1993 WL 79272 (N.D.Ill.))
TSR, INC., Plaintiff,
MAYFAIR GAMES, INC.,
a corporation and Darwin P. Bromley, individually and as
President of Mayfair Games, Inc., Defendants.
No. 91 C 0417.
March 17, 1993.
MEMORANDUM OPINION AND ORDER
*1 TSR, Inc. ("TSR") has sued Mayfair Games, Inc.
("Mayfair") and its President Darwin Bromley ("Bromley"), seeking
injunctive relief, damages and contract rescission on the basis
of several claims: (1) copyright infringement, (2) trademark
infringement, false designation and misappropriation, (3) unfair
competition and (4) breach of contract, all arising from
Mayfair's use on its products of TSR's "Advanced Dungeons and
Dragons" trademark. TSR currently moves for summary judgment on
the Fourth Count of its Amended Complaint, which asserts that
Mayfair breached a 1984 Settlement Agreement (the "Agreement")
between the parties. [FN1] Mayfair responds by asking for
summary dismissal of that breach of contract claim. For the
reasons stated in this memorandum opinion and order, each motion
is granted in part and denied in part.
Fed.R.Civ.P. ("Rule") 56 Standards
Rule 56 principles impose on the movant the burden of
establishing the lack of a genuine issue of material fact
(Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). For
that purpose this Court is "not required to draw every
conceivable inference from the record--only those inferences that
are reasonable"--in the light most favorable to the nonmovant
(Bank Leumi Le- Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th
Cir.1991)). Where as here cross- motions are involved, that
principle thus demands a dual perspective--one that this Court
has described as Janus-like--that sometimes calls for the denial
of both motions.
This District Court's General Rule ("GR") 12(m) and 12(n)
require factual statements in support of and in opposition to
Rule 56 motions, and both sides have tendered such statements.
TSR's statement in support of its motion is cited "P. 12(m),"
while Mayfair's responsive statement is cited "D. 12(n)."
Mayfair's statement of additional facts in support of its cross-
motion is cited "D. 12(m)," and TSR's responsive statement is
cited "P. 12(n)." [FN2] Where one party's assertion within its GR
12(m) statement is admitted by the other party, that will be
indicated here by omitting "12(m)" and "12(n)," so that the
citation will simply read "P-D P --" or "D-P P --" (the first-
listed party being the one whose Rule 12(m) statement has been
TSR owns trademarks for the "Advanced Dungeons and Dragons"
("AD & D") [FN3] and "Dungeons and Dragons" ("D & D") role-
playing game systems, [FN4] which were created by TSR co-founder
E. Gary Gygax ("Gygax") (P. 12(m) P 8). [FN5] Such a role-playing
game is a system of interactive story telling using maps, dice
and an extensive set of rules (P-D P 7). "One participant acts
as a referee narrating the adventure, describing problems and
controlling the actions of supporting characters and events. The
remaining players play out their roles in accordance with the
rules." (P-D P 10). TSR places the AD & D trademarks on rules
and accessories, as well as on adventure modules and supplements
(P-D P 21).
*2 In 1982 Mayfair began to produce and market adventure and
reference books under the trademark "Role Aids" for use in
playing AD & D (D. Mem. 10, P- D P 22). TSR complained to
Mayfair that Mayfair was making improper and infringing use of
the AD & D trademark, and the parties signed the Agreement on
September 28, 1984 to govern Mayfair's future use of TSR's
trademarks (P-D P 28).
Under the Agreement Mayfair acknowledged TSR's ownership of
the D & D and AD & D trademarks and agreed not to contest their
validity (P. Ex. 1 s III, P-D P 29). Mayfair also agreed to use
the AD & D trademarks solely in connection with Role Aids
modules, advertising and promotional materials. TSR's trademark
was to appear once on an advertisement, catalog, flyer or press
release, and only within a specific emblem form [FN6] in which
Mayfair would state that the Role Aids product involved is for
use with the AD & D role-playing game and that AD & D is a
registered trademark of TSR, and would disclaim TSR's approval of
that specific use of TSR's trademark by Mayfair (P. Ex. 1 s I and
Ex. B, P- D PP 30-32). Mayfair's own symbol was required to
appear on the same page. Mayfair also agreed (2) to phase out all
noncomplying packaging, (2) not to use TSR's trademark in any
other manner and (3) not to include statements on Role Aids
modules carrying the AD & D trademark that such modules were
suitable for use with other role-playing games (P. Ex. I ss IV-V
and Ex. B, P-D 136). If materials violating the Agreement were
distributed, Mayfair was required to make good faith efforts to
recover such materials and to withdraw and withhold offending
materials from distribution (P. Ex. 1 s VI, P-D 12(n) P 38).
Despite the foregoing prohibitions, Mayfair was not prohibited
from acquiring from the creators of Dungeons and Dragons, Arneson
and Gygax, any of their rights to use the D & D trademark (P. Ex.
1 s V, D-P P 121).
Unsatisfied with Mayfair's performance, on January 22, 1991
TSR filed its initial Complaint against Mayfair advancing the
four claims described at the outset of this opinion. After
discovery TSR filed an Amended Complaint on December 19, 1991.
Only the Fourth Count is at issue on the current cross- motions,
which dispute whether various Mayfair products violate the terms
of the Agreement (P. 12(m) PP 40-106).
Breach of the Agreement
TSR's allegations of breach of the Agreement by various
Mayfair products fall into three categories: (1) packaging and
promotional materials for the "City State of the Invincible
overlord" product, (2) "Role Aids" promotional materials and (3)
advertising materials for the "Freedom of Choice" campaign. This
opinion addresses each in.turn.
City State of the Invincible overlord
In July 1987 Mayfair acquired the rights in, and began to
produce and market, a new role-playing game called "City-State of
the Invincible overlord" (the "Invincible Overlord" game)(P-D P
41). On July 9 Mayfair and Gygax entered into a written
agreement under which the Invincible Overlord box cover would
state that it came "With an introduction by E. Gary Gygax,
creator of Advanced Dungeons & Dragons" ("Gygax statement")(D-P P
122). TSR's trademark was not placed within the cartouche as
specified in the Agreement, and no disclaimer of TSR's approval
of the use of the AD & D trademark was visible (P-D P 44).
