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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 1 of 22

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

THE VELVET UNDERGROUND,
a Partnership, by its General Partners,
John Cale and Lou Reed,

Plaintiff,

– against –

THE ANDY WARHOL FOUNDATION
FOR THE VISUAL ARTS, INC.,

Defendant.

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12 Civ. 0201 (AJN) (FM)

ECF Case

FIRST AMENDED
COMPLAINT

JURY TRIAL
DEMANDED

Plaintiff The Velvet Underground, by its attorneys, Christopher R. Whent and

Clifford James, for its ?rst amended complaint, alleges as follows:

Nature of the Action and Relief Sought

1. Defendant The Andy Warhol Foundation For The Visual Arts, Inc. (the

“Warhol Foundation”) has infringed the trademark of Plaintiff The Velvet Under-

ground (“VU”) consisting of a certain Banana design (the ”Banana design” or

the ”Mark”), described by The New York Times (the “Times”) as ”iconic” in relation
to VU.1 The Warhol Foundation has continued to infringe the Mark by licensing

its use by third parties in a manner likely to cause confusion or mistake as to

the association of VU with the goods sold in commerce by such third parties,

or as to the sponsorship or approval by VU of such goods, despite having ac-

knowledged, by its counsel, receipt of VU’s repeated written demands to cease
1 Cator Sparks, Pop Shop | Andy Warhol for Incase, N.Y. Times, Apr. 8, 2011 (Style Magazine
section); Cator Sparks, Bananas for Apples, N.Y. Times, Apr. 24, 2011 (Style section of the
Sunday edition). See ¶ 12 & note 16; ¶ 13 & note 17.

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 2 of 22

infringing activities. Consequently, VU brings this action under the Lanham Act,

and the common law of New York State, for appropriate relief, including, without

limitation, an award of attorneys’ fees.

2. The Warhol Foundation has sought to justify its unlawful licensing activi-

ties involving the Mark by asserting that it has a copyright interest in the Banana

design. However, the Warhol Foundation holds no copyright rights in the Banana
design. The Banana design was ?rst published in 1967, and continuously and

repeatedly afterwards, without any copyright notice in the name of Andy Warhol

(or any person or entity af?liated with Andy Warhol or any successor-in-interest).

Under the applicable copyright law—which is the Copyright Act in effect from
July 1, 1909 through December 31, 1977 (the ”1909 Act”)—such publication did

not give the Warhol Foundation any copyright rights in the Banana design (even

if the Banana design has not been in the public domain at all times—both before
and after its initial publication).2 Consequently, VU also seeks a declaration,
under applicable copyright law, and pursuant to 28 U.S.C. §§ 2201 and 2202, that

the Warhol Foundation has no copyright rights or interest in the Banana design.

Factual Background

3. VU is the business entity formed by the rock group “The Velvet
Underground,” 3 regularly active as musical performers from 1964 through 1973,

and often described as one of the most important and in?uential groups of
the 1960s. In 2003, the music magazine Rolling Stone named The Velvet Under-

2 See ¶¶ 6, 18 & note 19, 34–37.
3 When it is useful or necessary to distinguish the rock group and its members from
plaintiff as a business entity, the group is referred to as ”The Velvet Underground.” The
term VU, however, should be read to include the group itself, and its members, unless
the context otherwise requires.

2

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 3 of 22

ground’s ?rst commercially released album entitled The Velvet Underground and
Nico the 13th “Greatest Album of All Time,” and described the album as the
“most prophetic rock album ever made.” 4 In 2006, The Velvet Underground and

Nico album was made part of the National Recording Registry of the Library of
Congress.5 The album is commonly known as The Banana Album because its cover

artwork featured the Banana design—an illustration of a banana selected for the

purpose by artist Andy Warhol from an element of an advertisement in the public

domain.

4.

John Cale and Lou Reed, together with Sterling Morrison and Angus
MacLise, formed the band in or about January 1965 under the name “The War-
locks” or “The Falling Spikes.” In or about November 1965, the band changed

its name to “The Velvet Underground,” and Maureen Tucker replaced Angus
MacLise. In or about December 1965, Andy Warhol attended performances by

The Velvet Underground, and began a collaborative association with the band.

