jamesd@qiclab.UUCP (James Deibele) (09/23/88)
The following documents were typed in by Karen Little (address below),
who wrote PKware's documentation. She claims that she re-keyed them
from photocopies of the actual court documents filed in the Federal
Courthouse in Milwaukee, and I see no reason to doubt that. I have
deleted her interpretation of what the facts mean, since we are all
adults :-) here and can make up our own minds.
James Deibele
TECHbooks
3646 SE Division St.
Portland, OR 97202
(503) 238-1005
PS: If you want to read the original documents, with comments, they are
available on many BBS's as SEA-PK-?.ARC, including our BBS at (503) 761-7451.
---------------------
These documents were keyed in by:
Karen Little, President
Office Technology Academy, Inc.
230 W Wells, Suite 310
Milwaukee, WI 53203
414 / 273-7310
Thanks, Karen! JSD
---------------------
The following document is the original letter from SEA's attorney to
Phil Katz of PKware dated 12-23-87.
To: Phil Katz Dated: December 23, 1987
From: Thomas M. Marshall, Esq., Attorney to SEA & Thom Henderson
Dear Mr. Katz:
My Client, System Enhancement Associates (SEA) is the creator and
owner of its proprietary, the present MS/PC-DOS "standard", data
compression/storage software programming product known as "ARC."
At great expense and over the past few years, SEA has evolved its
product, via world-wide "shareware" distribution and licensing of
commercial and government Licensees, so that "ARC" is a vital commer-
cial product and important asset of SEA's business.
SEA has retained me to assist in protecting its interests in "ARC",
its proprietary technology and the goodwill it has developed. I
have been instructed to contact you in an effort to address an
important matter that has arisen.
The development and distribution by you of "ARC compatible" competing
products you call "PKARC" and "PKXARC", also distributed via the
same "shareware" form of marketing and very recently being the
subject of advertising addressed to the same "commercial market",
has and is being followed by SEA with great concern.
Any objective or subjective comparison of the features and functions,
the user interfaces' "look and feel" and the documentation of your
"PKARC/PKXARC" products and their advertising/marketing with SEA;s
"ARC" establishes that your products and your marketing methods
are substantially the sea and a copy of SEA'S "ARC". Thus, your
acts in the past and as you continue with them constitute a serious
infringement of my Client's intellectual property rights, including
specifically its Federally protected Copyrights.
Under these circumstances, I am instructed to demand that you im-
mediately cease and desist from any further distribution, advertising
or promotion in any way of your products that infringe my Client's
rights. I am also instructed to demand that you undertake immediate-
ly to withdraw your infringing products from any source from which
they are available by any means.
I am also instructed to advise you that SEA is prepared to offer
you a license, on reasonable terms, that would allow you to dis-
tribute PKARC.COM and PKXARC.COM as non-commercial software.
Please advise me, personally or through your attorney, at once of
the actions you undertake to comply with my Client's Demands and
report to me on the progress of your efforts to withdraw your in-
fringing products from the market.
Very sincerely yours, Thomas M. Marshall, Esq.
------------------------
To: Thomas M. Marshall Dated January 8, 1988
From: Harry Lensky, Safer, Lensky & Kahn, SC, for PKware
Dear Mr. Marshall:
This office represents PKWARE, Inc. Our client has received your
letter dated December 23, 1987, addressed to Mr. Phil Katz. That
letter has been turned over to our office for response.
In this letter, you have indicated that our client's product,
"PKARC/PKXARC," its "look and feel," its "advertising/marketing,"
and its "documentation" are substantially the same as that of your
client's. It is claimed by you that these acts "constitute a serious
infringement of my client's intellectual property rights, including
specificially its federal protected copyrights."
We disagree.
The central issue is whether or not our client, in fact, copied
your client's program, if your client's program was protected by a
copyright. It is our client's position that it did not copy your
client's program.
Basically, your client developed a program which was based on work
done by others which is in the public domain, such as the algorithm
developed by D. Huffman, which was referred to as "Squeezing;" the
Ziv-Limpel Welch "ZLW" algorithm.
There are also numerous indications in your client's source code,
which has been widely published, that your client's program was
taken from programs which were also part of the public domain.
