Fritz v. Arthur D. Little, Inc.

944 F. Supp. 95, 41 U.S.P.Q. 2d (BNA) 1352, 1996 U.S. Dist. LEXIS 16648, 1996 WL 653025
CourtDistrict Court, D. Massachusetts
DecidedNovember 6, 1996
DocketCivil Action 96-10607-NG
StatusPublished
Cited by15 cases

This text of 944 F. Supp. 95 (Fritz v. Arthur D. Little, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fritz v. Arthur D. Little, Inc., 944 F. Supp. 95, 41 U.S.P.Q. 2d (BNA) 1352, 1996 U.S. Dist. LEXIS 16648, 1996 WL 653025 (D. Mass. 1996).

Opinion

MEMORANDUM AND ORDER

GERTNER, District Judge:

This case concerns the tangled web of copyrights, trademarks, licenses and understandings between former partners in the “Leadership Training” field. Plaintiffs Robert Fritz and his wholly-owned companies Dimensional Mind Approach (“DMA”) and Technologies For Creating (“TFC”) (hereinafter collectively “Fritz”) claim that defendants Arthur Little, Inc., Charles Kiefer, Jr., Innovation Associates, Inc. I (“IA Inc I”) and its successor Innovation Associates, Inc. II (“IA Inc. II”), have infringed several of plaintiffs’ copyrights and plaintiffs’ protectable trade dress. Fritz further claims that defendants have engaged in statutory and common law unfair competition, and that they have breached licensing agreements and implied covenants of good faith and fair dealing.

Fritz now seeks a preliminary injunction to stop defendants from using the allegedly infringing materials. Defendants move to dismiss the trade dress claims in Count Three of plaintiffs’ complaint. Both motions are DENIED, as set forth below.

I. BACKGROUND

Robert Fritz and Charles Kiefer first met in 1976. Both were engaged in the preparation and teaching of courses that focused on personal enhancement, and the enhancement of team performance. Fritz was the sole proprietor of Dimensional Mind Approach, Inc., through which he taught the DMA Course, while Kiefer was the sole proprietor of Innovation Associates, (“IA Inc. I”) through which he taught the “Core Course.” The two men became friends, and each attended the other’s course. Starting in 1978-79, they collaborated in developing a comprehensive course in leadership training called the “Leadership and Mastery” course (under the auspices of Innovation Associates).

Kiefer paid Fritz, as a subcontractor, to teach the Leadership and Mastery course. In 1979, Kiefer purchased parts of Fritz’s DMA course to use in his Core Course. Kiefer did not buy the right to use the entire DMA course, but only certain clearly specified portions of it.

In a letter dated November 3, 1980 (hereinafter “letter-agreement”), Fritz became Kiefer’s partner in Innovation Associates. As part of their agreement, Innovation Associates agreed to pay Fritz royalties for a limited time for the use of DMA course materials. Fritz retained the right to decide how his own future innovations would be used. In the crucial paragraph of the November 3, 1980 letter-agreement, all of Fritz’s future contributions to Innovation Associates, unless “specifically exempted in advance,” were to be “free and clear of obligation” to DMA. In December, 1982, Innovation Associates incorporated (hereinafter “IA Inc. I”). Fritz made some contributions to IA Inc. I’s Leadership and Mastery course while teaching it, contributions which may have been entirely oral. There is no indication that these contributions were expressly exempted by Fritz under the November 3,1980 letter-agreement.

On numerous occasions, Kiefer wrote updated versions of the Leadership and Mastery course incorporating Fritz’s oral contributions. Meanwhile, around 1981, Fritz began revising his own DMA course around the central theme of “Structural Tension”; *97 Fritz began to teach Structural Tension through DMA, Inc. These “ST” courses were owned by DMA and taught by a number of DMA instructors. Fritz claims he granted oral and non-exclusive licenses to IA Inc. I to use material contained in the ST courses. Kiefer denies this.

When IA incorporated in December 1982, Fritz became a stockholder of IA Inc. I, and as such, continued to teach its Leadership and Mastery course. Fritz also continued developing his own ST courses, including one course called the Genesys course (“Gene-sys”), the use of which Fritz claims he licensed to IA Inc. I.

In the early 1980’s, IA Inc. I created the Visionary Leadership course (“VL”) and the Visionary Business Planning course (“VP”). Both of these courses used Fritz’s materials, drawn from the Leadership and Mastery course on which Kiefer and Fritz had collaborated. In 1985, the VL and VP courses were combined to create the Visionary Leadership and Planning course (“VLP”). Some of the material was drawn from Fritz’s material, either pursuant to the November 3, 1980 licensing arrangement contained in the letter-agreement, the various oral licenses, or other agreements between Fritz and IA Inc. I (or Innovation Associates, the partnership). The VLP course does not explicitly acknowledge that it contains the copyrighted work of Robert Fritz, whereas the Leadership and Mastery and the VL course manuals (noting on their covers that some material is copyrighted by Robert Fritz and is used with permission).

On July 2, 1991 IA Inc. I redeemed all of Fritz’s shares for $30,000 and other valuable consideration. In 1992, Fritz granted IA Inc. I permission to use some of his Technologies For Creating (“TFC”) materials, as IA Inc. I was considering purchasing them. This licensing arrangement was terminated on July 20, 1994, when IA Inc. I decided not to purchase these materials.

In August, 1995 IA Inc. I was acquired by a subsidiary of Arthur D. Little, Inc. (“ADL”), the ADL Acquisition Corp. The merger resulted in a new company, a subsidiary of ADL also called Innovation Associates Inc. (“IA Inc. II”). IA Inc. II continues to perform the same business as its predecessor, IA Inc. I.

On March 21, 1996, Fritz brought suit against the defendants, alleging copyright and trade dress infringement, unfair competition, breaches of contract and implied covenants of good faith. Plaintiffs have moved for a preliminary injunction to stop defendants from using allegedly infringing material. Defendants move to dismiss Count III, in which Fritz claims trade dress infringement and unfair competition by defendants.

II. DISCUSSION OF PRELIMINARY INJUNCTION

A. Preliminary Injunction Standard

The traditional standard for preliminary injunctions requires the Court to consider and balance the following four factors: 1) whether the plaintiffs have exhibited a likelihood of success on the merits; 2) whether the plaintiffs risk suffering irreparable injury if the injunction is not granted; 3) whether the public interest will be adversely affected by the granting of the injunction; and 4) in light of the plaintiff’s likelihood of success on the merits, whether the injury complained of by the plaintiff outweighs any harm which granting the injunction would inflict on the defendants. See Concrete Machinery Co. v. Classic Lawn Ornaments, 843 F.2d 600, 611 (1st Cir.1988).

1. Public Interest

In copyright and trademark cases, the public interest almost always favors the granting of otherwise appropriate injunctions. Id. at 612; see Calamari Fisheries, Inc. v. The Village Catch, 698 F.Supp. 994, 1015 (D.Mass.1988).

2. Potential Harm to Defendants from Injunction

Harm to the defendant flowing from an injunction where infringement appears likely is entitled to less consideration than other harms.

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944 F. Supp. 95, 41 U.S.P.Q. 2d (BNA) 1352, 1996 U.S. Dist. LEXIS 16648, 1996 WL 653025, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fritz-v-arthur-d-little-inc-mad-1996.