Major League Baseball Promotion v. Colour-Tex

• Decision Date: 24 January 1990
• Docket Number: Civ. A. No. 87-3249.
• Citation: 729 F. Supp. 1035
• Parties: MAJOR LEAGUE BASEBALL PROMOTION CORP., et al., Plaintiffs, v. COLOUR-TEX, INC., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

729 F. Supp. 1035

MAJOR LEAGUE BASEBALL PROMOTION CORP., et al., Plaintiffs, v. COLOUR-TEX, INC., et al., Defendants.

Civ. A. No. 87-3249.

United States District Court, D. New Jersey.

January 24, 1990.

COPYRIGHT MATERIAL OMITTED

Richard H. Bauch, Kirsten, Simon, Friedman, Allen, Cherin & Linken, Newark, N.J. and Louis A. Columbo, Baker and Hostetler, Cleveland, Ohio, for plaintiff, Anheuser-Busch, Inc.

Max Goldman, Cherry Hill, N.J. and Alan H. Bernstein, Caesar, Rivise, Bernstein, Cohen & Pokotilow, Philadelphia, Pa., for defendants, A.C. Printed Sportswear, Inc., EDJ Inc., d/b/a Tees for Two, and Edward DiNicolantonio.

GERRY, Chief Judge.

In July of 1987, two investigators working for plaintiff Anheuser-Busch, Inc., discovered a number of counterfeit and infringing products of various copyrights and trademarks at a company known as Colour-Tex, Inc. This suit was instituted and a temporary restraining order and an ex parte seizure order pertaining to Colour-Tex were issued on August 11, 1987. The restraining order and seizure order were served and executed the following day at Colour-Tex's premises. At that time, numerous counterfeit and infringing products were seized along with some of Colour-Tex's business records. Among other things, the seized records showed that a series of transactions had occurred in the summer of 1987 between A.C. Printed Sportswear, Inc. (A.C.) and Colour-Tex. Based on Colour-Tex's business records, Busch's investigators suspected that there might be counterfeit and infringing goods at a store known as Tees For Two or Ed's Threads. After investigating Tees For Two and finding apparently counterfeit shirts at the store, Busch's investigators determined that the source of the shirts was A.C.

In August of 1987, Busch amended the underlying complaint naming as defendants A.C. Printed Sportswear, EDJ Inc., d/b/a Tees For Two, and Edward DiNicolantonio, the president and principal shareholder of A.C. The complaint as amended consists of allegations against these defendants of copyright and trademark infringement, as well as unfair competition. On August 25, 1987, this court issued a temporary restraining order and an ex parte seizure order authorizing seizures at the premises of A.C. and Tees For Two. Representatives of Busch and two United States Marshals went to A.C.'s premises on August 26, 1987, but they did not execute the seizure order due to circumstances that they learned about after arriving at A.C.'s facility.

Busch's claims against the defendants generally involve allegations that the defendants infringed a number of Busch's marks, including "Bud," "Bud Light," and "The Original Party Animal." Specifically, Busch alleges that the defendants have infringed the name and likeness of the anthropomorphic British terrier, Spuds MacKenzie, who serves as the "spokesperson" for Bud Light beer. Subsequent to the filing of the second amended complaint and the issuance of the temporary restraining and seizure orders, the defendants filed various counterclaims against Busch and two of its representatives, James L. Bikoff and Robert Holmes. The counterclaims allege a statutory cause of action for wrongful seizure in addition to common law causes of action for malicious interference with contract, civil conspiracy, malicious use of process, and intentional and negligent infliction of emotional distress. On September 6, 1988, the court dismissed the counterclaims against Mr. Bikoff and Mr. Holmes upon a motion for judgment on the pleadings. At this time, the case still consists of Busch's original claims against the defendants and the counterclaims against only Busch.

We now are presented with motions by all parties for summary judgment in their favor on all or virtually all of the claims and counterclaims. In addition, Busch has appealed a magistrate's order directing Busch to answer certain discovery requests. We will begin by articulating the standard for summary judgment, and then proceed to discuss the motions on each claim and counterclaim in turn. In our discussion, we will mention and address additional facts pertaining to particular causes of action when necessary. We will conclude by dealing with the appeal of the magistrate's discovery order.

I. The Standard for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." An issue is "genuine" only if a reasonable jury, considering the evidence presented, could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986). A party may not rest upon bare allegations to require submitting an issue to a jury, but he must present some probative evidence tending to support the claim. Id. at 249, 106 S.Ct. at 2510.

