The opinion of the court was delivered by: Politan, District Judge.
This matter comes before the Court on cross-motions for judgment as a
matter of law and for a new trial pursuant to Federal Rules of Civil
procedure 50(b) and 59. The Court heard oral argument on April 9, 1999.
For the reasons explained below, plaintiff Marshak's motions are DENIED
and defendant Treadwell's motions are GRANTED IN PART.
This lawsuit arises out of a trademark dispute involving the musical
group "The Drifters." The plaintiff Larry Marshak owned a federal
trademark registration for the name "The Drifters," which he acquired
through a 1976 assignment from three former Drifters singers, Charlie
Thomas, Elsbeary Hobbs, and Dock Green. Since the assignment, Marshak has
continuously used the mark in connection with his promotion of Drifters
performances. In 1995, Marshak filed the instant Complaint alleging that
Faye Treadwell had infringed and disparaged Marshak's federal trademark
As a defense to Marshak's infringement action, Treadwell alleged, and
ultimately proved, that Marshak's federal registration had been obtained
by fraud. Treadwell also proved that she and her late husband George
Treadwell had owned and managed the original Drifters group since 1955.
With regard to Treadwell's infringement counterclaim, however, the jury
found that she had abandoned her trademark rights in or about 1976, when
her group stopped performing regularly in the United States. Because
Marshak's Drifters group has performed continuously since the early
1970s, the jury found that Marshak acquired common law trademark rights
II. The Drifters: 1954 to 1969
The Drifters first appeared in New York in 1953. Shortly thereafter, in
1954, the group came under the management of George Treadwell, who had
previously managed other musicians, including Sammy Davis, Jr., Billie
Holiday, and Sarah Vaughn. Mr. Treadwell managed the group through The
Drifters, Inc., a New York corporation that he formed in 1954. He married
the defendant Faye Treadwell in March of 1955.
Although Mr. Treadwell owned all of The Drifters, Inc. stock, he
managed the company with his two partners, Irving Nahan and Lewis
Lebish.*fn2 Mr. Lebish acted as the accountant and bookkeeper for The
Drifters, Inc. Treadwell, assisted by his wife Faye and Irving Nahan,
managed the entertainment side of the business. Together, they exercised
complete artistic control over The Drifters: they hired and fired
Drifters singers; they paid the singers a weekly salary; they selected
the music and arrangements; and they made all musical and business
decisions relating to both live performances and recording contracts.
Since the group's inception, The Drifters has always been comprised of
a constantly changing cast of singers, including Ben E. King, Rudy
Lewis, and Johnny Moore. During George Treadwell's stewardship, each
Drifters singer was an employee of The Drifters Inc., and each of them
signed a written employment contract and received a weekly salary.
In about 1959, Treadwell hired several singers from a group called "The
Crowns." Three of these replacement singers were Charlie Thomas, Elsbeary
Hobbs, and Dock Green. Thomas, Hobbs, and Green signed employment
contracts with The Drifters, Inc. and they performed and recorded as
members of The Drifters under Treadwell's exclusive management. Hobbs
left the group less than two years later in 1961. Green left in 1964.
The Drifters continued to perform live concerts and record new music
through most of the 1960s. The Drifters recorded dozens of original
songs, many of which were "Top Ten Hits" on Billboard's Rhythm and Blues
Charts. These included "There Goes My Baby" (1959), "Save the Last Dance
for Me" (1960), "Some Kind of Wonderful" (1961), "Up on the Roof"
(1962), "On Broadway" (1963), and "Under the Boardwalk" (1964). All
Drifters records were recorded pursuant to recording contracts negotiated
and signed by The Drifters, Inc. and the Atlantic Recording Company. The
majority of royalties were paid to The Drifters, Inc. and its
shareholders. It was undisputed that Mr. Treadwell exercised exclusive
managerial control over the group, without interruption, from 1954 until
his death in 1967.
It appears that the demand for live Drifters performances had
substantially declined by the late 1960s. Although the Drifters
shareholders continued to receive royalties from the sale of previously
recorded albums, the Drifters style of music had fallen out of favor in
the United States. Treadwell began to focus the group's touring efforts
in Europe, where The Drifters popularity was growing.
