home *** CD-ROM | disk | FTP | other *** search
- System Enhancement Associates vs. PKware, Inc
-
- Document dated August 11, 1988 -- SEA is calling PKware in
- contempt of the cross-license agreement which was signed on
- July 29, 1988.
-
- The following pages have been re-keyed by me for purposes of full
- disclosure to the public. They have been run through spelling
- checker, but have not been proofread by anyone.
-
- See the file --> SEA-PK-L.arc <-- for re-keyed version of the
- Confidential Cross-License Agreement between SEA and PKware that
- this document refers to.
-
- Both documents were photocopied at the Clerk of Court's Office in the
- Milwaukee County Federal Courthouse by myself at 1:00 PM on August
- 31, 1988.
-
- The ESSENCE of the suit is that the PKware Users Manual purposely
- and deceptively uses words that contain ARC which represent
- trademark violations of SEA's ARC archiving* program. (Ooops, I just
- did it again! I used a word with "arc" in it. Naughty me.)
-
- By the way, as *I* am the person who wrote PKware's documentation
- for their file compression programs, this new law suit came as a
- COMPLETE shock to me! Neither Phil Katz or his attorney, Nick
- Kees, discussed any aspect of the case or upcoming legal proceedings
- with me prior to this revaluation which I received at the courthouse.
-
- Karen Little, President
- Office Technology Academy, Inc.
- 230 W Wells, Suite 310
- Milwaukee, WI 53203
- 414 / 273-7310
-
- + + + +
-
- PROCEEDINGS UNDER JUDGMENT FOR PLAINTIFF ON CONSENT:
- BRIEF IN SUPPORT OF PLAINTIFF'S MOTION FOR ORDER HOLDING
- DEFENDANTS IN CONTEMPT
-
- On August 2, 1988, this Court signed a JUDGMENT FOR PLAINTIFF
- ON CONSENT which permanently enjoined the Defendants PKWARE
- and Phillip Katz from infringing the Plaintiff's trademark "ARC."
- Effective August 1, 1988, System Enhancement Associates, Inc. ("SEA")
- and Defendants PKWARE and Phillip Katz (hereinafter jointly referred
- to as "PKWARE") entered into a Confidential CROSS-LICENSE
- AGREEMENT whereby the Defendants also agreed not to infringe
- Plaintiff's trademark "ARC," specifically by agreeing not to distribute
- or offer for license any program that carries a trademark, tradename
- or filename including the letters, or notation "ARC". Nonetheless,
- Defendants have willfully violated this Court's Order and the Cross-
- License Agreement by distributing and offering for license a new
- version of its former software program, which it now entitles PKPAK
- and PKUNPAK. This program is, for all intents and purposes, identical
- to the programs, PKARC and PKXARC, which were the subject
- 2
-
- of this litigation. (Declaration of Thomas M. Marshall, Esq. at
- paragraph 15).
-
- One of the Plaintiff's principal complaints in this litigation was that
- Defendants infringed Plaintiff's Trademark "ARC" by using, throughout
- their computer programs and accompanying user manual, the term
- "ARC." Defendants used this as a verb, as an adjective, as a noun.
- These improper uses of Plaintiff's trademark have the effect of
- confusing the public as to the source of the computer programs and of
- diluting Plaintiff's protected trademark.
-
- The Defendants' newest version of a software program continues the
- same infringing actions. As Plaintiff's Exhibits 57-65 to the
- Declaration of Thomas M. Marshall, Esq. illustrate, Defendants
- continue to use Plaintiff's protected mark in a connection with the
- distribution and licensing of Defendants' computer programs.
-
- Plaintiff comes to this Court seeking further protection from
- Defendants' continuing activity. It is apparent that the Defendants do
- not respect this Court's prior Order which permanently enjoined them
- from undertaking such activity. Nor do the Defendants respect the
- Cross-License Agreement that they entered into only a few days
- before Court signed the Judgment.
-
- AUTHORITY
-
- A. This Court has the power to punish defendants for their
- actions
-
- It is clear that this Court has the authority and power to punish the
- Defendants' acts under its power of contempt. This power is an
- inherent power of the federal courts and is specifically recognized in
- 18 USC -Par 401. NLRB v Deena Artware, Inc., ... reversed other
- grounds. 361 US 398 (1960). A consent judgment is enforceable,
- although it was negotiated by the parties, via the Court's contempt
- powers. Usery v Chef Italia, ...; Delaware Valley Citizens' Council for
- Clean Air v Commonwealth of Pennsylvania, ..., affirmed, 678 F. 2d 470
- (3d Cir. 1982), cert. denied, 459 US 969 (1983).
-
- Finally, courts have the power to punish by both civil and criminal
- contempt actions of a party which violate an injunction against
- trademark infringement. See, eg, Musidor B V V Great American
- Screen, 688 F 2d 60 (2d Cir. 1981), cert denied, 455 US 944 (1982);
- Chanel Industries, Inc. v Pierre March, Inc., 199 F Supp 748 (ED Mo
- 1961); Bradstreet Co. v Bradstreet's Collection Bureau, 249 F 958 (2d
- Cir 1918).
-
- B. Defendants' Actions Violate This Court's Order by Continuing
- to Infringe Plaintiff's Trademark.
-
- The Judgment for Plaintiff on Consent provides at paragraph 1:
- "Defendants and each of them, jointly and severally, . . . be and
- hereby are enjoined permanently . . . from infringing in any manner
- Plaintiff's trademark ARC." In this case, it is clear that the
-
- 3
-
- continued actions of the Defendants violate this Court's order of
- August 2, 1988 by infringing Plaintiff's trademark.
