Opinion ID: 474193
Heading Depth: 2
Heading Rank: 3

Heading: Universal's License Agreements with Coleco, Atari and Ruby-Spears

Text: 67 The district court rejected Nintendo's counterclaims seeking damages on the basis of Universal's license agreements with Coleco, Atari and Ruby-Spears. Nintendo contends that it is entitled to relief on the ground, first, that Universal tortiously interfered with Nintendo's license agreements with these three companies (the Nintendo Agreements), and second, that Universal's action resulted in unjust enrichment. 68 As to tortious interference, there is no evidence to indicate that the Nintendo Agreements were materially breached. Universal's actions did not in any way reduce the payment of royalties to Nintendo. Further, the fact that these licensees entered into agreements with Universal, by itself, does not establish a breach of the Nintendo Agreements because those agreements permitted the licensees to settle any infringement actions brought against them. 69 In the counterclaim for unjust enrichment, Nintendo alleges that Universal misappropriated Nintendo's trademark in Donkey Kong when it licensed King Kong in agreements with Coleco, Atari and Ruby-Spears. Nintendo argues that it is entitled to recover the $4.76 million in revenue that Universal earned from these agreements because, in substance, Universal licensed not King Kong, but rather Nintendo's rights to Donkey Kong. 70 To recover on a theory of unjust enrichment under New York law, a party must establish not only that there was enrichment, but that the enrichment was at the plaintiff's expense, and that the circumstances dictate that, in equity and good conscience, the defendant should be required to turn over its money to the plaintiff. Dolmetta v. Uintah National Corp., 712 F.2d 15, 20 (2d Cir.1983); see also McGrath v. Hilding, 41 N.Y.2d 625, 629, 394 N.Y.S.2d 603, 606, 363 N.E.2d 328, 330 (1977). A circuit court's review of an unjust enrichment determination is limited. The granting of equitable relief lies within the sound discretion of the trial court, so long as that discretion is exercised in accordance with the applicable established precedents. Indyk v. Habib Bank Limited, 694 F.2d 54, 57 (2d Cir.1982). 71 Nintendo sold its rights in Donkey Kong to Coleco, Atari and Ruby-Spears when it entered into license agreements with these three companies. Thus, on the face of the transactions involved in this case, Universal did not obtain money that was owed to Nintendo. 72 This is not to say that Universal acted properly when it entered into these three license agreements. Any injustice harmed not Nintendo, however, but the three companies that paid Universal. Equity requires, therefore, that if Universal must disgorge its profits, the money should be paid to these companies. Coleco has already sued Universal to recover the revenues it paid. Coleco Industries, Inc. v. Universal City Studios, Inc., 84 Civ. 2596 (S.D.N.Y. filed April 12, 1984). That case, not this one, represents the proper means to determine the propriety of Universal's conduct. 73 The judgment of the district court is affirmed.