Health Ins. Ass'n of America v. Novelli

• Decision Date: 17 May 2002
• Docket Number: Civil Action No. 02-0831 (RBW).
• Citation: 211 F.Supp.2d 23
• Parties: HEALTH INSURANCE ASSOCIATION OF AMERICA, Plaintiff, v. Goddard Claussen Porter NOVELLI, et al., Defendants.
• Court: U.S. District Court — District of Columbia

211 F.Supp.2d 23

HEALTH INSURANCE ASSOCIATION OF AMERICA, Plaintiff, v. Goddard Claussen Porter NOVELLI, et al., Defendants.

Civil Action No. 02-0831 (RBW).

United States District Court, District of Columbia.

May 17, 2002.

Daniel E. Johnson, Shari Klevens, McKenna & Cuneo, LLP, Washington, DC, for Plaintiff.

William Webber, Morgan, Lewis & Bockius, LLP, Washington, DC, Richard

Ben-Veniste, Mayer, Brown, Rowe & Maw, Washington, DC, for Defendant.

AMENDED MEMORANDUM OPINION

WALTON, District Judge.

This matter is before the Court on plaintiff's application for a temporary restraining order¹ and motion for a preliminary injunction, defendants' Goddard Claussen Porter Novelli's ("Goddard") and CuresNow Action's ("CuresNow")² oppositions to plaintiff's motions, and plaintiff's reply to defendants' oppositions. Upon consideration of the arguments advanced by the parties during the hearing on plaintiff's motions that was held on May 13, 2002, and the positions raised in the parties pleadings, the Court concludes that plaintiff's motions must be denied.

I. Summary of Facts

The plaintiff, Health Insurance Association of America ("HIAA"), is an organization comprised of traditional risk-bearing organizations, such as health insurers, managed care organizations, and reinsurers that "attempt[] to shape and influence state and federal public policy through advocacy." (Compl.¶ 4.)³ In 1993, as part of its campaign opposing then-President Clinton's proposed health care initiatives, HIAA retained defendant Goddard, a company that provides public relations and public affairs services, to aid it in creating a national advertising campaign. (Id. ¶¶ 6-7.) The campaign resulted, in part, in the creation of the "now famous Harry and Louise advertisements." (Id. ¶¶ 9-10.)⁴

There are several features of the "Harry and Louise" advertisements which, HIAA contends, make them distinctive: the actors used in the advertisements are the same;⁵ there is a piano playing soft music in the background; the characters have a colloquy in "worried tones" regarding a serious political issue; and there is contact information displayed at the end of the advertisement informing viewers how they can express their views. (Id. ¶ 9.)⁶ In addition the characters normally act according to specified roles, with Louise typically being "educative" and Harry being "reactive." (Id.)

Throughout 1993-1994, there were 13 "Harry and Louise" advertisements created. (Goddard Decl. ¶ 4.) The first six were created pursuant to an oral agreement;⁷ the remaining advertisements were completed pursuant to a written agreement executed between HIAA and Goddard in 1994. Section VI of the 1994 agreement (the "Termination" section) provides that:

"[a]ll advertising copy and tapes and all other work product, including mailing lists, developed as a result of this campaign, are and shall be the property of the Client; however, this shall not prevent [Goddard] from using, as a sample of its work, any materials produced for use in the campaign."

(Goddard Decl. Ex. A.) HIAA and Goddard executed another agreement in 1998 wherein they included more specific language regarding copyright ownership, however, this agreement did not specifically refer to the Harry and Louise advertisements at issue, but dealt with the subject of "public relations counseling and communications services." (Compl.Ex.A).⁸ In 2000, HIAA again retained Goddard to create advertisements in connection with an effort named "InsureUSA," HIAA's initiative to increase and expand health insurance coverage among uninsured Americans. (Id. ¶ 13.) Again, actors Harry Johnson and Louise Claire Clark were used in these commercials.

On April 23 and 24, 2002, Benjamin Goddard, Goddard's executive creative director, informed individuals at HIAA that Goddard had created political advocacy advertisements for defendant CuresNow, a non-profit organization that is a member of the Coalition to Advance Medical Research and an advocate that supports therapeutic cloning.⁹ (Id. ¶ 6.) The advertisements, which were created as a part of CuresNow's campaign against proposed Congressional legislation that will criminalize therapeutic cloning,¹⁰ are very similar to the advertisements Goddard had created for HIAA, and in fact use the same actors, the same business attire, the same background music, the same setting, the same "worried" tones, the same actor roles and the same display of contact information at the end of the advertisement, although the CuresNow advertisements instruct viewers to contact CuresNow, not HIAA. (Id. ¶ 23.) News releases issued by CuresNow and Goddard specifically refer to the advertisements as the Harry and Louise advertisements. (Id.)¹¹

