Michael D. Loprete (MDL1695) CRUMMY, DEL DEO, DOLAN, GRIFFINGER & VECCHIONE, P.C. One Riverfront Plaza Newark, New Jersey 07102 (201) 596-4500 George L. Graff James W. Kennedy Charles B. Ortner MILGRIM THOMAJAN & LEE P.C. New York, New York 10005-2815 (212) 858-5300 Sanford Tannebaum Executive Vice President and General Counsel UNIX System Laboratories, Inc. 190 River Road Summit, New Jersey 07901-1444 (908) 522-6666 Attorneys for Plaintiff Unix System Laboratories, Inc. UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNIX SYSTEM LABORATORIES, INC., Plaintiff, Civil Action No. 92-1667 (DRD) -against- COMPLAINT BERKELEY SOFTWARE DESIGN, INC., Defendant. Plaintiff UNIX System Laboratories, Inc. ("USL"), for its Complaint against defendant Berkeley Software Design, Inc. ("BSDI"), avers as follows: The Nature of The Action 1. This is an action for trademark infringement, false advertising and unfair competition under the federal Lanham Trademark Act, 15 U.S.C. Section 1051, et seq., and under the statutory and common law of New Jersey and of each State in which BSDI has engaged in the conduct detailed below. USL seeks injunctive relief and damages to redress BSDI's ongoing unauthorized use of the UNIX(R) trademark in BSDI's toll-free telephone number, 1-800-ITS UNIX, and its inclusion in its advertising and promotional materials of materially false and misleading statements in violation of the rights of USL. Jurisdiction and Venue 2. This Court has subject matter jurisdiction over this action pursuant to 15 U.S.C. Section 1121(a) and 28 U.S.C. Sections 1331, 1338. 3. Venue is properly laid in this district pursuant to 28 U.S.C. Section1391(b). The Parties 4. USL is a Delaware corporation with its principal place of business located in Summit, New Jersey. USL is a subsidiary of American Telephone and Telegraph Company ("AT&T") engaged in the development, manufacture, licensing and sale of computer software operating systems and related products and servlces. 5. Defendant BSDI is a Delaware corporation engaged in the manufacture and sale of computer software operating systems and related services. BSDI's principal place of business is located in Richmond Falls, Virginia. Background 6. Beginning in the early 1970s, AT&T's Bell Laboratories developed proprietary computer operating system software and other computer related products which it identified with the trademark "UNIX." 7. On May 6, 1986, AT&T's UNIX trademark was placed on the Principal Register of the United States Patent and Trademark Office for computer programs, under Registration No. 1,392,203. A copy of the registration is annexed as Exhibit A. This registration is valid, subsisting, in full force and effect, and is now incontestable pursuant to 15 U.S.C. Section 1065. 8. AT&T has assigned all of its proprietary rights in the UNIX trademark and the software sold and licensed thereunder to USL. For more than fifteen years, AT&T and its successor, USL, have widely used the trademark UNIX to identify their system software, computers and related products and services, including educational and training services, system manuals, and technical and consulting services. 10. The trademark UNIX is widely known as identifying the products of AT&T and its successor, USL. 11. Pursuant to agreement with AT&T, the Regents of the University of California (the "Regents") have been authorized to distribute to third parties certain works derived from UNIX system software subject to various restrictions intended to protect and preserve AT&T's proprietary rights thereto. Those restrictions include a requirement limiting such distribution to persons who have also acquired licenses from AT&T or USL. The derivative works distributed by the Regents are generally known as "Berkeley Software Distributions," and USL-authorized releases thereof have been widely distributed by the Regents under the initials "BSD" (e.g., "4.3BSD"). 12. BSDI is not affiliated with the Regents, nor has it entered into any license agreements with USL pertaining to UNIX brand software, computers or related products. 13. BSDI is attempting to develop a computer operating system software product that is directly competitive to products sold or licensed by USL and/or its licensees, and to market that product under the name "BSD/386". Exhibit B is a copy of a BSDI promotional brochure for its "BSD/386" system software. 14. Substantial portions of BSDI's BSD/386 operating system are copied from, based upon, or otherwise derived from, USL's proprietary software products. Plaintiff reserves the right to seek an amendment of this Complaint to add claims for relief with respect to violations by BSDI of USL's proprietary rights upon the development of additional facts. 15. BSDI has attempted to market its BSD/386 software product to prospective licensees in New Jersey and elsewhere throughout the United States and beyond. First Claim for Relief Federal Trademark Infringement 16. Some time prior to January 1992, BSDI acquired a toll- free telephone number that would permit someone to contact BSDI by dialing "1-800-ITS-UNIX". 17. BSDI has included the "ITS-UNIX" telephone number in its advertising and promotional materials and has otherwise used the UNIX trademark in connection with the sale, distribution or advertising of its goods and/or services in commerce. 18. BSDI's use of the "ITS-UNIX" telephone number is intended to and likely to cause confusion, or to cause mistake, or to deceive in that BSD/386 is not a "UNIX" product nor is BSDI authorized or licensed to use the UNIX trademark in connection with any of its products or services. 19. USL acted promptly to protect its rights in its UNIX trademark and to protest BSDI's conduct. 20. In response to USL's objections, BSDI, through its attorneys, represented that "BSDI has taken steps to discontinue advertising containing the mark, UNIX, as part of a telephone number." However, BSDI has failed or refused to discontinue its use of the 1-800-ITS- UNIX telephone number. 