Demetriades v. Kaufmann

698 F. Supp. 521, 8 U.S.P.Q. 2d (BNA) 1917, 1988 U.S. Dist. LEXIS 11892, 1988 WL 113559
District Court, S.D. New York·Decided October 27, 1988·No. 88 Civ. 0848 (GLG)·Published·Cited by 18 cases

Opinion

MEMORANDUM DECISION

GOETTEL, District Judge.

This case continues to present novel issues for resolution by the court. Among other things, the instant motions require that we chart the extension of New York’s expansive law against unfair competition to the domain of residential development. Although we embark on that course with some trepidation, we think the New York courts would shape the malleable law proscribing all forms of “commercial immorality” to provide residential developers with at least some limited protection from the unauthorized appropriation of their labors.

The facts of this case have been set forth in two previous decisions, familiarity with which is presumed. Demetriades v. Kaufmann, 680 F.Supp. 658 (S.D.N.Y.1988) *523 (“Demetriades I”); Demetriades v. Kaufmann, 690 F.Supp. 289 (S.D.N.Y.1988) (“Demetriades II”). The upshot of this widely publicized cause celebre involves the misappropriation by certain of the defendants of plaintiffs’ copyrighted architectural plans for a home built at 12A Cooper Road in Scarsdale (the “Demetriades house”). The plans were then copied and the infringing plans were used to construct a home (the “Kaufmann house”) imitative of plaintiffs’ original work.

In the last round of motions, we dismissed the federal and state claims sounding in trade dress infringement, but allowed plaintiffs’ leave to replead newly asserted claims for unfair competition based on defendants’ alleged infringement of the “Demetriades” trade name. Demetriades II, 690 F.Supp. at 294-295. This new round of motions is comprised of defendants’ motions to dismiss (or, in the alternative, for summary judgment) all claims other than the copyright claim asserted in the Second Amended Complaint. In addition, a dispute has arisen as to the scope of discovery allowable in ascertaining the breadth of damages to which plaintiffs are entitled due to the copyright infringement in this case. Defendants’ motion for a protective order in that regard is also before us. For reasons that will become clear, we consider first the substantive arguments raised as to the constituent claims asserted in the Second Amended Complaint before turning to the motion for a protective order.

a. Alleged Violations of the Preliminary Injunction

In Demetriades I, we (1) preliminarily enjoined defendants from further, unauthorized copying of plaintiffs’ architectural plans, (2) preliminarily enjoined defendants from relying on any infringing copies of plaintiffs’ plans, and (3) ordered the im-poundment of all infringing copies of plaintiffs’ plans that remained within the defendants’ control. Demetriades I, 680 F.Supp. at 666 & 670. A subsequent order was issued in conformance with that decision. Demetriades v. Kaufmann, No. 88 Civ. 0848 (S.D.N.Y. Mar. 22, 1988) (Order for Preliminary Injunction).

As a consequence of our decision, defendants were required to prepare new plans governing the continued construction of the Kaufmann house. Demetriades I, 680 F.Supp. at 666 n. 3. Plaintiffs now allege that the Kaufmann and Gallo defendants, in preparing these new plans (which were subsequently filed with the Scarsdale Building Department), violated the injunctive remedy ordered in Deme-triades I. As articulated by plaintiffs’ counsel, “[T]he Kaufmanns and Gallos continued to rely on infringing copies of the [plaintiffs’] Plans by submitting ‘as built’ plans to the Scarsdale Building Department to enable them to continue to rely on the infringing plans, rather than going through the expense of creating a new set of plans by reverse engineering.” Plaintiffs’ Brief, at 26. Nowhere are the terms “ ‘as built’ plans” or “reverse engineering” specifically defined for the court. Nonetheless, the nub of this claim quite obviously is that, in violation of our decision in Demetriades I, the Kaufmann and Gallo defendants allegedly relied upon an infringing copy of plaintiffs’ architectural plans in drawing up the new plans submitted for the Kaufmann house. Were this so, it would certainly be a violation of our decision in Demetriades I and subsequent order.

In their reply papers on this motion, the defendants submit the affidavit of the architect employed to prepare the new plans. He avers that, between March 9 and March 17 of this year, actual measurements, inspections, and photographs of the partially constructed Kaufmann house were made. That data, we are assured, together with the actual survey of the property, served as the bases for the new plans. Kahn Aff. ¶¶1 3-4.

There has been no discovery, however, on this specific issue and, on its face, the second claim states a valid cause of action. Consequently, dismissal of the second claim is denied, but without prejudice to the motion’s renewal should discovery confirm the Kahn Affidavit and reveal that this claim is without factual foundation.

*524 b. The Federal Claim of Unfair Competition

Plaintiffs next contend that defendants, by falsely designating the infringing architectural plans and passing them off as their own, have violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (“section 43(a)”).

Defendants argue that this “problem is easily solved by merely affixing to the plans retained in the Scarsdale Building Department some type of label, to be agreed upon by the parties and ordered by this Court, showing the origin of the original plans.” Kaufmann Defendants’ Brief, at 8. Defendants further maintain that, at least under section 43(a), injunctive relief of this nature would be the exclusive remedy available to plaintiffs on this claim. Thus, they curiously conclude, defendants “are entitled to dismissal of the claim, since a trial would merely be an imposition on this Court’s time.” Id. Needless to say, this proposition, although novel, is hardly grounds for dismissal of a validly asserted cause of action.

If plaintiffs have stated a valid claim for unfair competition under the Lanham Act (and defendants offer no substantive challenge to that claim), and if plaintiffs are entitled to injunctive relief of the kind above described, the mere fact that a trial is not needed to fashion that relief does not discharge this court of its jurisdiction.

Alternatively, defendants contend that we have no jurisdiction over the Lan-ham Act claim because this case does not involve interstate commerce. Although we think this challenge presents a close question, we reject it in light of the broad precedent guiding our actions.

Jurisdiction under section 43(a) of the Lanham Act is premised expressly upon a defendant’s actions in placing into “commerce” a good or service containing a false designation of origin. 11 U.S.C. § 1125(a). “Commerce” is defined under the statute to comprise “all commerce which may lawfully be regulated by Congress,” id. at § 1127, that is to say all commerce within the ambit of the Commerce Clause, U.S. Const, art. I, § 8, cl. 3, as that clause has been construed by the courts.

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Demetriades v. Kaufmann, 698 F. Supp. 521, 8 U.S.P.Q. 2d (BNA) 1917, 1988 U.S. Dist. LEXIS 11892, 1988 WL 113559 (S.D.N.Y. 1988).

698 F. Supp. 521 (Demetriades v. Kaufmann) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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