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A federal district court denied a motion by plaintiff Twentieth Century Fox Film Corporation to obtain a preliminary injunction enjoining defendant from using advertising that allegedly infringes Fox's copyrights and trademarks in order to market and sell a reproduction of a necklace portrayed in Fox's recent motion picture "Titanic,"--the highest grossing movie of all time. (The actual ship--the RMS Titanic--was an Olympic class passenger liner that was considered "unsinkable" and is noted in history for the collision with an iceberg on April 14, 1912 on the ship's maiden voyage. The actual sinking of the RMS Titanic occurred on April 15, 1912. The film, Titanic, is based--at least to some degree--on facts about the real Titanic contained in the historical record concerning this ill-fated ocean liner. The 1997 movie, Titanic, starred Leonardo DiCaprio and Kate Winslet and won 11 Academy Awards--holding the all-time record for highest box office returns.)

The love of the protagonists (Jack and Rose)--two passengers on the ill-fated vessel--in the story comes to be symbolized by a dazzling sapphire and diamond necklace, originally given to Rose by her fiancee, and called the "Heart of the Ocean." As stated in its TRO Brief, the "Heart of the Ocean" is a central, defining element of "Titanic." The movie "Titanic" begins and ends with scenes in which the "Heart of the Ocean" is featured prominently, and the rest of the motion picture is an account of the story behind the "Heart of the Ocean" and the events that took place on the ship's maiden voyage before and during the sinking of the R.M.S. Titanic. There is no counterpart in history to the "Heart of the Ocean" and the prop was designed specifically for the motion picture. Further, the "Heart of the Ocean" embodies the romance of the story.

Fox jointly owns the copyright in the motion picture with Paramount Pictures Corporation. Under an agreement between the two studios, Fox distributes the movie internationally, while Paramount distributes it in North America. Fox owns all trademark and merchandising rights in the motion picture.

Among the myriad merchandising licenses which Fox has sold or hopes to sell is the asserted right to reproduce "The Heart of the Ocean." The Court noted that though such a reproduction is not yet commercially available, it will be on sale for $195 shortly by a purported "licensee."

On or about February 26, 1998, defendant placed in many newspapers across the U.S. a full-page color ad of a necklace of its own manufacture, called "Jewel of the Sea", priced at $19. Defendant included a similar ad on the first screen of its Internet web page. Until this action came before the Court, Internet customers could buy the "Jewel of the Sea" interactively through the web page or by calling defendant's toll-free number. In the advertisement, the "Jewel of the Sea" is displayed by an actor who closely resembles Leonardo DiCaprio. Leonardo DiCaprio--who made the Time 100 List of the most influential people of the year in 2007--played the part of Jack Dawson in the movie, "Titanic". A close inspection of the text reveals that the model displaying the necklace is not in fact Leonardo DiCaprio, but rather one Tim Hays, who apparently served as Leonardo DiCaprio's double during filming. In the advertisement, Hays is clothed in garb virtually identical to that worn by Leonardo DiCaprio in the movie and is pictured in front of the drawing of a ship clearly labeled "TITANIC." At the bottom of the ad, in tiny print, is a disclaimer by which the defendant purports to disassociate the "Jewel of the Sea" from "any film, cast or studio of any production company."

At the temporary restraining order (TRO) hearing, the defendant voluntarily consented to cancel all the "Jewel of the Sea" ads it was then running, or planned in the future to run, pending prospective settlement negotiations with Fox. Defendant also consented to remove all screens from its website which displayed the allegedly infringing ad. By letter dated March 13, 1998, defendant informed the Court that it had indeed pulled down its Internet website. As for the ads, it had succeeded in canceling 42 of them, but 18 were either already in print or in the process of being printed and could not be canceled.

The Court was advised that the parties had come to a complete understanding as to defendant's future conduct, but defendant refused plaintiff's demand that it flatly reject all offers to buy the $19 necklace that might come to it as a result of the ads it had been powerless to cancel.

In its March 13, 1998 letter, the defendants further represented as follows:

"In order to eliminate any possibility of consumer confusion, defendant will take extraordinary steps to inform purchasers of the lack of any connection between the parties. At the time of and before any telephone orders are taken, defendant will specifically advise purchasers that the product is not licensed, sponsored, endorsed, approved or connected in any way with the motion picture `Titanic' and will offer a full refund on any orders already taken. To insure compliance, orders will be taken by an independent order processing organization, following a standardized script."

