Court Opinion

ID: 2961871
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:49:05.748501+00
Date Added: 2024-06-11T11:42:22.731559
License: Public Domain

USCA1 Opinion

	

          March 30, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1139                                     MARGRET REY,                                 Plaintiff, Appellee,                                          v.                            RICHARD G.D. LAFFERTY, ET AL.,                               Defendants, Appellants.                                 ____________________        No. 92-1177                                     MARGRET REY,                                Plaintiff, Appellant,                                          v.                            RICHARD G.D. LAFFERTY, ET AL.,                                Defendants, Appellees.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Rya W. Zobel, U.S. District Judge]                                           ___________________                                 ____________________                                        Before                                Selya, Cyr and Boudin,                                   Circuit Judges.                                   ______________                                 ____________________             H. Joseph Hameline  with whom  Andrea M. Fish  and Mintz,  Levin,             __________________             ______________      ______________        Cohn, Ferris, Glovsky & Popeo, PC were on brief for appellee Rey.        _________________________________             Charles  Donelan  with whom  Katherine  E.  Perrelli, Kristen  G.             ________________             _______________________  ___________        McGurn  and Day, Berry & Howard were on brief for appellants Lafferty,        ______      ___________________        et al.                                 ____________________                                    March 30, 1993                                 ____________________                             CYR, Circuit Judge.   Margret Rey,  who owns the  copy-                    CYR, Circuit Judge.                         _____________          right  to the  "Curious George"  children's books,  challenges an          award of damages to Lafferty Harwood & Partners ("LHP") for Rey's          withholding of  approval of various ancillary  products utilizing          the "Curious George" character  under their 1983 licensing agree-          ment.   LHP appeals the district court order awarding Rey damages          and future royalties on  certain other "Curious George" products.          We affirm in part and reverse in part.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    "Curious George" is  an imaginary  monkey whose  antics          are chronicled in seven  books, written by Margret and  H.A. Rey,          which have  entertained readers since  the 1940s.   A mischievous          personality  consistently lands Curious George in amusing scrapes          and  predicaments.  The more  recent "monkey business"    leading          to  the  present litigation     began  in  1977 when  Margret Rey          granted Milktrain  Productions an option to  produce and televise          104 animated "Curious George"  film episodes.  The  option agree-          ment was  contingent on  Milktrain's obtaining financing  for the          film project,  and adverted to  a potential agreement  to license                                            _________          "ancillary  products," based  on the "Curious  George" character,          once the 104 film episodes had been completed.                                          3          A.  The Original Film Agreements.          A.  The Original Film Agreements.              ____________________________                    Milktrain  approached LHP, a  Canadian investment firm,          to  obtain financing for  the project.   LHP  agreed to  fund the          venture by selling  shares in the project to investors (hereinaf-          ter:  the "Milktrain  Agreement"); LHP and its investors  were to          divide a 50% share of Milktrain's profits on the films and on any          future ancillary products.                    With  the financing  commitment in  place, Rey  granted          Milktrain  and LHP a limited  license "to produce  (within a two-          year period from the date of exercise) one hundred and four (104)          four minute film episodes based on the ["Curious George"] charac-          ter  solely for broadcast on television"  (hereinafter:  the "Rey          License").   Rey  was to  receive a  fee for  assisting  with the          editing and production of the episodes, and an additional royalty          amounting  to 10% of the  revenues from any  film telecasts.  The          Rey  License made no mention of ancillary product rights.  Never-          theless, LHP promoted the project to investors through a prospec-          tus (hereinafter:  the "1978 Private Placement Memorandum") which          represented, inter alia, that "the production contract [with Rey]                       _____ ____          gives LHP the right to participate in the financing of  . . . the          option . . .  to undertake the  exploitation of  other rights  to          'Curious  George'  including manufacturing,  food,  licensing and          other commercial areas of exploitation."          B.  The Revised Agreements.          B.  The Revised Agreements.              ______________________                    The film project soon  encountered delays and financial          setbacks.  By early 1979, though only 32 of the  104 episodes had                                          4          been completed, the original  investment funds had been virtually          exhausted.  In order to rescue the project and complete the films          to Rey's satisfaction, LHP  offered to arrange additional financ-          ing.  In consideration, LHP insisted that the Milktrain Agreement          be revised to permit LHP to assume control of the film production          process  and to  receive higher  royalties on the  completed epi-          sodes.  Milktrain  assented to these  revisions, and the  revised          Milktrain Agreement (hereinafter:   the "Revised Milktrain Agree-          ment" or "RMA") was signed on November 5, 1979.                    As prelude  to its  description of the  new obligations          between Milktrain and LHP, the RMA recited that Milktrain and LHP          owned "the rights to Curious George which have been obtained from          . . . Rey" under the Rey License.  The RMA further stated that:                    Investors  acquiring  the episodes  shall ac-                    quire all right,  title and interest therein,                    without limitation or reserve,  including the                    original negative . . . .                    LHP shall have the right to participate on an                    equal basis with  [Milktrain] in their  right                    of  first refusal  after  the present  agency                    rights expire to  undertake the  exploitation                    of  other rights to Curious George, including                    manufacturing, food, licensing and the publi-                    cation of the 104 episodes in book form . . .                    in  accordance with  the  rights  granted  to                    [Milktrain] and  LHP [by Rey] in [the Revised                    Rey License].1                    Simultaneously  with the  negotiation of  the RMA,  LHP          proposed several  changes in the Rey  License, including language                                        ____________________               1Shortly thereafter, Milktrain apparently assigned its share          of ancillary  product licensing  rights to LHP,  leaving LHP  the          sole owner of these rights.                                          5          which would have  granted LHP the  immediate right to  "undertake          the exploitation  of other rights to  'Curious George,' including          manufacturing,  food, licensing  and the  publication of  the 104          episodes in  book form."   Rey  rejected  the LHP  proposal in  a          letter to Richard G.  D. Lafferty (president and C.E.O.  of LHP):          "I have repeatedly stated to Milktrain and to you that I will not          consider negotiating such rights before the films are done."  Rey          did  consent, however, to certain changes to the royalty arrange-          ments, whereby Rey  would receive  a 10% share  of film  revenues          only "after  the investors  have recouped [their  investment] and          certain soft dollar commitments . . . have been paid."                    On November 5, 1979, concurrently with the execution of          the Revised  Milktrain Agreement,  a revised  version of the  Rey          License  (hereinafter:  the  "Revised Rey License"  or "RRL") was          executed,  incorporating  these   changes,  and  superseding  the          original  Rey License.   The  RRL recited  that the  original Rey          License  had granted Milktrain and  LHP the right  to produce and          distribute animated "Curious George" films "for  television view-          ing,"  but  made no  mention  of the  "ancillary  product" rights          unsuccessfully sought by LHP.                    As agreed, LHP undertook  to arrange further  financing          to complete the film project.  On November 23, 1979, LHP released          another  prospectus (hereinafter:   the  "1979 Private  Placement          Memorandum") to  which it  attached the Revised  Milktrain Agree-          ment.  The 1979  Private Placement Memorandum again  stressed the          prospect of  eventual revenues from ancillary  products but noted                                          6          that these rights "have yet to be negotiated" with Rey.          C.   The Ancillary Products Agreement.          C.   The Ancillary Products Agreement.               ________________________________                    Production  of the  104  TV episodes  was completed  in          1982.   On January 3, 1983,  an Ancillary Products  Agreement (or          "APA") was signed by Rey and LHP, granting LHP a general right to          license "Curious George" in spin-off ("ancillary") products for a          renewable term of five  years.  The APA defined  "ancillary prod-          ucts" as:                    All  tangible  goods  . . . excluding  books,                    films, tapes, records,  or video  productions                    . . . . However, for stories already owned by                    [LHP]  and which  have been  produced as  104                    episodes  under the  license  granted in  the                    January, 1978 agreement  and the  November 5,                    1979  revision of that agreement, [LHP] shall                    have  the  right  to  produce  books,  films,                    tapes, records and video productions of these                    episodes  under  this  Agreement, subject  to                    [Rey's]  prior  approval  . . .  which  prior                    approval shall not be unreasonably withheld.          In  return for these rights, Rey  was to receive one-third of the          royalties on  the licensed products, with  certain minimum annual          payments guaranteed.   Rey retained the  right to disapprove  any                                                                        ___          product, and  to propose changes  which would make  a disapproved          _______          product  acceptable to her.   The APA provided,  inter alia, that                                                           _____ ____          Rey's approval would not be withheld "unreasonably."          D.  The Houghton Mifflin Contract.          D.  The Houghton Mifflin Contract.              _____________________________                    Following  the  execution  of  the  Ancillary  Products          Agreement, LHP assigned its licensing rights to a new subsidiary,          Curgeo Enterprises,  which turned its attention  to licensing the                                          7          "Curious  George"  character  in  various  product  forms.2    On          March 27, 1984, Curgeo executed  a contract with Houghton Mifflin          Company to publish the  104 television film episodes in  the form          of a children's book series.  The contract provided that Houghton          Mifflin  would publish  at least  four books,  with illustrations          drawn  directly from the film  negatives, in each  year from 1984          through 1987; the contract was renewable  for an additional five-          year term  if LHP and Rey  agreed to extend the  APA beyond 1987.          