R. Ready Productions, Inc. v. Cantrell
| Citation | 85 F.Supp.2d 672 |
| Decision Date | 07 January 2000 |
| Docket Number | No. Civ.A.H-98-0401.,Civ.A.H-98-0401. |
| Parties | R. READY PRODUCTIONS, INC., et al., Plaintiffs, v. Anthony C. CANTRELL, et al., Defendants. |
| Court | U.S. District Court — Southern District of Texas |
R Mark Ramsey, Ramsey & Murray, Houston, TX, for Apple Chevrolet Incorporated, movant.
John T Klug, Broocks Baker et al, Houston, TX, for Torrado Chrysler Plymouth Jeep Eagle, Brasada Ford Ltd., Austin Pontiac Ltd., McCombs Austin Inc., Atrm Ltd., Red McCombs Motors Inc., Hemphill Ford Center Inc., McCombs-Hendrix GMC, amicus.
Lee L Kaplan, Smyser Kaplan & Veselka, Houston, TX, for Texas Automobile Dealers Association aka TADA, amicus.
Myall S Hawkins, Lisa H Meyerhoff, Jenkens & Gilchrist, Houston, TX, for Anthony C Cantrell, Automotive Consulting Company, defendants.
William Fred Hagans, Hagans & Bobb, Houston, TX, Robert G McConn, Jr, McConn & Williams, Houston, TX, for R Ready Productions Inc, CSI Direct, Robert Ready, plaintiffs.
Pending before the Court in this copyright case is the Motion for Summary and Declaratory Judgment ("Defendants' Motion") [Doc. # 31] filed by Defendants Anthony C. Cantrell and Automotive Consulting Company. Plaintiffs Robert Ready, R. Ready Productions, Inc., and CSI Direct have responded in opposition. See Plaintiffs' Opposition to Defendants' Motion for Summary Judgment ("Plaintiffs' Opposition") [Doc. # 41]. In addition, Plaintiffs, Defendants and other third parties have filed pleadings.1 The Court has considered Defendants' Motion, Plaintiffs' Response, all matters of record, and the applicable authorities, and concludes that Defendants' Motion should be GRANTED in part and DENIED in part.
Overview. — This dispute involves the promotion of retail automobile sales through the use of targeted mailings. Plaintiff R. Ready Productions ("Ready Productions"), formed in 1993 by Plaintiff Robert Ready ("Ready"), is a marketing company that specializes in sales promotions for automobile dealerships. As part of its business, Ready Productions produces and mails a direct mail solicitation letter ("advertising letter") which is sent to selected customers. In 1995, Plaintiffs obtained a copyright for two of its advertising letters. This dispute concerns the legality of Defendants' use of mail solicitations very similar to the copyrighted advertising letters.2
In March 1995, Defendant Anthony Cantrell ("Cantrell") began work for Ready Productions as a salesman. He later became an independent contractor. See Independent Contractor Agreement, Plaintiffs' Response, Defendants' Reply, Exhibit 9. Cantrell soon left Ready Productions and started his own business, Defendant Automotive Consulting Company ("ACC") in October 1995. ACC also conducts sales promotions for automobile dealerships. At ACC, Cantrell used advertising letters similar to the ones used by Ready Productions. See Comparisons of ACC advertising letters and Ready Production advertising letters, Plaintiffs' Response, Exhibits H-J.
Early Promotional Materials and Creators. — The history of direct mail promotions in retail automotive sales, however, reaches far beyond the litigants involved in this case. In 1988, Kevin Bone ("Bone") started a direct mail business in Southern California with Randall Silbert ("Silbert"). See Deposition of Kevin Bone ("Bone Deposition"), Appendix to Defendants' Motion for Summary Judgment [Doc. # 33] ("Defendants' Appendix"), Exhibit 9, at 9. The name of this business originally was Ritz Promotions. Ritz Promotions was incorporated on June 10, 1988 in California. See Defendants' Reply, Exhibit 11 ("Status Inquiry Report" from California Secretary of State); Defendants' Reply, Exhibit 7, Deposition of Randall Silbert ("Silbert Deposition"), at 17.3 Bone and Silbert incorporated their business formally as "The Ritz Corporation" on January 19, 1989, but continued to use the name "Ritz Promotions" and the same mailing address. See Defendants' Appendix, Exhibit 11. From 1988 to approximately 1991, The Ritz Corporation (or a predecessor corporation) operated in several cities in Southern California and Florida. See Bone Deposition, at 10-11. The company's focus was the promotion of retail sales of automobiles through the use of direct mailings known as, "advertising letters" or "mailers." Id. at 29; see also Example of Ritz Mailers, Defendants' Reply, Exhibit 3, at 2-3. These advertising letters were sent to selected potential automobile purchasers, and essentially stated that the recipient was invited to an exclusive, day-long, sales event where a particular automobile dealership would sell its inventory of automobiles at very low prices. See id.
