IN THE UNITED STATES DISTRICT COURT
KAREN DUDNIKOV, a/k/a TABBERONE,
Major League Baseball Properties, a New York Corporation
DEFENDANT'S CROSS MOTION FOR JUDGMENT ON THE PLEADINGS OR
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, defendant Major League Baseball Properties, Inc. ("MLPB"), through its undersigned counsel, respectfully moves for summary judgment on the state law claims of plaintiffs' Karen Dudnikov and Michael Meadors ("Tabberone") (1) fraudulent misrepresentation, (2) negligent misrepresentation, (3) tortious interference with contract, and (4) outrageous conduct, and their claim of perjury under 17 U.S.C. § 512 (2003).
This dispute arises from MLBP's objection to Tabberone's use of the trademarks of the New York Yankees, Atlanta Braves and Arizona Diamondbacks Major League Baseball Clubs ("MLB Clubs" or "Clubs") for three fabric tissue box covers Tabberone made and advertised for sale on eBay. Tabberone believes that it has defenses to its use of these MLB Clubs' trademarks, and MLBP disagrees. The parties's differing views are expressed in four e-mails they exchanged, and MLBP's e-mail to eBay. Tabberone brought a declaratory judgment action of non-infringement and also brought a hodgepodge of state law claims and a claim for perjury based on the Digital Millennium Copyright Act, 17 U.S.C. § 512 (2003). This motion seeks summary dismissal of plaintiffs' state law and perjury claims.
Tabberone's state law claims fail as a matter of law. First, MLBP had every right to advise eBay, using procedures eBay established in its Verified Rights Owner ("VeRO") program, that it believed that Tabberone's use of MLB Clubs' trademarks for fabric tissue box holders infringed the Clubs' trademarks. MLBP also had the right to advise Tabberone that it infringed the MLB Clubs' trademarks and copyrights. This is not different from Tabberone's right to express a contrary opinion both to eBay and MLBP.
Second, Tabberone fails as a matter of law to allege facts to satisfy the elements required for its state law claims. Most fundamentally, MLBP never made any misstatement of fact and Tabberone never relied on any misstatement of fact made by MLBP. These incontrovertible facts, evidenced by MLBP's e-mail to eBay, and the four e-mails between MLBP and Tabberone – which constitute the parties entire exchange-eliminate Tabberone's fraudulent misrepresentation and negligent misrepresentation claims.
Third, Tabberone has failed to show that MLBP's actions were in any way improper or harassing, foreclosing its claim of tortious interference with contract. Fourth, while Tabberone may by outraged that MLBP might take a different view of its copyright and trademark rights, that is not a basis for a claim of outrageous conduct. MLBP's expression that it had valid claims for trademark and copyright infringement simply does not constitute conduct so outrageous as to go beyond all possible bounds of decency, as required for a claim of outrageous conduct.
Finally, there is no civil cause of action for perjury under 17 U.S.C. § 512. The statute does provide for a claim for misrepresentation, but since MLBP only claimed that its Clubs' trademarks were infringed and made no misrepresentation of fact, Tabberone also fails to make out a claim for misrepresentation. Accordingly, Tabberone's state law and perjury claims should be summarily dismissed.
II. STATEMENT OF UNDISPUTED FACTS
1. Plaintiffs Karen Dudnikov and Michael Meadors are in the business of manufacturing, distributing and selling fabric items manufactured from a variety of copyrighted fabrics (Ex. A-1 ¶ 3).
2. Plaintiffs sell these products over the Internet, either through their own website, www.tabberone.com, or through eBay under the name "Tabberone." (Ex. A-1 ¶¶12-13.)
3. Defendant MLBP, pursuant to an agency agreement, is the licensing agent for all thirty MLB Clubs, including the Atlanta Braves, Arizona Diamondbacks, and New York Yankees. MLBP is responsible for the enforcement and protection of the Clubs' trademarks and copyrights, including infringement and counterfeiting actions. (Ex. A-6, "Orlinsky Decl." ¶¶2,6.)
4. In March, 2003, MLBP became aware that Tabberone was manufacturing, marketing and advertising on eBay fabric tissue boxes as "New York Yankees Fabric Tissue Box Covers," "Atlanta Braves Fabric Tissue Box Covers," and "Arizona Diamondbacks Fabric Tissue Box Covers." (Orlinsky Dec. ¶8.)
