Rosenfeld v. WB Saunders

• Citation: 728 F. Supp. 236
• Decision Date: 09 January 1990
• Docket Number: No. 88 Civ. 8207 (JMC).,88 Civ. 8207 (JMC).
• Parties: Alan ROSENFELD, as Trustee of the John Marquis Converse Testamentary Trusts for the Benefit of Veronica Converse and Sheila Converse, Plaintiff, v. W.B. SAUNDERS, A DIVISION OF HARCOURT BRACE JOVANOVICH, INC., and Joseph G. McCarthy, Defendants.
• Court: U.S. District Court — Southern District of New York

728 F. Supp. 236

Alan ROSENFELD, as Trustee of the John Marquis Converse Testamentary Trusts for the Benefit of Veronica Converse and Sheila Converse, Plaintiff, v. W.B. SAUNDERS, A DIVISION OF HARCOURT BRACE JOVANOVICH, INC., and Joseph G. McCarthy, Defendants.

No. 88 Civ. 8207 (JMC).

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

January 9, 1990.

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Ben C. Friedman, Baker & Friedman, New York City, for plaintiff.

Ira S. Sacks, Fried Frank Harris Shriver & Jacobson, New York City, for defendant Saunders.

Eugene F. Farabaugh, Milbank Tweed Hadley & McCloy, New York City, for defendant McCarthy.

MEMORANDUM AND ORDER

CANNELLA, District Judge.

The plaintiff's motion for a preliminary injunction is denied. Fed.R.Civ.P. 65(a).

BACKGROUND

Plaintiff, Alan Rosenfeld, brings this action in his capacity as the trustee of the John Marquis Converse Testamentary Trusts for the Benefit of Veronica Converse and Sheila Converse the "Trusts". The Trusts are the testamentary heirs of the intangible personal property rights of the late John Marquis Converse, M.D. "Dr. Converse". Defendant W.B. Saunders "Saunders", a division of Harcourt Brace Jovanovich, Inc., is a Delaware corporation engaged in business as a book publisher. Defendant Joseph G. McCarthy, M.D. "Dr. McCarthy" is the Lawrence D. Bell Professor of Plastic Surgery and Director of the Institute of Reconstructive Plastic Surgery at New York University Medical Center, positions to which Dr. McCarthy succeeded after Dr. Converse's death.

Pursuant to a 1961 contract between Dr. Converse and Saunders, Dr. Converse was the principal author and editor of Reconstructive Plastic Surgery, a five volume treatise published by Saunders in 1964. Dr. Converse selected his student and then employee Dr. McCarthy to serve as assistant editor of the second edition of Reconstructive Plastic Surgery, a seven volume treatise published by Saunders in 1977. Reconstructive Plastic Surgery is a comprehensive reference known as the "Bible" of plastic surgery.

Due to the rapid evolution of plastic surgery, Albert E. Meier, then supervising editor of Saunders for the second edition of Reconstructive Plastic Surgery, wrote to Dr. Converse on November 12, 1980 outlining the many changes necessary to update the work for a third edition. Declaration of Albert E. Meier in Opposition to Plaintiff's Motion for a Preliminary Injunction, at ¶ 8, 89 Civ. 8207 (JMC) (S.D.N.Y. Dec. 18, 1989) "Meier Decl.". In his reply, Dr. Converse acknowledged the need to publish a third edition. Id. at Exh. 4. Dr. Converse also indicated to Meier that Dr. McCarthy should serve as associate editor of the third edition and as the sole editorial successor for any future editions of Reconstructive Plastic Surgery after Dr. Converse's death. Id. In the event of such future editions after Dr. Converse's death, Dr. Converse suggested that Dr. McCarthy shall be the sole recipient of any royalties. Id. Dr. Converse's plans for a third edition were abandoned upon his death on January 31, 1981. It is unclear precisely how much work Dr. Converse had undertaken to update the second edition prior to his death. At a minimum, Dr. Converse began revising certain chapters and received commitments from prospective contributors to the third edition. See id.

Following Dr. Converse's death, Saunders submitted a proposed contract to Dr. McCarthy in July 1981 to serve as editor for the third edition of a work to be entitled Converse's Reconstructive Plastic Surgery. For reasons not made clear by the record, no contract was executed. Soon thereafter, Meier determined that the state of the art of plastic surgery had evolved so dramatically since 1977 that a totally new work was needed, not simply a revised edition of Reconstructive Plastic Surgery. Consequently, Meier sent Dr. McCarthy a formal invitation letter to edit a new multivolume textbook on plastic surgery written by various contributors. Meier Decl., Exh. 12. On August 14, 1984, Ardmore Medical Books, an imprint of Saunders, and Dr. McCarthy executed a contract pursuant to which Dr. McCarthy agreed to edit and deliver a new work entitled Plastic Surgery. Id. at Exh. 15.