Mayfair used the Gygax statement in the text of a flyer promoting
Invincible overlord, and it used the AD & D trademark again at
the bottom of the flyer to identify AD & D as a registered
trademark of TSR (P-D P 47). Mayfair also used the AD & D
trademark in various promotional materials that depicted the
Invincible Overlord box cover or described Invincible Overlord as
compatible with AD & D, without an accompanying disclaimer of
TSR's approval of the use of its trademark (P-D PP 50, 52, 54,
*3 TSR asserts that all uses of the AD & D trademark in
connection with the Invincible overlord game violate the
Agreement. Mayfair admits that the use of the AD & D trademark
in the 1990 Mayfair Trade Catalog violated the Agreement (D.
12(n) P 51), but it denies that the other uses violate the
Agreement (D. 12(n) PP 46, 48, 53, 55).
A. Gygax Statement
Mayfair's use of the AD & D trademark within the Gygax
statement in conjunction with Invincible Overlord and related
advertisements contravenes the plain language of the Agreement,
which states in part (P. Ex. 1 P I): Mayfair agrees that except
as otherwise provided herein, any use of TSR's Advanced Dungeons
& Dragons trademark shall be limited to use within a specified
Trademark Statement, solely in connection with "Role Aids"
modules, and advertising and promotional materials therefor, and
strictly in compliance with the Trademark Use Requirements as set
forth in Exhibit B attached hereto and incorporated herein by
reference. Invincible Overlord is not of course a Role Aids
product. Even though the Agreement later went on (P. Ex. 1 P V)
to carve out a total exception for rights acquired from Gygax,
that exception was limited to rights in the D & D trademark, and
the AD & D trademark did not appear in the oval emblem form.
Mayfair's Mem. 5 argues that it used the Gygax statement based on
his representation that under his confidential termination of
employment agreement with TSR he had the right to allow Mayfair
to use the statement. However, Mayfair's belief in that respect
could not of course justify a patent breach of the Agreement's
But Mayfair also contends that TSR's acceptance of several
ads for Invincible Overlord that showed the Gygax statement
operate as a waiver of TSR's claim of a material breach (D. Mem.
10). TSR's own Dragon Magazine published three Mayfair ads for
Invincible overlord in March 1988, April 1989 and February 1990
(D-P P 124). TSR claims that portions of the ads with the Gygax
statement were not visible in the ads (P. 12(n) P 124). While
TSR admits that a lawyer reviews "certain advertisements" for
possible misuse of trademarks, TSR's attorney was employed only
for "some portions of the pertinent time period" (P. 12(n) P
Under Wisconsin law waiver requires proof of (1) a right
possessed by the waiving party, (2) knowledge of the right by the
waiving party and (3) an intentional and voluntary waiver
(Shannon v. Shannon, 429 N.W.2d 525, 530 (Wis.App.1988)). Intent
to waive a known right may be inferred from the conduct of the
parties (Christensen v. Equity Coop. Livestock Sale Ass'n, 396
N.W.2d 762, 763 (Wis.1986)).
Under a view of the facts in the light most favorable to
Mayfair, TSR's knowing acceptance of the Invincible Overlord
advertisements, which displayed a picture of the Invincible
Overlord box cover with the Gygax statement, could be construed
as a waiver of the materiality of any breach by Mayfair's
packaging and advertising. Mayfair used the Gygax statement on
the Invincible Overlord box cover (P. Ex. 12) and in the
Invincible Overlord flyer (P. Ex. 13), the Invincible Overlord
product description sheet (P. Ex. 14), the Mayfair reply card (P.
Ex. 16) and the 1990 Mayfair trade catalog (P. Ex. 17). To the
extent that TSR's motion for summary judgment charges Mayfair
with breach of the Agreement by its use of the Gygax statement in
Invincible Overlord advertising and packaging, the motion is
*4 On the other side of the coin, Mayfair's motion for
summary dismissal of that same charge on grounds of waiver by
acceptance must be denied as well. By definition TSR could not
waive any objection to use of the Gygax statement if it did not
know or should not have known of that use (Shannon, 429 N.W.2d at
530). Although the visibility of the Gygax statement varies
within the ads, in all three of the ads the box cover print is
greatly reduced, so that the statement is not as readily noticed
as it would be on the full-sized box cover. TSR also asserts
that "the legal department at TSR had an attorney employee for
only some portions of the pertinent time period" (P. 12(n) P
123). But the statement that TSR cites for that statement (Moore
Dep. 18-20) does not really support its proposition. [FN9]
Nevertheless it remains possible that the.TSR attorney reviewers,
if any, may not have noticed the Gygax statement in the
Invincible Overlord ads. [FN10]
Mayfair's Mem. 10 also contends that TSR's failure to object
to the use of the AD & D trademark before filing the motion for
summary judgment operates as a waiver on delay grounds. Although
Mayfair has not labeled (nor argued) the contention in this
fashion, this Court views the argument--waiver due to the passage
of time--as one for the application of laches. Wisconsin law
requires four elements for laches to apply: (1) unreasonable
delay, (2) knowledge of the basis of the claim and failure to act
on the part of the plaintiff, (3) lack of knowledge on the part
of the party asserting the defense that the other party would
assert the right on which he bases his suit and (4) prejudice to
the party asserting the defense in the event the action is
maintained (Jensen v. Janesville Sand & Gravel Co., 415 N.W.2d
559, 562 (Wis.App.1987)).
Again on a pro-Mayfair look at the facts, TSR knew of the
Invincible Overlord ad by March 1988 but did not raise any
objection until it filed its summary judgment motion on June 17,
1992. [FN11] That four-year lapse before objection may well be
unreasonable (see Money Store v. Harriscorp Finance, Inc., 689
F.2d 666, 674 (7th Cir.1982), upholding the district court's
determination that a 22-month delay was unreasonable). [FN12]
Such an unreasonable delay in trademark actions precludes
recovery of damages or wrongfully derived profits during the
period before suit was filed (James Burrough Ltd. v. Sign of the
Beefeater, Inc, 572 F.2d 574, 578 (7th Cir.1978)). Although
injunctive relief and damages and profits for the period after
the filing of suit may not be precluded (id., citing McLean v.