The Velvet Underground became regular habitués of the Warhol studio known as

The Factory, and as such the band contributed soundtracks to motion pictures by

Andy Warhol, and were engaged as part of a Warhol-directed light show know as
the “Exploding Plastic Inevitable.” In or about February 1966, in an interview

for WNET, Andy Warhol announced that he was sponsoring a “new band, The

Velvet Underground.”

4 http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time-196
91231; http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time
-1969 1231/the-velvet-underground-the-velvet-underground-and-nico-19691231.
The Beatles’ album Abbey Road was rated 14th, and Miles Davis’s Kind of Blue was rated
12th.
5 The National Recording Registry quotes critic Lester Bangs as follows: “Modern music
starts with the Velvets, and the implications and in?uence of what they did seem to go
on forever.” http://www.loc.gov/rr/record/nrpb/registry/nrpb-masterlist.html.

3

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 4 of 22

5. During 1966, the band recorded the songs that were later to be included

on The Velvet Underground and Nico album (at the suggestion of Andy Warhol,

Christa Paeffgen, professionally known as Nico, sang three of the songs). The

band conveyed the exclusive rights to the recordings to the record division of

Metro-Goldwyn-Mayer, Inc. (“MGM Records”) pursuant to a royalty contract
dated May 2, 1966 that provided for an advance of $3,000, which the band split

with Andy Warhol in part in consideration for his furnishing the illustration for
the record cover.6

6. The illustration Andy Warhol furnished for the front cover of The Velvet

Underground and Nico album consisted of a banana design and a stylized
“Andy Warhol” signature.7 In March 1967, MGM Records published The Vel-

vet Underground and Nico album on its Verve imprint. Upon information and

belief, such publication was unaccompanied by any copyright notice in the name,

or for the bene?t, of Andy Warhol (or any person or entity af?liated with Andy

Warhol). After release, the album was brie?y withdrawn in consequence of a

claim that a back cover photograph furnished by Andy Warhol (having nothing

whatever to do with the Banana design) was infringing; the album was later

republished with changes to the back cover, and, again without any copyright

6 According to Paul Marechal, Andy Warhol: The Record Covers 1949–1987, Catalogue
Raisonné (Munich, London, New York: Prestel Publishing 2008), Andy Warhol designed
more than ?fty record covers starting in 1949, the earliest being amongst his earliest
commissioned works, with most including a stylized Andy Warhol signature. The cover
for The Velvet Underground and Nico album was, however, the work of and attributed to
Lacy R. Lehman, a noted graphics designer who as art director at MGM Records and
RCA Records created award-winning album covers for many record albums, starting in
1964.
7 According to John Cale, Andy Warhol also suggested that the Banana design be made
peelable, such that when peeled back, it revealed the same design below in a different
color. The added expense that this entailed has meant that later editions of the album
have lacked this feature; it was, however, reinstated when VU used the Banana design as
the cover of a 5 CD retrospective box set of recordings of The Velvet Underground issued
in 1995 and currently still available.

4

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 5 of 22

notice in the name, or for the bene?t, of Andy Warhol, any person or entity

af?liated with him, or any successor-in-interest, including, without limitation, the

Warhol Foundation. A copy of the iconic Banana design as it appeared on the
album (taken from the Internet) is annexed as Exhibit 1.8

7. This debut album by The Velvet Underground was not a commercial

success on its initial release, despite its Warhol-designed cover and sponsorship.

However, its uncompromising and iconoclastic version of rock music did catch

the attention of young musicians; one prominent musician commented that the

“album only sold ten thousand copies, but everyone who bought it formed a
band.” 9 Twenty years after its ?rst release, The Banana Album was recognized, as

noted, as one of the great rock albums, and The Velvet Underground as one of

the most in?uential of rock bands.