21. BSDI's unauthorized use of the UNIX trademark has caused, and, unless enjoined, will continue to cause, irreparable injury to USL for which there is no adequate remedy at law. 22. In addition, BSDI's unauthorized use of the UNIX trademark has caused USL to sustain damage to its business, and to the value of its trademark and the goodwill associated with that mark. 23. BSDI's conduct constitutes infringement of a registered trademark in violation of Section 32 of the Lanham Act, 15 U.S.C. Section 1114. Second Claim for Relief False Descriptions of Origin, Source, Sponsorship or Authorization 24. As shown in Exhibit B, BSDI's promotional materials contain the following representations concerning its "BSD/386" system: BSD/386 is a "Berkeley UNIX" compatible operating system for the 386 and 486 PC architectures. It is based on the most recent release from the Computer Systems Research Group of the University of California, Berkeley - the Networking Release 2. The NET2 tape contained no AT&T licensed code, but was not a complete system. BSDI has completed the system and added additional drivers. The resulting system does not require a license from AT&T, and so is available in source form at a fraction of AT&T's price. 25. This statement is materially false and misleading in that, among other things, the "Networking Release 2" referred to therein contains software code that was copied from, based upon, or derived from, code licensed to the Regents by AT&T, such that any operating system derived from "Networking Release 2" requires a license from AT&T or its successor, USL. 26. In the License Agreement by which BSDI sells its BSD/386 software product to consumers, BSDI represents that "THE LICENSED PROGRAM DOES NOT CONTAIN CODE FROM AT&T'S UNIX OPERATING SYSTEM CURRENTLY LICENSED BY UNIX SYSTEMS [sic] LABORATORIES." A copy of BSDI's form of License Agreement is attached as Exhibit C. 27. This statement is likewise materially false and misleading in that, to the extent the BSDI "LICENSED PROGRAM" is (as BSDI claims) based upon Berkeley's Networking Release 2, it is in fact based upon, copied from or derived from AT&T's code, such that users of the BSDI program require a license from AT&T or its successor, USL. 28. BSDI's conduct constitutes the use in commerce, in connection with goods or services, of false or misleading descriptions of fact or false or misleading representations of fact in commercial advertising or promotion which misrepresent the nature, characteristics or qualities of BSDI's goods, services or commercial activities. 29. BSDI's false and misleading use of the UNIX trademark has caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 30. BSDI's false and misleading use of the UNIX trademark has caused USL to sustain damage to its business, and to the value of its trademark and the goodwill associated with that mark. 31. BSDI's conduct constitutes false advertising in violation of Section 43(a) of the Lanham Act, 15 U.S.C. Section 1125. Third Claim for Relief Dilution 32. Plaintiff repeats the foregoing allegations as if fully set forth herein. 33. BSDI's conduct threatens to and does impair the distinctive significance of the UNIX mark, in violation of USL's statutory and common law rights. Fourth Claim for Relief Unfair Competition and Deceptive Trade Practices under State Statutory and Common law 34. Plaintiff repeats the foregoing allegations as if fully set forth herein. 35. BSDI's conduct constitutes unfair competition and deceptive trade practices in violation of applicable statutory and common law. WHEREFORE, USL demands judgment as follows: 1. A temporary restraining order, and preliminary and permanent injunctions: (a) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from any and all use of a telephone number that can be expressed with the letters "UNIX"; (b) directing BSDI to publish and distribute corrective advertising and promotional matter; (c) directing BSDI, its officers, agents, servants, employees, and all persons in active concert with them, to surrender up for destruction all advertising or other material that contains reference to the telephone number "l-800-ITS-UNIX". 2. A preliminary and permanent injunction: (a) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from stating or implying in any advertising or promotional materials of any kind that (i) the BSD/386 system, or the "Networking Release 2" upon which it is based, contains no AT&T or USL licensed code or derivatives thereof and/or (ii) the BSD/386 system does not require a license from AT&T or USL; (b) directing BSDI to publish and distribute corrective advertising and promotional matter; (c) directing BSDI, its officers, agents, servants, employees, and all persons in active concert with them, to surrender up for destruction all advertising or other material that states or implies that (i) the BSD/386 system, or the "Networking Release 2" upon which it is based, contains no AT&T or USL licensed code or derivatives thereof and/or (ii) the BSD/386 system does not require a license from AT&T or USL. 3. An award of compensatory damages in an amount to be determined at trial, and treble damages pursuant to 15 U.S.C. Section 1117. 4. An award of punitive damages in an amount to be determined at trial. 5. An accounting and disgorgement of BSDI's profits derived as a result of its wrongful acts or such other amount as the court shall find to be just according to the circumstances of the case. 6. An award of attorneys fees and expenses incurred by USL herein, pursuant to 15 U.S.C. Section 1117. 7. Such other and further relief as this Court may deem just and proper. Dated: Newark, New Jersey April 20, 1992 CRUMMY, DEL DEO, DOLAN, GRIFFINGER & VECCHIONE, P.C. By: Michael D. Loprete (MDL1695) One Riverfront Plaza Newark, New Jersey 07102 (201) 596-4500 and MILGRIM THOMAJAN & LEE P.C. By: George L. Graff James W. Kennedy Charles B. Ortner 53 Wall Street New York, New York 10005-2815 (212) 858-5300 Attorneys for Plaintiff Unix System Laboratories, Inc. Of Counsel: Sanford Tannenbaum Executive Vice President and General Counsel UNIX System Laboratories, Inc. 190 River Road Summit, New Jersey 07901-1444 (908) 522-6666