5. These products prominently bore registered trademarks of the New York Yankees, Atlanta Braves, and Arizona Diamondbacks. (Orlinsky Decl. ¶8, Orlinsky Decl Ex. E.)
6. Tabberone obtained the New York Yankees, Atlanta Braves and Arizona Diamondbacks trademarks by using copyrighted Licensed Fabric bearing these marks. MLBP licenses the Licensed Fabric, and it is sold for individual use only. (1) This MLB Club Fabric contains a statement prominently printed on its selvage stating: "THIS IS FOR INDIVIDUAL CONSUMPTION ONLY. ANY UNAUTHORIZED USE OF THIS FABRIC IS PROHIBITED AND ILLEGAL." Id. footnote: The Agency agreement provides the basis for MLBP's involvement with the Clubs' trademark and copyright licensing (Orlinsky Decl. ¶2.)
7. Plaintiffs' use of the New York Yankees, Atlanta Braves and Arizona Diamondbacks trademarks for its fabric tissue box covers was not authorized by MLBP or those Clubs. (Orlinsky Decl. ¶9.)
8. eBay developed procedures, under its VeRO program, concerning possible infringements of intellectual property rights in the eBay marketplace. (Orlinsky Decl. ¶ 10, Orlinsky Decl Ex. G.)
9. The VeRO procedures allow an owner of intellectual property to file a Notice of Infringement with eBay based on a god faith belief that a listing infringes the VeRO member's intellectual property rights. (Orlinsky Decl. ¶ 10, Orlinsky Decl. Ex. G) Based on the good faith assertion by a VeRO member, eBay will remove allegedly infringing materials from its website listings. Id.
10. Tabberone accepted the VeRO procedures as a condition of selling sits products on eBay. (Ex. A-2).
11. On march 31, 2003, MLBP filed a Notice of Infringement with eBay in which MLBP advised eBay that it had "a good faith belief that the listings or materials listed below [Plaintiffs' New York Yankees, Atlanta Braves and Arizona Diamondbacks fabric tissue box covers] are not authorized by the above IP Owner….and therefore infringe the IP Owner's rights according to state, federal, or United States law." The rights were describes as" "Infringed Work or Right: Unauthorized use of MLB trademarks on Tissue Box Covers." MLBP requested that eBay disable access to the material claimed to be infringing. (Orlinsky Decl. ¶¶11-12, Orlinsky Decl Ex. H.)
12. MLBP made no misstatement of fact in its e-mail to eBay. (Orlinsky Dec. ¶ 12, Orlinsky Decl. Ex. H.)
13. eBay shut down the three auctions as requested. (Ex. A-3)
14. On the same day, eBay advised Tabberone of its action and who to contact at MLBP for more information. (Ex. A-3.)
15. In an e-mail dated March 31, 2003, Karen Dudnikov of Tabberone asked MLBP for the reason it requested that Tabberone's listings be removed. (Orlinsky Decl. Ex. 1.)
16. On April 1, 2003, MLBP responded to Tabberone, via e-mail as follows:
Please be advised that we will be sending you a thorough response by certified mail in the coming days. However, I did briefly want to respond to your e-mail. The Tissue Box Covers you were selling on bay use protected Major League Baseball-related trademarks without authorization. Therefore, they create a likelihood of consumer confusion and suggest some type of sponsorship or endorsement by Major League Baseball Properties in violation of trademark law. Furthermore, the Tissue Box Covers are derivative works based upon a preexisting Major League Baseball-related copyright protected work in violation of copyright law.
(Orlinsky Decl. Ex., I.)
17. Tabberone replied on the same day, April 1, with an e-mail explaining to MLBP the reasons that it believed that it did not infringe any copyright or trademark rights (Orlinsky Dec. Ex. J.)
18. MLBP replied on April 1, again reiterating that it would be sending a more thorough response and stating that "[u]nfortunately MLBP disagrees with your assertions." It also warned Tabberone that in the meantime it would be forced to take all necessary and appropriate action if Tabberone attempted to re-list the offending items. (Orlinsky Decl. Ex.J.)
