Conte, pro se, sued Newsday and a bunch of others forviolating the Lanham Act and other laws (most claims were dismissed). The false advertising claim was based onNewsday’s use of inflated circulation figures, which allegedly attracted moreadvertising dollars than the truth would have, and there was also a trade dressclaim based on alleged imitation of Conte’s TV publication. In this opinion,the court granted summary judgment on the remaining federal claims to Newsdayand related defendants and declined to exercise supplemental jurisdiction overthe remaining claims.
Conte’s I Media was founded in December 2003; it publishedand distributed TV Time magazine, a“free, weekly, full color, gloss-coated, easy to read TV-listings publicationcontaining articles and features related to television as well as crosswordpuzzles, cartoons and word games.” It was financed by selling delivery routesto independent distributors, who were supposed to recoup their investmentsthrough payments for each delivery of TVTime. It was first published in lateNovember 2004, and last published on May 1, 2005; only sixteen issues werepublished (there were some missed weeks). Conte didn’t maintain corporate books or hire an accountant. Newsday argued that no one paid to advertisein TV Time and Conte didn’t seriouslyattempt to sell ads in it. In spring2005, some of Conte’s distributors were contacted by investigators from theNassau County DA’s office who were investigating him for fraud. He testified that I Media failed for lack ofcash flow, among other reasons.
Although Conte spoke with potential clients about paying toadvertise in TV Time only after helearned about Newsday’s circulation fraud, he claimed to have spoken to a longlist of potential clients about advertising in TV Week Magazine, a different I Media publication, before then.Indeed, he testified that he tried to capitalize on Newsday’s misrepresentationonce he learned of it (e.g., emailing one prospect, “The reality is thatNewsday is charging you a fortune for the sloppy product and phantom circulationthat they give you”).
Newsday had its own TV-related publication, TV Picks, which was redesigned invarious ways in 2004 and 2005; as part of the redesign, Newsday decided to useglossy paper stock for the cover, as it had done before 2004 under the name TV Plus; other companies such as the NYTand the NY Daily News also published TV guides on Long Island in that timeframewith glossy covers.
Consumers Warehouse, a Long Island company, had beenadvertising in Newsday for over 25 years and was contractually bound toadvertise in Newsday’s TV publication through the end of 2005. The Consumersdefendants learned of the new format in December 2004, including the fact thatthe footer at the bottom of the cover page would become ad space; the February2005 edition of TV Picks featured abanner there for Consumers Warehouse. One of Consumers’ principals found a copy of TV Time in his driveway and contacted Conte for a rate card; heviewed it as a potential way to reach non-Newsdaysubscribers since it was being distributed for free. Conte never responded with a rate card butoffered to place a full page ad as a courtesy in the next edition, an offer renewedtwice. Ads for Consumers Warehouse appeared at least four times in TV Time, though Conte never sent aninvoice and never received any written commitment to advertise therein. Conte rejected Consumers’ offer to advertisein TV Time for 26 weeks for $50,000,though a woman who worked for Conte at the time testified that it was the onlycompany willing to pay Conte for advertising at the time and that she triedunsuccessfully to convince him to agree. Conte counteroffered for a larger amount, claiming to have otherinterested advertisers, and Consumers wished him luck.
Separately, a Newsdayreporter, Harrington, claimed that he was approached by some of Conte’sdistributors in May/June 2005, and he began researching a story. Higher-ups testified that they weren’tinvolved in this investigation. Harrington called Ram Marketing, one of Conte’s vendors, allegedly toverify its relationship with Conte. Thepresident stated that he didn’t remember the conversation and that it wouldn’thave affected his business relationship with Conte. In July, Harrington attended a meeting ofConte’s route distributors and their attorney; the defendants contended thathis sole purpose was to gather information. He also called Conte—in defendants’version, to give him an opportunity to give his side of the story; in Conte’sversion, as part of an extortion scheme. Thirty-three of Conte’s distributors then filed a class action allegingthat I Media was a fraudulent scheme. Their attorney drafted the complaint without any assistance fromNewsday. In September, Newsday ranHarrington’s articles “Distributors sue over TV Time” and “DA opens criminalprobe into iMedia,” both quoting the complaint. (Among other things, Conte subsequently filed an $8.3 billion lawsuitagainst Nassau County, the Nassau District Attorney, and various AssistantDistrict Attorneys and investigators with the present court.)