8. The Velvet Underground broke up as a performing unit in 1972. But, while

its members followed diverse career paths after that, they were ever afterwards

identi?ed in the public eye as “former members of The Velvet Underground,” in

large part because of the respect and affection engendered by their uncompro-

mising attitude towards their music, and their rejection of compromise needed

to achieve immediate commercial success. Their reputation as members of The
Velvet Underground continued to grow and, in the 1980s, due to the accolades

that their music had continued to garner, Polygram Records, Inc., which by then

owned the assets of MGM Records (for whom The Velvet Underground made

most of its recordings), reissued all those recordings in new editions together
8 This image on the Internet appears as a “thumbnail,” with a stated resolution of 350 ×
350 pixels, and the legend, “No higher resolution available.” This is the reason the words
“Peel Slowly and See,” appearing immediately to the right of the stem of the banana, are
not legible.
9 The statement is usually attributed to Brian Eno or Peter Buck, and has even been
attributed to Courtney Love.

5

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 6 of 22

with material that had been recorded in the late 1960s but never released.10 Since

then, The Velvet Underground’s recordings have remained available throughout

the world and continue to sell to their decidedly strong and loyal audience, which

constantly grows. The goodwill of The Velvet Underground’s activities, and of its

constituent members, has in reality become global, extending to all parts of the

world.

9. Concomitant with that, the Banana design became a symbol, truly an icon,

of The Velvet Underground. What had been the cover design for one album,

The Velvet Underground and Nico, became an element of multiple different CD

and DVD recordings embodying music by The Velvet Underground, and, more

broadly, a symbol of the group The Velvet Underground and its members even

in non-musical contexts. For example, the Banana design became a recurring

visual theme in connection with The Velvet Underground reunion performing
tour in Europe in 1993,11 and the cover design for the compact disc albums, the
VHS tape and the DVD that resulted from that tour, used the Banana design.12
As previously noted,13 the 5 CD retrospective tribute album entitled Peel Slowly
And See that was released in 1995 also used the Banana design, expressly noting
in the booklet packaged with the CD that the design was a trademark of VU.14
In 2001, licensed by VU, Absolut vodka used the Banana design in an “Absolut

10 For example, a reproduction of the cover of the CD version of The Velvet Underground
and Nico album, released in 1986, is annexed as Exhibit 2.
11 Artwork for an advertisement for a London arena concert is reproduced as Exhibit 3,
and the cover for the tour booklet is reproduced as Exhibit 4.
12 The front cover of the VHS live recording is reproduced as Exhibit 5.
13 See note 7.
14 The cover of Peel Slowly And See is reproduced as Exhibit 6.

6

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 7 of 22

Underground” national advertisement; the advertisement noted that the Banana
design is a trademark of VU.15

10. The Banana design is a signi?cant element of VU’s ongoing licensed

merchandising activity. VU’s use and application of the design to symbolize

the group and its whole body of work has been exclusive, continuous, and
uninterrupted for more than 25 years. As a result, the symbol has become so

identi?ed with The Velvet Underground and its members as a group, and of their

identity as creators and the goodwill associated with them, that members of the

public, and particularly those who listen to rock music, immediately recognize

the Banana design as the symbol of The Velvet Underground, and link the same

to The Velvet Underground and its members, such that the Banana design has

developed and now possesses secondary and distinctive meaning to purchasers

of goods bearing the Banana design.

11. Recognizing its responsibilities to the public purchasing goods bearing

the Banana design, VU reviews each licensed use of its Mark and retains control

over such uses to protect the buyers, and to assure themselves that the goods in

question are of the quality, and type that the implied endorsement warrants.

12. Within the past year, VU learned from an article in the Times, dated April

8, 2011, that:

[T]he Andy Warhol Foundation [has] agreed to lend [Warhol’s] work to
a new series of iPhone and iPad cases, sleeves and bags from Incase.
For the ?rst in a series of four, they chose to focus on the iconic 1966
banana that Warhol created for the Velvet Underground’s self-titled
album . . . .16

15 The advertisement is reproduced as Exhibit 7.
16 Cator Sparks, Pop Shop | Andy Warhol for Incase, N.Y. Times, Apr. 8, 2011 (Style
Magazine section).

