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SELCHOW & RIGHTER CO. v. GOLDEX CORP.

February 20, 1985

SELCHOW & RIGHTER COMPANY, Plaintiff,
v.
GOLDEX CORPORATION, JOHN A. ISHMAEL, AND 800 MARKETING, INC., Defendants; GOLDEX CORPORATION, Counter-Plaintiff, v. SELCHOW & RIGHTER, COMPANY, HORN ABBOT, LTD., WALTER D. AMES, WARSON, COLE, GRINDLE & WATSON and JOHN DOES 1-50, Defendants


Paine


The opinion of the court was delivered by: PAINE

This cause is before the Court for consideration of the plaintiff, Selchow & Righter Company's Motion for Summary Judgment, or alternatively, for a Preliminary Injunction (DE #20). A hearing on this motion was held on October 26, 1984. After reviewing the record in this cause, the various submissions of the parties and considering argument of counsel, this Court makes the following findings of fact and conclusions of law.

 FINDINGS OF FACT

 The plaintiff, Selchow & Righter Company ("S & R") is a New York Corporation which manufactures family games. Horn Abbot, Ltd. ("Horn Abbot"), a Canadian corporation, is the originator of the Trivial Pursuit-brand games which have achieved amazing popularity in the United States and Canada. In conjunction with its plan to sell and distribute these games in the United States, Horn Abbot obtained and is the legal owner of the following trademarks, design patents, and copyrights covering Trivial Pursuit-brand games: *fn1"

 1. "Trivial Pursuit" - U.S. Registered Trademark No. 1,236,540.

 2. Game Board Design - U.S. Design Patent No. 270,741.

 3. Game Board - U.S. Copyright Registration No. U.A. 95-532.

 4. Rules and Cards - U.S. Copyright Registration No. TX 846-925.

 On November 19, 1982, Horn Abbot executed an exclusive license agreement whereby Horn Abbot granted the exclusive right to manufacture, use and sell Trivial Pursuit-brand games in the United States, its territories and possessions to S & R. This agreement also provides that these rights are exclusive even as to Horn Abbot. *fn2"

 Trivial Pursuit-brand games (Genus Edition) manufactured by S & R in the United States consist of a playing board, rules and card sets, plastic playing pieces, a die and an advertising brochure. Additional card sets printed in the United States, for example the Silver Screen and Baby Boomer editions, contain only the rules, the card sets, and the advertising brochure. Games manufactured in Canada are identical to those manufactured in the United States with some exceptions: (1) The S & R wheel logo does not appear on the boxes of games manufactured in Canada, except those manufactured by Chieftain Products, discussed infra at slip op. p. 4; (2) complete game sets (i.e. complete with playing board, card sets, playing pieces, etc.) are manufactured in Canada for several editions (e.g., Genus edition, Baby Boomer edition, Silver Screen, etc.) whereas only one edition (Genus edition) is manufactured in the United States as a complete set. All other editions manufactured for the United States market (e.g. Baby Boomer edition) are available only as additional card sets; (3) several questions and/or answers in the Canadian version were deemed by S & R to be offensive and unsuitable for family participation. Accordingly, games manufactured in the United States contain some different subject matter, and/or different words or phrases; (4) games manufactured in Canada do not contain a S & R advertising brochure.

 S & R maintains a manufacturing plant in Holbrook, L.I., N.Y. In addition to manufacturing games there, S & R hires "printing brokers", who act as agents of S & R, to manufacture the games as well. One of these printing brokers hired by S & R is Cornacchia Press, Inc. ("Cornacchia"). When S & R first began manufacturing Trivial Pursuit games in November, 1982, Cornacchia was hired to print and collate the card sets for S & R. In turn, Cornacchia subcontracted with Banta Company in Menasha, Wisconsin to do the actual printing and collating of the cards [Cornacchia deposition, DE #75; pp. 13-18]. The finished card sets were delivered to S & R's manufacturing plant in Holbrook, Long Island.

 Sometime in 1983, Cornacchia began manufacturing and assembling complete game sets for S & R (the actual production of these games was done by Banta Company; Cornacchia supervised the production) [Cornacchia deposition, DE #75; pp. 23-25]. In order to meet increased demand for the game, Cornacchia also subcontracted with Chieftain Products, a Canadian printing broker, and Western Publishing Co. of Wisconsin to manufacture complete game sets for S & R. [Cornacchia deposition, DE #75; pp. 26-27 and p. 30]. Apparently, Chieftain Products was also the manufacturer utilized by Horn Abbot to produce the Canadian games [Cornacchia deposition, DE #75, p. 31]. The method utilized for payment consisted of Chieftain billing Cornacchia per game. Cornacchia would pay Chieftain. Thereafter, Cornacchia billed S & R. [Cornacchia deposition, p. 43]. The games manufactured by Chieftain for Cornacchia comprise 15% of all the games manufactured for S & R. In other words, 15% of all Trivial Pursuit games sold by S & R in the United States and its territories are manufactured in Canada.

