and 3. Disseminating, publishing, distributing, or otherwise using information or materials of any kind whatsoever containing a false designation of origin, or false description, or false representation, or likely to deceive the relevant consuming public into thinking that any goods or services offered by Kittinger, are in any manner associated or connected with, or licensed, authorized, sponsored, endorsed or approved by Colonial Williamsburg.

19. Section VII, in turn, enjoins Kittinger, as of April 1, 1991, from:

manufacturing and/or selling the Licensed Products or any products so similar in appearance to the Licensed Products as to be likely to cause confusion, or to cause mistake, or to deceive the relevant consuming public into thinking that such products are the Licensed Products or are in any manner associated or connected with, or licensed, authorized, or approved by Colonial Williamsburg.

20. Section VIII of the Consent Judgment provided that Kittinger was to give Colonial Williamsburg access to its books to allow the determination of additional royalties and the number and status of licensed pieces ordered but not yet completed.

21. Section IX generally enjoined Kittinger from "commencing the manufacture of any Licensed Products whose assembly was not already in progress as of February 15, 1991," with the clarification that through March 31, 1991, Kittinger could "(1) sell Licensed Products through its showrooms, (2) complete the manufacture into finished pieces of work-in-progress pieces whose assembly was already in process as of February 15, 1991," and (3) ship finished pieces in order to fill orders accepted by the close of business on March 15, 1991, "provided, that all such manufacture shall be completed and all sales and shipments of Licensed Products made no later than March 31, 1991, except that shipments of Licensed Products sold through Kittinger showrooms may be made through April 5, 1991."

22. Sections IX and X provide a schedule for the calculation and payment of royalties. Additionally, section X provided for the audit of Kittinger's books "with respect to such payments and the transactions related thereto."

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