Look Magazine v. Look, Inc.

• Decision Date: 16 October 1984
• Docket Number: Civ. A. No. 84-290-JLL.
• Citation: 596 F. Supp. 774
• Parties: LOOK MAGAZINE ENTERPRISES S.A., Plaintiff, v. LOOK, INC. and Howard Kunitz, Defendants.
• Court: U.S. District Court — District of Delaware

596 F. Supp. 774

LOOK MAGAZINE ENTERPRISES S.A., Plaintiff, v. LOOK, INC. and Howard Kunitz, Defendants.

Civ. A. No. 84-290-JLL.

United States District Court, D. Delaware.

October 16, 1984.

Henry E. Gallagher, Jr., of Connolly, Bove, Lodge & Hutz, Wilmington, Del., Richard Lehv of Weiss, Dawid, Fross, Zelnick & Lehrman, P.C., New York City, of counsel, for plaintiff.

William E. Manning of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., Victor M. Wigman and Herbert Cohen of Wigman & Cohen, P.C., Arlington, Va., of counsel, for defendants.

OPINION

LATCHUM, Senior District Judge.

This is an action for trademark infringement and dilution, unfair competition, and injury to business reputation. The case is before the Court on the defendants' pre-answer motion for dismissal or, in the alternative, a stay of proceedings to allow resolution of related litigation before the Trademark Trial and Appeal Board ("TTAB") of the United States Patent and Trademark Office ("PTO"). (Docket Item "D.I." 6.)

I. FACTS

The plaintiff, a Swiss corporation named Look Magazine Enterprises S.A. ("LME"), is the owner by assignment of the trademark "LOOK,"¹ familiar to many Americans as the title of a pictorial magazine. (D.I. 1 at 2-3.) The defendants are LOOK, Inc. ("LI"), a Delaware corporation, and its sole officer, shareholder, and director, Howard G. Kunitz ("Kunitz").

In 1979, Kunitz began laying the groundwork for the publication of a magazine to be titled "LOOK." (D.I. 17 at 30.) A magazine of that name was first published in 1936 and continued in successful publication for many years. (D.I. 1 at 2.) Despite its record of success, LOOK magazine apparently fell on hard times; it ceased publication, resumed it again sometime later, and then once more ceased. (See D.I. 13 at Ex. 5, p. 3.) Kunitz was "watching carefully the activities of LOOK magazine with great interest ...." (D.I. 17 at 32.) He stated in deposition testimony that "when I noticed how the magazine was being handled, I remember ... I asked ... an attorney in Washington, D.C., to write to New Sound, Inc. -the publisher and then-owner of the "LOOK" mark-, to find out if they ever had any intentions of doing this again," (id.) meaning, it seems, did New Sound, Inc., intend to publish LOOK again. Although that company responded to Kunitz's lawyer that "Look magazine was published and widely distributed in interstate commerce between January and September of 1979 and further uses of the trademark are contemplated," (D.I. 13 at Ex. 4), Kunitz eventually determined to go forward with his plans to publish a new edition of LOOK. (D.I. 17 at 33.)

A part of those plans involved Delaware. In April of 1982, Kunitz retained a Delaware law firm to help him incorporate defendant LI (D.I. 6 at Kunitz Affidavit, p. 2; D.I. 17 at 22), and, at his request, these attorneys, representing his Delaware corporation, solicited investments. (D.I. 17 at 44-46.) A "pre-publication" issue of the magazine was prepared and sent to magazine distributors throughout the country, including Delaware (id. at 63-64); in that issue, the business address listed for the magazine is that of Kunitz's Delaware attorneys. (Id. at 56.) Kunitz testified at his deposition that it was his intention to have inquiries about the magazine forwarded to him from Delaware. (Id. at 57.) Not only would Kunitz's magazine-related mail be received at the Delaware address, his answering correspondence would appear to come from there because he had printed and used stationery with the "LOOK" logo and Delaware address. (Id. at 58, 60-61.)

In late December, 1982, after its attempts to raise money were consistently frustrated by the legal cloud over its claim to the "LOOK" mark (id. at 59-60), LI instituted proceedings before the TTAB to have the registration of LME's marks cancelled.² (D.I. 6 at Kunitz Affidavit, p. 4.) Nearly two years later, those proceedings have failed to produce any decision. It has been, as counsel for defendants noted more than once at argument in this Court, a frustrating and unproductive experience.

In May of this year, LME decided "that it could no longer tolerate defendants' infringement of its valuable LOOK trademark," and therefore filed this action. (D.I. 13 at Lehv Affidavit, pp. 13-14.) At roughly the same time, LME filed a motion with the TTAB for suspension of the cancellation proceedings, pending decision in this suit. The defendants moved the TTAB to stay decision on LME's motion until this Court has ruled on the defendants' present motion to dismiss this civil action. (Id. at 14.)

