National Football League Properties v. NJ GIANTS

• Decision Date: 08 May 1986
• Docket Number: Civ. A. No. 84-3560.
• Parties: NATIONAL FOOTBALL LEAGUE PROPERTIES, INC. and New York Football Giants, Inc., Plaintiffs, v. NEW JERSEY GIANTS, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

637 F. Supp. 507

NATIONAL FOOTBALL LEAGUE PROPERTIES, INC. and New York Football Giants, Inc., Plaintiffs, v. NEW JERSEY GIANTS, INC., Defendant.

Civ. A. No. 84-3560.

United States District Court, D. New Jersey, Civil Division.

May 8, 1986.

COPYRIGHT MATERIAL OMITTED

Townley & Updike, New York City by John Paul Reiner, Gary M. Gertzog; Meyner & Landis, Newark, N.J. by William J. Fiore, for plaintiffs.

Maloof, Lebowitz & Bubb, P.C., Florham Park, N.J. by Michael S. Bubb, for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

BARRY, District Judge.

Plaintiff, the New York Football Giants, Inc., owns and operates the New York Giants, a major league professional football team which plays all of its home games in New Jersey yet eschews a New Jersey identification as resolutely as a vampire eschews the cross. Defendant, the New Jersey Giants, Inc., which is decidedly not a major league professional football team, was created and exists solely to illegally exploit the confusion engendered by the unwillingness of the team to correlate its name with the place it calls home. The other party to the case, plaintiff National Football League Properties, Inc. ("NFLP"), is the marketing arm of the twenty-eight present National Football League ("NFL") Member Clubs, and is licensed by those Clubs to use the NFL marks to promote the interests of the NFL and the Clubs while protecting those marks from infringement, dilution, misappropriation, and unfair competition.

Defendant, sensing an opportunity to exploit the anomoly of a team bearing the name of one state while playing in another, began to sell various items of sports-related apparel bearing the words "New Jersey GIANTS". Plaintiffs contend that defendant, as a result, has violated § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) and § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (service mark infringement and unfair competition); the New Jersey Trademark Act, N.J.S.A. 56:3-13.11; common law trademark infringement and unfair competition; tortious misappropriation of good will; and tortious interference with business relationships. They seek, among other relief, a permanent injunction, various damage awards, and attorneys' fees, costs, and expenses.

This opinion, of necessity, will analyze the host of violations pressed by plaintiffs in light of the facts as found and the law as applicable. I note at the outset, however, that the testimony of the three principals of this three man defendant corporation, who are not themselves named as defendants, goes very far in and of itself towards proving the violations with which defendant is charged and the propriety of certain of the relief sought. These men testified that one of the purposes for starting the business and incorporating the name, as they had previously incorporated the name "New Jersey Cosmos", was to sell the corporate name to the Giants' football team; that the other purpose was to sell the merchandise to fans of the Giants' football team who would associate and "no doubt" did associate that merchandise with the team; that even though in its best year the company sold but $2263.85 of merchandise and operated out of a law office, a post office box, and the back seat of the car of one of the principals, $30,000 worth of stock in the company has now been sold to three additional individuals; that two cease and desist letters were ignored with defendant, through its principals, continuing to do business and continuing to solicit business by means of radio spots which were intended to refer to the New York Giants' team and by means of advertisements in the "Giants News Weekly", a newsletter directed to Giants' fans and the subject of which was the team; and that these actions continued until such time as a temporary restraining order was entered with notice to but no appearance by any representative of defendant.¹

What came through from this testimony was an attempt to ride the New York Giants' coattails for one reason and one reason only — money. Defendant's attempt to foist upon the court a first amendment rationalization for its illegal actions and now to clothe those actions in justifications of "editorial content", "right to comment", and altruism are, in a word, incredible. Indeed, at no time from the inception of the New Jersey Giants, Inc., until the restraining order was entered was any hint given much less statement made in any ad placed in the print media or on radio or anywhere else that these individuals had any view about the team changing its name. Certainly, defendant's merchandise itself bearing the words "New Jersey GIANTS" over an outline of the State of New Jersey conveys no message whatsoever. And, I note, that separate and apart from the testimony of defendant's three principals, adduced on plaintiffs' case, defendant presented but one witness, an "expert" to whose opinion I accord no weight.