Conte first contended that Newsday’s inflated circulationfigures violated §43(a), causing advertisers to buy from Newsday instead offrom Conte.
The Second Circuit has a pragmatic, case by case approach tostanding—a plaintiff must show that it has a reasonable interest to beprotected, even a future interest. A more substantial showing is required wherethere isn’t direct competition. Here theevidence showed that Conte didn’t have standing:
It is undisputed that, for a periodof time, Newsday inflated its circulation figures in the marketplace. However,it is also uncontroverted that plaintiff did not begin to solicit advertisersfor his TV Time publication (the product that was allegedly in competition withNewsday's products) until after Newsday publicly acknowledged its misstatementsand revised its circulation numbers. Accordingly, plaintiff cannot demonstratea reasonable basis for believing that his potential to attract advertisers toTV Time was damaged by Newsday's false advertising.
Even extending his claim to an alleged diversion fromConte’s TV Week publication, anotherproduct for which he allegedly solicited advertisers during the period whenNewsday was misstating its circulation, he failed to show likely injury orcausation: he had no evidence that he would have sold more ads if Newsdayhadn’t misstated its circulation. His theorydepended on multiple unevidenced speculations: that the inflated numbersallowed Newsday to set higher rates, then allowing it to offer discounts forlong term exclusive agreements that prevented advertisers from advertising withI Media. This was too attenuated atheory.
Separately, the court granted summary judgment on Conte’sfalse advertising claim for allegedly disparaging statements about him becausethe only evidence of potentially deceptive statements came from two Newsday articles, which aren’tcommercial advertising or promotion.
Even if there were other deceptive statements about Conteoutside those articles, they wouldn’t have been part of an organized campaignto penetrate the relevant market and wouldn’t be actionable. Conte argued that some of his routedistributors were Newsday employee/agents, that those people made falsecriminal accusations about him, and that Newsday was liable for thosestatements. Setting aside Conte’s agencyliability argument, the allegation that they disseminated falsities was “simplyconclusory and unsupported by any evidence in the record.” His argument was based on an email fromHarrington to an editor stating, “Got a call from a Newsday agent. He andaround 25 other agents are in contact with the Nassau DA's office after theowner of a TV guide-type magazine they began distributing (not Newsday), from aMellville company called Imedia, has stopped providing them with paper and theowner apparently has fled ... They believe the operation is a Ponzischeme....” This didn’t show that falseaccusations had been made, and even if the distributors conveyed their beliefsthat Conte’s business was a Ponzi scheme, subjective opinions aren’tactionable. Separately, even assumingthat there were evidence that Newsday employee/agents made deceptive statementsabout Conte, no “rational” juror could conclude that they were made as part ofan organized campaign to penetrate the relevant market, which was not I Mediadistributors but rather all potential route distributors.
Finally, the court rejected the trade dress claim. The claimed TV Time trade dress was comprisedof commonly used, nonunique and functional elements: a glossy cover, off-the-shelffonts/large font sizes in the title, and the design and layout of theadvertising footer. Though combinationscan be protectible, the fact that a claimed trade dress is composed exclusivelyof common or functional elements invites careful scrutiny to prevent a singlecompetitor from tying up a product or marketing idea. Here, there was noevidence that the combination of these functional and generic elements wasanything but functional and generic. Conte sought protection for the idea or concept of a glossy cover of anad-supported magazine, and the Lanham Act doesn’t protect ideas or concepts.Even assuming that his trade dress was descriptive and not generic, there wasno evidence of secondary meaning: no evidence of ad expenditures, consumerstudies, unsolicited media coverage, sales success, or longterm use. Speculativeassertions of copying don’t create secondary meaning, and even intentionalcopying doesn’t trigger any presumption of secondary meaning. And even assuming that he had protectabletrade dress, no “rational” juror could find likely confusion. Similarity was dispositive: the titles TV Time and TV Picks were at best marginally similar from the common use of(generic) “TV”; Newsday added its house mark; the size of the periodicalsdiffered; so did the date range format; so did the way the title was positionedwith respect to the cover photo; so did how they were distributed (as astandalone and with Newsday,respectively). The cumulative effecteliminated any likelihood of confusion.
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