19. MLBP made no misstatement of fact in its e-mails to Tabberone. (Orlinsky Decl. Ex., I, J)
20. Tabberone did not rely on any statements of fact made by MLBP. (Orlinsky Decl. Ex. I, J.)
21. On April 3, 2002 (sic), plaintiffs filed a complaint in the Federal Court for the District of Colorado seeking a Declaratory Judgment. (Ex. A-1.)
Each of the state law claims and the perjury claim under 17 U.S.C. § 512 that Tabberone brings in its motion rests on the assumption that it was somehow inappropriate for MLBP to assert rights to the trademarks at issue. Protecting the use of the trademarks of the MLB Clubs in not only a privilege that MLBP holds, it a duty (sic) that must be taken seriously in order to maintain the enforceability of these trademarks. (Orlinsky Decl. ¶¶ 2,4) See, e.g., Fuji Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F. 2d 591, 602 (5th Cir. 1985) (" A trademark holder is required to police his mark; else, it may become generic, diluted, or otherwise lessened in value"). While Tabberone may disagree with MLBP's legal position, and may even be outraged by it, MLBP committed no wrongdoing by notifying eBay of its beliefs. In fact, the Precious Moments case that Tabberone relies heavily upon in its motion actually granted relief for a trademark claim similar to MLBP's trademark claim against Tabberone. Precious Moments, Inc. v. La Infatil, Inc., (sic). Supp. 66, 69 (D.P.R. 1997). Because MLBP has not made any false statements of fact or acted out of bad faith in any manner, the elements of the various state claims that Tabberone brings are not satisfied and Tabberone has not made out claim for perjury. Further, there is no civil cause of action for perjury under 17 U.S.C. § 512.
A. Summary judgment standard
Summary judgment is proper when there is no genuine issue of material fact to be resolved at trail. Fed. R. Civ. P. 56 (c) Nebraska v. Wyoming, 507 U.S. 584, 590 (1993). Thus, a district court may grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56 (c); Nelson v Geringer, 295 F. 3d 1082, 1086 (10th Cir. 2002). "An issue of material fact is genuine where a reasonable jury could return a verdict for the party opposing summary judgment." Seymore v Shawver & Sons, Inc., 111 F.3d 794, 797 (10th Circ. 1997).
In applying these standards, the district court will view the evidence in the light most favorable to the party opposing summary judgment. Jenkins v. Wood, 81 F. 3d 988, 990 (10th Cir. 1996). The movant bears the initial burden of demonstrating the absence of evidence to support the non-moving partys' claims. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
B. Fraudulent misrepresentation
Tabberone fails to state facts that would support any of the four material elements necessary for a claim of fraudulent misrepresentation. To establish a claim of fraudulent misrepresentation, a plaintiff must shows: (1) a fraudulent misrepresentation of a material fact, (2) the plaintiff's reliance on the material misrepresentation, (3) the plaintiff's right or justification in replying on the misrepresentation, and (4) reliance resulting in damages. Nielson v. Scott, 53 P. 3d 777-80 (Colo App. 2002) See also M.D.C./Wood, Inc. v. Mortimer, 86 P.2d 1380, 1382 (Colo. 1994).
As a threshold matter, MLBP notes that Tabberone appears to base its fraudulent misrepresentation claim on statements made by MLBP to eBay. However, under Colorado law, reliance by the plaintiff is a necessary element for a fraudulent misrepresentation claim. Tabberone has not alleged facts which satisfy this element, nor has it alleged facts necessary to satisfy the other elements of a fraudulent misrepresentation claim.
First, MLBP has not made any factual assertions, or misrepresentations as to fact. Tabberone only has three MLBP communications upon which to base its claim of fraudulent misrepresentation. In the first e-mail exchange between the parties, Tabberone asked MLBP why MLBP requested that eBay remove Tabberone's New York Yankees, Atlanta Braves and Arizona Diamondbacks fabric tissue box cover listings. MLBP responded by stating that Tabberone's products infringed MLBP's trademark and copyrights. Tabberone replied that it did not agree with MLBP's position. MLBP replied that it did not agree with Tabberone's position. In the whole of these exchanges, MLBP simply expressed its view regarding its belief that Tabberone's products infringed upon MLB Clubs' rights. (See Orlinsky Decl. Ex., I, J) No factual statements were made upon which Tabberone can base a claim for fraudulent misrepresentation, and it is well established that "[e]xpressions of opinion cannot support a misrepresentation claim." Mehaffy, Rider, Windholz, & Wilson v. Central Denver Bank, 892 P. 2d 230, 237 (Colo. 1995) (en banc).