Pursuant to  the contract, Houghton Mifflin  published four books          each year from 1984 through 1987.                    In  1987, LHP  notified  Houghton Mifflin  that it  had          declined to extend  the APA, but that Curgeo  had "entered into a          new  operating agreement which permits  us to continue  to act in          the capacity  in  which we  have been  acting for  the last  five          years. . . . [Y]ou are free to pick up your option to renew."  In          response, Houghton  Mifflin extended  its contract for  the addi-          tional  five-year term,  publishing an  additional four  books in          1988 and again in 1989.  It ceased publication of the book series          in 1990, when Rey advised that the APA had been cancelled.          E.   Other Product Licenses.          E.   Other Product Licenses.               ______________________                    Curgeo  moved  aggressively  to  license  the  "Curious          George" character in other  product areas as well.   Beginning in          1983, the  "Curious George"  TV  episodes were  licensed to  Sony                                        ____________________               2Curgeo  Enterprises  is not  named  in  the Rey  complaint;          Curgeo  Agencies Inc.  and  Curgeo Overseas,  Inc., are  named as          defendants.   We  refer to  the  three entities  collectively  as          "Curgeo."                                          8          Corporation,  which transferred  the images  from the  television          film negatives to  videotape.   LHP takes the  position that  the          Sony video license was entered pursuant to the RRL; Rey claims it          is subject to the APA.  See supra at pp. 6-7.                                  ___ _____                    In 1983, Curgeo licensed  "Curious George" to Eden Toys          Inc., which proposed to market a "Curious George" plush  toy.  In          the beginning, Rey rejected Eden's proposed  designs for the toy,          but Eden eventually proposed  several versions which were accept-          able to Rey.   The plush toy was marketed from  1983 to 1990, but          experienced poor sales and  generated less revenue than expected.          Eden blamed the  poor market performance on  Rey's alterations to          Eden's original design proposals.                    In 1987,  Curgeo  received  a  commitment  from  Sears,          Roebuck  to market  "Curious  George" pajamas  through the  Sears          catalog.   The  Sears pajama  project promised high  returns, but          catalog deadlines  necessitated immediate  approval of  a product          design.   Glen Konkle,  Curgeo's agent, brought  Rey a  prototype          pajama and a flat paper sketch of "Curious George" which had been          proposed as  the basis for the  final pattern.  Rey  rejected the          proposal, complaining  that the  pajama material was  "hard, ugly          [and] bright yellow," and that the sketch of "Curious George" was          "plump" and "not  recognizable."  The catalog deadline passed and          the pajama manufacturers withdrew their bids.  In addition, Beach          Paper  Products,  which had  orally  agreed  to license  "Curious          George" for a line  of paper novelties, withdrew its  offer after          learning that  "Curious George" products would  not receive expo-                                          9          sure in the Sears catalog.                    In 1988, Curgeo licensed  "Curious George" to DLM Inc.,          which intended to use the "Curious George" character in a trilogy          of educational software.  Rey approved the software in principle,          and production began in July 1988.   In August 1988, however, DLM          withdrew its plans to complete the "trilogy" after Rey telephoned          DLM's project director and  harshly criticized the design  of the          first software  product and the accompanying  manual developed by          DLM.          F.  The Ancillary Products Agreement Renewal.          F.  The Ancillary Products Agreement Renewal.              ________________________________________                    Due  in part  to these  product rejections,  LHP earned          less money than it anticipated from ancillary products.  When the          APA came up for renewal in January 1988, LHP declined to exercise          its  option for  an  additional  five-year  term.   Instead,  the          parties agreed to renew on  a month-to-month basis, terminable by          either  party  on one  month's notice.    Rey's royalty  rate was          increased to 50% (effective January 3, 1988), but with no guaran-          teed minimum payment.  On April 10, 1989, Rey terminated the APA.          LHP responded by advising that Curgeo would "continue to adminis-          ter those licenses which [remained] outstanding and report to you          from time  to  time accordingly."    LHP thereupon  continued  to          market the Sony  videos and  to publish the  television films  in          book form under the Houghton Mifflin agreements.          G.   "Curious George" Goes to Court.          G.   "Curious George" Goes to Court.                _____________________________                    On February 8,  1991, Rey filed  suit against Lafferty,                                          10          Curgeo and  LHP, in  connection with LHP's  continuing, allegedly          unauthorized production  of the  Houghton Mifflin books  and Sony          videos.  Rey's complaint alleged violations of federal copyright,          trademark  and unfair-competition  statutes, breach  of contract,          and  violations  of Mass.  Gen. L.  ch.  93A ("chapter  93A"); it          sought to  enjoin further violations and to recover unpaid royal-          ties on the books and videos.  LHP countersued, claiming that Rey          unreasonably had withheld approval  of various products while the          APA  remained  in force.   The  LHP  complaint alleged  breach of          contract, interference with contractual and advantageous business          relationships, and violation of chapter 93A.                    After a four-day bench  trial, the district court found          for Rey on  her claims  for breach of  contract, ruling that  the          book and video licenses were governed by the APA and that Rey was          entitled to recover $256,327  in royalties.  The court  found for          LHP  on  several LHP  counterclaims,  however,  holding that  Rey          unreasonably  had withheld  approval  of, inter  alia, the  Sears                                                    _____  ____          pajamas, the DLM software, and  Eden's original plush toy design.          LHP was  awarded $317,000,  representing lost profits  and conse-          quential damages  resulting from  Rey's rejection of  these prod-          ucts.                                          II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________                    "Under  Massachusetts law,  the  'interpretation  of  a          contract is  ordinarily  a  question  of  law  for  the  court'."                                          11          Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990, 993 (1st          _________________________________    ____          Cir. 1992) (quoting Edmonds  v. United States, 642 F.2d  877, 881                              _______     _____________          (1st Cir. 1981)); see also, e.g., Lawrence-Lynch Corp. v. Depart-                            ___ ____  ____  ____________________    _______          ment of Environmental Mgmt., 392 Mass. 681, 682, 467 N.E. 2d 838,          ___________________________          840 (1984); Sparks v. Microwave Associates, Inc.,  359 Mass. 597,                      ______    __________________________          600, 270 N.E. 2d 909,  911 (1971).3  Only if the contract  is am-          biguous  will  there arise  issues of  fact reviewable  for clear          error.   See Dwek,  970 F.2d  at 993; see  also ITT Corp.  v. LTX                   ___ ____                     ___  ____ _________     ___          Corp., 926 F.2d  1258 (1st Cir.  1991); Fashion House, Inc.  v. K          _____                                   ___________________     _          Mart Corp., 892 F.2d 1076, 1083  (1st Cir. 1989) (New York  law).          __________          "Contract  language  is  usually  considered  ambiguous where  an          agreement's terms  are inconsistent on  their face  or where  the          phraseology can  support reasonable  difference of opinion  as to          the meaning of the words employed and  obligations undertaken," K                                                                          _          Mart, 892 F.2d at 1083 (citing In re Navigation Technology Corp.,          ____                           _________________________________          880 F.2d 1491, 1495  (1st Cir. 1989)).  The  ambiguity determina-                                        ____________________               3The  Rey License and  RRL contain  choice-of-law provisions          providing  for the application of New York law, and the Milktrain          Agreement and RMA contain choice-of-law provisions providing  for          the application of  the law  of the Province  of Quebec,  Canada.          Neither party  alludes to  these contractual provisions  in their          briefs, however, and both  parties appear to have  premised their          trial presentations  and appellate  briefs on the  application of          Massachusetts  law.  In accordance with their choice, and since a          "reasonable  relation"  exists  between their  contract  and  the          Massachusetts forum, see  Carey v. Bahama Cruise  Lines, 864 F.2d                               ___  _____    ____________________          201, 206 (1st Cir. 1988), we apply Massachusetts law.  See Borden                                                                 ___ ______          v.  Paul Revere Life Ins. Co., 935  F.2d 370, 375 (1st Cir. 1991)              _________________________          ("[w]here . . . the parties have agreed about what law governs, a          federal court sitting  in diversity  is free, if  it chooses,  to          forego independent analysis and accept the  parties' agreement");          accord  Doherty v. Doherty Ins.  Agency, Inc., 878  F.2d 546, 547          ______  _______    __________________________          (1st Cir. 1989);  Moores v.  Greenberg, 834 F.2d  1105, 1107  n.2                            ______     _________          (1st Cir. 1987).                                          12          tion itself is subject to plenary review, id., and parol evidence                                                    ___          may not be  used to  "create ambiguity where  none otherwise  ex-          ists."  See Boston Car Co. v. Acura Auto. Div., 971 F.2d 811, 815                  ___ ______________    ________________          (1st Cir. 1992) (citing ITT Corp., 926 F.2d at 1261).                                  _________          A.   The Book/Video Claims.          A.   The Book/Video Claims.               _____________________                    The  Rey complaint  alleged  that LHP's  only right  to          publish the "Curious George"  TV episodes in book and  video form          derived from the Ancillary Products Agreement, was subject to the          APA's royalty provisions, and expired when Rey terminated the APA          in 1989.  LHP responds  that the book and video rights  to the TV          episodes were governed by the parties' other agreements, specifi-          cally  the Revised Rey  License, which (according  to LHP) incor-          porated the Revised Milktrain Agreement.  According to LHP, these          other  agreements continued in effect notwithstanding termination          of the APA; moreover, these agreements provided that no royalties          were due Rey before LHP's investors recovered their investment in          the 104 TV films.4   The district court accepted  the interpreta-          tion urged by Rey, based on the language of the various contracts          and the circumstances surrounding their execution.  We agree.               1.   The Houghton Mifflin Books.               1.   The Houghton Mifflin Books.                    __________________________                    The  Ancillary Products Agreement provided, inter alia,                                                                _____ ____          that                    for  stories  already  owned by  [LHP]  . . .                    