The party moving for summary judgment must demonstrate that, under the undisputed facts, the non-moving party has failed to introduce evidence supporting a necessary element of his case. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the moving party can demonstrate such a failure, the burden shifts to the non-moving party to identify the portions of the record which support the allegedly unsupported element. Id. at 322-23, 106 S.Ct. at 2552.

"Summary judgment should only be granted, however, where there are no genuine issues of material fact that can only be properly resolved by a trier of fact because they may reasonably be resolved in favor of either party." In re Phillips Petroleum Securities Litigation, 881 F.2d 1236, 1243 (3d Cir.1989). Therefore, if reasonable minds could differ as to the import and consequence of the facts presented, summary judgment should not be granted. See id., citing Anderson, 477 U.S. at 250-51, 106 S.Ct. at 2511.

II. The Printing of Shirts by Defendant A.C. Printed Sportswear

A.C. Printed Sportswear, Mr. DiNicolantonio and Busch have all moved for summary judgment on the plaintiff's major causes of action. Busch has brought various claims against the different defendants involving two incidents of alleged infringement. The first incident involves approximately one-hundred twenty shirts with Spuds MacKenzie marks which were being sold at Tees For Two, a retail store in a Pennsylvania shopping mall. Tees For Two is part of EDJ Inc., a corporation located in Atlantic City, New Jersey. Mr. DiNicolantonio is an owner and officer of EDJ Inc., and he also is an owner and officer of A.C. Printed Sportswear. Defendants Tees For Two and Mr. DiNicolantonio admit that the shirts sold at Tees For Two technically did infringe on Busch's copyrights and trademarks.

As a result of this incident, Busch has sued Tees For Two, Mr. DiNicolantonio in his capacity as an owner and officer of Tees For Two, A.C. Printed Sportswear under an alter ego or piercing the corporate veil theory, and Mr. DiNicolantonio again in his capacity as an owner and officer of A.C. Busch charges the defendants with copyright infringement under 17 U.S.C. § 501, trademark infringement under 15 U.S.C. § 1114(1), federal unfair competition or false designation of origin under 15 U.S.C. § 1125(a), and common law trademark infringement or unfair competition. The summary judgment motions involving this incident and the defendants argument that this incident of infringement was innocent, and therefore excusable, will be discussed later in our opinion.

The second incident of alleged infringement, which concerns us at present, involves the printing of Spuds MacKenzie shirts by A.C. Printed Sportswear. Mr. DiNicolantonio is joined as a defendant both personally and in his capacity as an owner and officer of A.C. As a result of this incident, Busch charges A.C. and Mr. DiNicolantonio with copyright infringement under 17 U.S.C. § 501, trademark infringement under 15 U.S.C. § 1114(1), federal unfair competition or false designation of origin under 15 U.S.C. § 1125(a), and common law trademark infringement or unfair competition. The defendants admit that they printed Spuds MacKenzie shirts employing Busch's copyrighted property and trademarks, but they argue that they had authorization to do so. On the present motions for summary judgment, the only relevant issue is whether A.C. Printed Sportswear was authorized to print Spuds MacKenzie shirts.

1. The Causes of Action

The federal copyright laws proscribe any unauthorized copying of an owner's copyrighted works. 17 U.S.C. § 501(a) (incorporating by reference 17 U.S.C. § 106); see Fitzgerald Publishing Co. v. Baylor Publishing Co., 807 F.2d 1110, 1113 (2d Cir. 1986). There are two elements to a copyright infringement claim: (1) the plaintiff must own a valid copyright, and (2) the defendant must have copied the plaintiff's work in the course of the defendant's business without the plaintiff's approval. Whelan Associates v. Jaslow Dental Laboratory, 797 F.2d 1222, 1231-32 (3d Cir. 1986), cert. denied, 479 U.S. 1031, 107 S.Ct. 877, 93 L.Ed.2d 831 (1987). Intent or knowledge is not an element of copyright infringement. Fitzgerald Publishing, 807 F.2d at 1113; Costello Publishing Co. v. Rotelle, 670 F.2d 1035, 1044 (D.C.Cir.1981). If a defendant admits to using copyrighted material, that alone would make the defendant liable for copyright infringement, absent the owner's authorization. Fitzgerald Publishing, 807 F.2d at 1113. Since the defendants in the present case admit to printing shirts employing Busch's copyrighted property, the only issue on the copyright infringement claim is whether A.C. Printed Sportswear was authorized to print the shirts.

The absence of authorization or consent is also an essential aspect of a trademark infringement claim. See 15 U.S.C. § 1114(1)....