Fleming, 96 U.S. 245 (1877)), Mayfair has said it ceased
distribution of Invincible Overlord in June 1992 (Bromley Aff. P
12). If so, and if Mayfair can make the appropriate showing of
prejudice due to TSR's delay, the laches defense would in effect
be a complete bar to relief on the issue of breach by the
Invincible Overlord product.
To take the opposite view as was done with Mayfair's
estoppel defense, the defense of laches requires knowledge (or at
least constructive knowledge) on TSR's part. Because this
opinion must assume lack of knowledge by TSR in considering
Mayfair's motion to dismiss, [FN13] laches cannot now provide
grounds to grant Mayfair's motion.
B. Compatibility with AD & D
*5 TSR also alleges breach of the Agreement by two
Invincible Overlord materials that state that the series is
compatible with AD & D. Mayfair has admitted that the Mayfair
1990 trade catalog, which stated that "The Invincible overlord
series is compatible with the Advanced Dungeons & Dragons role-
playing game" (with the only disclaimer statement being placed in
a footnote ten pages later) violated the Agreement. Because
Mayfair has also made no defense of waiver as to that catalog
(see D. Mem. 10), TSR's motion for summary judgment is granted to
the extent that it is based on breach of the Agreement by the
1990 Mayfair trade catalog.
TSR has also alleged violation by writers' guidelines that
Mayfair distributed to authors and potential authors of its
publications. Those guidelines stated that "The Overlord and
Role Aids product lines are designed for use with TSR's Advanced
Dungeons & Dragons TM system" (P. 12(m) P 53, P. Ex. 11)).
Mayfair denies violation, but without any attempt at providing an
explanation or evidence (D. 12(n) P 53). Accordingly breach of
the Agreement by the writers' guidelines is deemed admitted, and
summary judgment is granted to that extent as well.
Role Aids Promotional Materials
In 1988 or 1989 Mayfair began a marketing drive for the Role
Aids product line, and in 1990 it introduced the new Role Aids
modules "Witches," "Psionics" and "Lizardmen" (P-D P 57). TSR
claims that the advertising materials for the Role Aids products
(reply cards, trade and consumer catalogs, posters, flyers, slick
sheets, press releases, product description sheets and Mayfair
Games News letters) violated the terms of the Agreement (P. 12(m)
A. Violations Admitted by Mayfair
Mayfair acknowledges many of TSR/s assertions. It admits
that its reply card (P. Ex. 16, D. 12(n) P 59), its 1990 summer
catalog (P. Ex. 18, D. 12(n) P 63), a flyer for the "Witches"
module (P. Ex. 21, D. 12(n) P 65), the Role Aids Slick sheets (P.
Ex. 22, D. 12(n) P 68), an advertisement for "Psionics" (P. Ex.
20, D. 12(n) P 70), its 1990 and 1991 trade catalogs (P. Exs. 17,
19, D. 12(n) PP 72, 74), the July 1990 and June 1992 Mayfair
Games News letters (P. Exs. 25, 27, D. 12(n) PP 79, 81) and
several Role Aids product description sheets (P. Ex. 28-1 to -4,
and -6 to -15, D. 12(n) PP 84, 86, 88) all violated the
Agreement. Mayfair also admits that the "People, Places &
Things" sourcebook and "Demons" module product description sheets
violate the Agreement (P. Exs. 29-1 and -2, D. 12(n) PP 99, 100).
Mayfair makes three arguments as to those admitted
violations by the Role Aids promotional materials: (1) TSR has
waived its right to object because Mayfair gave TSR copies of the
Role Aids promotional materials violating the Agreement at game
conventions between 1988 and 1991, but TSR did not alert Mayfair
to the violations until the Amended Complaint was filed in
December 1991, (2) the breaches were not material and (3) the
violations caused no injury to TSR. Those arguments are addressed
1. Waiver As already indicated, Mayfair says that it
provided TSR representatives with copies of the Role Aids
promotional materials from 1988 to 1991 (D. Mem. 11; Bromley
Aff. P 19). Because TSR assertedly did not notify Mayfair of the
violations until the December 1991 filing of the Amended
Complaint, Mayfair urges that TSR has waived its right to object
to the violations (D. Mem. 11). Again this will be treated as an
argument for the application of laches.
*6 TSR admits that "Darwin Bromley and perhaps other
representatives of Mayfair have passed out some catalogs and
promotional materials to some representatives of TSR for general
promotional purposes" (P. 12(n) P 135). However, TSR Mem. 6
argues that it did not knowingly relinquish its right to object
to the Role Aids promotional materials. TSR asserts that the
promotional materials were distributed primarily during 1990
through 1992, that TSR filed its initial Complaint here on
January 22, 1991 and that many Mayfair documents were not
produced until Bromley's deposition was taken on October 1 and 2,
1991, after which TSR filed its Amended Complaint expanding the
Fourth Count on December 16, 1991 (P. R. Mem. 5, Bromley Dep.
Only one of the materials that Mayfair acknowledges as
violations is dated in 1988, with the rest dated in 1990, 1991 or
1992. [FN14] measured back from the filing of the Amended
Complaint, the earliest of the undated 1990 materials could not
have been as much as 24 months old before TSR lodged its
objections. Case law in this circuit has noted "that two years
has rarely, if ever, been held to be a delay of sufficient length
to establish laches" (Piper Aircraft Corp. v. Wag-Aero, Inc., 741
F.2d 925, 933 (7th Cir.1984)). Even if TSR knew of each
offending Mayfair item at the time of issue (an unlikely
situation, and certainly not established on the current record),
Mayfair would have a potential laches defense only as to a single
product description sheet dated in 1988. And TSR's failure to
object to a single isolated item cannot form the basis for a
Thus Mayfair's motion to dismiss the breach of contract
claim on the basis of laches must be denied. TSR's statement
that it had only limited knowledge of the offending materials
before filing its December 1991 Amended Complaint is enough to
negate the required element of knowledge of facts sufficient to
raise a claim for breach. In fact, Mayfair may have contributed
to TSR's delay by its own delays in responding to discovery
2. Lack of Materiality
Mayfair Mem. 11 advances a lack of materiality defense in
one nonstop sentence: [T]he promotional materials showed that
they were from Mayfair and the Role Aids modules themselves,
without exception, contained the Trademark Statement in strict
compliance with the Settlement Agreement on their front covers so
as to put the consumer clearly on notice as to the disclaimer
sentences which, in fact, have little impact on the consumer and
are not even read by the typical consumer who, in making a
purchase decision, does not care which particular company
produced the role-playing product. That argument might have had
force in the absence of the Agreement--but once the parties had
entered into the Agreement, such a contention comes too late.