II. The Reunited Drifters: 1970 through 1995
In 1969, CBS Radio Network adopted an "oldies format" for their FM
radio station. At about the same time, CBS also formed a partnership with
Rock Magazine, a subsidiary company, to produce live concerts featuring
reunited singing groups from the fifties and sixties. Larry Marshak was
an editor at Rock Magazine at the time. Although he had never met George
or Faye Treadwell or any of their singers, Marshak was given the task of
reuniting some of the old groups, including The Drifters.
Marshak first called former-Drifter Ben E. King. King declined
Marshak's invitation to participate in a Drifters reunion tour, but he
suggested that Marshak contact Charlie Thomas. Charlie Thomas accepted
the offer, as did Elsbeary Hobbs and Dock Green. They began performing
under the name "The Drifters" in 1970, and then appeared regularly at
concerts promoted by CBS Radio and Rock Magazine.*fn4 Shortly
thereafter, Treadwell's attorney sent a letter informing Marshak that,
pursuant to employment contracts signed by Thomas, Hobbs, and Green,
Treadwell and The Drifters, Inc. owned the rights to the group's name
In 1971, Treadwell brought an infringement action in the Supreme Court
of New York against Marshak, Thomas, Hobbs, and Green, seeking to enjoin
them from using the name "The Drifters" in connection with their
performances. The court denied Treadwell.; application for a preliminary
injunction based upon its finding that Treadwell had not established a
likelihood of success on the merits. The suit was dismissed the following
year as a result of Treadwell's failure to provide adequate discovery.
Shortly after the dismissal of Treadwell's lawsuit in 1972, Marshak
signed an exclusive management contract with his Drifters singers.
Marshak's group toured extensively, and according to Marshak's
testimony, he employed an aggressive litigation strategy to prevent any
other groups from performing as "The Drifters." During this time,
Treadwell became either unwilling or unable to compete with Marshak's
superior resources. Since 1972, Treadwell's Drifters have performed
primarily in Europe.*fn5
Marshak testified that he later learned that a federal trademark
registration would likely simplify his litigation strategy. After
discussing the idea with Thomas, Hobbs, and Green, Marshak hired a
trademark lawyer to draft the necessary documents. On December 15, 1976,
Thomas, Hobbs, and Green executed an assignment of all of their rights to
The Drifters mark to Larry Marshak.*fn6 Two days later, on
December 17, 1976, Thomas, Hobbs, and Green, acting through a
partnership, filed an application in the United States Patent & Trademark
Office to register "The Drifters", as a service mark for use in
connection with a musical group. In support of their application, the
registrants signed a declaration certifying that: (1) they believed
themselves to be the rightful owners of "The Drifters" mark, and (2) to
the best of their knowledge and belief, no person or company had the
right to use The Drifters" mark in commerce.
On January 3, 1978, The Patent & Trademark Office issued a service
mark, Registration Number 1,081,338, for "The Drifters." Marshak has
owned that federal registration since 1978, and it has achieved
incontestible status under the Lanham Trademark Act.
Marshak subsequently expanded his operation to include two, and
sometimes three, separate groups of Drifters. Marshak testified that he
coordinated his groups performances so that there would never be more
than one Drifters group in a particular geographic area. There was also
evidence that Marshak signed a recording contract with Musicor Records
and that some of his singers recorded new songs under the name "The
Drifters," although Marshak testified that none of these recordings ever
achieved the "Top Ten" status enjoyed by the original Drifters songs.
At the conclusion of the trial in this case, the jury found that
Marshak and his assignors had never owned any rights to the name "The
Drifters," and that they had defrauded the Patent and Trademark Office
into issuing a federal trademark registration. Although the jury found
that Marshak later acquired common law rights in the Drifters mark, he
has lost the benefits of his incontestible federal registration. The
jury's verdict leaves Treadwell in essentially the same position from
which she started. Both parties now move before this Court for relief
from the jury's verdict.
