Tobacco Documents Online

;~1~TEF~;I~~~SUPPOR~` y, ~tCSTY01~'~~7R AP CQNSIDERATION -~O~i.,.i,EAVE ~~'O, PE 2%w EI 5 5 t~~FK~ND,;;WHAR QN" _ . ~ ~ ~~TTORNEYS~~ND CO~1NS R9 i 3d5, PARI(~AVEN{lE TTIEW ~bR1C 1-..::...._ .. _. -:T:-!mnss:.. ._-- . T:-r

a 10 [ NEW'YORK SUPREME COURT APPELLATE DIVISION : FIRST'DEPARTMENT - - - - - - - - - - - - - - - - - - - - -x ROBERT BRIAN ASSOCIATES, INC., . Plaintiff-Respondent, . -against- . Index No. 6859/77 LOEWS THEATRES, INC., . Defendant-Appellant. . - - - - - - - - - - - - - - - - - - - - -x BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OR LEAVE TO APPEAL t C t C C - Preliminary Statement Defendant-appellant Loews Theatres, Inc. (hereafter, generally referred to as "Lorillard") respectfully petitions this Court to reconsider its order of July 10~, 1979 sustain- ing in part and reversing and remanding in part the order of the trial court below. In the alternative, Lorillard petitions this Court for leave to appeal to the Court of Appeals. This was an appeal from a jury verdict in favor of plaintiff on a contract claim that plaintiff was entitled to certain~ payments for promotional ideas allegedly used by Lorillard in four promotions for Kent cigarettes. This p C.~ Court, in its decision of July 10, 1979, upheld the jury 0 1-~ O L

r [' [ t l L e a verdict on liability, holding that_the jury could have found that the four Kent promotions "emanated from programs devel- oped by plaintiff . . ." The Court, however, overturned the 2 trial on damages, holding that plaintiff failed to offer suf- jury's $90,000 general damage award and remanded for a new We seek reconsideration because it appears that the Court may have overlooked or been mistaken about several crucial issues. Alternatively, we seek leave to appeal because the decision as it stands raises issue,s of great ficient evidence in support of its damage claim~. The Court also upheld a $10,000 jury verdict on a second cause of action~ in which plaintiff claimed that it was entitled to a percentage of costs incurred in the rejudging of a promo- tional contest known as the Kent Castle contest. significance to the law of intellectual property, including the standards of law and proof applicable in such cases and~ the role of the Court in assuring that ideas in the public domain remain~freely available to all competitors. The Issues Warranting Reconsideration We submit that the following issues warrant recon- sideration: 1. In upholding the jury determination of liabil- ity on the first cause of action, the Court held that the evidence permitted the jury to find that the four Kent pro-

C t [ C C C C n ., motions "emanated" from plaintiff's ideas. But New York law requires that to recover under a contract for the submis- sion of commercial ideas a mere showing of "emanation" is not enough. It must be shown that the idea so used is novel. Otherwise, payment would be required for ideas already in everyday use and in the public domain. Moreover, here plain- tiff conceded, both in its complaint and in its testimony, that the agreement applied only to "new and different" ideas. The record contains no evidence that the promotions actually run: by Lorillard contained any of the ideas identified by plaintiff as new and different. The Court's per curiam opinion makes no reference to this issue. As we show, if the Court's decision is per- mitted to stand, Lorillard must either forgo such commonplace promotions, concededly long in the public domain, as, givinqq away steak knives or run a perpetual risk that whenever Lorillard used these commonplace promotions a jury could later find that they "emanated" from plaintiff's id'eas, thus compelling Lorillard to pay a substantial toll ad infinitum: for the use of promotional ideas otherwise freely available to its competitors. 2. The trial court refused even to instruct the jury that in order to find for plaintiff, the jury had to find that Lorillard promotions used plaintiff's ideas. The 3 N 0 d O W ~ 0

C f U [ I C C a ., trial court left the jury completely at sea in this regard, charging only that it could find for plaintiff if it found that defendant "did not perform" the agreement. The law is clear that such an empty charge is inadequate. It is par- ticularly inadequate in a case of this kind, since it does not require the j~ury to distinguish between ideas in the public domain and those original ideas created!by plaintiff. This Court's per curiam opinion does not refer to this cru- cial issue. 3. This Court's remand for a new trial limited to damages overlooks the fact that there is no way to determine whether the first jury found that plaintiff was entitled to recover on all or only on some of the four separate promo- ity for plaintiff on all four promotions and that it can, therefore, assess damages for all four promotions. Hence, there must be a new trial on liability if there is to be a just verdict on damages. tions. There is only a single, general verdict on the first cause of action covering the four promotions. The trial court refused to address special interrogatories to the jury, as requested by Lorillard. On the new trial for damages, it would be a miscarriage of justice to permit the new jury to proceed on the assumption that there was a finding on liabil- ., ~