which  have  been  produced  as  104 episodes                                        ____________________               4LHP contends that  $250,000 (U.S.) had yet to  be recovered          by the investors at the time the present action was commenced.                                          13                    under  the  license granted  in  the January,                    1978 agreement and the November 5, 1979 revi-                    sion of that agreement,  [LHP] shall have the                    right to produce books, films, tapes, records                                     _____                    and video productions of these episodes under                        _____ ___________                   _____                    this  Agreement,  subject  to  [Rey's]  prior                    ____  _________                    approval . . .          (Emphasis added.)  Throughout the document the  term "this Agree-          ment,"  utilizing the  capital  letter "A",  refers  to the  APA.          Thus, the plain language of the  operative provision clearly con-          templates that the  APA was to govern the licensing  of any books          and "video productions" arising from the 104 films.  See Barilaro                                                               ___ ________          v.  Consolidated Rail  Corp., 876  F.2d 260,  265 n.10  (1st Cir.              ________________________          1989) ("it is  . . . 'a  general rule  in the  construction of  a          written instrument that the same word occurring more than once is          to  be given  the  same meaning  unless  a different  meaning  is          demanded  by the context.'")  (quoting Dana v.  Wildey Sav. Bank,                                                 ____     ________________          294 Mass. 462, 466, 2 N.E.2d 450, 453 (1936)).                    LHP argues, nonetheless, that  a narrow meaning must be          ascribed to the quoted APA language, insofar as the RMA purported          to grant investors  "all right,  title and interest  [to the  104          film  episodes], without  limitation  or reserve,  including  the          original  negative."  The problem with LHP's argument is that Rey          never signed the RMA.  LHP concedes this, but argues that the RMA          and  RRL were negotiated and  executed simultaneously by LHP, and          must be  interpreted  in pari  materia.   See,  e.g.,  Interstate                                __ ____  _______    ___   ____   __________          Commerce Comm'n v. Holmes,  slip op. at 10-11 (1st  Cir. Jan. 11,          _______________    ______          1993)  (escrow agreement  and  consent decree  read together,  as          "synergistic" documents);  accord Chelsea Indus.,  Inc. v.  Flor-                                     ______ _____________________     _____                                          14          ence,  358  Mass. 50,  55-56, 260  N.E.2d  732 (1970);  Thomas v.          ____                                                    ______          Christensen, 12 Mass. App.  Ct. 169, 422 N.E.2d 472,  476 (1981).          ___________          The Massachusetts courts sometimes have held that the party to be          bound need not have  signed each component part of  an integrated          agreement where it is the "sense" of the transaction, as support-          ed  by reliable indicia in the  writings which were signed by the          party to be bound, that a unitary transaction was contemplated by          the parties.   See Chase Commercial Corp. v. Owen,  32 Mass. App.                         ___ ______________________    ____          Ct.  248,  588  N.E.2d  705 (1992)  (holding  that  non-signatory          guarantor  was bound by jury  trial waiver contained  in loan and          security agreements, though guarantee agreement contained no such          waiver,  where "the  three  documents were  part of  one transac-          tion"); see also Gilmore  v. Century Bank &  Trust Co., 20  Mass.                  ___ ____ _______     _________________________          App. Ct. 49, 50, 477 N.E.2d 1069, 1073  (1985) (holding that non-          signatory trustee could recover  for breach of workout agreement,          even though not a party to its terms, based on  "sense" of agree-          ment, and "such factors as simultaneity of execution, identity of          subject  matter and  parties, cross-referencing,  and interdepen-          dency  of  provisions").   On  this theory,  LHP  contends, Rey's          signature on  the RRL bound her  to the language of  the RMA, and          authorized LHP to transfer the television episodes to  book form,          using available technology.                    However, where contract language contains  no unambigu-          ous indicia of the parties' mutual intent to enter into a unitary          transaction, we review for "clear error" the fact-dominant deter-          mination whether  their separate  documents were intended  by the                                          15          parties as  an integrated agreement.   Interstate Commerce Comm'n                                                 __________________________          v. Holmes, slip op. at 10-11; Holmes Realty Trust v. Granite City             ______                     ___________________    ____________          Storage  Co., 25 Mass.  App. Ct. 272, 517  N.E.2d 502, 504 (1988)          ____________          ("it  would be  open to  a fact finder  . . . to  treat [separate                          ____ __  _ ____ ______          documents] as  intended by the  parties to  be parts of  a single          transaction") (emphasis  added); Fred S. James & Co. v. Hoffmann,                                           ___________________    ________          24 Mass. App. Ct. 160, 163, 507 N.E.2d 269, 271 (1987).                    In  the present case, we  find no "clear  error" in the          district  court's  determination  that the  parties  contemplated          separate  (though  related)  transactions  for  film  rights  and          ________          financing.  The evidence cut both ways.  On the one hand, the RMA          and  the RRL were executed  at approximately the  same time, with          some overlap in their internal references and subject matter.  On          the  other hand, their  respective provisions are  less in unison          than parallel.5   Most  importantly, the written  and circumstan-          tial indicia sharply  contradict any suggestion  of a meeting  of          the minds relating to  the licensing of ancillary products.   Rey          did not  participate in negotiating the RMA, did not sign it, was                                        ____________________               5Even  if the  RMA  and RRL  were  jointly construed,  their          language might point away  from the interpretation urged  by LHP.          Section 2(i) of the RMA granted LHP's investors "all right, title          and  interest" in the  104 T.V. episodes,  "without limitation or          reserve,"  but   1(a) tempered this  grant by defining the rights          as "described herein, and  set forth in Schedule 'A'  [the RRL]."          This  language suggests  that  the "right,  title, and  interest"          language of  the RMA was meant  only to confirm  and restate, and                                                  _______      _______          not to expand upon,  the RRL's parallel, but more  limited, grant          of  rights.  Cf. Fred  S. James & Co., 24  Mass. App. Ct. at 164,                       ___ ____________________          507  N.E.2d at  272 (finding  no conflict  between simultaneously          executed  instruments, where  their  language  and the  extrinsic          evidence suggested independent obligations arising  from simulta-          neous contracts).                                          16          never  made a party to  its terms, and  expressly refused, during                                                  _________ _______  ______          the RRL negotiations, to license "Curious George" for the "ancil-          ___ ___ ____________  __ _______  _______ ______  ___ ___  ______          lary"  purposes now urged by LHP.  See  supra at p. 6.  Moreover,          ____   ________ ___ _____ __ ___   ___  _____          the 1979 Private Placement Memorandum prepared by LHP acknowledg-          es Rey's  nonacceptance by  attaching  the RRL as an  exhibit and          noting that  ancillary product rights "have yet to be negotiated"          with  Rey.  Finally, the parties' intention to exclude the Hough-          ton Mifflin books from the RRL, and their intention to cover them          in  the  APA, are  corroborated  by  their subsequent  course  of          dealing:  among  other things, the record shows that LHP paid Rey          royalties on the books and videos on several occasions at the 33%                                                                 __ ___ ___          rate  required under the APA, rather than the 10% rate prescribed          ____  ________ _____ ___ ___          by the  RRL, and  that Curgeo  expressly keyed  the dates of  the          Houghton Mifflin  contract to  the term (and  anticipated renewal                                     __  ___ ____  ___  ___________ _______          term) of the Ancillary Products Agreement:          ____  __ ___ _________ ________ _________                    By September 30, 1987,  Curgeo [will]  inform                    [Houghton  Mifflin] in writing  as to whether                    Curgeo  has exercised  its option  to exploit                    the   character   "Curious  George"   through                    December 31,  1993 and,  if Curgeo  has exer-                    cised  said option,  Curgeo  shall  give  the                    Publisher the option to extend this Agreement                    through December 31, 1993.                    It was for  the district court to balance  the evidence          in the  first instance, see  Holmes Realty Trust, 517  N.E. 2d at                                  ___  ___________________          504, and  we discern no sound  reason to disagree  with its find-          ings,  particularly  on "clear  error"  review.   See  Interstate                                                            ___  __________          Commerce Comm'n v.  Holmes, slip  op. at 13  (citing Cumpiano  v.          _______________     ______                           ________          Banco Santander Puerto Rico,  902 F.2d 148, 152 (1st  Cir. 1990))          ___________________________                                          17          (even  if  proffered interpretation  did  "[give]  rise . . .  to          another plausible  view of the evidence,"  reversal not warranted          on "clear error" review).6                    To sum up:   Since the district court supportably found          that the RRL  and the  RMA are separate,  though related,  agree-          ments, the RMA's purported grant of rights did not  bind Rey, who          was bound only by the grant of rights she endorsed in the RRL and          APA.   The RRL contained no grant of rights to produce the Hough-          ton  Mifflin  books, and  the APA,  which  granted the  right "to          produce books . . . of these episodes," obligated LHP  to pay Rey          royalties on the books without  regard to whether LHP's investors          had  recouped their  investment on  the television  film project.          Thus,  the district  court  did not  err  in finding  that  LHP's          withholding of the Houghton  Mifflin book royalties was wrongful,          and we affirm its ruling on this point.                                          ____________________               6We reject  LHP's further  contention that Rey's  failure to          protest publication of  the four Houghton  Mifflin books in  1990          estops her from cancelling the book and video contracts under the          APA.   Where more than one inference fairly may be drawn from the          evidence and  an estoppel ruling  turns on an  issue of fact,  we          review for clear error.  United  States v. Marin, 651 F.2d 24, 29                                   ______________    _____          (1st Cir. 1981); Morgan  Guaranty Trust Co. v. Third  Nat'l Bank,                           __________________________    _________________          529 F.2d 1141, 1144 (1st Cir. 1976).  In our  view, Rey's conduct          does not require an inference that she acquiesced in the publica-          tion  of these books  under the APA.   