[1,2] Federal Rule of Civil Procedure 50 directs trial courts to enter
judgment as a matter of law when "there is no legally sufficient
evidentiary basis for a reasonable jury to find" in favor of the
nonmoving party on an essential issue. In deciding a renewed motion for
judgment as a matter of law, the Court must grant all reasonable
inferences in favor of the jury's verdict. See Barna v. City of Perth
Amboy, 42 F.3d 809, 812 (3d Cir. 1994). This Court may not consider
either the credibility or weight of the evidence. See Motter v. Everest &
Jennings, Inc., 883 F.2d 1223, 1228-29 (3d Cir. 1989). Rather, this Court
must "confine [itself] to ascertaining whether the party against whom the
motion is made adduced sufficient evidence to create a jury issue." Id.
at 1229 (quoting Fireman's Fund Ins. Co. v. Videfreeze Corp.,
540 F.2d 1171, 1178 (3d Cir. 1976), cert. denied; 429 U.S. 1053, 97
S.Ct. 767, 50 L.Ed.2d 770 (1977)).
[3,4] Motions for a new trial are governed by the less exacting
standards embodied in Rule 59. Under this Rule, a court may, in an
exercise of its discretion, grant a new trial if the jury's verdict is
against the clear weight of the evidence or if substantial errors
occurred in the admission or rejection of evidence or the giving or
refusal of instructions. See Montgomery Ward & Co. v. Duncan, 311 U.S. 243,
251, 61 S.Ct. 189, 85 L.Ed. 147 (1940); see also 12 MOORE's FEDERAL
PRACTICE § 59.13. However, errors committed during the course of a
trial cannot justify the grant of a new trial unless they affected the
substantial rights of the parties. See Fed.R.Civ.P. 61.
 A Rule 59 motion may also be granted upon a finding that the jury's
verdict was against the great weight of the evidence. However, the Third
Circuit has instructed that trial courts have an "obligation to uphold
the jury's [verdict] if there exists a reasonable basis to do so."
Motter v. Everest & Jennings, Inc., 883 F.2d 1223, 1230 (3d Cir. 1989).
Therefore, this Court must "search the record for any evidence which
could have led the jury to reach its verdict, "drawing all reasonable
inferences in favor of the verdict winner." Nissim v. McNeil Consumer
Prod. Co., Inc., 957 F. Supp. 600, 601 (E.D.Pa. 1997) (quoting Blum v.
Witco Chemical Corp., 829 F.2d 367, 372 (3d Cir. 1987)); see also 12
MOORE'S FEDERAL PRACTICE § 59.13[a].
II. Plaintiff Marshak's Motions
A. Renewed Motion for Judgment as a Matter of Law
1. Sufficiency of Evidence
 The Lanham Act requires every trademark applicant to sign an oath
declaring that the applicant believes himself to be the owner of the mark
sought to be registered and "that no other person, firm, corporation, or
association, to the best of [the applicant's] knowledge and belief, has
the right to use such mark in commerce." 15 U.S.C. § 1051 (a)(1)(A).
Fraud in procuring a trademark "occurs when an applicant knowingly makes
false, material representations of fact in connection with an
application." Metro Traffic Control, Inc. v. Shadow Network Inc.,
104 F.3d 336, 340 (Fed.Cir. 1997) (citing 15 U.S.C. § 1064 (3)).
Fraud also occurs when an applicant willfully fails to correct an
originally innocent misrepresentation after learning the true facts,
knowing that the Patent & Trademark Office ("PTO") relied upon the
misrepresented facts in granting registration.
 There has been no dispute that Marshak stands in the shoes of his
assignors and that Marshak can have no greater trademark rights can they
had. See Hyosung America Inc. v. Sumagh Textile Co., 934 F. Supp. 570,
576-77 (S.D.N.Y. 1996), aff'd in part, reversed in part, 137 F.3d 75 (2d
Cir. 1998). Nor has there been any dispute that the assignors —
Thomas, Hobbs, and Green — acted through a partnership when they
filed their federal trademark application. See Trans. at 144; see also
Pretrial Order, Stip. Fact No. 25. Therefore, fraud may be established by
evidence that either Charlie Thomas, Elsbeary Hobbs, or pock Green
knowingly made material misrepresentations in connection with their
After reviewing the evidentiary record, this Court is unable to "see
the merit in Marshak's motion. In this Court's judgment, the evidence of
fraud was over-whelming.
