Marshak v. Sheppard

• Decision Date: 11 August 1987
• Docket Number: No. 86 Civ. 9960 (MP).,86 Civ. 9960 (MP).
• Parties: Larry MARSHAK, Plaintiff, v. Rick SHEPPARD, Mike Vogel, and A.S.V., INC., Defendants.
• Court: U.S. District Court — Southern District of New York

666 F. Supp. 590

Larry MARSHAK, Plaintiff, v. Rick SHEPPARD, Mike Vogel, and A.S.V., INC., Defendants.

No. 86 Civ. 9960 (MP).

United States District Court, S.D. New York.

August 11, 1987.

COPYRIGHT MATERIAL OMITTED

Hopgood, Calimafde, Kalil, Blaustein & Judlowe by Stephen B. Judlowe, Claudia A. Smith, Mary Dashke, and Marcus & Marcus, New York City by Clark Marcus, Kathy N. Rosenthal, for plaintiff.

Zavin, Sinnreich & Wasserman, New York City by Jonathan Zavin, Marya Lenn Yee, Richard Wasserman, for defendant Rick Sheppard.

Joseph E. Zyncak, P.C., New York City by Christopher R. Whent, for defendants Mike Vogel and A.S.V., Inc.

OPINION AND DECISION

MILTON POLLACK, Senior District Judge.

This is an action for infringement of a United States registered service mark, and for the wrongful use in commerce of false designations of origin, false descriptions and false representations, all in violation of the Lanham Trademark Act of 1946, 15 U.S.C. §§ 1114(1), 1116-1118, 1125(a); for infringement and dilution of service mark and trademark and trade name rights under the statute and under common law; and for unfair competition. Jurisdiction is based on 15 U.S.C. § 1121 (suits for infringement of United States registered trademarks and service marks); and 28 U.S.C. § 1338(b) and 15 U.S.C. § 1125(a) (unfair competition actions). Venue in this court is proper under 28 U.S.C. § 1391(b). The issues were tried to the Court at a Bench trial.

Plaintiff Larry Marshak is the manager of a performing group known as "The Drifters." In that capacity plaintiff has promoted, advertised and maintained the goodwill of the performing group known as "The Drifters," and as such, has acquired a valuable property right therein. Plaintiff is the owner of United States Registration No. 1,081,338 for the service mark "The Drifters," which was registered January 3, 1978. The mark covers entertainment services, namely vocal and instrumental music, rendered by a group and of the goodwill of the business connected with the use and symbolized by the service mark "The Drifters." This registered service mark was duly and lawfully issued and is in full force and effect.

The defendant Rick Sheppard, was, and still is, engaged in the field of entertainment and, from time to time, has performed under the group name "Rick Sheppard and The Drifters," thus competing with plaintiff in the field of entertainment. One of these performances was on November 26, 1986, at the Stratton Restaurant in Queens, New York, which is owned by defendant A.S.V., Inc. and managed by defendant Mike Vogel. None of Sheppard's performances as "Rick Sheppard and The Drifters" in the relevant period were authorized by plaintiff. Plaintiff contends that the defendants have profited thereby, and unless defendants' conduct is permanently enjoined plaintiff and his good-will and reputation will suffer irreparable injury.

Two answers have been filed, one for Sheppard, and the other for Vogel and A.S.V. The answers contain general denials and include several common affirmative defenses. Defendants state that Marshak is barred from his suit by laches, in that he has not vigorously protected his mark against Sheppard, who has been using it for over ten years; that Marshak has unclean hands in having appropriated a mark used by one Treadwell; that the mark was registered by fraud; that Marshak's assignors had no rights which they could transfer to Marshak; and that defendants' use of the mark was innocent because they didn't know that Marshak had registered it. Vogel says further that he was acting as an employee of A.S.V., Inc. and should not be held personally liable if A.S.V., Inc. is held liable.

Defendant Sheppard's Answer to the complaint contains eight counterclaims asserting: antitrust violation; violation of § 38 of the Lanham Act (procurement of a service mark by false or fraudulent declarations to the patent and trademark office); unfair competition; malicious prosecution; defamation; disparagement; inducement to breach the contractual relationship of third parties with said defendant; and interference with Sheppard's prospective business relations.

The relief sought in the Answer of the defendant Sheppard is that the service mark be ordered cancelled on the ground of procurement by fraud; that Marshak be permanently enjoined from holding himself out as manager of a performing group under the name of "The Drifters" and that the plaintiff respond in the amount of Sheppard's actual damages. The Answer of defendants Mike Vogel and A.S.V., Inc. prays that, if liability on the part of Sheppard is found, they be held to be merely innocent infringers within the meaning of 15 U.S.C. § 1114.