It is our client's position that it developed a system which is
not a copy of your client's program. It was developed independently
using some of the same sources that were available to all who desire
to develop programs in this area. There are numerous other parties
who have developed such programs. See article by Russell Nelson
in DR. DOBB'S JOURNAL, March, 1987, "ARC Wars: MS-DOS Archiving
Utilities."
There has been no copyright infringement by our client. OUr client
is not obligated to your client in any manner.
Very truly yours, Harry Lensky
---------------------
The following document is the out-of-court settlement.
---------------------
CONFIDENTIAL CROSS-LICENSE AGREEMENT
This Agreement is made effective this 1st day of August, 1988, by and
between PKware, Inc., a Wisconsin Corporation having offices in
Glendale, Wisconsin, and Phillip W. Katz, a citizen of the State of
Wisconsin, hereinafter collectively referred to as "PK", and System
Enhancement Associates, Inc., a New Jersey Corporation having offices
in Wayne, New Jersey, hereinafter referred to as "SEA."
WHEREAS, SEA filed a lawsuit against PK on or about April 25, 1988,
in the Federal District Court for the Eastern District of Wisconsin,
Case No. 88-C-447, claiming copyright infringement, violations of the
Lenham Act, trademark infringement and unfair competition; and
WHEREAS, both parties desire to resolve the above identified lawsuit,
without admitting any fault, wrongdoing or liability;
IT IS THEREFORE AGREED THAT:
1. Judgment on Consent: A Judgment for Plaintiff on Consent, in
the form to which this Agreement is attached, shall be entered in
the above identified lawsuit referencing the following terms of
this Agreement.
2. Magazine Advertising: PK shall forthwith withdraw all magazine
advertising of ARC compatible programs in any publication where
they may currently appear to the extent possible.
3. Cross License: SEA hereby grants to PK, nunc pro tunc, a
license to use its source code for a period beginning with the
first release of an ARC compatible program by PK, and ending on
January 31, 1989. PK hereby grants to SEA a personal, non-
transferable (except with the assets of SEA's business in ARC
compatible programs), perpetual, world-wide, non-exclusive
(including the right to grant sub-licenses of no greater scope)
royalty-free license to use PK's source code for ARC compatible
programs, provided that, in using any code provided by PK to
SEA, SEA agrees not to alter materially the existing "look and
feel" of SEA's ARC program, that is, SEA agrees not to use any
code provided to SEA by PK for the purpose of splitting its ARC
program into separate compression and extraction modules. PK
agrees to provide, as expeditiously as possible after the date of
this Agreement, fully commented source code of its ARC
compatible programs to SEA. SEA agrees never to sell or
license, without substantial changes, the entire source code
provided to it by PK.
4. Termination of PK's License: After January 31, 1989, PK agrees
not to distribute or offer for license any program that: 1.
creates ARC compatible archive files; 2. by default adds a
filename extension of ".ARC"; or 3. processes ARC format files.
5. No Trademark License: After the effective date of this
Agreement, PK agrees not to distribute or offer for license any
program that carries a trademark, tradename or filename
including the letter combination "ARC" or any other trademark,
tradename or filename the use of which may be confusingly
similar to any of SEA's trademarks, or the use of which may be
likely to cause confusion or mistake or to deceive with respect
to SEA's programs. PK agrees to forthwith abandon any
applications it has pending to register in the United States
Patent & Trademark Office any of its trademarks containing the
letter combination "ARC".
6. New Versions: PK agrees not to release any new versions of
ARC compatible programs. SEA does, however, hereby grant to
PK a license to distribute, prior to January 31, 1989, bug fixes,
and minor modifications not affecting the substantive
functionality of the programs, for only those versions of ARC
compatible programs released by PK prior to the date of this
Agreement.
7. Royalties: PK agrees to account monthly and pay to SEA a
royalty fee of 6.5% (six and one half percent) of all revenue
received for ARC compatible programs on all orders received
after the effective date of this Agreement, such revenue
including any license fees or shareware registrations received
after January 31, 1989, for ARC compatible programs. During the
period from the effective date of this Agreement to January 31,
1989, the parties hereto agree to discuss and, on an ad hoc basis,
mutually determine which party is to respond to any inquiries PK
receives for commercial licenses to use ARC compatible programs.