When all of the foregoing is considered together with the substantial additional evidence plaintiffs have presented, the conclusions I reach are inexorable. It is to that evidence and those conclusions that I now turn.

FINDINGS OF FACT

Each of the 28 Member Clubs of the NFL owns and operates a professional football team engaged in providing entertainment services by playing competitive professional football games in various cities throughout the United States. The NFL Constitution establishes the New York Football Giants' home territory as the area within a seventy-five mile radius of the City of New York and, thus, the Giants' fans are concentrated in the New York metropolitan area which includes portions of New York, New Jersey, and Connecticut.

In the New York Football Giants' sixty-year history, home games have been played at several locations in the New York metropolitan area: the Polo Grounds, Manhattan, New York (1925-1955); Yankee Stadium, Bronx, New York (1956-September, 1973); Yale Bowl, New Haven, Connecticut (1973-1974)²; Shea Stadium, Queens, New York (1975); and Giants' Stadium, East Rutherford, New Jersey (1976-present). The New York Football Giants' decision to move to New Jersey was made in 1971 at which time an agreement was entered into with the New Jersey Sports and Exposition Authority under which the Giants agreed to play home games in East Rutherford, New Jersey, less than seven miles from midtown Manhattan, upon completion of the construction of Giants' Stadium. To maintain continuity of tradition, the Giants retained the name "New York Giants" when it began playing home games in New Jersey. This decision is embodied in the New York Football Giants' agreement with the New Jersey Sports and Exposition Authority.

To identify and distinguish their respective football teams and the entertainment services that they provide, the New York Football Giants and other NFL Member Clubs have adopted and have used in interstate commerce various names, logos, designs, color combinations, uniforms, and other identifying marks ("NFL marks"). The New York Football Giants' marks have been registered under federal law pursuant to the provisions of the United States Trademark Act of 1946, 15 U.S.C. § 1051 et seq., ("the Lanham Act") and under the statutory laws of the states of New Jersey and New York. Among these registered marks are included the marks "Giants" and "New York Giants" which are service marks for entertainment services in the form of professional football games and exhibitions. The marks "Giants" and "New York Giants" have been continuously used by the Club since 1925, and throughout its history the team has referred to itself and has been known by the media and fans as the "New York Giants" or the "Giants".

Because of the popularity of NFL football and the extensive media coverage it receives, the NFL marks, including those long standing marks of the Giants, are nationally recognized and have become well known in the metropolitan area in which each Member Club plays its home games. Moreover, the popularity of NFL football coupled with NFLP's promotional efforts which, as will become apparent, involved extensive advertising and culminated in an extraordinary volume of sales, have combined to create a public perception and consumer awareness that merchandise bearing the NFL marks is sponsored or authorized by the NFL and its Member Clubs. The NFL marks and, more particularly, "Giants" and "New York Giants," have achieved secondary meaning as identifiers of the NFL and its Member Clubs.

NFLP has established a licensing program in which it licenses selected companies to use the NFL marks on specific articles of merchandise and in approved promotional programs. NFLP has issued over one hundred national and local licenses for use of the NFL marks on a wide variety of merchandise including t-shirts, sweatshirts, caps, jackets, other wearing apparel, novelty items, sporting goods, toys and games and home furnishings, and apparel bearing the marks "Giants" and "New York Giants" has been manufactured and sold under NFLP license for many years. Moreover, the NFLP has established a quality control program in which it supervises and approves the conception, design, color combinations, production and distribution of all merchandise licensed to bear the marks of the Giants and other NFL Clubs.

Licensed articles of merchandise bearing NFL marks are sold by licensees throughout the United States in a wide range of distribution channels, such as mail order catalogs, major retail department store chains, and small retail sporting goods and athletic wear stores, including outlets in New York and New Jersey. NFLP's licensees have invested significant amounts of capital and have devoted substantial amounts of time to the production, marketing and promotion of merchandise bearing the NFL marks. For the four year fiscal period beginning April 1, 1980 and ending March 31, 1984, retail sales of NFLP licensed merchandise were in excess of four hundred million dollars ($400,000,000). NFLP derives...