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Callanetics Management Co., Inc. v. Pinckney

United States District Court, Seventh Circuit

December 11, 2013

CALLANETICS MANAGEMENT COMPANY, INC., Plaintiff,
v.
ELIZABETH B. PINCKNEY, Executor of the Estate of Callan Pinckney and CALLAN PRODUCTIONS CORPORATION, Defendants. ELIZABETH B. PINCKNEY, Executor of the Estate of Callan Pinckney and CALLAN PRODUCTIONS CORPORATION, Counter-Plaintiffs,
v.
CALLANETICS MANAGEMENT COMPANY, INC. and PATRICIA KLEIN, Counter-Defendants.

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, District Judge.

On June 13, 2013, Callanetics Management Company, Inc. ("CMC") filed suit against Elizabeth B. Pinckney, as the executor of the Estate of Callan Pinckney and Callan Productions Corporation ("Callan Productions"), seeking declarations that Pinckney's Federal Trademark and Service Mark Registrations are to be cancelled by the United States Patent and Trademark Office (the "PTO") and further seeking a declaration of CMC's right to license copyrighted works.

Pinckney and Callan Productions filed an Answer and a Counterclaim against CMC and another individual, Patricia Klein[1], amending it on July 19, 2013. Pinckney and Callan Productions assert claims of trademark infringement, false designation of origin, cybersquatting, copyright infringement, violation of the Illinois Uniform Deceptive Trade Practices Act, and infringement of the right of publicity under Georgia common law against CMC and Klein. CMC moves for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), on the premise that Counter-Plaintiffs' claims are barred by either the doctrine of laches, the applicable statute of limitations, or both. This Motion has been fully briefed. For the reasons provided below, CMC's Motion is denied.

BACKGROUND

The following facts are drawn from the Verified Complaint and are accepted as true for purposes of this Motion. See Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633 (7th Cir. 2007).

Callan Pinckney was a resident of Georgia; she died on March 1, 2012. (Am. Counterclaim ¶ 1.) Counter-Plaintiff Elizabeth Pinckney was Callan Pinckney's sister-in-law and is the executor of Callan Pinckney's estate. ( Id. ¶ 2.) The Estate wholly owns Counter-Plaintiff Callan Productions. ( Id. ¶ 3.) Counter-Defendant CMC is an Illinois corporation. ( Id. ¶ 4.) The president and sole employee of CMC is Counter-Defendant Patricia Klein, an Illinois resident. ( Id. ¶ 5.)

Callan Pinckney developed an exercise method she dubbed "Callanetics" by combining her first name with the suffix "-etics." ( Id. ¶¶ 9, 12.) Callan Pinckney starred in and published several books and videos relating to the Callanetics exercise method. ( Id. ¶ 10.) Counter-Plaintiffs own several registered copyrighted works. ( Id. ) The Estate also owns two federally registered trademarks: U.S. Registration No. 1, 416, 973, used in connection with "educational services, namely, conducting courses in physical fitness and exercise" in International Class 41, and U.S. registration No. 3, 323, 109, for "exercise videos" in International Class 9 and "exercise books" in International Class 16. ( Id. ¶ 11.)

Callan Pinckney entered into agreements with Metro-Goldwin-Mayer Studios, Inc. ("MGM"), under which MGM published certain copyrighted works in VHS format, under the Callanetics trademark. ( Id. ¶ 13.) She also contracted with book publishers to publish some of her copyrighted works under and in connection with the Callanetics trademark. ( Id. ¶ 14.) Some of these videos and books are still being sold. ( Id. ¶¶ 13-14.)

The Estate asserts it controls all rights of publicity and privacy relating to Callan Pinckney, and did not authorize Counter-Defendants to use her likeness or endorsement. ( Id. ¶ 16.) It further contends Counter-Defendants used the registered marks without authorization or license. ( Id. ¶ 15.)

The company Callanetics Franchising Corporation ("Callanetics Franchising") was incorporated in the early nineties to manage the franchising of the Callanetics business. ( Id. ¶ 17.) Callanetics Franchising engaged Counter-Defendants to take over management duties of the Callanetics franchises and granted CMC the option to purchase Callanetics Franchising's assets. ( Id. ¶ 18.) Callanetics Franchising was dissolved on February 1, 1999. ( Id. ¶ 19.)

On May 23, 2003, Callan Pinckney's attorney, Marc Bailin, wrote a letter to Klein that purportedly authorized CMC to "negotiate and subject to our prior approval, enter into any written agreements regarding the use of the Callanetics' trade name in connection with the production or marketing of any new Callanetics Exercise videos or media productions related thereto." ( Id. ¶ 20.) Bailin was not authorized by Callan Pinckney to send this letter to CMC. ( Id. ¶ 21.) The letter provided that Callan Pinckney had to approve of any marketing and service agreement entered into with CMC; however, Callan Pinckney never approved of any such agreement. ( Id. ¶ 22.)

In 2008, Counter-Defendants began negotiating with Callan Pinckney about the license of the Callanetics mark, as well as Callan Pinckney's name and likeness; however, no agreement was executed because the parties were unable to agree to final terms. ( Id. ¶¶ 26-27.) Despite this, Counter-Defendants reproduce and sell the copyrighted works, sell products and services with the Callanetics mark and in connection with the name and likeness of Callan Pinckney. ( Id. ¶ 27.) Counter-Defendants also registered and use the domain name callanetics.com. ( Id. ¶ 28.) Callan Pinckney has never received a royalty or any other payment for the use of her intellectual property by Counter-Defendants. ( Id. ¶ 39.)

Based on these facts, Counter-Plaintiffs allege six counts against CMC and Klein: (I) trademark infringement, (II) false designation of origin, (III) cybersquatting, (IV) violation of the Illinois Uniform Deceptive Trade Practices Act, (V) copyright infringement, and (VI) infringement of the right to publicity under Georgia common law. CMC moves for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), on the ...


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