Opinion
No. 05 Civ. 2242 (RO).
March 29, 2005
MEMORANDUM AND ORDER
Plaintiff, Interactive Advertising Bureau, Inc. (IAB) is a not-for-profit trade association dedicated to helping online, interactive broadcasting, email, wireless and interactive television media companies. As part of an effort to organize and promote the industry, IAB agreed with defendants MediaPost Communications (MediaPost), a publishing and content company that develops online and print magazine content for media planners and buyers, and Fadner Media Enterprises, LLC (Fadner Media) to merge the annual conferences they were each planning and co-produce a conference in 2004. The basic terms of this joint venture were set forth in a letter of June 24, 2004 (Letter Agreement). Stuart Decl. at ¶¶ 8-9, Ex. A. Under this agreement, the parties were to share "equally in all revenues, expenses, and gross profits," and any name pursuant to which the event would be branded and marketed was to be "jointly-owned 50-50 property of IAB and MediaPost." The name of the event was Interactive Advertising World (IAW).
The parties subsequently decided the conference would be capped by an awards show, and began discussing possible names for this component. Draizen Decl. at ¶ 7. When the September 21, 2004 awards show was announced to the public, in a call for entries and various other contexts, it was called the OMMA — or Online Media, Marketing and Advertising — Awards, and was advertised as co-sponsored by IAB and MediaPost as part of the jointly produced conference and trade show. See e.g. Draizen Decl., Exs. B-I, K. The program booklet for the show includes a letter signed by Greg Stuart of IAB and Ken Fadner of MediaPost, with the heading "The OMMAs: The Beginning of a Tradition." Draizen Decl. Ex. C. The tradition was to be short-lived, however, since IAB opted out of continuing the joint venture for 2005. In a series of emails after the joint venture ended, IAB attempted to address rights to the OMMA name, admitting that "[s]ince the concept was developed outside of our negotiations for IAW, the [OMMA Awards] was not covered in the letter of agreement." Stuart Decl. Ex. C. IAB proposed a "wind-up" agreement with MediaPost making the name joint property, but MediaPost declined to sign it. Id. Ex. B. In an email of December 20, 2004, MediaPost informed IAB that it claimed sole ownership in the OMMA Awards name based on the fact that it fell outside the Letter Agreement and was created by MediaPost, which had fully disclosed its intention to use the name on other products. Id. Ex. C.
Upon discovering that MediaPost was indeed using the OMMA name on a magazine, was planning a 2005 OMMA awards show, and had attempted to register OMMA with the Trademark Office, IAB commenced this action. The complaint alleges (1) false designation of origin and unfair competition under section 43(a) of the Lanham Act; (2) common law unfair competition; (3) breach of contract; (4) breach of joint venture agreement; and (5) violation of New York's Consumer Protection Act, N.Y. General Business Law § 349. On Thursday, March 24, 2005 the Court held a hearing on plaintiff's motion for an order preliminarily enjoining defendants from (i) using the OMMA mark in any further communications without IAB's prior written consent and (ii) unfairly competing with IAB and doing any other act likely to cause the public to believe defendants' goods or services are connected with IAB. The motion for preliminary injunction is based solely on the Lanham Act and common law unfair competition claims.
To grant preliminary injunction, IAB must establish it will suffer irreparable harm and demonstrate either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tilting decidedly in their favor.Otokoyama Co. v. Wine of Japan Import, Inc. 175 F3d 266, 270 (2d Cir. 1999). IAB claims defendants are currently infringing its rights in the OMMA mark, which it claims is jointly owned by the two parties. This joint ownership, IAB argues, was the result of the parties' joint efforts to promote and host the 2004 OMMAs and is consistent with the Letter Agreement, which "expressly provided that any name pursuant to which the event would be branded and marketed would be the `jointly-owned 50-50 property of IAB and MediaPost.'" Pl. Mem. at 2. Plaintiff has conceded, however, that the "name" covered under the Letter Agreement is IAW (the name of the conference), not OMMA.
There is no express agreement covering the rights to the name OMMA. Defendants claim they are sole owners of the mark, pursuant to an oral agreement between Michael May — who, as Vice President for Events at IAB, handled both the Letter Agreement and other follow-up conversations with MediaPost concerning the co-production of the conference — and Kenneth Fadner, chairman of MediaPost. The understanding was apparently that defendants would "loan" the OMMA name to the joint venture "with the express understanding that [they] might utilize the name at a later time on [their] yet-to-be-named magazine" and for other purposes. Fadner Decl. ¶ 6, ¶ 15. Mr. May (now a consultant for MediaPost) corroborates this understanding at the time of the conference, stating "unequivocally that `OMMA' was a term originated by MediaPost (having first been mentioned to me by Kenneth Fadner) and was lent to plaintiff and MediaPost upon the agreement that MediaPost would retain ownership of that term. . . . On behalf of plaintiff, I consented to such `lending' arrangement." May Decl. ¶ 2. Even if, as plaintiff argues, the trademark rights did not attach until the mark was used in commerce in connection with the awards show, some weight must be given to the terms of this alleged oral agreement, under which any rights that arose in the name OMMA would revert to MediaPost after its use by the joint venture ended.
Plaintiff claims it has shown irreparable harm by virtue of actual confusion on the part of potential consumers. Attached to the declaration of Sheryl Draizen, an independent marketing consultant employed by IAB, are three emails from members of the public asking IAB for information about how to enter the 2005 OMMAs. Draizen Decl., Ex. P. A key issue under section 43(a) of the Lanham Act, which protects against false designation of origin, is "whether an appreciable number of consumers are likely to be misled or confused about the source of the product in question." Nikon, Inc., v. Ikon Corp., 987 F.2d 91, 94 (2d Cir. 1993). However, in order to show irreparable harm plaintiff must first show infringing use. Defendants have cast sufficient doubt on whether IAB has joint ownership interest in the OMMA mark to diminish the weight of the evidence of actual confusion. Preliminary injunctive relief seems particularly inappropriate where, as here, any temporary confusion can quickly be cleared up by redirecting the relatively small number of inquiries that have come to IAB. The alternative is to bar both parties from using the name OMMA in connection with anything in the industry except an awards show jointly produced by the parties. If such an injunction were entered, the balance of hardships would tilt in favor of defendants who, in reliance of their understanding of their rights, have already put out one issue of the OMMA magazine and are gearing up for the 2005 OMMA awards show.
Based on the foregoing, plaintiff's motion for preliminary injunction is denied.