Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


July 30, 1999


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.


I. The Litigation

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 registration.*fn1

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 in 1976.

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.

After Mr. Treadwell's death, his widow Faye succeeded him as The Drifters principal manager and shareholder. Charlie Thomas left The Drifters shortly after Faye Treadwell assumed control, but the remaining group members, including Johnny Moore, continued to sing and perform under the management of Mrs. Treadwell and as employees of The Drifters, Inc.*fn3

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.


I. Standards of Review

[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[1]. 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.

[5] 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[2][a].

II. Plaintiff Marshak's Motions

A. Renewed Motion for Judgment as a Matter of Law

1. Sufficiency of Evidence

[6] 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.

[7] 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 trademark application.*fn7

[8] In this case, the jury concluded that Marshak's federal trademark registration had been Obtained by a fraud on the Patent and Trademark Office. He now asks this Court to set aside the jury's verdict on the ground that no reasonable jury could have found that the trademark registrants acted with fraudulent intent.*fn8

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
   the Artist.

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, 388-94."*fn11

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's Testimony

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).

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
   their voices.
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." *fn17

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 law.

2. Legal and Equitable Bases for J.N.O.V.

a) Res Judicata and Related Doctrines

[9] 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 ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.