Rather, Rey  protested the          publication  of the  four  books  by  filing suit  shortly  after          realizing the unauthorized nature of Houghton Mifflin's continued          publication.  The district court apparently found that Rey's one-          year delay, dating from  the first unauthorized publication until          the filing of Rey's  suit for injunctive relief, was  not "unrea-          sonable"  in the  circumstances, and  we  decline to  disturb its          findings on this issue.                                          18               2.   The Sony Videos.               2.   The Sony Videos.                    _______________                    LHP's claim to the Sony video royalties is more compli-          cated:  assuming the  videos were not covered by  the contractual          clause in the RMA, see supra Part II.A.1., might they nonetheless                             ___ _____          have  been covered  by  the grant  of rights  in  the RRL,  which          licensed LHP  to produce the  104 episodes "for  television view-                                                      ___  __________ _____          ing"?  The district  court thought not:  the  parties' "reference          ___          to television viewing  . . . in a licensing agreement  . . . does          not include  [video technology] . . .  which probably was  not in          existence at the time that the rights were given."                    a.  "New Uses" and Copyright Law.                    a.  "New Uses" and Copyright Law.                         ___________________________                    For  purposes  of the  present  appeal,  we accept  the          uncontested  district  court  finding  that  the  relevant  video          technology "was not  in existence  at the time  that the  rights"          were granted under  the RRL  in January 1979.   Consequently,  it          must be  inferred that the  parties did not  specifically contem-          plate  television  "viewing" of  the  "Curious  George" films  in          videocassette form at the  time the RRL was signed.  Such absence          of  specific intent  typifies cases  which address "new  uses" of          licensed  materials, i.e., novel technological developments which                               ____          generate unforeseen applications for a previously  licensed work.          See  Melville B. Nimmer and  David Nimmer, 3  Nimmer on Copyright          ___                                           ___________________            10.10[B] at 10-85  (1992) ("Nimmer") ("the  . . . fact that  we                                        ______          are  most  often dealing  with  a  later developed  technological          process  (even if  it were  known  in some  form at  the time  of          execution) suggests that the parties' ambiguous phraseology masks                                          19          an absence of intent rather than a hidden intent which the  court          simply must 'find'").                    Normally, in such situations, the courts have sought at          the  outset to identify any indicia of a mutual general intent to                                                          _______          apportion  rights to "new  uses," insofar as  such general intent          can  be discerned from the language of the license, the surround-          ing  circumstances, and trade usage.  See, e.g., Murphy v. Warner                                                ___  ____  ______    ______          Bros. Pictures, Inc., 112 F.2d 746, 748 (9th Cir. 1940) (grant of          ____________________          "complete and entire" motion picture rights to licensed work held          to  encompass later-developed  sound motion  picture technology);          Filmvideo Releasing Corp. v. Hastings, 446 F. Supp. 725 (S.D.N.Y.          _________________________    ________          1978) (author's explicit retention  of "all" television rights to          licensed work, in  grant of motion picture rights predating tech-          nological advances  permitting movies to be  shown on television,          included  retention of  right to  show motion picture  on televi-          sion).   Where no reliable indicia of general intent are discern-                                                _______          ible, however, courts  have resorted to one of  several interpre-          tive methods to resolve the issue on policy grounds.                    Under the  "preferred" method,  see 3 Nimmer  at 10-85,                                                    ___   ______          recently cited with  approval in SAPC, Inc.  v. Lotus Development                                           __________     _________________          Corp., 921  F.2d 360,  363 (1st Cir.  1990), the court  will con-          _____          clude, absent contrary  indicia of the parties' intent, that "the          licensee  may properly pursue  any uses  which may  reasonably be          said to fall  within the medium as described in  the license."  3          Nimmer at 10-86.  Under this interpretive method, the courts will          ______          presume that at  least the possibility of nonspecific  "new uses"                                          20          was  foreseeable by  the  contracting  parties  at the  time  the          licensing agreement was drafted; accordingly, the burden and risk          of drafting licenses  whose language anticipates the  possibility          of  any  particular "new  use"  are  apportioned equally  between          licensor  and licensee.    See, e.g.,  Bartsch v.  Metro-Goldwyn-                                     ___  ____   _______     ______________          Mayer, Inc., 391 F.2d 150, 155 (2d Cir.), cert.  denied, 393 U.S.          ___________                               _____  ______          826 (1968)  ("[i]f the words [of the license] are broad enough to          cover the new use, . . . the burden of framing and negotiating an          exception should fall on the grantor" of the licensed rights).                    An alternative interpretive method is to assume that                    a license of rights  in a given medium (e.g.,                                                            ____                    'motion picture rights')  includes only  such                    uses  as  fall  within  the  unambiguous core                    meaning  of the  term . . . and  excludes any                    uses which lie  within the ambiguous penumbra                    (e.g.,  exhibition of motion  picture film on                     ____                    television).  Thus  any rights not  expressly                    (in this case meaning  unambiguously) granted                    are reserved.          See 3  Nimmer at 10-85; see  also Bourne Co. v.  Walt Disney Co.,          ___    ______           ___  ____ __________     _______________          1992  Copyr. L.  Rep.  (CCH)   26,934  (S.D.N.Y.  1992) ("if  the          disputed  use  was not  invented  when the  parties  signed their          agreement,  that use is not permitted under the contract").  This          method  is intended  to  prevent licensees  from "'reap[ing]  the          entire  windfall'  associated  with  the new  medium,"  Cohen  v.                                                                  _____          Paramount Pictures  Corp.,  845 F.2d  851,  854 (9th  Cir.  1988)          _________________________          (quoting Neil  S. Nagano, Comment, Past Software Licenses and the                                             ______________________________          New  Video Software  Medium, 29  U.C.L.A. L.  Rev. 1160,  1184 (-          ___________________________          1982)),  and  is  particularly  appropriate  in  situations which                                          21          involve overreaching or exploitation  of unequal bargaining power          by a licensee in  negotiating the contract.  See,  e.g., Bartsch,                                                       ___   ____  _______          391 F.2d at 154 & n.2 (citing Ettore  v. Philco Television Broad-                                        ______     ________________________          casting Corp.,  229 F.2d  481 (3d  Cir. 1955) (suggesting  narrow          _____________          construction where licensor was not "an experienced  businessman"          and had no  "reason to know of the . . .  potential" for new uses          at  the time he signed the relevant  agreement)).  It may also be          appropriate where  a particular "new use"  was completely unfore-          seeable  and therefore could not possibly have formed part of the                                 _____ ___ ________          bargain  between the parties at  the time of  the original grant.          Cohen, 845 F.2d  at 854; Kirke  La Shelle  Co. v. Paul  Armstrong          _____                    _____________________    _______________          Co., 263 N.Y. 79,  188 N.E. 163  (1933).  Obviously, this  method          ___          may  be  less appropriate  in  arm's-length transactions  between          sophisticated parties involving foreseeable  technological devel-          opments;  in  such  situations, narrow  construction  of  license          grants may afford an unjustifiable windfall  to the licensor, who          would  retain blanket rights to analogous "new uses" of copyright          material notwithstanding the breadth of the  bargained-for grant.          See generally 3 Nimmer at 10-85 ("it is surely more arbitrary and          ___ _________   ______          unjust to  put the onus on the licensee by holding that he should          have  obtained a  further  clarification of  a meaning  which was          already present than it is to hold  that the licensor should have          negated  a meaning which  the licensee  might then  or thereafter          rely upon.").7                                        ____________________               7The problem  becomes particularly acute when  the analogous          technology  develops so  rapidly  as to  supplant the  originally          contemplated  application of  the  licensed  work, rendering  the                                          22                    b.  Video Technology as "New Use".                    b.  Video Technology as "New Use".                        ____________________________                    These  fine-tuned  interpretive  methods  have  led  to          divergent results  in cases considering the  extension of televi-          sion rights to new video forms.   Thus, for example, in Rooney v.                                                                  ______          Columbia Pictures Industries, Inc.,  538 F. Supp. 211 (S.D.N.Y.),          __________________________________          aff'd, 714 F.2d  117 (2d Cir. 1982), cert.  denied, 460 U.S. 1084          _____                                ____   ______          (1983), the court determined that a series of  contracts granting          motion picture  distributors a general license  to exhibit plain-          tiffs'  films "by any present or future methods or means" and "by                                        __ ______          any means now known  or unknown" fairly encompassed the  right to                    ___ _____  __ _______          distribute the  films by means of  later-developed video technol-          ogy.                    The  contracts  in  question gave  defendants                    extremely  broad  rights in  the distribution                    and  exhibition  of  pre-1960 films,  plainly                                                          _______                    intending  that such rights  would be without                    _________                    limitation  unless  otherwise  specified  and                    further indicating  that future technological                    advances in methods  of reproduction,  trans-                    mission  and  exhibition would  inure  to the                    benefit of defendants.          (Emphasis  added.)     Similarly,  in  Platinum   Record  Co.  v.                                                 ______________________          Lucasfilm,  Ltd., 566 F. Supp. 226, 227 (D. N.J. 1983), the court          ________________                                        ____________________          parties'  original bargain  obsolete.   