-
- First, the Defendants have admitted that in the consent judgment (at
- paragraph 1), the license agreement (at paragraph 5) and the agreed
- press release (Plaintiff's Exhibit 63 to Marshall Declaration), that
- Plaintiff has a predictable mark in the designation "ARC".
-
- Second, merely by glancing through the Defendants' programs and User
- Manual, it is evident that PKWARE continues to use Plaintiff's
- protected mark ARC. For example, in the User Manual which
- accompanies Defendants' new programs (Exhibit 65 to Marshall
- Declaration) virtually every page contains numerous uses of the
- Plaintiff's trademark ARC. Similarly, in the programs themselves, the
- messages which a computer user may see on his screen at certain
- points while running Defendants' program contain the protected
- trademark ARC. (See paragraph 13 to Marashall Declaration and the
- Plaintiff's Exhibits 57-61.)
-
- Obviously, Defendants' actions infringe Plaintiff's mark by taking the
- protected mark and using it in connection with the publication,
- distribution and offering for licensing of their computer programs.
- Such misuse is clearly illustrated in the first few pages of the User
- Manual accompanying the newest version of the PKWare programs
- (Plaintiff's Exhibit 65 to the Marshall Declaration). In the manual,
- PKWare explains its programs:
-
- Computer file compression means that by using PKWare programs,
- files are quickly reduced in size and thereby take up less storage
- space. This process, sometimes called ARCing, crates ARCHIVE
- files.
-
- ***
-
- PKPAK is the program that compresses files. This shrinking
- process is often referred to as archiving or ARCing . . .
-
- ***
-
- PKUNPAK is the program that reconstructs or extracts archived
- files. A shorthand term for this process is UNarcing.
-
- User Manual, Plaintiff's Exhibit 65 at page 3. The misuse of
- Plaintiff's trademark ARC continues throughout the User Manual,
- where Defendants use ARC as a noun, an adjective and a verb. There
- is no legitimate reason for using Plaintiff's mark in this manner. It
- confuses the public as to the source of origin of this project (a
- computer user pursuing this manual could easily associate the PKWare
- programs with those distributed and licensed by SEA which legitimately
- use the trademark ARC). Further, this misuse dilutes the unique and
- distinctive value of the ARC trademark by making it appear to be a
- commonplace equivalent for archiving or compressing files. Such uses
- clearly infringe Plaintiff's trademark and are an attempt to destroy
- SEA's valuable property right.
-
- 4
-
- The conduct in this case is similar to that enjoined in Scandia Down
- Corporation v Euroquilt, Inc., 772 F 2d 1423 (78th Cir 1985). In
- Scandia, the court is held a defendant in contempt when it continued
- to use a logo, the outline of a goose, in connection with the sale of
- its bedding products. The Court of Appeals affirmed findings that the
- plaintiff's marks identified its products with the plaintiff and that the
- competitor was using confusingly similar marks. Further, the Court
- affirmed the trial court's findings of contempt, holding that the
- infringement was willful and in a deliberate effort to capture the
- plaintiff's customers. See also Ideal Industries, Inc. v. Gardner
- Bender, Inc., 612 F 2d 1018 (7th Cir 1979) (holding that electrical
- connectors labeled "71B", etc. violated plaintiff's trademarks).
-
- The misuse is all the more damaging here where there is being
- circulated information indicating that the PKWARE programs are
- flawed. Exhibit 68 to the Marshall Declaration is a Warning Notice
- that was recently published on a computer bulletin board. It states
- that the PKARC version "will cause your system to FLAT LOCK UP. .
- .it is altering DOS and memory and it DOES NOT restor things to the
- way they were before it was run...be safe, not sorry! DON'T TAKE
- THE CHANCE...SEA distributes and licenses computer programs that
- perform the same functions as that now being distributed and licensed
- by Defendants. To the extent that, as a result of Defendants'
- continuing trademark infringement the PKWARE programs with their
- perceived serious flaws are associated with ARC programs licensed and
- distributed by SEA, SEA's business may be permanently damaged.
- Given the continuing use by the Defendants of the ARC trademark, it
- is likely the public will be confused and SEA will be hurt.
-
- Finally, the intent of the Defendants cannot be much clearer. They
- did not wait to issue a new version of their prior program and User
- Manual. One need only compare the User Manual distributed with the
- pre-judgment version of their software programs (Plaintiff's Exhibit 17
- to Marshall Declaration) with the current User Manual (Plaintiff's
- Exhibit 65). Apparently, all that was changed were the names of the
- programs from PKARC and PKXARC to PKPAK and PKUNPAK. Only a
- superficial attempt was made to delete the infringing references
- throughout the computer programs to ARC and to the references
- throughout the user manual. (Marshall Declaration at paragraph 15.)
- Rather, it appears clear that the Defendants seem bent on a course of
- continuing in their use of Plaintiff's trademark in an attempt to
- capture Plaintiff's customers or to dilute or destroy its protected
- rights.
-
-
- 5
-
- CONCLUSION
-
- For these reasons, the Plaintiff respectfully requests this Court enter
- an order holding Defendants in contempt of the Judgment for Plaintiff
- on Consent and grant the relief requested in Plaintiff's motion.
-
- Dated this 11 day of August, 1988.
-
- Attorneys for Plaintiff
- SYSTEM ENHANCEMENT ASSOCIATES, INC.
- Michael A. Lechter & Mary K. Braza
- FOLEY & LARDNER
- Milwaukee, WI
-
- and
-
- Thomas M. Marshall, Esq.
- Powder Mill Village
- Morris Plains, NJ