Charlie Thomas Employment Contract
First, there was the written employment agreement executed by Charlie
Thomas and The Drifters, Inc.*fn9 See Trial Exh. D-19. By its terms, the
contract was executed during April of 1960 between THE DRIFTERS, INC., a
New York corporation, hereinafter called the "EMPLOYER and CHARLES THOMAS
. . . hereinafter the ARTIST." The contract contains numerous clauses
regarding Thomas obligations to perform and record songs at the sole
direction of his employer, The Drifters Inc.; and also forbidding Thomas
from making any musical recordings without the express written consent
his employer. What was most decisive in this case, however, was paragraph
seven of the agreement which provides:
The Artist agrees that the name of THE DRIFTERS
belongs exclusively to the Employer and that he will
not at any time use the name of The Drifters or any
name similar thereto or any name incorporating The
Drifters. In the event the employee leaves the employ
of The Drifters he will not in any way advertise or
attempt to publicize the fact that he had been a
member of a singing group known as The Drifters and
will not associate his name in any manner with The
Drifters; and he further acknowledges that the name,
The Drifters, is a valuable property and any
violation of this paragraph could not be adequately
compensated by money damages and he therefore agrees
that the Employer shall be entitled to an injunction
in any Court of competent jurisdiction to enjoin any
violation or threatened violation of this contract by
Id.; see Trans. at 440-56.
Thomas employment contract, standing alone, was sufficient for the jury
to conclude that Thomas had made a knowing and material misrepresentation
in his trademark application.
Continuous Commercial Use of Original Drifters Recordings
Next, the jury heard uncontroverted testimony regarding the continuous
commercial use of original Drifters recordings, which have been played on
the radio and sold in record stores since the 1950s. See Trans. at 597.
Moreover, the following stipulated facts were read into evidence:
13. Treadwell's Drifters performed and recorded a
number of songs throughout the United States under
the name The Drifters, each of which are original
works of authorship.
14. Amongst the most popular of these songs are
"There Goes My Baby," "Up on the Roof," "Under the
Boardwalk," "Save the Last Dance for Me," and "On
Broadway," each of which were "Top- 10" hits on
Billboard's Rhythm and Blues charts.
15. Each of these songs have [been] publicly
performed on the radio throughout the United States,
sold on singles records and albums, and continue to
be played and sold in the United States to this day.
In sum, Marshak and his assignors applied for a trademark that was
already being used in connection with the original Drifters records.
Those records have been continuously marketed and sold under the name
"The Drifters" and they contain the same songs that Marshak's group sings
at its performances. In this Court's judgment, the applicants failure to
disclose this fact to the PTO is strong evidence of fraudulent
registration and it was wholly uncontroverted at trial. There was simply
no suggestion in this case that Thomas, Hobbs, Green, or Marshak were
unaware, at the time of their trademark application, that Atlantic's
recordings of original Drifters songs were being marketed, sold, and
played on the radio throughout the United States. The jury was therefore
free to conclude that they knew.
Atlantic Records continuous commercial use of the original Drifters
recordings provided clear and convincing evidence that Thomas, Hobbs, and
Green committed a fraud upon the Patent and Trademark Office when they
certified in 1976 that no other person, firm, corporation or association
had the right to use The Drifters trademark in commerce. See Metro
Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336, 340
(Fed.Cir. 1997) (holding that third party may petition to cancel
fraudulently obtained trademark registration).
Charlie Thomas Depositions
The jury also heard deposition testimony given by Charlie Thomas in two
prior lawsuits, Marshak v. Arista Records, Civ. Index No. 96-3032
(JBW(S.D.N.Y.) and Marshak v. Green, Civ. Index No. 79-3458 (EW)
(S.D.N.Y.) Portions of these depositions were read in to the record
during Marshak's cross-examination in this case. See Trans. at 347-51,
In the Arista deposition, Thomas testified that he had joined The
Drifters during the late 1950s at the request of George Treadwell. See
id; at 347. Thomas also testified that Treadwell was the manager of the
group and that Treadwell made all final decisions relating to
performances, costumes, appearance bookings, musical content, travel
arangements, and personnel changes."*fn12 See id. at 347-51, 389; see also
Rick v. Buchansky, 609 F. Supp. 1522 (S.D.N.Y. 1985) (holding that, in
the absence of written contracts, the manager of a singing group may own
the rights to the name if he or she remains continuously involved with
the group and is in a position to control the quality of its services).