Agreement Ex. B P 5 requires, not only as to the Role Aids
modules but also as to all promotional materials except for sales
training literature, correspondence and press releases, that
Mayfair use the AD & D trademark only in the form of the
cartouche with the disclaimer statement. In the Agreement itself
Mayfair "acknowledge[d] that its failure to remedy [a] violation
in accordance with the foregoing may result in immediate and
irreparable damage to TSR" (P. Ex. 1 P VI). Mayfair has admitted
that it has disseminated materials using the AD & D trademark
outside of the cartouche form and without the disclaimer
statement, but also says that it has not attempted to recover the
violating Role Aids advertising and marketing materials.
*7 In short, this branch of Mayfair's argument would
effectively render the Agreement a nullity by making a violation
of its key terms nonactionable. That contention too is rejected.
3. Lack of Injury
Mayfair finally contends that even if it violated the
Agreement, its actions caused no injury to TSR. Walgreen Co. v.
Sara Creek Property Co., 775 F.Supp. 1192, 1195 (E.D. Wis.1991)
teaches that Wisconsin follows universal doctrine in that
respect: Under Wisconsin law, a plaintiff claiming breach of
contract has the burden of proving by a preponderance of the
evidence that ... the defendant's breach is material and results
or will result in injury.
Mayfair says that its use of TSR's trademarks caused no
customer confusion. To that end it presents the deposition of
Stephen Winter, AD & D product group leader and game editor at
TSR, in which he testified that he was aware of no customer
confusion of Mayfair for TSR products since the Agreement (Winter
Dep. 43) and that consumers do not refer to "Advanced Dungeons
and Dragons" as a generic designation for role-playing game
systems (id. at 37-38). [FN15] Moreover, Mayfair Mem. 12-13
states, the Trademark Statement was an the cover of every Role
Aids module, the Role Aids logo was more prominent on the front
cover than the AD & D logo and every Role Aids module and piece
of promotional material indicated that it came from Mayfair. On
the other hand, TSR says that confusion is "inevitable," and it
represents (though not in evidentiary form) that retailers in
London had "intermix[ed]" TSR and Mayfair products (P. R. Mem. 9
& n. 3).
For aught that appears, this may indeed be a case of minimal
damage to TSR. So far as the ultimate consumer is concerned,
Mayfair's compliance with the Agreement on all Role Aids modules
negates any potential damage--for having bargained for the
precise form of disclaimer that it wanted, TSR will not be heard
to say that it has been hurt when that disclaimer has been
adhered to. As for the sales market in which TSR and Mayfair
compete, whether wholesalers or retailers, there has been no
showing of lost sales or damage to the value of TSR's trademarks
because of Mayfair's violations of the Agreement in promotional
materials. That subject remains for future determination. [FN16]
And as stated later, the record here does not support TSR's claim
for rescission of the Agreement.
Accordingly the appropriate action at this point is simply
to declare the existence of the breaches that have been admitted
by Mayfair. To that extent TSR is entitled to a judgment as a
matter of law, with the decision as to the extent of any damages
remedy to await further proceedings.
B. Violations Denied by Mayfair
TSR contends and Mayfair denies that the cover of its new
"Demons" module violates the Agreement (P-D P 108). [FN17]
According to TSR, Mayfair has failed to comply with the
contractual requirement that the Mayfair trademark be visually
more prominent than the AD & D trademark--a requirement
buttressed by express standards. TSR's Supp. Mem. 2 argues that
in violation of those standards the Role Aids logo is "almost
invisible" in the upper corner of Demons, in gold lettering on a
red background. Mayfair admits that "[t]he degree of contrast of
the Role Aids logo on Mayfair's Demons product cover ... is
substantially less than it was on the final proof submitted by
the printer and approved by Mayfair" (Bromley Aff. P 37). Even
so, Mayfair urges that the Role Aids logo is nonetheless visible,
that the second page of Demons makes clear that it is a Mayfair
product and that "future production runs of Demons will have the
Role Aids logo in white on a red background" (D. 12(m) P 149,
Bromley Aff. P 37, D. Ex. 7).
*8 There is no ambiguity in the Agreement, which requires
that "the ROLE AIDS trademark [be] on a color background with no
less contrast than the contrast of the ADVANCED DUNGEONS &
DRAGONS trademark to its background" (P. Ex. 1 P I and Ex. B P
1). Although the Role Aids logo was not visible at all in the
photocopy of the Demons cover originally submitted to this Court,
it is certainly legible on the Demons module itself. But the
Role Aids logo is a dull gold printed on a red background, while
the AD & D logo is in white on a red background. Mayfair's
printer woes and future intentions notwithstanding, the cover of
the present Demons module clearly does not comply with the terms
of the Agreement. It too constitutes a contractual breach.
2. Quote from Dragon Magazine Review
TSR also asserts that Mayfair's 1990 and 1991 trade catalogs
and the Undead product description sheet (P. Ex. 17 at 25, P. Ex.
19 at 11, P. Ex. 28-5) violate the Agreement by using this quote
from a review of Undead in Dragon Magazine (P-D P 75): This is a
quality AD & D game campaign supplement. The setting is
imaginative and fantastic; the dead guys are grim and menacing;
there are plenty of neat new magic and monsters. [FN18] Mayfair
denies that its use of the AD & D trademark in the context of
quoting from Dragon Magazine amounts to a violation of the
Agreement (D. 12(n) P 76).