On April 30 and May 1, 2002, HIAA filed copyright registration forms, submitted the deposits, and paid the required fees to register the copyrights for its Harry and Louise advertisements and their formats. (Id. ¶ 30.) HIAA specifically checked the box on its registration forms designated for "works made for hire."¹² (See Compl. Ex. E.)¹³

In addition to its copyright position, HIAA claims that it owns the "trade dress" in the format of the Harry and Louise advertisements, which is protectible under the Lanham Act, 15 U.S.C. § 1125(a) (1994). HIAA argues that it is entitled to a preliminary injunction because it has established a substantial likelihood of success on the merits of its trademark infringement claim¹⁴ and is being irreparably harmed by continued dissemination of the CuresNow advertisements because they confuse the public as to whether HIAA sponsors therapeutic cloning¹⁵ and permits CuresNow to unjustly benefit from HIAA's goodwill.

Defendant Goddard argues that HIAA does not own the copyrights in the Harry and Louise advertisements because HIAA did not, despite its argument to the contrary, co-author the advertisements, the parties never contracted to transfer Goddard's copyright in the advertisements, and the advertisements were not intended to be works made for hire. Therefore, Goddard submits that it is the copyright owner of the Harry and Louise advertisements. In addition, Goddard contends that HIAA does not own any trade dress rights to the format of the advertisements. Finally, both defendants argue that the balance of equities tilt in their favor because if injunctive relief is granted at this time, CuresNow would be prohibited from continued dissemination of its political advertisements at a critical point of its campaign and that it would not have the time or the money to begin a new advertisement campaign just weeks before the Senate's scheduled vote on the proposed therapeutic cloning legislation.

II. Analysis

A. Standard for Granting Injunctive Relief

The Court must apply the familiar four-prong test in determining whether HIAA is entitled to injunctive relief. This test requires the Court to ask whether (1) HIAA has demonstrated that there is a substantial likelihood that it will prevail on the merits of one of its claims; (2) whether HIAA has shown that it would be irreparably harmed if injunctive relief is not awarded; (3) whether the issuance of injunctive relief would not "substantially harm" the other parties, and (4) whether awarding the relief is in the public interest. Washington Metro. Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C.Cir.1977) (citing Virginia Petroleum Jobbers Assoc. v. FPC, 259 F.2d 921, 925 (D.C.Cir.1958)).

In applying this test, district courts "employ a sliding scale under which a particularly strong showing in one area can compensate for weakness in another." Sociedad Anonima Vina Santa Rita v. Department of the Treasury, 193 F.Supp.2d 6, 13-14 (D.D.C.2001) (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C.Cir.1995)). Under this sliding scale, injunctive relief may be issued where, for example, the moving party has made a particularly strong showing of success on the merits "even if there is a relatively slight showing of irreparable injury." Id., at 13-14 (quotation omitted). However, "a party seeking preliminary injunctive relief must demonstrate at least some irreparable injury because `the basis for injunctive relief in the federal courts has always been irreparable harm.'" Id. (quotation omitted). A harm is "irreparable" only if it is "both certain and great." Id. (citation omitted). The failure of the moving party to demonstrate irreparable harm is sufficient reasons for the district court to refuse to grant injunctive relief. Id.

In its motions, HIAA argues that a temporary restraining order, or alternatively, a preliminary injunction is necessary to preserve "HIAA's reputation" and the "value of its intellectual property." (HIAA's Application for a Temporary Restraining Order ("HIAA's App.") at 11.) In copyright infringement cases, "[a] copyright holder may be presumed to suffer irreparable harm as a matter of law when his right to the exclusive use of copyrighted material is invaded, and such a holder is entitled to a preliminary injunction without a detailed showing of harm." Hart v. Sampley, No. CIV.A.91-3068, 1992 WL 100135, at *3 (D.D.C. Feb.4, 1992) (citations omitted). Similarly, "[t]rademark infringement by its very nature causes irreparable injury." Appleseed Foundation Inc. v. Appleseed Inst., Inc., 981 F.Supp. 672, 677 (D.D.C.1997) (citations omitted). Thus, if the Court finds that plaintiff has demonstrated a substantial likelihood of success on the merits of either its copyright or trademark infringement claims, it is not necessary for plaintiff to provide overwhelming evidence in support of its showing of irreparable injury.

1. Likelihood of Success

(a) Copyright Infringement Claim

To establish a likelihood of success on the merits of its copyright infringement claim, HIAA must prove ownership of a copyright and copying by the defendant. Hart, 1992 WL 100135, at *2 (citation omitted). In addition, copyright infringement "is...