Thus, for  example, broad          grants  of "motion  picture  rights,"  made before  technological          advances permitted  the combination of moving  images with sound,                                                                     _____          later were  held, typically,  to encompass  the  rights to  sound          motion picture technology; a narrower holding would have left the          original license virtually worthless, despite its broad language,          and would have provided the licensor with an undeserved windfall.          See, e.g., Murphy, 112  F.2d at 748; L.C. Page &  Co. v. Fox Film          ___  ____  ______                    ________________    ________          Corp., 83 F.2d 196 (2d Cir. 1936).          _____                                          23          held  that  videocassette  rights  were encompassed  by  a  broad          synchronization license to "exhibit, distribute, exploit, market,          and perform [a motion  picture containing licensed musical compo-          sition] . . . perpetually  throughout the world  by any means  or          methods now or  hereafter known."   Again, the  court rested  its          holding on  the  "extremely  broad  and  completely  unambiguous"          contractual  grant of  general rights  to applications  of future                                 _______          technologies, which  was  held to  "preclude[]  any need  in  the          Agreement for  an exhaustive list  of specific potential  uses of          the film."  Id.                      ___                    By contrast,  in Cohen, 845  F.2d at 853-54,  the Ninth                                     _____          Circuit concluded that a 1969 contract granting rights  to "[t]he          exhibition  of [a]  motion picture  [containing a  licensed work]          . . . by means of television," but containing a broad restriction                __ _____ __ __________          reserving to  the licensor "all  rights and uses  in and to  said          musical composition, except those herein granted," did not encom-                                                             ___ ___          pass the  right to revenues  derived from  sales of  the film  in          videocassette form.  After deciding  that "[t]he general tenor of          the [contract]  section [in which the granting  clause was found]          contemplate[d] some sort of broadcasting or centralized distribu-                                      ____________ __ ___________ _________          tion,  not distribution by sale or rental of individual copies to          ____          the general public," see  id. at 853 (emphasis added),  the court                               ___  ___          stressed that  the playing of videocassettes,  with their greater          viewer control  and decentralized access on  an individual basis,          did not constitute "exhibition" in the  sense contemplated by the          contract.                                          24                    Though  videocassettes  may  be exhibited  by                    using a television monitor, it does not  fol-                    low  that,  for  copyright purposes,  playing                    videocassettes  constitutes  "exhibition   by                    television."  . . .  Television  requires  an                    intermediary  network,  station, or  cable to                    send the television  signals into  consumers'                    homes.   The menu of  entertainment appearing                    on  television is controlled  entirely by the                    intermediary and, thus, the consumer's selec-                    tion is limited to what is available on vari-                    ous channels.  Moreover, equipped merely with                    a conventional television set, a consumer has                    no means of capturing any part of the televi-                    sion  display; when  the program  is over  it                    vanishes,  and the  consumer is  powerless to                    replay  it.   Because they  originate outside                    the  home,  television signals  are ephemeral                    and beyond the viewer's grasp.                    Videocassettes, of course, allow viewing of a                    markedly  different  nature. . . .  By  their                    very  essence, . . .  videocassettes liberate                    viewers  from  the constraints  otherwise in-                    herent in television,  and eliminate the  in-                    volvement of an intermediary, such  as a net-                    work.                    Television  and  videocassette  display  thus                    have very  little in common  besides the fact                    that a conventional  monitor of a  television                    set  may be  used both to  receive television                    signals and to  exhibit a videocassette.   It                    is in  light of this fact  that Paramount ar-                    gues that VCRs  are equivalent to "exhibition                    by  means of  television."    Yet, even  that                    assertion is flawed.  Playing a videocassette                    on a VCR does  not require a standard televi-                    sion  set  capable  of  receiving  television                    signals by cable or  by broadcast; it is only                    necessary to have a  monitor capable of  dis-                    playing the material on the magnetized tape.          Id. at 853-54.          ___                    Most  recently,  in  Tele-Pac,  Inc. v.  Grainger,  570                                         _______________     ________          N.Y.S.2d 521, appeal dismissed,  580 N.Y.S.2d 201, 588  N.E.2d 99                        ______ _________          (1991), the court held  (one judge dissenting) that a  license to                                          25          distribute certain  motion pictures "for broadcasting  by televi-          sion or any  other similar  device now known  or hereafter to  be          made  known" did  not  encompass the  videocassette film  rights.          "Transmission of sound and  images from a point outside  the home                                                          _______  ___ ____          for  reception by  the general  public . . .  is implicit  in the                                 _______  ______          concept of  'broadcasting by television.'   Conversely, while one          may speak of 'playing,'  'showing,' 'displaying,' or even perhaps          'exhibiting' a videotape, we are unaware of any usage of the term          'broadcasting' in that context."  Id. at 523 (emphasis added).                                            ___                    c.   Video Rights and the RRL.                    c.   Video Rights and the RRL.                         ________________________                    Although  the question  is extremely  close, under  the          interpretive  methodology outlined  above  we  conclude that  the          RRL's  grant of rights to  the 104 film  episodes "for television          viewing" did  not encompass the right to  distribute the "Curious                   ___  ___          George" films in videocassette form.                    First,  unlike the  contracts in Rooney  and Lucasfilm,                                                     ______      _________          the  RRL contained no general grant of rights in technologies yet          to be developed, and no explicit reference to "future methods" of          exhibition.   Compare Lucasfilm, 566 F. Supp. at 227; Rooney, 538                        _______ _________                       ______          F.  Supp. at  228.   Rather,  the  RRL appears  to  contemplate a          comparatively limited and particular grant of  rights, encompass-          ing only the 104 film episodes and leaving future  uses of "Curi-          ous  George"  to  later  negotiation in  the  ancillary  products          agreement.   Although  the RRL  conversely contains  no "specific          limiting language,"  compare Cohen, 845  F.2d at 853,  we believe                               _______ _____          such limitation is reasonably inferable from the situation of the                                          26          parties  and  the "general  tenor of  the  section" in  which the          "television viewing" rights were granted.                    Second, as properly  noted in Cohen, "television  view-                                                  _____          ing" and "videocassette viewing" are not coextensive terms.  Even          though videocassettes may be,  and often are, viewed by  means of                                ___ __          VCRs on home television screens, see, e.g., Sony Corp. of America                                           ___  ____  _____________________          v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (noting             ____________________________          prevalent use  of videocassette recorders for  "time-shifting" of          commercial television  programming); Rooney, 538 F.  Supp. at 228                                               ______          ("whether the exhibition apparatus is a home videocassette player          or a  television station's  broadcast transmitter, the  films are          'exhibited' as images on home television screens"), still, as the          Ninth Circuit pointed  out, a "standard television set capable of          receiving television signals" is not strictly required for video-          cassette viewing.  Cohen, 845 F.2d  at 854.  "[I]t is only neces-                             _____          sary to have a monitor capable  of displaying the material on the          magnetized  tape."   Id.    Indeed,  a  number of  non-television                               ___          monitors recently marketed in  the United States permit videocas-          sette viewing  on computer screens, flat-panel  displays, and the          like.8  Thus,  we find  insufficient reliable indicia  of a  con-          trary mutual  intent on the part  of Rey and LHP  to warrant dis-          turbing  the district  court's  implicit  determination that  the                                        ____________________               8See, e.g.,  Nathalie  Welch,  ASK  Flat-Panel  Display  Now                ___  ____                     _____________________________          Available in U.S., MacWeek, January 4,  1993 (noting availability          _________________          of  flat-panel LCD  monitor  capable of  displaying VCR  output);          Alice Laplante & Stuart  Johnston, IBM Unveils Multimedia Adapter                                             ______________________________          Board,  Software Toolkit,  InfoWorld,  February 12, 1990  (noting          ________________________          availability of MCA adapter card permitting videocassette  images          to be viewed and manipulated on PS/2 color computer monitor).                                          27          language  of the RRL is not "broad  enough to cover the new use."          Bartsch, 391 F.2d at 155.          _______                    Finally, any  lingering concerns about  the correctness          of  the  district court's  interpretation  are  dispelled by  the          evidence that the RRL (including its "television viewing" clause)          was drafted and proposed  by LHP, a professional investment  firm          accustomed to licensing agreements.  Rey,  an elderly woman, does          not appear  to have  participated in its  drafting, and,  indeed,          does  not appear to have  been represented by  counsel during the          larger part of  the transaction.   Under these circumstances,  as          noted supra pp. 21-22, ambiguities in the drafting instrument are                _____          traditionally  construed against  the  licensor and  the drafter.          See also Nimmer at  10-71 ("ambiguities [in licensing agreements]          ___ ____ ______          will  generally  be  resolved  against the  party  preparing  the          instrument of transfer"); U.S.  Naval Institute v. Charter Commu-                                    _____________________    ______________          nications, Inc., 875 F.2d 1044, 1051 (2d Cir. 1989) (interpreting          _______________          ambiguous  copyright  assignment  against sophisticated  drafting          party);  see  generally, e.g.,  Merrimack  Valley  Nat'l Bank  v.                   ___  _________  ____   _____________________________          Baird, 372  Mass. 721,  724, 363  N.E.2d 688,  690 (1977)  ("as a          _____          general  rule, a writing is  construed against the  author of the          doubtful language . . . if  the circumstances surrounding its use          and the ordinary meaning of the words do not indicate the intend-          ed meaning of the language").                    