Bone achieved some recognition in the automotive direct mail promotions industry. He states that he was thought of as a founder of the industry and his advertising letters have been copied by "quite a few people" in different parts of the country. See Bone Deposition, at 207-08. In terms of his reputation, he states that "[p]eople refer to me as — I hate to use the terminology, but for lack of a better word, I've heard the king." Id. at 208.
In or about early 1990, James Kennedy ("Kennedy"), a salesman with The Ritz Corporation, resigned and started his own automotive direct mail business named Kennedy Promotions. See Deposition of James Kennedy ("Kennedy Deposition"), Defendants' Appendix, Exhibit 13, at 58, 76. This then became the Presidential Group ("Presidential") when Silbert and several other salespeople left The Ritz Corporation and joined Kennedy. Id. at 59. Presidential also engaged in direct mail automobile sales promotions, and it used advertising letters that were almost identical to those used by Ritz. See Examples of Presidential Materials, Defendants' Reply, Exhibit 4, at 2-3.
Silbert's involvement with Presidential triggered a lawsuit by Bone against Silbert; The Ritz Corporation later crossclaimed against Silbert and Presidential. See Cross-Complaint filed in Orange County, California. Bone v. Silbert, Cause Nos. 643804 and 644426 ("Bone/Ritz Suit"). Defendants' Appendix, Exhibits 15, 16. In its cross-complaint, The Ritz Corporation alleged that Silbert and Presidential
had improperly used THE RITZ CORPORATION's client list and other documentary and proprietary information including promotional material information in order to solicit prospective and actual business of THE RITZ CORPORATION.
Defendants' Appendix, Exhibit 16, at 4, ¶ 16. A settlement was eventually reached in which Silbert agreed to transfer all his stock in The Ritz Corporation back to that corporation. See Transcript of Proceedings in the Bone/Ritz Suit, Defendants' Appendix, Exhibit 17, at 10.
Ready's Involvement. — Plaintiff Ready joined Presidential in March 1991 as a sales trainer. When he joined Presidential, Ready had no experience in direct mail promotions in the automobile industry. See Deposition of Robert Ready ("Ready Deposition"), Defendants' Appendix, Exhibit 5, at 20-21. While employed with Presidential, Ready occupied positions of sales trainer, sales representative, and major accounts representative. Id. at 283-84. Ready admitted that he never helped develop direct mail materials for Presidential. Id. at 55. Moreover, he does not claim he has any ownership interest in Presidential's or The Ritz Corporation's materials. Id. at 55-56.
In June 1992, Ready and Silbert started a new partnership in California named Premier Productions ("Premier").4 See Ready Deposition, at 58-59. Premier was involved in the same promotion business as Ritz and Presidential. Ready admits that Silbert used documents originally obtained from both Ritz and Presidential in developing Premier's materials. Id. at 74. In September 1992, Ready and Silbert moved to Texas and filed a "doing business as" certificate for the name "Premier Productions." Ready states that he explained to Silbert "that we needed to move so that we were not competing nor were we going up against The Presidential Group or The Ritz...." Id. at 71-72.
Ready ended his partnership with Silbert in August 1993. That same month, he formed R. Ready Productions, the second Plaintiff in this case. See Affidavit of Robert Ready ("Ready Affidavit"), Plaintiffs' Response, at 1, ¶ 2. Again, this new business involved the same direct mail promotions for automobile sales as The Ritz Corporation, Presidential, and Premier. See Example of Plaintiffs' direct mail material compared with that of Ritz and Presidential, Plaintiffs' Response, Exhibits M through S.
Ready states, however, that "it was my intention at that time to create a new mailpiece [sic] which would be substantially different from other mailpieces [sic] that were being used in the direct mail advertising business at that time." Ready Affidavit, at 1, ¶ 2. He explains that
[o]ne of the major differences which I eventually incorporated into my basic mailpiece was a statement to the effect that the sales event to which the prospective customer was being invited did not involve any kind of phony gift.
On October 20, 1995, Plaintiffs filed copyright applications for two advertising/promotional letters. See Plaintiffs' Patent Applications, Plaintiffs' Opposition, Exhibit Y. These letters are almost identical to each other in content. The first advertising letter was designed for "Gilman Honda," see id. at 3, and the second letter was for "Gilman Mitsubishi," see id. at 6. On the application for each of these works, there is a space in which Plaintiff Ready was asked to "[briefly] describe the nature of material created by this author in which copyright is claimed." On each application, Plaintiffs answered "Entire Text." Id.
Plaintiffs filed another copyright application three years later, on October 6, 1998.5 See id. at 7. The title of this work is: "Best representatives of promotional literature." Plainti...
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