At the conclusion of the trial, on inquiry from the Court, defendant Sheppard conceded that he had not adduced any evidence of damages in support of any of his counterclaims, and consented in open Court to the dismissal of all those of his counterclaims seeking damages, leaving outstanding only those seeking cancellation of the plaintiff's mark and a ruling of unfair competition on plaintiff's part.

BACKGROUND

In 1953 a singing group called "The Drifters" first appeared. Shortly after its formation, George Treadwell became the manager of the group. The membership of "The Drifters" thereafter underwent frequent change; at least twenty different individuals appeared as members of The Drifters between 1953 and 1976.

In 1958 Treadwell hired several members of another group, "The Crowns," to supplant individuals then performing as The Drifters. Among those who became the Drifters at that time were plaintiff's assignors, Dock Green, Elsbeary Hobbs, and Charles Thomas. Hobbs remained with the group through 1961, Green through 1962, and Thomas through 1967. The period of the early 1960s was a productive one for The Drifters, including the recording of several of their most popular songs, including "There Goes My Baby," (1959), "Save the Last Dance for Me," (1960), "Some Kind of Wonderful," (1961), "Up on the Roof," (1962), "On Broadway," (1963), and "Under the Boardwalk," (1964).

Treadwell operated The Drifters through a New York corporation, Drifters, Inc. Defendant Sheppard claims that all members of The Drifters signed employment contracts with Treadwell before performing in the group and that these contracts divested the performers of any rights in the name "The Drifters," at least as against Treadwell. Defendant offered evidence of one such contract between Drifters, Inc. and Charles Thomas.

Defendant Rick Sheppard performed as a member of The Drifters from 1966 to 1970. Treadwell died in 1967. After Treadwell's death, his widow Faye Treadwell continued to manage the group. Record royalties continued to flow to her, through Drifters, Inc., for Drifters records issued up to that time. Drifters, Inc., however was dissolved as a New York corporation in 1977, for tax delinquency.

In 1969, Thomas, Green, and Hobbs reunited to perform in revival shows as "The Drifters." This group came under the management of plaintiff Larry Marshak in the early 1970s.

In 1971, Drifters, Inc., the Treadwell corporation, brought an infringement suit in New York State Court against Thomas, Green, Hobbs, Marshak and several others. In the complaint, Drifters, Inc. stated that it had continuously used the name "Drifters" as the distinctive title for its appearances and that as a result of extensive exposure, the public had come to have a high regard for the performance and entertainment abilities of those connected with Drifters, Inc. The complaint in that suit alleged that defendants had used the name "Drifters," exploiting for their own gain the good will which had come to be associated with the use by Drifters, Inc. of that name. Drifters, Inc. accused Marshak's group of infringement and requested an injunction barring defendants from using the name "Drifters."

The State Court denied plaintiff a preliminary injunction against use of "The Drifters" by the defendants before it. In an opinion dated January 25, 1972, the court held: "plaintiff Drifters, Inc. has failed to establish its allegations that it has an established reputation in the entertainment field and that defendants have been infringing upon plaintiff's good name and good will. In fact, the evidence submitted apparently indicates that it is the defendants who have established such reputation and notoriety." On the subject of the employment contracts between Drifters performers and Drifters, Inc., the court noted, "There are serious questions raised respecting the validity of the purported contracts and whether or not plaintiff has fully complied with the contract terms and conditions." Final Judgment of dismissal of the suit was entered for defendants on May 6, 1973, including an award of costs to them.

The Drifters group managed by Marshak has performed with significant continuity and popularity since its inception in the early 1970s. Marshak testified that his group, which is billed as "The Drifters" or "The Drifters featuring Charlie Thomas," is booked through three major agencies and has appeared in all fifty states and abroad. Marshak's group has appeared in large arenas throughout the country, including performances in Madison Square Garden in New York, which were sold-out on seven to ten occasions. Marshak's group has appeared at baseball stadiums, amusement parks, concert halls, as well as the Kennedy Arts Center in Washington.

Marshak's Drifters were one of twelve groups selected to perform in the Soviet Union in 1976 as part of a bicentennial exchange. They performed in the White House for President Ford, on the battleship Intrepid as part of the anniversary celebration for the Statue of Liberty in New York, at the 75th Anniversary celebration of the New York Stock Exchange, and recently at a celebration of the United States Constitution, which was presided over by former Chief Justice Warren Burger.

In addition, Marshak's group...