Furthermore, MLBP has a valid basis for its claim of infringement by Tabberone's products. With regards to the trademark claim, Precious Moments, 971 F. Supp. At 69, the district court action upon which Tabberone so heavily relies, actually granted a preliminary injunction to the trademark owner on the basis of a trademark claim that is factually similar to this action. And with regards to the copyright claim, Tabberone acknowledges that there is a case law, namely Mirage Ed., Inc. v. Albuquerque A.R.T. Co., 856 F. 2d 1341, 1343-44 (9th Cir. 1988), which supports MLBP's claim that the transformation of fabric by adding material and manufacturing a separate product undermines Tabberone's first use defense, (my note: what is first use? Do they mean first sale or fair use?) Tabberone thus has not alleged and cannot prove facts to support fraudulent action by MLBP.
Second, Tabberone has not alleged that it relied upon a fraudulent misrepresentation made by MLBP, nor that is reliance resulted in damages. The parties' interactions consisted of MLBP stating its position, Tabberone disagreeing with that position, MLBP restating its position, Tabberone restating its disagreement and Tabberone filing an action for a declaratory judgment which further showed its disagreement and non-reliance. Plaintiffs have not alleged facts which satisfy this burden.
Third, Tabberone has not alleged facts demonstrating that it had a right to rely on information communication to it by a party with whom it was in dispute over intellectual property rights.
Fourth, Tabberone has not alleged facts showing it incurred damages from its reliance on a misrepresentation by MLBP.
For the above stated reasons, plaintiffs have failed to state a claim upon which relief can be granted.
C. Negligent misrepresentation
Negligent misrepresentation has the same elements as fraudulent misrepresentation, and Tabberone fails to state a claim on the same grounds. Moreover, negligent misrepresentation has the additional requirement that a defendant owe a duty to the party claiming negligent misrepresentation. See Miami Int'l Reality co. v Paynter, 841 F. 2d 348, 352 (10th Cir. 1988) ("[B]efore a negligence action can be maintained [in Colorado], there must be a duty of care owed by the defendant to the plaintiff"). Clearly, adversaries in a disagreement over intellectual property rights do not owe a duty of care to one another. Tabberone has not alleged and cannot prove facts which state a claim for negligent misrepresentation.
D. Perjury under 17 U.S.C. §512
Plaintiffs fail to demonstrate MLBP's liability for perjury under 17 U.S.C. § 512 or otherwise. First, there is no cause of action for perjury under 17 U.S.C. § 512, and a perjury action under federal law, 18 U.S.C.S. § 1621, is unavailable to plaintiffs because this statute does not authorize civil actions or create civil liability. Gipson v. Callahan, 18 F. Supp. 2d 662, 668 (W.D. Tex. 1997).
Second, although 17 U.S.C. § 512(f) provides a claim for misrepresentation for any person who knowingly materially misrepresents that material is infringing, for the reasons addressed above, Tabberone has not demonstrated that MLBP made any misrepresentations of fact to either Tabberone or eBay. Specifically, in its March 31, 2003 e-mail to eBay, MLBP asserted that it had a "good faith belief" that the listings infringe on the MLB Clubs' trademark rights (Orlinsky Decl. ¶¶ 11, 12, Ex. H.) Since there is no issue that the MLB Clubs own their trademarks or that MLBP is the rightful agent, and since Tabberone undeniably identified its products as "New York Yankees," "Atlanta Braves," and "Arizona Diamondbacks" products, MLBP clearly had a right to object to eBay and a basis to believe that the trademarks of those Clubs were infringed by Tabberone. Tabberone simply has not alleged facts and cannot prove that would demonstrate that MLBP did not have a good faith belief in its claims
Finally, this statue addresses copyright law, however, MLBP's complaint to eBay related to trademark infringement.
E. Tortious interference with contract
Tabberone fails to allege facts sufficient to support its tortious interference with contract claim because it has not shown improper behavior on the part of MLBP.