Thomas further stated that he considered himself an "employee" of The
Drifters and that he signed an employment contract to that effect. See
id. at 348. He also stated that he was compensated in the form of a
weekly salary. See id. at 389. Finally, Thomas testified that George
Treadwell owned the rights to the name "The Drifters." See id. at 348.
Marshak offered no evidence to rebut Thomas admission that he did not
own the name "The Drifters" when he applied for his trademark
registration. The Thomas depositions therefore provided sufficient
evidence to support the jury's verdict.
Johnny Moore sang lead vocal on the original Drifters recording of
"Under the Boardwalk" in 1963 and "Saturday Night at the Movies" in
1964. See Trans. at 605. He testified that he joined George Treadwell's
Drifters in 1954 and that he stayed with the group until he was drafted
into the Army in 1957. See id. at 602. When Moore returned to the group
in 1963, he was required to sign an employment contract with The
Drifters, Inc. See id. at 606-07. Moore testified that he worked for
George Treadwell's Drifters until Mr. Treadwell died in 1967. See id. at
608. Moore also testified that, when Mrs. Treadwell succeeded her husband
as the group's manager in 1967, both Moore and Charlie Thomas continued
to perform as members of The Drifters under Mrs. Treadwell's management.
See id. Thomas quit the group within a year of Mr. Treadwell's death;
Moore stayed until 1979. See id. at 603, 608-09.
Larry Marshak's Testimony
In addition to Charlie Thomas employment contract and deposition
testimony, as well as evidence regarding the continuous commercial use of
original Drifters recordings, the jury also heard Mr. Marshak's live
testimony and two of his prior depositions.
In the Green case, Marshak admitted that he knew that Thomas, Hobbs,
and Green had previously been managed by Faye Treadwell.*fn14 Mr.
Marshak was then asked, "If someone had been with George Treadwell's
Drifters and been part of the Drifters, would he have had the right to
use the name Drifters?" Trans. at 387-88. Marshak answered:
In the music business, continually there are people
coming and going in groups. . . . The only person who
has the right to the name is the person that develops
it and keeps it in the public's eye. I might be one
person, but the whole act, it is a continuing
situation. People die and new people is a hundred
people. That's what it looks like. I don't know what
that means. Continually four or five of them are
changing every day and it's a common —
certainly someone who sang with the Drifters, just by
virtue of having sung with the Drifters, didn't
develop a right to the name when he left voluntarily
or even when he was dismissed from the Drifters.
Trans. at 388 (emphasis added); see also Trans. at 235-43, 711; Rick v.
Buchansky, 609 F. Supp. 1522 (S.D.N.Y. 1985).
Marshak's live testimony was also telling. In describing how he came to
manage his Drifters group, Marshak told the jury that the first
ex-Drifter he solicited regarding the 1970 reunion was Ben E. King, who
declined the offer. See Trans. at 90-92. Marshak also testified that,
shortly after he had reunited Thomas,
Hobbs, and Green in 1970, he received a letter from Mrs. Treadwell's
attorney claiming that The Drifters Inc. had superior rights to the name
of the group. See Trans. at 96-98. Marshak also admitted that, several
years prior to his federal trademark application, he had seen copies of
the employment contracts between The Drifters Inc. and Marshak's
assignors. See id. at 98-102, 104, 108, 288. Finally, Marshak testified
that it had been his idea to file the trademark application in 1976, and
that he handled all of the necessary details. See Trans. at 711-14; see
also footnote 1, supra.
In addition to Marshak's sworn testimony, the jury also watched a
video-tape of a television interview in which Marshak gave the following
description of Charlie Thomas' connection with the original Drifters:
They already had had three top ten records by the
time [Charlie Thomas] joined the Drifters in the
1950's. He joined the Drifters as an employee. He got
a job. He was now a sideman.
Can a sideman in Les Mis go around saying he is Les
Mis? of course not.
He got a job. He worked then under somebody's
direction, who told him what to do. . . .
None of the original members, not from the
Drifters, the Platters, the Marvelettes, ever wrote
those songs, ever arranged those songs, ever chose
the materials, chose the singers to perform. They had
nothing to do with what made them hit records, except
Stipulated Transcription of Video Tape (Trial Exh. D-100), attached as
Exhibit A to June 21, 1999 Stipulation; see Trial Trans. at 256-65.