Plaintiff has specifically conceded that the defendant has done everything within its power to cancel all ads, but nevertheless insists defendant be enjoined from accepting orders generated by the ads it was powerless to cancel. The Court concluded that "considering all the equities of the situation, the defendant should not be required to reject any and all orders that may come to it as a result of those advertisements it was impossible to cancel."

Concluded the Court: "In light of defendant's good faith efforts to limit the damage flowing from the thoughtless use of its deceptive advertisement there is not even a slight danger that it would now turn around and embark upon another course of deceptive conduct. There is, therefore, no basis for the issuance of a preliminary injunction. We adhere to our decisions not to force the defendant to reject all orders arising from the advertisements it could not cancel, and to deny plaintiff's motion for a preliminary injunction."

(Twentieth Century Fox Film Corporation v. Suarez Corporation Industries, dba Lindenwold Fine Jewelers, 98 Civ. 1711 (WK), United States District Court for the Southern District of New York, 1998 U.S. Dist. LEXIS 3487;46 U.S.Q.P.2D (BNA) 1312, March 19, 1998.)

SWINDLE, THOMPSON CONFIRMED AS FTC COMMISSIONERS

Orson Swindle was confirmed unanimously by the U.S. Senate on March 19, 1998 as an FTC Commissioner to a term that expires in September, 2004. Commissioner Swindle, who received a one-year recess appointment, assumed the responsibilities of the office on December 18, 1997.

Swindle has had a distinguished military career and served in the Reagan Administration from 1981 to 1989 directing financial assistance programs to economically distressed rural and municipal areas of the country. As Assistant Secretary of Commerce for Development he managed the Department of Commerce's national economic development efforts directing seven offices across the country. Swindle was State Director of the Farmers Home Administration for the U.S. Department of Agriculture financing rural housing, community infrastructure, businesses, and farming.

Mozelle W. Thompson was also confirmed on March 19, 1998 by the U.S. Senate as an FTC Commissioner to a term that expires in September, 2003. Thompson, who has already assumed the responsibilities of the office, was sworn in as Commissioner on December 17, 1997, when President Clinton appointed Thompson under the President's power to fill vacancies that exist during a recess of the Senate.

Before joining the Commission, Thompson most recently held the position of Principal Deputy Assistant Secretary of the Treasury, where he was responsible for overseeing domestic spending and credit policies, including the operations of the Federal Financing Bank and the Office of Government Financing.

Thompson was responsible for creating the Office of Privatization, which among its activities, provides guidance on the privatization of federal assets and operations. Thompson was Principal Deputy Assistant Secretary since April 1996. He was appointed Deputy Assistant Secretary in August 1993.

Before joining the Treasury Department, Thompson served as Senior Vice President and General Counsel to the New York State Finance Agency and its four sister corporations. In addition, he was an adjunct associate professor at the Fordham University School of Law where he taught courses in municipal law and finance. Thompson also was an attorney with the New York firm of Skadden, Arps, Slate, Meagher and Flom.

(FTC Release, March 20, 1998; materials relating to this FTC matter are available on the Internet at FTC's World Wide Web site at: http://www.ftc.gov.)

FTC COMMISSIONER AZCUENAGA TO RESIGN

Mary L. Azcuenaga announced her resignation to be effective June 5, 1998. Azcuenaga has served as a commissioner during three presidential administrations. A political independent, she was appointed commissioner by President Ronald Reagan and sworn in on November 27, 1984, for a term expiring September 25, 1991. She was reappointed by President George Bush for a second term of office, expiring September 25, 1998.

In her letter to the President, Azcuenaga said: "Although my departure will not be without regret, I have decided that, after more than 25 years in public service, it is time to seek a new challenge in the private sector. I am profoundly grateful to have had this opportunity to have served my country and the interests of American consumers."

FTC Chairman Robert Pitofsky said,

"Mary will be remembered by her colleagues for her rigorous intellect, her dedication and her fairness. She brought to her job substantive expertise gained from her two decades at the Commission. Her work as a commissioner reflected her extensive experience as a trial attorney and as legal counsel to the agency."

In furtherance of FTC's consumer protection mandate, Azcuenaga wrote an important unfairness doctrine opinion in Orkin Exterminating Co. Her consumer protection law opinions also include, among others, Figgie International, Inc., and Brake Guard Products, Inc.

In addition to authoring opinions on behalf of a majority of the Commission, Azcuenaga has written numerous separate statements to clarify points of law or policy in connection with both adjudicated matters and consent orders. Some of the more notable of these statements include B.F. Goodrich, California Dental Association, and Dell Computer Corp.

(FTC Release, March 26, 1998; materials relating to this FTC matter are available on the Internet at FTC's World Wide Web site at: http://www.ftc.gov.)