Plaintiff is a corporation which publishes and distributes the Atlantic City Press , a daily newspaper which circulates in Atlantic County and neighboring counties. Defendant corporation publishes and distributes the Atlantic County Advertiser , a weekly paper, in portions of Atlantic County.
This action was brought primarily to enjoin defendants, corporate publisher and its staff, from copying or reproducing in its papers advertisements which plaintiff prepares for its advertising customers and which have first appeared in plaintiff's newspaper.
The thesis upon which plaintiff seeks relief is that the conduct of defendants constitutes "unfair competition" by reason of defendants' "pirating" the advertising copy and art work prepared by and printed in the Atlantic City Press.
By stipulation it was agreed that the case should be first tried on the issue of liability with respect to six contracts for advertisements, presumably typical of those claimed by plaintiff as having been reproduced; that following the initial hearing, if it were determined that plaintiff was entitled to relief, a further hearing would be afforded whereat plaintiff might establish defendants' similar conduct with respect to other advertisements, and might prove specific damages for which defendants might be liable.
The facts are not in great dispute. Plaintiff, as part of its advertising department, maintains or employs specialists who suggest and make up advertising designs and layouts which are shown to prospective advertisers. The advertising matter is prepared upon the request and suggestions of advertisers or on plaintiff's own initiative, in order to induce them to enter their orders for the advertising. In certain cases plaintiff engages an outside agency to aid in preparing special advertising matter.
Shortly after certain advertisements had appeared in plaintiff's newspaper, similar advertisements and, in some cases, identical advertisements appeared in defendants' newspaper. These advertisements in defendants' newspaper result from either defendants' solicitation of plaintiff's advertisers, or at the request of some of the advertisers without any solicitation.
Defendants also maintain an advertising department, and there are many advertisements in its paper besides those reproduced from plaintiff's newspaper. Defendants' paper is published by use of photo-offset, a comparatively inexpensive process.
Each advertiser signs an agreement with plaintiff which partly provides as follows:
"7. ASSIGNMENT -- For value received, advertiser hereby assigns to the ABC Newspaper, Inc., all right, title and interest to all layouts of advertisements placed with the ABC Newspaper which represent the creative efforts of the newspaper and/or utilization of its own illustrations, labor, composition or material. Advertiser understands that because of said assignment, he cannot authorize photographic
or other reproduction of any such advertising layout appearing in the ABC Newspaper in any other publication without the express written consent of the ABC Newspaper, Inc. It is further understood that this assignment does not preclude advertiser from supplying to other publications similar or identical material or information for production of advertisements by such publication or from suggesting the content or form of such advertisement."
The advertising which appears in plaintiff's newspaper is not protected by federal copyright ...