Tortious interference with a contract requires that: (1)the plaintiff have a contract with another party; (2) the defendant know or should have know of such contract's existence; (3) the defendant intentionally inducted the other party to the contract not to perform the contract with the plaintiff; and (4) the defendant's actions caused plaintiff to incur dames. See Memorial Gardens, Inc. v. Olympian Sales & Management Consultants, Inc., 690 P. 2d 207, 210 (Colo. 1984) (adopting Restatement (Second) of Torts § 766-68 (1997) which address intentional interference with contract). The interference must be both intentional and improper. Amoco Oil Co. v. Ervin, 908 P. 2d 493, 500 (Colo 1995).
Tabberone has failed to allege facts showing MLBP improperly interfered with its contract. Under the Restatement (Second) of Torts § 767, incorporated into Colorado state law by Memorial Gardens, Inc. 690 P. 2d at 210, instituting a lawsuit or the threat of a lawsuit is improper only "if the actor has no belief in the merit of the litigation" or if the actor "institutes or threatens to institute the litigation in bad faith, intending only to harass the third parties and not to bring his claim to definitive adjudication." Restatement (Second) of Torts § 767, comment c. Throughout the course of MLBP's communication with Tabberone, MLBP continuously asserted its belief in the merit of its position, and asserted its intention to protect the Clubs' trademarks and copyrights. (See Orlinsky Decl. Ex. I, J.) Furthermore, in reporting Tabberone's listings to eBay, MLBP followed procedures that were set up by eBay and that Tabberone had agreed to as a condition to sell its products on eBay. MLBP did not complain to any of Tabberone's suppliers or anyone else in a manner that was inappropriate under the circumstances where MLBP believed someone was infringing the Clubs' trademarks. Based on MLBP's e-mail to eBay, the four e-mails that were exchanged between the parties, and MLBP's assertion of its claims according to the procedure set up by eBay and agreed to by Tabberone under its User Agreement with eBay, MLBP's actions were neither improper nor harassing.
F. Outrageous conduct
MLBP's assertion of its rights under trademark and copyright law could not possibly give rise to the level of conduct necessary to show outrageous conduct under Colorado state law. The elements of outrageous conducts are: (1) the defendants engaged in extreme and outrageous conduct, (2) recklessly or with the intent of causing the plaintiff severe emotional distress, (3) causing the plaintiff severe emotional distress. Archer v. Farmer Bros. Co., 70 P 3d 495, 499 (Colo. App. 2002). The level of outrageousness required for conduct to create liability for intentional infliction of emotional distress is extremely high. Id. "Only conduct that is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency and be regard as atrocious and utterly intolerable in a civilized community will suffice." Bob Blake Builders, Inc. v. Gramling, 18 P 3d 859, 866 (Colo. App. 2001).
MLBP's assertion of rights under copyright and trademark law does not rise to the level of conduct which is "beyond all possible bounds of decency," nor are its actions so "atrocious" as to be "utterly intolerable in a civilized community." A trademark and copyright owners' desire to protect its intellectual property rights is an action that is neither outrageous or extreme, but rather something that occurs in the ordinary course of business. Tabberone has not alleged and cannot prove facts demonstrating that MLBP's conduct rises to the level required under Colorado law.
In addition, Tabberone has not shown severe emotional distress. To the contrary, it appears Tabberone has relished its recent legal experiences, and particularly the federal action it filed against MLBP. This is evidenced by plaintiff's own website which touts its apparent success in its intellectual property disputes, cites approvingly the amount of traffic drawn to its website because of its legal battles, and offers assurance that one can successfully defend intellectual property actions without the assistance of counsel. (Ex. A-4). In addition, plaintiffs have issued three press releases since the commencement of its action against MLBP, and, according to Tabberone, have been the subject of a television news story by FOX news, and in article in the on-line magazine The MicroEnterprise Journal, see Fighting Back (and Winning) in Trademark-land, The MicroEnterprise Journal (July 14, 2003), available at http://www.microenterprisejournal.com/articles/legal/20030714.html. (Ex. A-5) Plaintiffs have not shown any evidence that MLBP's actions have caused them several emotion (sic) distress. Rather, all Tabberone has show (sic) is that it is simply unhappy that MLBP holds a different interpretation of trademark and copyright law.
For the foregoing reasons, Defendant respectfully ask the Court to grant its motion for summary judgment.         Date: July 18, 2003
Steven M. Kaufmann
Willaim G. Pecau