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NFL PROPERTIES, INC. v. NEW JERSEY GIANTS

May 8, 1986

NATIONAL FOOTBALL LEAGUE PROPERTIES, INC. and NEW YORK FOOTBALL GIANTS, INC., Plaintiffs
v.
NEW JERSEY GIANTS, INC., Defendant



The opinion of the court was delivered by: BARRY

 (Pursuant to Fed.R.Civ.P. 52(a))

 BARRY, District Judge

 Plaintiff, the New York Football Giants, Inc., owns and operates the New York Giants, a major league professional football team which plays all of its home games in New Jersey yet eschews a New Jersey identification as resolutely as a vampire eschews the cross. Defendant, the New Jersey Giants, Inc., which is decidedly not a major league professional football team, was created and exists solely to illegally exploit the confusion engendered by the unwillingness of the team to correlate its name with the place it calls home. The other party to the case, plaintiff National Football League Properties, Inc. ("NFLP"), is the marketing arm of the twenty-eight present National Football League ("NFL") Member Clubs, and is licensed by those Clubs to use the NFL marks to promote the interests of the NFL and the Clubs while protecting those marks from infringement, dilution, misappropriation, and unfair competition.

 Defendant, sensing an opportunity to exploit the anomoly of a team bearing the name of one state while playing in another, began to sell various items of sports-related apparel bearing the words "New Jersey GIANTS". Plaintiffs contend that defendant, as a result, has violated § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) and § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (service mark infringement and unfair competition); the New Jersey Trademark Act, N.J.S.A. 56:3-13.11; common law trademark infringement and unfair competition; tortious misappropriation of good will; and tortious interference with business relationships. They seek, among other relief, a permanent injunction, various damage awards, and attorneys' fees, costs, and expenses.

 This opinion, of necessity, will analyze the host of violations pressed by plaintiffs in light of the facts as found and the law as applicable. I note at the outset, however, that the testimony of the three principals of this three man defendant corporation, who are not themselves named as defendants, goes very far in and of itself towards proving the violations with which defendant is charged and the propriety of certain of the relief sought. These men testified that one of the purposes for starting the business and incorporating the name, as they had previously incorporated the name "New Jersey Cosmos", was to sell the corporate name to the Giants' football team; that the other purpose was to sell the merchandise to fans of the Giants' football team who would associate and "no doubt" did associate that merchandise with the team; that even though in its best year the company sold but $2263.85 of merchandise and operated out of a law office, a post office box, and the back seat of the car of one of the principals, $30,000 worth of stock in the company has now been sold to three additional individuals; that two cease and desist letters were ignored with defendant, through its principals, continuing to do business and continuing to solicit business by means of radio spots which were intended to refer to the New York Giants' team and by means of advertisements in the "Giants News Weekly", a newsletter directed to Giants' fans and the subject of which was the team; and that these actions continued until such time as a temporary restraining order was entered with notice to but no appearance by any representative of defendant. *fn1"

 What came through from this testimony was an attempt to ride the New York Giants' coattails for one reason and one reason only - money. Defendant's attempt to foist upon the court a first amendment rationalization for its illegal actions and now to clothe those actions in justifications of "editorial content", "right to comment", and altruism are, in a word, incredible. Indeed, at no time from the inception of the New Jersey Giants, Inc., until the restraining order was entered was any hint given much less statement made in any ad placed in the print media or on radio or anywhere else that these individuals had any view about the team changing its name. Certainly, defendant's merchandise itself bearing the words "New Jersey GIANTS" over an outline of the State of New Jersey conveys no message whatsoever. And, I note, that separate and apart from the testimony of defendant's three principals, adduced on plaintiffs' case, defendant presented but one witness, an "expert" to whose opinion I accord no weight.

 When all of the foregoing is considered together with the substantial additional evidence plaintiffs have presented, the conclusions I reach are inexorable. It is to that evidence and those conclusions that I now turn.

 FINDINGS OF FACT

 Each of the 28 Member Clubs of the NFL owns and operates a professional football team engaged in providing entertainment services by playing competitive professional football games in various cities throughout the United States. The NFL Constitution establishes the New York Football Giants' home territory as the area within a seventy-five mile radius of the City of New York and, thus, the Giants' fans are concentrated in the New York metropolitan area which includes portions of New York, New Jersey, and Connecticut.

 In the New York Football Giants' sixty-year history, home games have been played at several locations in the New York metropolitan area: the Polo Grounds, Manhattan, New York (1925-1955); Yankee Stadium, Bronx, New York (1956-September, 1973); Yale Bowl, New Haven, Connecticut (1973-1974); *fn2" Shea Stadium, Queens, New York (1975); and Giants' Stadium, East Rutherford, New Jersey (1976-present). The New York Football Giants' decision to move to New Jersey was made in 1971 at which time an agreement was entered into with the New Jersey Sports and Exposition Authority under which the Giants agreed to play home games in East Rutherford, New Jersey, less than seven miles from midtown Manhattan, upon completion of the construction of Giants' Stadium. To maintain continuity of tradition, the Giants retained the name "New York Giants" when it began playing home games in New Jersey. This decision is embodied in the New York Football Giants' agreement with the New Jersey Sports and Exposition Authority.