II. LAW

The defendants' motion is, in the alternative, asking for either dismissal of the action because venue is improper, or a stay of proceedings until the TTAB has resolved the issue before it. (D.I. 6.) On a motion to dismiss, the facts must, of course, be construed in favor of the non-moving party. See Jenkins v. McKeithen, 395 U.S. 411, 421-22, 89 S.Ct. 1843, 1848-49, 23 L.Ed.2d 404 (1969). Each of the defendants' requests is dealt with in turn.

A. Venue

LME argues that its claims arose in this district and that venue is accordingly founded here under 28 U.S.C. § 1391(b).³ (D.I. 12 at 11.) The Court agrees.

The proper manner for determining where a claim arose has been a matter of some debate. Prior to the Supreme Court's decision in Leroy v. Great Western United, 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979), the leading precedent for courts of this circuit considering the issue was Tefal, S.A. v. Products International Co., 529 F.2d 495 (3d Cir.1976). The court in Tefal recognized, without making a qualitative judgment about them, that two alternative legal theories had developed in the district courts to deal with venue under 1391(b). In Honda Associates, Inc. v. Nozawa Trading, Inc., 374 F.Supp. 886, 892 (1974), the Southern District of New York applied a test which the Third Circuit characterized as "the `more than miniscule' test," 529 F.2d at 497, apparently meaning that venue was proper if, among the events giving rise to the claim, a more than miniscule number took place in the district in which venue was asserted to lie.⁴ In contrast, however, language in Scott Paper Co. v. Scott's Liquid Gold, Inc., 374 F.Supp. 184, 189-90 (D.Del.1974), indicated to the Third Circuit that this Court considered venue to lie in any district in which the claim could be said to have arisen, whether or not that district was the location of most of the claim-creating conduct. 529 F.2d at 497.

New and decisive light was shed on the "claim arose" question by the Supreme Court's Leroy opinion. The high court said, "Congress restricted venue either to the residence of the defendants or to `a place which may be more convenient to the litigants' — i.e., both of them — `or to the witnesses who are to testify in the case.'" 443 U.S. at 185, 99 S.Ct. at 2717 (citations omitted). The Court went on to say that it would only be "the unusual case in which it is not clear that the claim arose in only one specific district," id., and that in such a case "a plaintiff may choose between those ... districts that with approximately equal plausibility ... may be assigned as the locus of the claim." Id. Bearing on all this interpretation is the Court's counsel that

so long as the plain language of the statute does not open the severe type of "venue gap" that the amendment giving plaintiffs the right to proceed in the district where the claim arose was designed to close, there is no reason to read it more broadly on behalf of plaintiffs.

Id. at 184, 99 S.Ct. at 2717 (footnotes omitted).

Applying the Supreme Court's guidance to the facts of this case yields the conclusion that venue is proper in this district. This is the judicial district which Kunitz selected as the center for the activities allegedly infringing the plaintiff's trademark. It is the place of incorporation and the business location of the corporate defendant; it is the place to which people interested in the defendants' magazine have their attention directed, both by the address printed at Kunitz's direction in the pre-publication issue of the magazine and the address printed on the LOOK stationery made for and used by LI; it is the location of agents who acted on behalf of LI to solicit investment in the publishing venture; and it is incidentally the site of one of the magazine distributors solicited to move the magazine into widespread circulation.

Even if the Court were not satisfied that this district is the logical one to tap as the single district in which the claim arose for purposes of § 1391(b), the Court believes that this case could be called one of the unusual variety in which the claim arises in more than one district, one of them being Delaware, and that the plaintiff has properly exercised its option to select this district as the place to litigate its claim.

A third and powerful reason for judging venue correct in this jurisdiction is the Supreme Court's counsel to interpret § 1391(b) more broadly in favor of plaintiffs when necessary to avoid a venue gap. See Leroy, supra, 443 U.S. at 184, 99 S.Ct. at 2716. Although, again, the Court is satisfied that Delaware is the logical locus to pick as being where the claim arose, it is significant that the potential of a venue gap lurks in this case. In their attempts to dissuade the Court from believing such a potential exists, the defendants have strengthened that belief. They assure the Court there is no venue gap because Kunitz concedes, although it is quite obvious anyway, that venue as to him would lie in Maine. (D.I. 14 at 12.) It is what they fail to say that tells: there is not the slightest indication that LI would concede to venue in Maine. The defendants have made the case for the plaintiff, because if venue as to Kunitz did not lie in this Court and venue as to LI did not lie in Maine, the plaintiff would be faced with the perfect example of a venue gap.

The...