Accordingly, as the  Sony videocassette sales were  not          encompassed by the RRL,  but governed exclusively by the  APA, we          find  no  conflict between  the terms  of  the documents,  and we                                          28          affirm the award of royalties to Rey under the APA.          B.  The "Junk Products" Counterclaim.          B.  The "Junk Products" Counterclaim.              ________________________________                    We  next turn to the LHP counterclaim that Rey breached          the APA  by "wrongfully withholding" approval  of ancillary prod-          ucts  she considered  "junky."9  The  district court  agreed with          LHP, holding that                    [The  Ancillary  Products Agreement]  clearly                    contemplated  the   exploitation  of  Curious                    George. . . . Based on  the testimony of  Ms.                    Stoebenau and  Mr. Konkle, I find  that means                    that there may  be produced with  the charac-                    ter,  junk  products,  junky  products. . . .                    Plaintiff [had]  the right . . . to insist on                    . . . an  honest  and good  depiction of  the                                                          __  ___                    character.   She  did not  have the  right to                    _________                    disapprove the quality of  the product. . . .                                           __  ___ _______                    She had  [the] right to disapprove  an incor-                    rect,  improper,  bad  depiction  of  Curious                    George.          (Emphasis added.)  The court further found:                      [A]lthough  Mrs. Rey  unquestionably approved                    many  products, I  find  that she  improperly                    disapproved the Sears project for the reasons                    just  outlined;   that  she  was unreasonable                    with  respect to the  Eden project,  and that                    she was so rude to Ms. Craighead  as to abort                    the second and perhaps later trilogies of the                    software.          (Emphasis  added.)   After careful  consideration, we  must agree          with Rey that the district court misapplied the APA.                     The  product-approval procedure under  the APA required                                        ____________________               9LHP does not  challenge the district court  ruling that its          counterclaims  for interference with contractual and advantageous          business relationships,  breach of  the implied covenant  of good          faith  and  fair dealing,  and  unfair  business practices  under          chapter 93A were time-barred.                                          29          that:                    LHP  will submit product or other information                    sufficient to describe the product to you for                    prior approval.   When a product is submitted                    . . . we will wait two weeks  before proceed-                    ing.  If we do not receive any disapproval of                    the product from you  within two weeks we are                    entitled to  presume that you approve  of the                    product.   If you do disapprove  of any prod-                    uct,  you  will,  if  feasible,  suggest such                    changes  to  LHP  as may  render  the product                    acceptable to  you,  or, if  you cannot  make                    such feasible suggestions, you may  refuse to                    approve the product.   Product approval  will                    not be unreasonably withheld.          The term "product" is not defined in the APA.  It is black letter          law, however, that where "the words of an agreement are plain and          free from ambiguity, they must be construed in their ordinary and          usual sense," Boston Edison Corp. v. FERC, 856 F.2d 361, 365 (1st                        ___________________    ____          Cir. 1988), and,  as we have  noted in another context,  the word          'product,' taken in  its ordinary and usual  sense, "simply means          'something produced.'"   See K  Mart, 892 F.2d  at 1085  (quoting                                   ___ _______          Webster's Third  New International Dictionary 1810  (1981)).  See                                                                        ___          also  id. at 1084 ("where  possible, words should  be given their          ____  ___          natural  meaning,  consistent  with   the  tenor  of  contractual          terms"); id. at 1085 ("[I]t is sufficient [to avoid ambiguity] if                   ___          the language employed  is such that a reasonable  person, reading          the  document as a whole and in realistic context, clearly points          toward a readily ascertainable meaning").  Considered in context,          we  think  the "ordinary  and usual"  meaning  of the  broad term          "product" plainly  indicates the  parties' mutual  intention that          each  article bearing  the likeness  of "Curious  George"     not                _______                                          30          merely the likeness itself    be approved by Rey.                    By  contrast, the  narrow interpretation  urged by  LHP          would  convert the  term "product"  into a  mere synonym  for the          "Curious  George" mark.  Nowhere  does the APA  intimate that the          parties contemplated that the  term "product" was to be  given so          restrictive an interpretation.  Indeed, elsewhere the APA plainly          precludes  the narrow  interpretation urged  by LHP  by expressly          distinguishing between the  mark and the "product" with  which it          ______________          is used.  See APA p.3 ("[LHP] will not sell or authorize the sale                    ___          or distribution of  any product  on or in  connection with  which                                  _______  __ __ __  __________ ____  _____          'Curious George'  is used  . . .") (emphasis  added); id.  at 3-4           _______ ______   __ ____                             ___          (referring  to separate  approval  procedure for  "apparel  prod-                                                             _______  _____          ucts").10  As the  APA is unambiguous in  this regard, the  trial          ____                                        ____________________               10The interpretation we adopt accords with  the common-sense          understanding recognized in other  areas of intellectual property          law.   Thus, for example,  in the trademark  context, courts fre-          quently  have recognized  that  "the trademark  holder [has]  the          right to control the  quality of the goods manufactured  and sold          under  its trademark,"  Shell  Oil Co.  v. Commercial  Petroleum,                                  ______________     ______________________          Inc., 928 F.2d 104  (4th Cir. 1991)  (emphasis added);  El  Greco          ____                                                    _________          Leather Products  Co. v. Shoe World,  806 F.2d 392,  395 (2d Cir.          _____________________    __________          1986), cert. denied, 484 U.S. 817 (1987)) ("The actual quality of                 _____ ______          the goods  is irrelevant;  it is  the control  of quality  that a                                                _______  __          trademark holder is entitled to maintain") (emphasis added);  see                                                                        ___          also Societe  des Produits Nestle,  S.A. v. Casa  Helvetia, Inc.,          ____ ___________________________________    ____________________          982  F.2d  633  (1st  Cir. 1992)  (hereinafter  Produits  Nestle)                                                          ________________          ("[r]egardless  of the  offending goods'  actual  quality, courts          have issued Lanham  Act injunctions solely because of  the trade-          mark owner's  inability  to  control the  quality  of  the  goods          bearing  its name").  "The rationale for this requirement is that          marks  are treated by purchasers as an indication that the trade-          mark  owner  is associated  with  the product."    Kentucky Fried                                                             ______________          Chicken Corp. v. Diversified  Packaging Corp., 549 F.2d 368,  387          _____________    ____________________________          (5th Cir. 1977).   Indeed, under trademark law the  protection of          the mark may be lost if the licensor fails to control the quality                                               _____          of the licensed goods; failure to control the quality of licensed          goods  can constitute  an abrogation  of  the licensor's  duty to          protect  the informational value of the mark.  See Kentucky Fried                                                         ___ ______________                                          31          testimony of  LHP's witnesses, Cheryl Stoebenau  and Glen Konkle,          need not be considered.   Extrinsic evidence may not  be utilized          to  contradict the unambiguous terms of a written agreement.  See                                                                        ___          LTX  Corp., 926 F.2d at 1263-64; Triple-A Baseball Club Assoc. v.          ___  _____                       ________ ________ ____ ______          Northeastern Baseball, Inc., 832 F.2d  214, 221 (1st Cir.  1987),          ____________ ________  ____          cert. denied, 485 U.S. 935 (1988).          _____ ______                                        ____________________          Chicken, 549 F.2d at 387; see also Church of Scientology Int'l v.          _______                   ___ ____ ___________________________          Elmira Mission of Church of Scientology, 794 F.2d 38, 43 (2d Cir.          _______________________________________          1986).   LHP argues  that the licensor's duty  of control is less          stringent where  the mark is licensed for  use in a context unre-          lated to the licensor's original business.  See Winnebago Indus.,                                                      ___ _________________          Inc. v. Oliver &  Winston, Inc., 207 U.S.P.Q. 335,  340 (T.T.A.B.          ____    _______________________          1980).  Whatever  its merit  as a general  matter, however,  this          proposition  is  unavailing in  the  present  context:   the  APA          licensed the use  of "Curious George"  for purposes both  related                                                                    _______          and  unrelated to  the  original (literary)  use of  the "Curious               _________          George"  mark, and  in no  instance  does it  distinguish between          "related" and "unrelated" uses.                 Similarly,  under copyright  law,  while a  licensor has  no          "moral right" to control the quality of  licensed depictions, see                                                                        ___          Gilliam v. American Broadcasting  Cos., 538 F.2d 14, 24  (2d Cir.          _______    ___________________________          1976), she  may insist, contractually, on  approval provisions to          "assure quality  control and high standards  in the exploitation"          of her creative  work."  See Clifford Ross Co.  v. Nelvana, Ltd.,                                   ___ _________________     _____________          710 F.  Supp. 517, 520  (S.D.N.Y.), aff'd.  without opinion,  883                                              _______________________          F.2d 1022 (2d Cir. 1989);  see also Zim v. Western Pub.  Co., 573                                     ___ ____ ___    _________________          F.2d  1318, 1324 (5th Cir.  1978) (author has "profound interest,          both professional  and financial,  in maintaining the  quality of          [published products], particularly those already  published under          [her] name").   Clifford Ross is particularly  instructive, as it                          _____________          too involved  a "classic  literary property," the  "Babar" child-          ren's book  character.   