( f [ [ [ C C n lost net profits, or (3) to offer proof of damage under both theories (1) and (2). As this Court held, plaintiff offered 4. In the trial cour t, plaintiff had the option (1) to prove as its damage 15% of the actual cost of each promotion to Lorillard, (2) to prove that plaintiff would have won the bid on promotions and to prove as its damage, no proof of its damages on the first theory; it chose not to submit any proof of the actual cost of Lorillard's promo- tions. The remand order appears now to give plaintiff a second bite at this abandoned. theory. We do not believe the Court intended this unjiust result which would now allow plaintiff to try to prove what it totally declined to prove in the first trial. This Court should modify its order to make it clear that on remand,, proof of damage should be limited to lost net profits, if any. 5. This Court held that the jury could have found as one term of the contract "an override of 25 percent on [plaintiff's] outside purchases . . ." The second cause of action, relating to the rejudging, of the Kent Castle Contest, was predicated entirely on this never disputed contract term. Yet, there was no dispute that plaintiff incurred no costs on the rejudging, since it refused to have anything to do with procuring or supervising the rejudging. There was thus no basis for any award one the second cause of act•ion. ~ W ~ 0 N . ~, fN L

C [ t C C C C . a 6 6. This Court upheld the entire award of $10,000 Yet, no evidence of net profit was ever offered on this claim, on the second cause of actiom, thus allowing plaintiff to recover its gross lost profit with respect to the 25% over- ride. In fact, as the Court's decision on the first cause of action holds, plaintiff is entitled only to lost net profits. and the trial court even refused to instruct the jury that could~ return a verdict for less than the gross amount. The Issues To Be Certified On Appeal In the event the Court declines to reconsider and modify its decision as requested above, we urge that leave to appeal to the Cour t of Appeals be granted on the following issues: 1. In aniaction based on~ a contract for the sub- mission of new and different promotional ideas, may a jury find for plaintiff on a theory that defendant's promotions "emanated" from plaintiff's ideas, even though~defendant's promotions use ideas long in the public domain and d'o not incorporate any aspects of plaintiff's ide as wh~ich are orig- inal? - 2. Im an action on such a contract, can a jury verdict awarding plaintiff damages for the alleged use of . plaintiff's ideas in defendant's sales promotions be sus- C

E C C [ C C C r 7 tained in the absence of any evidence that defendant's pro- motions used any novel ideas of plaintiff and inthe face of uncontested evidence that defendant's promotions only embodied ideas commonly used well before plaintiff generated its ideas? 3. Where plaintiff claims that a contract entitled it to compensation~for defendant's use of plaintiff's new and different promotional ideas, was it error for the trial court merely to instruct the jury that it could find for plaintiff "if defendant did not perform," without giving any instruc- tions requiring the jury to distinguish between the use of ideas in the public domain and the use of plaintiff's ideas which were new and different? 4. Was it reversible error for the trial court to refuse to instruct the jury that a judgment could be returned for plaintiff in an action for the alleged use of promotional ideas only if defendant in fact used plaintiff's ideas? 5. When,the Appellate Division finds that plaintiff failed to prove its damages, can it remand for a trial court solely on the questions of damages, when plaintiff sought damages arising from four distinct claims and the general verdict failed to identify which of the four claims gave rise to defendant's liability?

f f I I I C C C n .• 8' 6. When a claim is remanded~for retrial on damages and plaintiff could have proved its damages by either or both of two different theories but declined at the first trial to introduce any evidence whatsoever whereby a jury might have found damages as to one such theory, may plaintiff introduce evidence at retrial with respect to such an abandoned theory? 7. Is it reversible error for a trial court to award damages to plaintiff based on an agreement between the parties that plaintiff would receive a 25% commission on plaintiff's own outside purchases made in furtherance of promotional work when~ the award~represents 25% of defendant's expenses in a promotional venture, and where it is undisputed that plaintiff refused to participate in the particular eff orts giving rise to such expenses? 8. Assuming defendant to be liable for the 25$ commission on the agreement above, was it reversible error for the trial court to decline to instruct the jury that damages could be recovered only for lost net profits, rather than gross profits, as a result of the breach? The Background For purposes of this appeal there is no dispute as C C to the terms of the contract. As this Court held, the might find: jury "plaintiff was retained by defendant to do sales p promotion work for the latter's Lorillard ciga- CO) O N F+ O CA l

t C C C C rette division; . . . an agreement between the parties gave plaintiff an exclusive right to supply finished artwork on its approved programs at usual industry rates, plus an override of 25% on its outside purchases, with a further right to bid on all production work on any approved program. ...[D]efendant had a good;faith right to reject any bid of plaintiff on produc- tion work [and] that, if plaintiff were an un- successful bidder on production work, it would receive 15% of defendant's payments to the ulti- mate producer." Robert Brian worked under this retainer until February 1972, when it was fired by Lorillard for good cause. During the retainer period, Robert Brian submitted;dozens of promotional ideas to Lorillard, some of which were used and most of which were not. Later, in 1974, Robert Brian claimed that subse- quent tQ its termination:, Lorillard conducted four different sales promotions derived from Robert Brian proposals, but for which Robert Brian obtained no benefits. In a single cause of action, it brought suit for its alleged lost profits with respect to these four promotions, seeking $235,000. In a second' cause of action, Robert Brian sought to recover a 25% commission on the sum ($40,000) which Lorillard had paid to a third party to rejudge one specific sales promotion contest, the Kent Castle contest. At trial, the jury returned a verdict of $10,000 against Lorillard with respect to the second cause of action, L