Agreement P V provides in part: Except for use of TSR's
Advanced Dungeons & Dragons trademark in accordance with this
Agreement, Mayfair hereby agrees to cease and desist throughout
the world from use of TSR's Advanced Dungeons & Dragons trademark
or any mark confusingly similar thereto, in connection with any
products or advertising or any other materials. If the quoted
review had originated with Mayfair, there could be no disputing
that it violated that restriction. Mayfair would have it that
the answer should be different because the reviewer and not
Mayfair made the decision to describe Undead as an "AD & D game
campaign supplement" (D. 12(n) P 76, Bromley Aff. P 36). But no
use by others of the AD & D trademark in connection with Role
Aids products can clear the way for Mayfair to do the same.
After all, Mayfair has curtailed its own use of the AD & D
trademark in the Agreement. It may not avoid those restrictions
by copying the usage of someone who was not so inhibited, the
Dragon Magazine reviewer.
Once again Mayfair points out that TSR did not complain to
Mayfair until it filed the present motion. Mayfair had included
the Dragon Magazine quote in its 1990 and 1991 catalogs, several
years after issuing the product description sheet on October 20,
1986. Though Mayfair has not contended that it supplied TSR with
a copy of that earlier document, it says that it gave TSR copies
of the Mayfair Games catalog at trade conventions (D 12(m) P 35).
But as already stated, even if TSR became aware of the violation
in the 1990 catalog, [FN19] its failure to object before it filed
the Amended Complaint in December 1991 is not so unreasonable as
to bar its current claim. [FN20]
3. "Suitable for Use with Any Fantasy Campaign"
*9 According to TSR, the To Hell & Back Again product
description sheet (P. Ex. 29-3) also violates the Agreement
because it 'says that the product "has numerous locations that
can be worked into any fantasy campaign" (P. 12(m) P 100).
Mayfair disputes that, because the relevant provision of the
Agreement prevents Mayfair only from describing Role Aids as
"suitable for other role- playing games" (P. Ex. 1 P I and Ex. B
P 6). For that purpose "role-playing game" is defined as (id.):
a structured form of social entertainment comprising a quantified
interactive story telling game that allows the participants,
within their imagination, and subject to the limitations of the
game's rules, to adventure forward, attempting to satisfy their
personal ambitions or fantasies through the use of the
characteristics, perceptions and abilities of an imaginery [sic]
character or person.
Mayfair Mem. 6-7 urges a difference between a role-playing
game and a fantasy campaign (D. 12(n) P 101, Bromley Aff. P 18,
Winter Dep. 82, Santana Aff. P 4). According to Mayfair Mem. 6,
"there are multiple fantasy campaigns in Advanced Dungeons and
Dragons." Winter Dep. 82 describes a fantasy campaign as "the
series of adventures that's being conducted by a particular game
referee or with a particular group of players with a rotating
Although TSR seeks to deny Mayfair's assertion that the use
of the term "fantasy campaign" does not violate the Agreement (P.
12(m) P 130), it does admit that "[a] fantasy campaign is
different from a fantasy role-playing game" (P. 12(m) P 131). It
really has advanced neither argument nor evidence to counter
Mayfair's position that the use of the term "fantasy campaign" is
TSR's Mem. 29-31 explains that its purpose in preventing
Mayfair from stating that Role Aids were suitable for use with
other role-playing games as well as AD & D was to protect TSR's
trademark from becoming generic. Sounding another variation on
the same theme, TSR's R. Mem. 9 asserts that "Mayfair's
advertising campaign promoting ROLE AIDS modules as suitable 'for
any fantasy role-playing game on the market' harms the reputation
and goodwill of the ADVANCED DUNGEONS & DRAGONS mark as
representing a unique brand of products."
That is really nonsense. As Mayfair's Mem. 11 asks
rhetorically: If the producer of Gatorade claims its drink is
great for football players and also claims it is great for
participants in any high-energy sport, is it reasonable to argue
that football is at risk of becoming generic for high- energy
sports as a result thereof? Indeed, the restriction that TSR
incorrectly contends was violated in the respect now under
discussion [FN21] is the one aspect of the Agreement that appears
to find no legitimate justification in TSR's trademark rights.
It seems to be purely anticompetitive and hence likely
unenforceable as an unlawful extension of the trademarks.
*10 For present purposes, though, that issue need not be
decided. It is enough to find (as this Court has) that TSR loses
as a matter of contract. Mayfair is entitled to dismissal of the
claim that the Agreement was breached by the To Hell and Back
Again product description sheet.
C. Freedom of Choice Campaign
In late 1991 Mayfair began the "Freedom of Choice"
advertising campaign (D. 12(m), P. 12(n) P 127). Mayfair has
admitted that its Freedom of Choice Poster that stated Role Aids
products "were for use with any role-playing game" violated the
terms of the Agreement (P. Ex. 31, D. 12(n) P 96). But its Mem.
6 says that once it realized that in April 1992, it promptly
terminated the use of promotional materials having the non-
complying language (Santana Aff. P 4).
Mayfair presents no evidence that it then attempted to
recall the Freedom of Choice materials, but its Mem. 7 states
that such attempts are futile (Bromley Aff. P 34, Santana Aff. P
6). TSR denies that Mayfair made good faith efforts to retrieve
noncomplying materials (P. 12(n) PP 130, 150), pointing out that
Bromley based his conclusion of the futility of recall attempts
merely on the attempted recall of one shipment of Psionics
(Bromley Aff. P 34). In fact, Mayfair's Jennifer Santana
testified that Mayfair made no attempts at recall of the Freedom
of Choice materials (Santana Aff. P 6). It does not necessarily
follow from the futility of Mayfair's attempts to recall the
Psionics modules that had been sent to stores that Mayfair would
have been equally unsuccessful in.recalling advertising
materials. After all, stores may be willing to comply with a
request to refrain from posting an advertisement or to replace
the advertisement with another, but may be reluctant to send back
what they believe will be a popular product.