 The defendants Goldex Corporation ("Goldex"), John Ishmael ("Ishmael") and 800 Marketing, Inc. are Florida residents. Ishmael is an officer of both corporations. The stock of Goldex is owned by a family trust; Ishmael's family members are the beneficiaries of the trust and Ishmael is the trustee. Each company operates what is essentially a "mail order" business. That is, they offer goods for sale through magazine and newspaper advertisements, obtain goods from different sources, and mail or ship the goods per customer order.

 Due to the enormous popularity of the game "Trivial Pursuit", S & R has had difficulty in supplying retail outlets in the United States to meet customer demand. Seizing on this short supply, Goldex (acting through Ishmael) contacted a representative of S & R to inquire about obtaining a large supply of games to distribute through his mail order businesses. S & R referred him to a Miami "jobber". Further inquiry elicited the information that this "jobber" could not supply him with the quantity desired. Ishmael also made inquiries in Canada, directed to Horn Abbot and Chieftain. Both companies refused to supply him with any games and informed Ishmael of the exclusive license agreement. Ishmael then made arrangements with a Canadian corporation, Goldex of Canada, to buy the Canadian versions of Trivial Pursuit-brand games. Evidence submitted by Ishmael (Def. Ex. 1) shows that he checked with U.S. Customs before importing any games into the United States; U.S. Customs informed him that the Trivial Pursuit trademark had not been registered with U.S. Customs by Horn Abbot or anyone else.

 Ishmael states that he sells approximately .001% of all Trivial Pursuit games, most of which are Baby Boomer editions. He admits that most of "his" games are shipped from Canada and, occasionally, he buys games from local retailers/wholesalers. His major medium for advertising is USA Today. Exhibits of advertisements submitted by both parties (Def. Ex. #2; Pl. Ex. #2) show that, in addition to the Genus and Baby Boomer editions, the defendants offer such games as "Sexual Trivia ", "Junior Trivia" and "Bible Trivia", all of which are under the heading "Trivial Pursuit". The ads also show "Goldex-800" as the offeror. Ishmael testified that he offers a "100% money-back guarantee", however, no mention of guarantee is contained in the ads for Trivial Pursuit games.

 Mr. Selchow, president of S & R, testified that the games imported from Canada are causing his company to lose advertising clout (since they do not contain a S & R advertising brochure), and generate dissatisfaction among S & R distributors (who cannot import the game from Canada and who are in consistently short supply) as well as S & R customers because of the sale of "Sexual Trivia". S & R concludes that, as a manufacturer of family type games, its reputation is injured by the sale of "Sexual Trivia".

 CONCLUSIONS OF LAW

 Fed.R.Civ.Pr. Rule 56(c) provides that on motion for summary judgment, the moving party must demonstrate that there exists no genuine issue of material fact and that he is entitled to judgment as a matter of law. Once the moving party has made this showing, the burden shifts to the opposing party to come forward with significant probative evidence demonstrating a triable issue of fact. American Viking Contractors, Inc. v. Scribner Equipment Co., 745 F.2d 1365 (11th Cir. 1984).

 There being no genuine issue or dispute between the parties as to the foregoing findings of fact or, no proof to the contrary being offered or elicited, the Court's first inquiry must be whether those uncontroverted facts establish a claim entitling the plaintiff to judgment as a matter of law.

 PLAINTIFF'S CASE

 The plaintiff S & R is the assignee in the United States of registered U.S. trademarks, design patents and copyrights owned by Horn Abbot, Ltd. (See, this Court's order of August 27, 1984). These registrations are presumptively valid. *fn3" The defendants admit that they are importing Trivial Pursuit-brand games from Canada and are selling them in the United States by mail order. The imported games are those manufactured and distributed by Horn Abbot in Canada. The plaintiff has not given the defendants permission to sell these Canadian games in the United States.