After January 31, 1989, PK agrees to refer all inquiries for ARC
compatible programs to SEA. SEa agrees to pay to PK a
commission in the amount of 6.5% of any license fees received by
SEA from any licensee referred to SEA by PK, whether before or
after January 31, 1989.
8. Customer List: PK agrees to promptly provide to SEA's
designated attorney a listing (in hard copy and machine readable
forms) of the names and addresses of PK's existing licensees as
of the effective date of this Agreement. SEA agrees that it will
not access the listing directly, and that the sole purpose for such
listing is to allow SEA's designated attorney to determine
whether any legal entity is licensed by PK.
9. Non-Infringing Programs: SEA acknowledges that PK continues
to have the right to distribute non-infringing compression
programs. This Paragraph 9 is not intended to grant any license
to PK to use any of SEA's intellectual property.
10. Payments: PK agrees to pay to SEA the sum of $22,500 for past
royalty payments, and the sum of $40,000 as litigation expense
reimbursements, for a total payment of $62,500. [payment
schedule follows]
11. Press Release: The parties agree to issue a mutually acceptable
publicity release describing disposition of the above identified
lawsuit and this Agreement, a copy of which is attached hereto
and incorporated herein by reference as Exhibit A. [Press
release is not being rekeyed at this time as my hands are
breaking off -- Karen]
12. Merger and Governing Law: This Agreement and the attachments
hereto embody the entire agreement between the parties hereto.
13. Jurisdiction. The parties agree that any dispute arising under
this Agreement shall be resolved under the Judgment to which it
is attached, in the US District Court for the EAstern District of
Wisconsin.
14. Waver: The waiver of either party hereto of any right hereunder
or failure to perform or breach by the other party shall not be
deemed as a waver of any other right hereunder or of any other
breach or failure by said other party whether of a similar nature
or otherwise.
15. Notice: Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and by certified
mail, and mailed to the parties at the following addresses . . .
[PKware, Glendale, WI and SEA, Wayne, NJ)
The agreement was signed by
Phillip W. Katz, PKware, Inc.
and
Thom L. Henderson, System Enhancement Associates, Inc.
---------------------
Document dated August 11, 1988 -- SEA is calling PKware in
contempt of the cross-license agreement which was signed on
July 29, 1988.
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
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
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.
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.
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
---------------------
End of documents
--
James S. Deibele jamesd@qiclab or jamesd@percival
TECHBooks: The Computer Book Specialists (800) TECH-BKS
3646 SE Division Portland, OR 97202 (503) 238-1005
TECHBooks One BBS (#1:105/4.0); 3/12/24 (503) 760-1473w8sdz@smoke.ARPA (Keith B. Petersen ) (09/24/88)
DataPoint has a trademark (and has had it since the '70s) on the word ARC. As reprinted from a current Datapoint Manual: +-----------------------------------------------------------------------+ | "Attached Resource Computer" is a trademark of DATAPOINT Corporation. | | Registered in the US patent and Trademark office. | | "ARC" is a trademark of DATAPOINT Corp. | +-----------------------------------------------------------------------+ This can be confirmed at any Datapoint Corporation sales office in most major cities. Datapoint has been notified and will no doubt be dealing with SEA in due course. --Keith Petersen Arpa: W8SDZ@SIMTEL20.ARMY.MIL Uucp: {ames,decwrl,harvard,rutgers,ucbvax,uunet}!simtel20.army.mil!w8sdz -- --Keith Petersen Maintainer of the CP/M and MSDOS archives at SIMTEL20.ARMY.MIL [26.0.0.74] Arpa: W8SDZ@SIMTEL20.ARMY.MIL Uucp: {ames,decwrl,harvard,rutgers,ucbvax,uunet}!simtel20.army.mil!w8sdz
raf@cup.portal.com (09/26/88)
In article <8574@smoke.ARPA> w8sdz@smoke.ARPA (Keith B. Petersen) writes: >DataPoint has a trademark (and has had it since the '70s) on the word >ARC. ... >Datapoint has been notified and will no doubt be dealing with SEA in >due course. The folks at American Research Corporation might also be interested. Their most recent advertisement (c.f. Byte, October 1988, p.95) proclaims, in a large typeface: "Why do institutions worldwide trust ARC?" :-) Bob Freed raf@cup.portal.com ...!sun!portal!cup.portal.com!raf