Mayfair's Mem. 10 also contends that its acknowledged breach
of the Agreement by the Freedom of Choice campaign literature is
not material because "the trade was correctly describing Role
Aids as being usable in any fantasy role-playing game for a long
time prior thereto" (D. 12(m) P 128). TSR denies that, but its
denial hardly seems in good faith in light of TSR's own Ex. 33, a
collection of catalog pages listing Mayfair Role Aids products.
Capital City's Game Buyer's Monthly for July 1990 and its March
1991 releases describe Mayfair's "Witches" and "Lizardmen"
modules as suitable for "any fantasy roleplaying adventure or
campaign" and "for use with any fantasy RPG" (P. Exs. 33-1 and -
2); Capital City"s "The Premium Specialty Collection" May,
October and December 1990 issues describe Role Aids products as
"generic" (P. Exs. 33-19, -20, -21); Wargames West's 1991 Spring
catalog states that Role Aids modules "can be used with any
fantasy role-playing system, especially TSR's Dungeons & Dragons
and AD & D systems" (P. Ex. 33-25). Several of the pages in P.
Ex. 33 list Role Aids modules under the category "Generic Fantasy
Source Books and Modules" (P. Exs. 33-3 through 33-13, 33-22 and
33-23) and describe Lizardmen and Psionics as "universal," "for
use with any RPG" or "designed to adapt to any fantasy
roleplaying game system" (P. Ex. 33-14 through 33-16, 33-24), but
no date of publication is shown on those exhibits.
*11 Mayfair has presented Bromley's affidavit testimony that
the only catalogs in P. Ex. 33 that did not precede the Freedom
of Choice campaign are P. Ex. 33-17 and 33-18 (Bromley Aff. P
14). Although the last page of Exhibit 33 (left unnumbered by
TSR) from the 1991-92 Winter/Spring Wargames West Catalog may
have come out after the Freedom of Choice campaign, TSR has made
no effort to provide the date of those materials. However, given
the substantial number of dated exhibits that describe Role Aids
modules generically, the undated exhibits provide only cumulative
To be sure, the fact that others describe Role Aids in a
manner that Mayfair agreed not to use does not release Mayfair
from its promise. But as.has already been indicated in the
discussion about the To Hell & Back Again product description
sheet, there is more than a serious question whether that promise
is valid and enforceable. Indeed, the usages by others that
comprise the various subparts of P. Ex. 33 graphically illustrate
the total lack of connection between a statement that Role Aids
has multiple uses and any conclusion that one of those uses--that
in conjunction with AD & D--somehow renders AD & D generic.
Again this Court would be strongly inclined to consider
invalidating that component of the Agreement. But once again it
is unnecessary to take that step, for at worst this claimed
violation of the Agreement is both de minimis and in the past.
It has potential relevance only on the issue of the relief to
which TSR may be entitled.
This opinion has earlier referred to the bifurcation of
issues that has deferred the question of damages sustained by TSR
as the result of Mayfair's several violations of the Agreement.
Consequently all that now remains for consideration is whether
TSR's prayer for rescission of the Agreement should be granted or
Not surprisingly, Wisconsin law adheres to universal
equitable principles in defining the conditions that entitle a
party to rescission of a contract for its breach. Any party who
would rescind a contract must do so within a reasonable time
following its discovery of the breach (Thompson v. Village of
Hales Corners, 340 N.W.2d 704, 718 (Wis.1983)(six-month delay in
asserting rights bars rescission)). Rescission is not the
appropriate remedy for every breach of contract--rather "the
nonperformance must be substantial and the breach so serious as
to destroy the essential objects of the contract" (Seidling v.
Unichem, Inc., 191 N.W.2d 205, 207 (Wis.1971)). And rescission
must "restore the parties to the position they would have
occupied if no contract had ever been made between them": Each
party must return to the other all benefits received under the
contract (id. at 208; First Nat'l Bank & Trust Co. v. Notte, 293
N.W.2d 530, 539 (Wis.1980)).
Merely to state those basic principles is to demonstrate why
rescission is inappropriate here., Whether or not TSR acted with
sufficient promptness after it learned of Mayfair's breaches,
[FN22] the parties' many years of performance under the contract
obviously render its unwinding far more difficult and less
appropriate (a point elaborated on in a moment). Next, it can
hardly be said that the breaches identified here have
"destroy[ed] the essence of the contract"--it will be remembered
that the presentation of Mayfair's Role Aids products to the
ultimate consumer has always (with one minor and inadvertent
exception) adhered to the standards that TSR itself established
to assure that Mayfair would not poach on its preserves (a point
also elaborated on in a moment or two).
*12 Perhaps most importantly, there is no way in which the
parties can effectively be restored to the status quo ante
contract--no way in which the omelet can be unscrambled and put
back into the egg. It is truly an impossibility, given the time
span from 1984 to the present during which the parties have
functioned under their contract, to "restore the parties to the
position they would have occupied if no contract had been made
between them." In terms of the restoration of benefits, just how
can TSR repay whatever benefit it has derived from the ongoing
Role Aids advertising of AD & D as the only role-playing game
expressly mentioned on Mayfair's products, or it has derived from
the continued reinforcement of the AD & D trademarks over the
intervening years without any attack by Mayfair?
In sum, this case does not at all call for TSR to obtain the
equitable benefit of contract rescission, beyond whatever damages
(not yet established) that it is able to demonstrate flowing from
the breaches shown here. For over eight years it has derived the
principal benefits that it bargained for in the Agreement: 1. To
the consuming public, Mayfair has meticulously observed the
requirements marked out by TSR--standards that make plain its
nonsponsorship of Mayfair's competing Role Aids modules, while at
the same time keeping the AD & D name before the consumers, with
TSR identified as its source. [FN23] 2. TSR's trademarks have
remained without challenge from Mayfair, promoting the continued
entrenchment of D & D and AD & D as fixtures in the consuming
As against that, TSR has shown a number of contract breaches
by Mayfair--but not such as to demand rescission. In some
instances Mayfair has cured the problems on its own, or (as in
the Demons situation) has promptly stated its intention to
correct the inadvertent error. In one instance it terminated the
employee responsible for misreading the Agreement's directives.
And there is no reason to believe that it will not promptly
correct the remaining breaches that have been found here.