Upholding a contractual  provision which          called for the copyright  holder's participation in the selection          of licensing agents for the character, and enjoining the issuance          of  further  licenses absent  the  holder's  approval, the  court          concluded that there  would be "irreparable  harm" to the  future          profitability of "Babar,"  and to the artistic  reputation of the          holder, "if the exploitation  of Babar continue[d] without regard          to [the licensor's] high standards of quality control."  Clifford                                                                   ________          Ross,  710 F. Supp. at 520.   Compare Geisel v. Poynter Products,          ____                          _______ ______    _________________          Inc., 283 F. Supp. 261  (S.D.N.Y. 1968) (issuing injunction under          ____          Lanham Act; finding likelihood  of "irreparable harm" to author's          reputation  where "Dr.  Seuss"  toys, which  author  found to  be          "tasteless,  unattractive,  and  of  an  inferior  quality," were          marketed as authorized by author).                                          32                    Even though  the APA's product approval  clause did not          preclude  Rey  from rejecting  products  based  on their  "junky"          quality, it did  obligate her  to act "reasonably"  in doing  so.          The duty  to act "reasonably,"  like a duty  to employ "best  ef-          forts," or to act in  "good faith," is not reducible to  "a fixed          formula[, and]  varies with the  facts and the  field of  law in-          volved."  See Triple-A Baseball Club, 832 F.2d at 225 (discussing                    ___ ______________________          contractual  "best efforts"  clause);   see  generally Robert  S.                                                  ___  _________          Summers,  "Good Faith"  in  General Contract  Law  and the  Sales                     ______________________________________________________          Provisions  of the Uniform Commercial  Code, 54 Va.  L. Rev. 195,          ___________________________________________          201, 204-07  (1968) (discussing  "good faith" as  "phrase without          general  meaning," incapable of precise definition).   In a some-          what different context, the Massachusetts courts have interpreted          contractual  clauses preventing the  "unreasonable withholding of          approval" of commercial sublessees, as imposing a duty to act "in          accordance with  usual standards of reasonableness."   See Nassif                                                                 ___ ______          v. Boston & M. R. Co., 340 Mass. 557, 564, 165 N.E.2d 397, 401-02             __________________          (1966);  Worcester-Tatnuck  Square CVS, Inc. v.  Kaplan, 33 Mass.                   ___________________________________     ______          App. Ct.  499, 601 N.E.2d 485  (1992).  It falls to  us to define          "usual standards of reasonableness," in the present context, in a          way  which  accords with  the  contracting  parties' intent,  yet          avoids  rendering the  "reasonableness"  standard  either  purely          illusory or duplicative of more particular contractual terms.                    We  think  the  APA's  proscription  of  "unreasonable"          product disapproval  required, at a minimum,  that Rey articulate          some material reason, subjective or otherwise, for disapproving a               ________                                          33          product.  That is to say, Rey could not withhold product approval          without ascribing  a reason,  nor for  reasons immaterial  to the          "Curious George" mark, its  proposed use or commercial potential,          or  unrelated to Rey's  artistic and  reputational identification          with the mark and ancillary  products.  Moreover, assuming  there          existed some material ground for withholding product approval, it          would need to be communicated, consistent with contractual speci-          fications,  "within a reasonable time and in a reasonable manner,          i.e., in  a manner which makes it  possible for [the licensee] to          ____          rework the [product]  in order to meet . . . approval."  See Zim,                                                                   ___ ___          573  F.2d at 1324.   Finally, the reason  for withholding product          approval could not be so preclusive as to frustrate the fundamen-                                                                  _________          tal contractual assumptions on  which the APA was formed.  In the          ___ ___________ ___________          context  of this case, for example, Rey could not impose approval          standards  which would  effectively eliminate  all potential  for          profitable  use of  the "Curious  George" property;  the parties'          mutual assent, in the APA, that Rey would be  entitled to minimum          royalty payments,  plainly  implied a  mutual understanding  that          some licensing of the "Curious George" character would be accept-          ____          able,  in order  to enable  sales from  which royalties  might be          generated.   Cf.  Steven J.  Burton, Breach  of Contract  and the                       ___                     ____________________________          Common  Law Duty to Perform in Good  Faith, 94 Harv. L. Rev. 369,          __________________________________________          403 (1980)  ("discretion in performance may  be exercised legiti-          mately  [only] for  the purposes  reasonably contemplated  by the          parties").                    The district court supportably found that Rey  approved                                          34          "many products," including the original film series, the Houghton          Mifflin books, the  Sony videocassettes, the first  series of DLM          software,  and the Eden plush  toys (as modified).   In addition,          Rey  testified,  without  contradiction,  that  she had  approved          "children's sweatshirts,  film strips, earmuffs  and school  bags          for  children . . .  buttons, children's  books . . .  paper doll          books[,]  [w]rist  watch,  alarm clocks,  wall  clocks, footwear,          little tennis shoes for  children, . . . [b]each slippers, . . ."          After reviewing the  record, we  are convinced that  Rey did  not          utilize  objectively unreasonable criteria for approving products          under  the APA.   We  turn to  the particular  product rejections          challenged on appeal.               1.   The Sears Pajamas.               1.   The Sears Pajamas.                    _________________                    The district court ruled that Rey acted unreasonably by          basing  her  disapproval of  the  Sears  project on  the  "junky"          quality  of the pajama material which  would bear "Curious Georg-          e's" likeness.11   As  we have stated,  see supra  at pp.  32-34,                                                  ___ _____          the basis for the  district court's finding of "unreasonableness"          was  insufficient as a  matter of law.   Rey did not unreasonably          withhold approval of the Sears pajama  project as unbefitting the          "Curious George"  image protected  by her copyright,  because the          grounds for  withholding approval were reasonably  related to the                                        ____________________               11The district  court did not address  the aesthetic reasons          Rey  gave  for rejecting  the  Sears project,  viz.,  the "bright                                                         ____          yellow"  color  of the  pajama  material  and the  unrecognizable          "plump"  depiction of "Curious George."  We believe these grounds          were not unreasonable.                                          35          integrity  and commercial  value of her  artistic creation.   See                                                                        ___          Clifford Ross, 710 F. Supp. at 520.12          _____________               2.   The Beach Paper Products.               2.   The Beach Paper Products.                    ________________________                    Our  conclusion that Rey  reasonably rejected the Sears          project disposes of LHP's claim for damages relating to the Beach          paper  products as well.  Rey never saw, much less "disapproved,"          the  Beach  paper products:   as  the undisputed  evidence shows,          Beach  withdrew its proposal when the Sears project fell through;          it never reached agreement  with LHP or presented any  product to          Rey for  approval.   Therefore,  LHP's claimed  right to  recover          potential profits from  the Beach project could  be justified, if          at  all, only as consequential damages  resulting from a wrongful                           _____________ _______          rejection of the  Sears project.   As the  Sears project was  not          wrongfully  rejected under  the  terms of  the  APA, LHP  is  not          entitled to consequential damages  related to Beach's anticipated                                        ____________________               12LHP  nonetheless  maintains that  Rey's  rejection of  the          Sears  pajama project was  "unreasonable," insofar as  it was not          communicated  in  a manner  which  "ma[de] it  possible  . . . to          rework  the [product] in order  to obtain . . .  approval."  Zim,                                                                       ___          573 F.2d at 1324.  LHP argues that time pressures inherent in the          Sears catalog deadlines  made the presentation  of the pajamas  a          "one-shot deal,"  with "reworking" of the  design impossible once          rejection  had occurred.  It insists that the "lousy material" in          the pajamas    a  basis for Rey's disapproval     was required by          federal fire  safety standards;  no other material  was available          for use in the product.               Even assuming  these fact-based arguments are  well founded,          however     an assessment we  are in no  position to make  on the          present record    they are beside the point:  the APA's  "reason-          ableness" constraint did not oblige Rey to apply lower standards,          or  to relax  her vigilance  in policing  ancillary uses  for the          "Curious George" character, merely  because deadlines were  tight          or objections to the product could not be cured.  See APA at p. 3                                       _____ ___            ___          ("if you  disapprove  of  any  product, you  will,  if  feasible,                                                              __  ________          suggest such changes to  [LHP] as may render the  product accept-          able to you") (emphasis added).                                            36          profits.   See, e.g., Ryan v.  Royal Ins. Co., 916  F.2d 731, 744                     ___  ____  ____     ______________          (1st Cir. 1990) ("unless  appellants can demonstrate that [appel-          lee] breached  a duty  owed to them. . . .  consequential damages          will not lie").                3.   The Eden Plush Toys.               3.   The Eden Plush Toys.                    ___________________                    The district court  ruled that  Rey acted  unreasonably          with respect to the  Eden plush toys project,  but the court  did          not state whether its ruling was based on Rey's objections to the          "junky" nature of the proposed product, or some other ground.  We          conclude, nonetheless, that remand  is unnecessary in the present          circumstances, see Produits Nestle,  982 F.2d at 640-41  ("when a                         ___ _______________          trial  court misperceives and  misapplies the law,  remand may or          may  not be  essential"), since  LHP did  not present  sufficient          evidence to enable a  finding that Rey's actions with  respect to          Eden were "unreasonable."   See id. at 642 (quoting  Dedham Water                                      ___ ___                  ____________          Co. v. Cumberland Farms Dairy, Inc., 972  F.2d 453, 463 (1st Cir.          ___    ____________________________          1992)).        Applying the standard articulated supra pp. 33-34,                                                           _____          "reasonableness" in the present  context turns, first, on whether          the reasons for rejecting a proposed product were "material."  