 I. Statutory Trademark Infringement

 "The primary and proper function of a trademark is to identify the origin or ownership of the article to which it is affixed" Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S. Ct. 357, 60 L. Ed. 713 (1916). As such, 15 U.S.C. § 1114(1) (the Lanham Trademark Act § 32(1)) provides, in pertinent part, that

 
any person who shall, without the consent of the registrant --
 
(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; . . .
 
shall be liable in a civil action by the registrant for the remedies hereinafter provided.

 The gravaman of an action for trademark infringement is that the use of the infringing mark is likely to confuse consumers as to the source of the product, its endorsement by the trademark holder, or its connection with the holder. Kentucky Fried Chicken Corp. v. Diversified Packaging Corp. 549 F.2d 368 (5th Cir. 1977). In determining whether there is a likelihood of confusion between marks, the Court must evaluate a number of factors including the type of trademark, similarity of design, similarity of product, identity of retail outlets and purchasers, similarity of advertising media used, defendant's intent, and actual confusion. Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178 (5th Cir. 1980), cert. den. 450 U.S. 981, 101 S. Ct. 1516, 67 L. Ed. 2d 816.

 The plaintiff S & R has shown that there exists a substantial likelihood of confusion between Trivial Pursuit-brand games originating from the United States manufacturer (S & R) and Trivial Pursuit-brand games originating from the Canadian manufacturer (Horn Abbot). The trademark "Trivial Pursuit" affixed to both games (and the product itself) are virtually identical. S & R does not identify itself with any particular retail outlet, so consumers are not put on notice as to the origin of the goods. *fn4" Mr. Selchow testified that purchasers of Canadian Trivial Pursuit-brand games often call or write to his company regarding offensive words/phrases which are contained in that version of the game.

 The advertisement submitted by the defendants show that a number of trivia games are offered for sale by the defendants under the trademark "Trivial Pursuit". The ad lists "Baby Boomer or Genus Edition -- complete game; Bible Trivia and Junior Trivia". Mr. Selchow testified that his company does not manufacture either the complete game set for Baby Boomer editions or Junior Trivia or Bible Trivia games; nor is there any allegation by the defendants that S & R does manufacture those games. It is unknown whether Horn Abbot manufactures Junior Trivia and Bible Trivia games. Another advertisement, submitted by the plaintiff, shows that the defendants offer the above-enumerated games for sale, as well as the game "Sexual Trivia", under the heading "Trivial Pursuits". *fn5" Given the fact that the plaintiff has shown that a number of S & R customers associate "Trivial Pursuit" with S & R, the Court concludes that the plaintiff has shown that a substantial likelihood of confusion exists *fn6" and has proved its case for statutory trademark infringement.

 II. Common Law Trademark Infringement

 S & R has acquired a common law trademark in the State of Florida by virtue of its adoption and continuous use in this state of the trademark "Trivial Pursuit" in connection with an established business. See, Crown Central Petroleum Corp. v. Standard Oil Co. 135 So. 2d 26, cert. den. 142 So. 2d 731 (Fla. 1962); and Sheila's Shine Products, Inc. v. Sheila Shine, Inc., 486 F.2d 114 (5th Cir. 1973).

 The same elements necessary to prove statutory trademark infringement (as set forth previously herein) would also establish common-law trademark infringement. See, eg., Mako Marine, Inc. v. Mako Inc., 328 F. Supp. 177 (S.D. Fla. 1971). The Court, having found that S & R has proved a case for statutory trademark infringement, also finds that S & R has proved common-law trademark infringement.

 35 U.S.C. § 271(a) provides that "whoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefor, infringes the patent". The term of the patent, (filed in November 1981) is for 14 years. There is no question that the defendants have been, and are, selling the game board (the patented article) in conjunction with Trivial Pursuit-brand games in the United States during the term of the patent. The majority of game boards sold by the defendants in the United States are imported from Canada, and are sold in the United States without the authority of the exclusive licensee, S & R, who stands in the shoes of the patentee. The plaintiff has established that its patent rights have been and are being infringed by the defendants. See, e.g., Aro Manufacturing Co., Inc. v. Convertible Top Replacement Co., Inc. 377 U.S. 476, 84 S. Ct. 1526, 12 L. Ed. 2d 457 (1964); and Shields v. Halliburton Co., 493 F. Supp. 1376 (W.D. La. 1980), affm'd. 667 F.2d 1232 (5th Cir. 1982).

 IV. Copyright Infringement

 17 U.S.C. § 501 provides that "anyone who violates any of the exclusive rights of the copyright owner . . . or who imports, copies or phonorecords into the United States in violation of Section 602, is an infringer of the copyright". *fn7" The exclusive rights of a copyright owner include the rights of ...


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