Moreover, this opinion has twice commented on the apparent
overreaching by TSR in one part of the Agreement: prohibiting
Mayfair's truthful advertising of the fact that Role Aids
products may be utilized by members of the consuming public in
conjunction with rival role-playing games as well as with AD & D.
That restraint inhibits not only Mayfair's market among consumers
who have purchased (or might intend to purchase) role-playing
games from TSR's competitors but (not incidentally) also tends to
lessen the demand for those competitive games among purchasers of
Mayfair's Role Aids products. And again those anti-competitive
measures appear to find no rational support in TSR's legitimate
goals for protecting the integrity of its own trademarks. [FN24]
Whether or not those considerations invalidate that
particular restraint of trade has not been decided here, because
it need not be. But those considerations do tend to place in
sharper focus the effect of a rescission of the Agreement here.
Because of AD & D's prominence in the marketplace, any revocation
of Mayfair's permission to refer to AD & D with appropriate
disclaimers could bid fair to destroy Role Aids as a competitor
for the marketplace with TSR's own products intended for use in
that role-playing game. [FN25] What is.reflected in the total
record here simply does not support this Court's throwing its
weight into the competitive scales in that fashion, when TSR has
a fully adequate remedy in the form of its recouping any damages
that it can prove and its obtaining an injunction compelling
Mayfair's correction of past violations and preventing new
*13 TSR's motion is granted to the extent that this Court
finds the following materials to have violated the Agreement:
the 1990 Mayfair Trade Catalog with the Invincible overlord
compatibility statement, the Invincible overlord writers'
guidelines, all the challenged Role Aids materials except for the
To Hell & Back Again product description sheet and the Freedom of
Choice materials. TSR's motion is denied as to Mayfair's use of
the Gygax statement on the Invincible Overlord materials.
Mayfair's motion is also denied as to that use of the Gygax
statement, while its motion is granted as to the To Hell & Back
Again product description sheet. As to remedies for the
adjudicated violations, TSR's prayer for rescission of the
Agreement is denied, and the scope of appropriate relief is
deferred pending further submissions by the parties.
FN1. According to TSR's Mem. 1 n.1, its success on that
claim "would subsume the relief it seeks for trademark
infringement." And because Mayfair is not now distributing the
book that gave rise to TSR's copyright infringement claim, "the
crux of the current dispute would be decided" (id.).
FN2. Because Mayfair's Statement of Additional Facts was
appended to its GR 12(m) statement, the D. 12(m) and P. 12(n)
numbering began where the P. 12(m) and D. 12(n) numbering left
FN3. Trademarks involved include "Advanced Dungeons and
Dragons," "AD & D," "Dungeons and Dragons" and "D & D." For
brevity's sake, this opinion refers to each set of trademarks by
employing only the abbreviated version. But where either set of
initials is used in the singular, it will stand for the full-
length mark ("Dungeons and Dragons" or "Advance Dungeons and
Dragons") unless otherwise specified.
FN4. Mayfair's responsive statements have devoted a
substantial amount of rhetoric to disputing the characterization
of Advanced Dungeons and Dragons and Dungeons and Dragons as
"games," contending in part that TSR does not "own" either of
them (see D. 12(n) PP 7-10, 12, 14, 15, 17, 23). For those
propositions Mayfair cites to Bromley's Aff. P 3: A role-playing
game is quantified, interactive storytelling, in accordance with
a series of rules and algorithms which define how the players
interact with one another and the game master. A role-playing
game is intangible, does not have a brand or trademark and is not
itself sold or owned. Books and reference information may be
used but are not essential for a role- playing game.
Interestingly, Mayfair does not dispute TSR's contention that
Mayfair "produces its own role-playing games" (P-D P 22).
Moreover, Mayfair is not consistent in its own semantic
insistence. It states at D. Mem. 10 that "Advanced Dungeons and
Dragons is different from other role-playing games because it is
based on different rules." As TSR has pointed out, the only
function of Mayfair's contentions seems to be an end run around
the Agreement's ban on its contesting the validity of the AD & D
FN5. David Arneson ("Arneson") was co-creator of Dungeons
FN6. Although the Agreement characterized that form as an
"oval," its physical depiction in P. Ex. 1 Ex. B is that of an
oblong cartouche drawn to appear three-dimensional. It seems
that the parties are better developers of games than they are
lexicographers. This opinion will use "cartouche" rather than
"oval" to refer to the emblem.
FN7. Mayfair's 1990 Trade Catalog did contain a footnote
marker after the AD & D trademark. Ten pages later "in small
print at the bottom of the page" was a disclaimer of TSR"s
approval of Mayfair's use of its trademark (P-D P 50). TSR also
points out, without alleging violation of the Agreement, that
both the 1990 Mayfair catalog and the Mayfair customer reply card
(P. Ex. 16) identified Invincible Overlord as adaptable for use
with any fantasy role-playing system (P. 12(m) PP 50, 56).
Although Agreement Ex. B P 6 prohibited Role Aids modules that
utilized the trademark statement from also including statements
that such modules are suitable for use with other role-playing
games, TSR has not attempted to argue that use of the AD & D
trademark on a non-Role Aids product is governed by a similar
FN8. One issue that TSR has steered clear of is how, given
the standards of trademark law as to likelihood of confusion and
confusing similarity, it could create an unlimited exception to
the Agreement's restrictions on Mayfair to allow Mayfair to deal
with Gygax for use of the D & D trademarks, and yet cavil at
Mayfair's acquisition of rights that Gygax apparently had in the
AD & D trademarks. Before TSR will be heard to make anything out
of that aspect of Mayfair's claimed breaches (an issue deferred
by the summary judgment context of this opinion), it has some
more explaining to do.
FN9. Moore testified that the legal department reviewed ads
before placement for misuse of TSR's trademarks (Moore Dep. 18-
19). Moore also testified that when he took the editorship of
Dragon Magazine in 1986, policies for review of ads may have been
"in flux" and he was "not sure at what point they settled out"
(id. at 19).