As          recently noted by  the court,  "[t]here is no  mechanical way  to          determine  the point  at which  a difference  becomes 'material.'          Separating  wheat  from chaff  must  be  done on  a  case-by-case          basis."  Produits Nestle,  982  F.2d at  641.   In  reference  to                   _______________          conventional commercial products, such as the Perugina chocolates          licensed in Produits Nestle, the appropriate test is  whether the                      _______________          ground for refusing to approve a version of a licensed product is                                          37          one  which "consumers would likely  consider relevant."   Id.  In                                                                    ___          the context  of an  artistic creation  such as  "Curious George,"          however, the highly subjective element  of "creativity," connect-          ing product and author, implicates intangible considerations such          as the  "total concept and feel" of the product.  See Roth Greet-                                                            ___ ___________          ing Cards v. United Card Co.,  429 F.2d 1106 (9th Cir. 1970); see          _________    _______________                                  ___          also Sid & Marty Krofft Television Productions, Inc. v. McDonalds          ____ _______________________________________________    _________          Corp., 562  F.2d 1157 (9th  Cir. 1977).   We believe  an author's          _____          discretionary right to disapprove an ancillary product, as not in          keeping  with the  aesthetic image the  author envisions  for her          artistic creation,  reasonably may be  made to depend  on product          conformity, at least where, as here, conformity with the author's          aesthetic standard would neither  set unreasonably high levels of          commercial  practicality nor  foreclose all  prospect  of profit-                                                       ________          ability on which the  contract was predicated.  See  supra at pp.                                                          ___  _____          33-34.                    The evidence before  the district court clearly  showed          that Rey imposed a demanding aesthetic standard for the design of          the  Eden Toys  doll.13  Eden's  frustration at  Rey's meticulous          immersion  in the details of toy design may indeed be understand-          able, the more so perhaps because of the irascible terms in which          Rey appears to  have chosen  to couch her  product criticisms  on          occasion.  Even viewing the evidence as a whole in the light most                                        ____________________               13For example,  she relocated the felt  patterns on "Curious          George's"  face  by a  few  millimeters  and rejected  particular          colors and color  combinations which Eden thought would  make the          doll more saleable.                                          38          flattering to LHP, however, we cannot conclude that her  proposed          changes were unrelated to her  legitimate artistic concerns or to          her desire  to protect the  aesthetic integrity  of the  "Curious          George" image.                    "Reasonableness"  likewise  requires,  of course,  that          changes be made  "within a  reasonable time and  in a  reasonable          manner, i.e., in a manner which makes it possible for [the licen-                  ____          see] to  rework the [product] in  order to meet .  . . approval."          See  Zim, 573  F.2d at 1324.   The  evidence before  the district          ___  ___          court, which we  have examined in detail, did not show that Rey's          product criticisms, though caustic,  were made in an unreasonable          time or manner.  And although the record is replete with testimo-          ny that  Eden and  LHP grumbled  about Rey's product  criticisms,          neither  Eden  nor LHP  ever communicated  to  Rey, prior  to the                                                     __  ___          present  lawsuit, that her proposed changes to the Eden plush toy          products were  impracticable or even unduly  burdensome.14  Since          Rey's  objections to  Eden's original  toy  design were  based on          criteria  reasonably  related  to  her  legitimate  artistic  and          aesthetic concerns about the proposed ancillary product, and were          communicated  in a  time and  manner which  would permit  Eden to          conform  the product, we conclude that  Rey's rejection of Eden's          product designs was not "unreasonable."                                        ____________________               14For  example,   the  President  of  Eden  Toys  testified:          "[W]hat we tried to do, therefore, was to  get very specific, and          say: If you  want it moved  three millimeters to the  left, we'll                                                                      _____          move it, but let's all agree on that's where it's going to be . .          ____ __          . ."  (Emphasis added.)                                          39               4.   The DLM Software.               4.   The DLM Software.                    ________________                    Finally, we consider whether  Rey's alleged rudeness to          Donna Craighead, the DLM project manager, amounted to  an "unrea-          sonable  withholding of approval" of  the DLM software project in          violation of  the APA.   We  conclude that  it did  not.  As  all          parties  agree, the  licensing  arrangement between  DLM and  LHP          covered only the first  installment in the proposed  DLM software          trilogy, the first installment  was approved by Rey prior  to her                                              ________          telephone  conversation  with  Craighead, and  DLM  continued  to          manufacture and market the first-installment  software even after          Rey's intemperate remarks.  Given  the fact that Rey's statements          led to no  curtailment in the production or  sale of the licensed          software,  we are unable to discern any relevant respect in which          Rey's statements  to Craighead could be  considered a "rejection"          of the product for which LHP had issued its license to DLM.                    The district court apparently  thought that Rey's harsh          criticism of the first  software installment may have discouraged          DLM from undertaking "second and . . . later" installments in the          proposed trilogy.   Here, however, the  relevant consideration is          that these subsequent  installments had not yet  been licensed by                                              ___ ___ ___  ____ ________          the time Rey communicated her criticism about the  first software                                                             _____          product  and manual.   Even  were Rey's  criticism  actionable in          tort,  as an  "intentional  interference  with contractual  rela-          tions,"  see Restatement (Second) of Torts    766, or as a breach                   ___          of the implied good-faith  duty not to interfere with  LHP's per-          formance under  the APA,  it nevertheless was  not actionable  in                                          40          contract.   Under  the plain  terms  of the  APA,  Rey could  not          "reject" products  not yet licensed or  presented for approval.15                    LHP  attempts to  extend  the APA's  plain language  by          characterizing Rey's criticism of the DLM project as "essentially          revok[ing]  product  approval  [of]  the  DLM  software  concept"          __________                                               _______          already approved  by Rey.  LHP does not define the term "software          concept," but clearly uses it to encompass not only the first DLM          product but  all subsequent installments in  the planned trilogy.          Such  an interpretation  would not  withstand analysis  under the          language of  the APA,  however, nor  comport with  the undisputed          record evidence.                    We reject LHP's  overly expansive definition  of "prod-          uct" in the present context.   By lumping all DLM software  prod-          ucts under the umbrella of a single software "concept," LHP would          eviscerate Rey's retained right to grant, or reasonably withhold,          approval  for  distinct generations  of  software  products in  a          particular  software series.   All conceptually  related articles                                             ____________          identified by  LHP as  part of  the same  series would  be deemed          approved,  sight unseen;  the policing  of the  integrity of  the          conceptual relationship  presumably having ceased to  be a matter          of legitimate concern  to Rey.  Courts universally recognize that          the  elasticity of contract  language is  limited by  the natural          meaning of its terms and their context.  See K Mart, 892 F.2d  at                                                   ___ ______                                        ____________________               15The district court ruled that the tort claims  arising out          of  "most of"  Rey's  conduct were  time-barred.   LHP  does  not          challenge this ruling.  See supra n.9 and accompanying text.                                  ___ _____                                          41          1085; Boston Edison Corp., 856 F.2d at 365.  LHP's interpretation                ___________________          strips the "product approval" term  from its context and depletes          its natural meaning.                                      CONCLUSION                                      CONCLUSION                                      __________                    Under the APA, Rey is entitled to recover the royalties          wrongly withheld on  the Houghton Mifflin books  and Sony videos;          and we affirm the district court rulings respecting these claims.          The APA likewise  entitled Rey to  withhold approval of  licensed          ancillary  products  on reasonable  grounds;  thus,  LHP was  not          entitled to  recover damages for Rey's reasonable exercise of her          right to withhold approval of the Sears pajama project, the Beach          paper products,  the Eden  Toys project, or  the DLM  software.16          Accordingly, the damages awards to LHP are vacated.                    Affirmed in  part, reversed in part;  costs are awarded                    _______________________________________________________          to Rey.          ______                                        ____________________               16We  have considered  all other  arguments advanced  by the          parties  and find  them either to  be wanting  or, alternatively,          moot.   Without limiting the generality of the foregoing, we note          that, because  we conclude that Rey  reasonably withheld approval          of  the Sears project, the Eden plush toys, and the DLM software,          we  need not  consider  whether LHP's  estimates  of lost  future          profits from  these products  were sufficiently certain  and non-          speculative to support an award of damages.  See, e.g., Hendricks                                                       ___  ____  _________          & Assocs.,  Inc. v. Daewoo  Corp., 923  F.2d 209,  217 (1st  Cir.          ________________    _____________          1991) (citing John Hetherington & Sons, 210 Mass. 8, 21, 95  N.E.                        ________________________          961 (1911));   Redgrave v. Boston  Symphony Orchestra, Inc.,  855                         ________    ________________________________          F.2d 888, 893  (1st Cir.),  cert. denied, 488  U.S. 1043  (1988).                                      _____ ______          Nor  need we consider whether  the damages awarded  LHP for these          products should have been reduced by  50%, reflecting Rey's share                                                ___          of product royalties under  the pre-1988 APA formula, or  by 33%,          under the revised APA formula for products licensed after January          1, 1988.                                          42