In the end, Marshak offered no explanation for how Thomas, Hobbs, and
Green alone possessed the exclusive rights to the name "The Drifters" in
1976; nor did Marshak testify that he subjectively believed that they
possessed such rights.*fn15 Indeed, all of the evidence on this point was
unequivocal: Marshak knowingly and intentionally helped his assignors
defraud the Patent & Trademark Office into issuing a registration for a
name that none of them owned.
Alleged Bases for J.N.O.V.
In this Court's Judgment, the foregoing evidence provides ample support
for the jury's finding that Marshak's federal trademark registration had
been fraudulently obtained. Nevertheless, Marshak contends that no
reasonable jury could have found fraud in light of the following three
facts: (1) Marshak relied on the fact that Treadwell's 1971 lawsuit
against him had been dismissed; (2) Marshak and his assignors consulted
with a trademark
West Page 562
attorney prior to submitting their federal trademark application; and (3)
even if the application failed to disclose other users of the mark, such
omissions were not fraudulent because Marshak and his assignors
reasonably believed that those users were trademark infringers rather
than trademark owners.*fn16
Turning first to the 1971 lawsuit, this was an action brought by The
Drifters Inc. against Marshak and his assignors in the Supreme Court of
New York. See The Drifters, Inc. v. Thomas, et al., Index No.
27336/1971; Trial Exh. D-B. In that case, the court denied Treadwell's
application for a preliminary injunction, and later dismissed the
complaint because of Treadwell's failure to provide discovery. Marshak
contends that he and his assignors reasonably believed, on the basis of
this dismissal, that Treadwell had no rights in the name "The Drifters."
Of course, any claim of reasonable reliance first requires proof of
actual reliance. In this case, Marshak has cited no testimony or other
evidence that he or his assignors subjectively believed that the
dismissal of Treadwell's 1971 lawsuit constituted a final adjudication of
their trademark rights. But even assuming that there was evidence of
reliance, the jury clearly rejected it as unreasonable.
The jury also rejected Marshak's claim that he and his assignors had
relied on the advice of a trademark attorney when they applied for their
federal registration. There was simply no testimony that Marshak or his
assignors discussed with the attorney either The Drifters Inc. employment
contracts or Atlantic Records continuous commercial sale of original
Drifters recordings. Moreover, the evidence of the registrants knowing
misrepresentations was legion in this case. The jury surely could
conclude that any claim of reliance was insincere or unreasonable.
Finally, the jury rejected Marshak's suggestion that the registrants
failure to disclose other users of the mark could not have been
fraudulent because they had a colorable claim that those other users were
infringers. The jury properly rejected this argument because there was no
evidence that the registrants had a colorable claim of infringement
against both Treadwell's Drifters and Atlantic Records prior to the 1976
trademark registration.*fn18 Moreover, there was no testimony that
Marshak or his assignors subjectively believed that both Treadwell and
Atlantic Records were infringers." In the absence of such testimony,
there is simply no factual basis for Marshak's argument.
In the end, there was more than sufficient evidence to support the
jury's verdict that Marshak's trademark registration had been
fraudulently obtained. Indeed all of the evidence led to the same
conclusion: Thomas, Hobbs, Green, and Marshak knowingly and unabashedly
took possession of a valuable trademark to which they had no colorable
claim and then sought to register that mark with the PTO. The evidence
also showed that they knew, but failed to disclose, that Atlantic Records
was using the mark in connection with its marketing and sale of original
Drifters records. Indeed, Marshak never really disputed that the 1976
trademark application contained these two material misrepresentations,
and he utterly failed to adduce any evidence in support of his claim that
these misrepresentations were innocent rather than fraudulent.*fn19 In
this Court's view, the jury's verdict reflected the only reasonable
conclusion supported by the evidence; there was fraud as a matter of
2. Legal and Equitable Bases for J.N.O.V.
a) Res Judicata and Related Doctrines
 Marshak has always contended in this case that Treadwell's
counterclaim for cancellation is precluded by prior litigations. This
Court has repeatedly rejected this argument because Marshak has cited
only one prior case in which Treadwell was a party-in-interest, The
Drifters, Inc. v. Thomas, et al., Index No. 27336/1971 (N.Y.Sup.Ct.),
which was dismissed because of Treadwell's failure to provide adequate
discovery. See Trans. at 435-38. No issue was actually litigated in ...