FN10. What has just been said in the text truly gives TSR
the benefit of the most favorable reasonable inferences. Even
though waiver law speaks of a party's knowledge, the concept
would seem to extend to charged knowledge as well--to prevent a
party from playing ostrich. Indeed, Shannon, 429 N.W.2d at 530
speaks of what the party knew or should have known. Thus final
resolution of the issue will require examination of whether TSR
should have known of the Invincible Overlord ads' contents, given
its keen awareness of the importance of its trademark rights and
of the nature of the role-playing game industry.
FN11. Neither TSR's original Complaint nor its Amended
Complaint had mentioned Invincible Overlord.
FN12. Although the analogous statute of limitations for
breach of contract has yet to run in this case, Wisconsin law
allows application of a laches defense within the limitations
period (Schafer v. Wegner, 254 N.W.2d 193, 196-97 (Wis.1977)).
FN13. But see n.10.
FN14. TSR could not have known of many of the Role Aids
items until 1990 at the earliest. That was the year in which
Mayfair introduced the Witches, Psionics and Lizardmen modules.
Those promotional materials would include an advertisement for
"Psionics" (P. Ex. 20, D. 12(n) P 70) a flyer for the Witches
module (P. Ex. 21, D. 12(n) P 65), a product description sheet
for Witches (P. Ex. 28-1), the 1990 summer catalog (P. Ex. 18, D.
12(n) P 63), the 1990 and 1991 trade catalogs (P. Exs. 17, 19, D.
12(n) PP 72, 74), and the July 1990 and June 1992 Mayfair Games
News letters (P. Exs. 25, 27, D. 12(n) PP 79, 81). In addition,
the product description sheets for People, Places and Things and
Demons (P. Ex. 29-1 and -2) were for products to be introduced in
1992 (P-D P 98). One product description sheet (P. Ex. 28-2) is
dated in 1988, while the rest are dated from 1983 to 1986 (P.
Exs. 28-5 to 28-15). Some materials are undated: Mayfair's
reply card (P. Ex. 16), Role Aids slick sheets (P. Ex. 22) and
two Role Aids product description sheets (P. Exs. 28-3 and -4).
FN15. Winter was, however, aware of media use of the
trademark "Dungeons and Dragons" to describe role-playing games
generically. Winter also testified that most customers would not
read the disclaimer language, and that at least some consumers
might think that a Role Aids product was licensed by TSR (Winter
FN16. This is not said to be critical. This Court earlier
entered an order bifurcating liability from damages.
FN17. TSR first saw the newly-developed Demons product at a
trade show in late August 1992, after its summary judgment motion
had been filed and briefing was under way (P-D P 107). TSR then
obtained leave to file a supplemental memorandum in support of
its motion, in which it addressed the latest of Mayfair's claimed
violations of the Agreement.
FN18. [Footnote by this Court] It may also be noted that the
AD & D trademark in the Dragon Magazine quote in Mayfair's 1991
catalog is over twice as large as the print of the rest of the
words in the sentence, and is also the largest descriptive print
on the page except for the lettering on the photographs of the
Role Aids modules.
FN19. TSR's partial denial in its P. 12(n) P 135 is really
ambiguous. That type of deliberate ambiguity will be construed
against it, but it turns out to make no difference.
FN20. Mayfair contends that TSR did not complain of
Mayfair's use of the Dragon Magazine statement until the current
motion for partial summary judgment was filed in June 1992 (D.
12(m) P 43). Although TSR denies that (P. 12(n) P 143), its
citation to Williams Dep. 40-41 really does not support that
position. That makes no difference, however, given the
allegation in Amended Complaint P 57: Mayfair has breached the
Limited Use terms of the Settlement Agreement by its use of the
TSR Trademarks in ... connection with certain of the Role Aids
publications and related materials. Under the Rules' notice
pleading regime, that is enough--TSR was not required to plead
its evidence. And Mayfair's use of the quote from Dragon
Magazine in describing Undead, a Role Aids product, surely comes
within the scope of the pleading's allegation.
FN21. As indicated earlier, that contention is incorrect as
a matter of contract construction: TSR has acknowledged that
"fantasy campaign" is different from "fantasy role-playing game,"
so that a prohibition framed in terms of the latter is not
violated by a statement that speaks in terms of the former.
FN22. There is understandably a very different and much
shorter yardstick for rescission purposes than for the
application of laches. Laches actually defeats any claim of the
aggrieved party, while the denial of the rescission remedy still
preserves for that party the benefit of being made whole through
the recovery of damages. In this case it would seem that TSR has
failed to meet the timetable defined in Thompson as a
precondition to rescission, but whether or not that is so, TSR
fails on the other grounds discussed here.
FN23. Although Demons has been a single exception to
Mayfair's strict adherence to the Agreement's specifications for
Role Aids modules, there is no reason to discredit Mayfair's
explanation that the contrast between the Role Aids name and its
background in the final product turned out to be less than the
original printers' proofs had shown. It will be remembered that
the Demons product came onto the market over 18 months after this
lawsuit was brought, and after TSR had already launched its
current motion. What incentive would Mayfair have, after eight
years of living by the Agreement's standards in designing all of
its other product modules, to depart from that practice
deliberately in the face of this litigation and a Rule 56 motion?
FN24. If anything, it would seem that measures that would
thus tend to promote AD & D's market domination would make it
more likely, rather than less likely, that AD & D might become a
generic term among consumers. It is only necessary to recall
such examples as Eastman's fight to prevent "Kodak" from entering
the public domain, or Bayer's like fight as to "Aspirin" or GE's
comparable fight as to "Frigidaire."
FN25. Absent Mayfair's joinder in AD & D's prayer for
rescission, it is assumed here that Mayfair is willing to
continue to live with the specific ground rules set out in the
Agreement, rather than having both parties relegated to the
principles of law (such as fair use) that would apply in the
absence of contract.
FN26. It should be emphasized that this point is only an
added fillip that demonstrates the soundness of denying TSR this
specific equitable relief-- one to which it has not shown its
entitlement based on the equitable principles that uniformly
govern the availability of the rescission remedy.
END OF DOCUMENT
John H. Kim <jhkim-at-darkshire-dot-net>
Last modified: Tue Aug 15 15:07:28 2000