 Because of the popularity of NFL football and the extensive media coverage it receives, the NFL marks, including those long standing marks of the Giants, are nationally recognized and have become well known in the metropolitan area in which each Member Club plays its home games. Moreover, the popularity of NFL football coupled with NFLP's promotional efforts which, as will become apparent, involved extensive advertising and culminated in an extraordinary volume of sales, have combined to create a public perception and consumer awareness that merchandise bearing the NFL marks is sponsored or authorized by the NFL and its Member Clubs. The NFL marks and, more particularly, "Giants" and "New York Giants," have achieved secondary meaning as identifiers of the NFL and its Member Clubs.

 NFLP has established a licensing program in which it licenses selected companies to use the NFL marks on specific articles of merchandise and in approved promotional programs. NFLP has issued over one hundred national and local licenses for use of the NFL marks on a wide variety of merchandise including t-shirts, sweatshirts, caps, jackets, other wearing apparel, novelty items, sporting goods, toys and games and home furnishings, and apparel bearing the marks "Giants" and "New York Giants" has been manufactured and sold under NFLP license for many years. Moreover, the NFLP has established a quality control program in which it supervises and approves the conception, design, color combinations, production and distribution of all merchandise licensed to bear the marks of the Giants and other NFL Clubs.

 Licensed articles of merchandise bearing NFL marks are sold by licensees throughout the United States in a wide range of distribution channels, such as mail order catalogs, major retail department store chains, and small retail sporting goods and athletic wear stores, including outlets in New York and New Jersey. NFLP's licensees have invested significant amounts of capital and have devoted substantial amounts of time to the production, marketing and promotion of merchandise bearing the NFL marks. For the four year fiscal period beginning April 1, 1980 and ending March 31, 1984, retail sales of NFLP licensed merchandise were in excess of four hundred million dollars ($400,000,000). NFLP derives income in the form of royalty payments from these retail sales.

 NFL Charities was created by the Member Clubs for the purpose of funding a wide variety of charitable causes including medical research, community services and drug rehabilitation programs. The sole source of funds for NFL Charities is the revenue received from NFLP directly or through a trust established by the Member Clubs. NFLP has remitted directly or through a trust more than $7 million to NFL Charities. The sale of unlicensed merchandise bearing the NFL marks jeopardizes not only NFLP's licensing program but threatens the contributions available to NFL Charities.

 By letter dated January 4, 1984, NFLP's attorneys requested that defendant cease and desist from the solicitation and sale of "New Jersey GIANTS" merchandise. No response was forthcoming. By letter dated February 13, 1984, NFLP's attorneys advised defendant that it would take legal action if defendant engaged in such conduct in the future. Again, no response was forthcoming. The NFLP presumed that defendant ceased its activities after the NFL football season ended, as consumer demand for merchandise bearing the NFL marks is highest during the NFL football season which begins in August with pre-season games and culminates with the NFL Championship Game known as the "Super Bowl" in late January.

 But defendant neither ceased its activities nor changed its mark; rather, it escalated its business activities by placing ads on the radio commencing in the spring of 1984, placing large ads in the "Giants Newsweekly" in May and July 1984, and soliciting Hermans' World of Sporting Goods in the summer of 1984. Shortly before the NFL pre-season games began, NFLP learned that defendant was actively engaged in the advertising, offering for sale, distribution and sale of a line of sportswear bearing the inscription "New Jersey GIANTS" which included t-shirts, mesh shirts, sport shirts, sweatshirts, 3/4-length sleeve football shirts, hooded sweatshirts, hats, golf hats, shorts, sweatpants, sweatsuits and windbreakers. The design of every item of defendant's "New Jersey GIANTS" merchandise displayed the word "GIANTS" more prominently than the descriptive geographic term "New Jersey" and used, on all but the earliest manufactured item, navy blue lettering, one of the Giants' team colors.

 Defendant's "New Jersey GIANTS" merchandise competes directly with licensed NFL merchandise bearing the New York Football Giants' marks, because NFLP has licensed the same types of merchandise sold by defendant. Moreover, defendant's "New Jersey GIANTS" merchandise is likely to confuse consumers into believing that it is part of the wide array of licensed merchandise sponsored and approved by the New York Football Giants and available to the public through NFLP's licensing program.

 But the Giants and NFLP have no control over defendant's business activities or over the nature and clearly inferior quality of the merchandise sold by defendant and, indeed, the quality of that merchandise does not satisfy the quality control standards imposed by NFLP on its licensees. The sale of inferior quality merchandise bearing the NFL marks, or colorable imitations thereof, will adversely affect NFLP's business including the poor impression of the NFL and its Member clubs that will be held by the consumer.

 Because the demand for merchandise bearing the NFL marks is finite, any sales of unlicensed merchandise bearing those marks will cause direct economic harm to NFLP's licensees thus reducing the royalties payable by licensees to NFLP and reducing the size of the fund available for NFL Charities. Defendant's activities in the sale of its "New Jersey GIANTS" merchandise will interfere, as well, with NFLP's business and cause harm to its reputation and goodwill with licensees and retailers actively promoting the products of NFLP's licensees. If NFLP in unable to abide by its agreement to protect licensees from companies that use the NFL marks without authorization, licensees will lose confidence in the NFLP's licensing program and the value of a license will be impaired thus harming the business of NFLP.

 Defendant's use of its trade name and the solicitation and sale of "New Jersey GIANTS" merchandise is also likely to confuse the public into believing that the New York Football Giants has changed the team's name to the New Jersey Giants or does not object to being referred to by that name. Neither is true, of course, and while one may wonder why the New York Giants resist a new name and may wish, perhaps, that it were otherwise, the fact remains that the Giants have the right to retain the long-standing goodwill and reputation they ...


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