The opinion of the court was delivered by: BROTMAN
This is a dispute about licensing and marketing of autographed sports memorabilia. Plaintiff The Score Board, Inc. ("Score Board") claims that defendants Upper Deck Co. (UDC) and Upper Deck Authenticated, Ltd. (UDA) (collectively "Upper Deck") are wrongfully infringing on Score Board's exclusive rights to market autographs and other indicia of baseball star Ken Griffey, Jr. Score Board seeks a preliminary injunction barring Upper Deck from selling items autographed by Griffey to retail catalog companies, stores, and television shopping networks. In addition, Score Board seeks dismissal of portions of Upper Deck's counterclaim. Upper Deck, meanwhile, has moved for summary judgment dismissing Score Board's complaint.
Score Board is a corporation based in Cherry Hill, New Jersey that is active in the autographed sports memorabilia industry. The present dispute arises out of an October 1994 "Player Highlight Agreement" between Score Board and the Major League Baseball Players Association ("MLBPA"), pursuant to which the MLBPA granted Score Board a license to commercialize the indicia of Major League Baseball player Ken Griffey, Jr ("Griffey"). A member of the MLBPA, Griffey is the starting centerfielder for Major League Baseball's Seattle Mariners and one of the most prominent players in baseball. Pursuant to this Score Board-MLBPA Player Highlight Agreement (the "Score Board Agreement"), Griffey agreed to autograph various items of sports memorabilia for Score Board to sell. In consideration, Score Board contracted to pay Griffey a minimum guaranteed sum.
The Score Board Agreement also contains certain limitations on Griffey's ability to sell autographed items elsewhere. Specifically, the Score Board Agreement provides:
Player agrees not to autograph baseball items, memorabilia or collectibles for any other person or entity that he knows or has reason to believe will sell or attempt to sell such items on a television shopping network or program, or in any retail catalogue or in any retail store.
Upper Deck Company ("UDC"), a California corporation that is a competitor of Score Board's in the autographed sports memorabilia business, subsequently entered into a licensing contract with Griffey effective March 1, 1996.
This Upper Deck Agreement acknowledges Score Board's exclusive contractual right to sell autographed Griffey items through television shopping networks, but asserts that UDC is not precluded from selling such items "through channels other than television."
Score Board alleges that UDC and its affiliate Upper Deck Authenticated, Ltd. ("UDA") (collectively "Upper Deck") have in fact sold Griffey items "through channels other than television" despite having notice about the restrictions in the Score Board Agreement. Specifically, plaintiff contends, licensee UDC has transferred items autographed by Griffey to UDA, which has then marketed the items to retailers. A Score Board sales manager states that in April 1996, Service Merchandise Company, Inc ("Service Merchandise") canceled an order from Score Board for over 400 Griffey autographed baseballs and told her it was going to buy from Upper Deck for a better price. This Score Board salesperson reports that shortly thereafter, she was told by a buyer at yet another retailer, Best Products Co., Inc. ("Best"), that Upper Deck had solicited Best to purchase Griffey autographed baseballs and photographs. The Best buyer testified to this effect in a deposition.
On May 22, 1996, Score Board instituted this diversity action against UDC and UDA for tortious interference with contractual rights, and for civil conspiracy. In late June, Score Board applied for an order to show cause why a preliminary injunction should not issue enjoining Upper Deck from selling Griffey autographed items to retail catalogue companies, stores, and television shopping networks. The Court deferred consideration of Score Board's preliminary injunction motion
pending discovery. In January, 1997, the parties completed briefing on the preliminary injunction motion; a motion by Upper Deck for summary judgment dismissing the Griffey action; and a motion by Score Board to dismiss portions of Upper Deck's counterclaim, and to strike an affirmative defense of improper venue. The Court heard oral argument on these motions on January 30, 1997.
A. PRELIMINARY INJUNCTION MOTION
1. STANDARD FOR PRELIMINARY INJUNCTION
An injunction is an "extraordinary remedy which should be granted only in limited circumstances." American Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1426-27 (3d Cir. 1994) (citing Frank's GMC Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir. 1988)), cert. denied, 131 L. Ed. 2d 757, 115 S. Ct. 1838 (1995). "This proposition is particularly apt in motions for preliminary injunctions, when the motion comes before the facts are developed to a full extent through the normal course of discovery." Id. at 1427.
1) the likelihood that the plaintiff will prevail on the merits at the final hearing; 2) the extent to which the plaintiff is being irreparably harmed by the conduct complained of; 3) the extent to which the defendant will suffer irreparable harm if the preliminary injunction is issued; and 4) the public interest.
New Jersey Hosp. Assoc. v. Waldman, 73 F.3d 509 (3d Cir. 1995) (quoting American Tel. and Tel. Co., 42 F.3d at 1427). Thus, a failure by Score Board to make the requisite showing regarding any one of these four factors must result in this Court denying its motion for a preliminary injunction. See In re Arthur Treacher's Franchisee Litigation, 689 F.2d 1137, 1143 (3d Cir. 1982) ("[A] failure by the moving party to satisfy these prerequisites: that is, a failure to show likelihood of success or a failure to demonstrate irreparable injury, must necessarily result in the denial of a preliminary injunction.")
a. Likelihood of Success on the Merits at Final Hearing
To satisfy the first prong of the preliminary injunction test in the Third Circuit, a movant must demonstrate a "reasonable probability of eventual success in the litigation." Kershner v. Mazurkiewicz, 670 F.2d 440, 443 (3d Cir. 1982). "It is not necessary that the moving party's right to a final decision after trial be wholly without doubt; rather, the burden is on the party seeking relief to make a prima facie case showing a reasonable probability that it will prevail on the merits." Oburn v. Shapp, 521 F.2d 142, 148 (3d Cir. 1975).
(1) Claim of Tortious Interference With Contract
In order to prevail on its claim that defendants tortiously interfered with the Highlight Agreement, Score Board must prove: 1) there was an existing contractual relationship between Score Board and Griffey, i.e. the Score Board Agreement relationship; 2) Upper Deck knew of the Agreement and its restrictions; 3) Upper Deck intentionally and unjustifiably interfered with this relationship; and 4) Score Board suffered damages resulting from such interference. Fleming v. United Parcel Service, Inc., 255 N.J. Super. 108, 604 A.2d 657 (N.J. Super. Ct. Law Div. 1992), aff'd, 273 N.J. Super. 526, 642 A.2d 1029 (N.J. Super. Ct. App. Div. 1994); ...