In an effort to procure the necessary authors for Plastic Surgery, Dr. McCarthy sent solicitation letters to potential contributors. Plaintiff contends that the solicitation letters falsely represented that the contributions would appear in the third edition of the Converse work. Defendants contend that the solicitation letters accurately stated that the contributions would appear in a new textbook of plastic surgery edited by Dr. McCarthy reflecting the recent extraordinary progress in the field.

Saunders went to press with the McCarthy work in September 1989 and spent $1,055,000 to print 7,000 copies of the eight volume set. Advertising expenses in the amount of $120,000 were also incurred by Saunders. Approximately 2,300 of the 7,000 sets printed have been shipped to doctors, hospitals, and medical libraries. Approximately 1,250 orders are currently awaiting shipping.

Plaintiff now moves for a preliminary injunction enjoining defendants from publishing, selling, or distributing the McCarthy work. Plaintiff contends that the McCarthy work constitutes reverse palming off under section 43(a) of the Lanham Trademark Act of 1946, 15 U.S.C. § 1125(a) (1988) "Lanham Act", and copyright infringement under section 501 of the Copyright Act of 1976, 17 U.S.C. § 501 (1988). Plaintiff also asserts common law claims of breach of contract, misappropriation of the publicity value in the Converse name, unfair competition, and tortious interference with prospective economic advantage.

DISCUSSION

In order to obtain a preliminary injunction, plaintiff must demonstrate "`(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief.'" Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 73 (2d Cir.1988) (quoting Jackson Dairy, Inc. v. H.P. Hood & Sons, 596 F.2d 70, 72 (2d Cir.1979) (per curiam)).

I. Lanham Act

Plaintiff seeks a preliminary injunction on the ground that defendants' distribution of the McCarthy book in commerce with false designations of origin and false descriptions of fact is likely to cause consumer confusion as to the true origin, sponsorship, and authorship of the book in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988). Defendants contend that plaintiff lacks standing to assert a Lanham Act violation on behalf of the Trusts due to the absence of commercial injury. Defendants further contend that plaintiff has failed to establish the necessary likelihood of consumer confusion to warrant the issuance of injunctive relief.

Section 43(a) of the Lanham Act broadly proscribes the use of false descriptions and false designations of origin in the advertising and sale of goods or services in commerce.¹ See 15 U.S.C. § 1125(a) (1988). The Second Circuit has repeatedly construed section 43(a) as the federal equivalent to the common law cause of action for unfair competition. See, e.g., PPX Enters., Inc. v. Audiofidelity, Inc., 746 F.2d 120, 124 (2d Cir.1984) "PPX Enters. I"; Gilliam v. American Broadcasting Cos., 538 F.2d 14, 24 (2d Cir.1976). As such, the Second Circuit has successfully employed section 43(a) to combat a wide variety of deceptive commercial practices, including various forms of misappropriation and unfair competition. See PPX Enters., Inc. v. Audiofidelity Enters., Inc., 818 F.2d 266, 270-71 (2d Cir.1987) "PPX Enters. II" (citing a broad spectrum of section 43(a) violations).

The Lanham Act generally prohibits two types of unfair competition— palming off (or passing off) goods under the name of another and false advertising concerning the goods or services of the advertiser. See Lamothe v. Atlantic Recording Corp., 847 F.2d 1403, 1406 (9th Cir.1988). Traditional palming off involves the selling of one's goods or services under the name of a more popular competitor. See 1 R. Callmann, Unfair Competition, Trademarks and Monopolies § 2.01, at 2-3 (4th ed. 1981). However, the palming off facet of section 43(a) liability also encompasses merchandising practices or conduct "`economically equivalent' to palming off." Smith v. Montoro, 648 F.2d 602, 605 (9th Cir.1981). Such practices include a false designation of origin in the form of reverse palming off, which is actionable under section 43(a) of the Lanham Act. See id.; Williams v. Curtiss-Wright Corp., 691 F.2d 168, 172 (3d Cir.1982); Sims v. Blanchris, Inc., 648 F.Supp. 480, 482 (S.D.N.Y.1986). Express reverse palming off occurs when "the wrongdoer removes the name or trademark on another party's product and sells that product under a name chosen by the wrongdoer." Smith, 648 F.2d at 605. Implied reverse palming off, in contrast, occurs when "the wrongdoer simply removes or otherwise obliterates the name of the manufacturer or source and sells the product in an unbranded state." Id. While reverse palming off involves the misappropriation of another's talents as in traditional palming off cases, the gravamen of the harm in a reverse palming of case is that "the originator of the misidentified product is involuntarily deprived of the advertising value of its name and of the goodwill that otherwise would stem from public knowledge of the true source of the satisfactory product." Id. at 607. The harm, however, also runs to the ultimate purchaser who is "deprived of knowing the true source of the product and may even be deceived into believing that it comes from a different source." Id.

A. Standing under the Lanham Act

Section 43(a) of the Lanham Act permits a suit to be brought "by any person who believes that he or she is or is likely to be damaged" by the use of...