7

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 8 of 22

VU promptly noti?ed the Warhol Foundation that: (a) the Banana design has,

and had acquired, secondary meaning as a mark of the VU; (b) the Warhol Foun-

dation’s purported licensing of the Mark to Incase and others was unauthorized;

and (c) the Warhol Foundation’s indiscriminate and unauthorized licensing of

the Mark was likely to lead to confusion as to the af?liation, approval or sponsor-

ship by VU of the goods in connection with which the Warhol Foundation had

purported to license the Mark.

13.

In August 2011, the Times did a follow-up story that again con?rmed

VU’s protectable interest in the Banana design, and validates VU’s concerns with

the Warhol Foundation’s unlawful purported licensing of it. The Times reported

that the Warhol Foundation had expanded its licensing of Warhol designs on

Incase products for use with Apple’s iPhone and iPad and other goods. Notably,

in this article the Times referred to the earlier purported license by the Warhol

Foundation of the Banana design as: “[T]he screen print of a banana featured on
the cover of the in?uential album ’The Velvet Underground and Nico.’ ” 17

14. Despite VU’s repeated demands that the Warhol Foundation cease its

continuing infringement of VU’s rights in the Mark, defendant has continued to

infringe VU’s rights. For example, as of the date of the ?ling of this ?rst amended

its Easter

Sunday

edition under

the

The

text of

2011 in the Style

this article on April 24,

http://tmagazine.blogs.nytimes.com/2011/04/08/pop-shop-andy-warhol-for
Times
re-
-incase/?scp=3&sq=warhol+foundation+iphone&st=nyt.
section
peated the
for Apples.
of
http://query.nytimes.com/gst/fullpage.html?res=9505E5DF1F38F937A15757C0A9679
D8B63&scp=4&sq=warhol+foundation+iphone&st=nyt.
17 Roy
an iPad Case, N.Y.
Times, Aug. 22, 2011 (“Gadgetwise” feature in the Personal Tech section).
http://gadgetwise.blogs.nytimes.com/2011/08/22/another-15-minutes-of-fame-for
-an-ipad-case/?scp=1&sq=warhol+foundation+iphone&st=nyt.
This story too the
Times repeated (in print in part) on August 25, 2011 in the Business Day section.
http://query.nytimes.com/gst/fullpage.html?res=9A0CE3D91638F936A1575BC0A9679
D8B 63&scp=2&sq=warhol+foundation+iphone&st=nyt.

Furchgott, Another

15 Minutes

of Fame

for

headline Bananas

8

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 9 of 22

complaint, the Warhol Foundation publicly advertises its supposed right and

ability to license, and includes the display of a sample image of, the Banana
design.18

15.

In response to VU’s communications, the Warhol Foundation has asserted

that VU has no trademark rights in the Mark, and that the Warhol Foundation

“may have” a copyright interest in the design. Consequently, VU brings this action
under the applicable copyright laws of the United States, and under Section 43(a)
of the Lanham Act (28 U.S.C. § 1125(a)).

Parties

16. Plaintiff The Velvet Underground is a New York partnership, with its
principal of?ce located at 270 Madison Avenue, Suite 1410, New York, NY 10016.

17. Upon information and belief, at all times relevant herein, Defendant The

Andy Warhol Foundation For The Visual Arts, Inc. was and is a New York

Not-For-Pro?t corporation, has its principal place of business in the Southern

District of New York, and transacts substantial business in the Southern District

of New York and New York State.

Jurisdiction and Venue

18. This Court has subject matter jurisdiction of this action under 28 U.S.C.
§§ 1331 and 1338(a) and (b) in that the controversy arises under Acts of Congress

relating to copyrights and trademarks, and also, with regard to trademarks, under
15 U.S.C. § 1121. As to copyrights, the action arises under the 1909 Act, namely,

18 See http://www.warholfoundation.org/licensing/index.html, and click on “View
Licensing Samples."

9

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 10 of 22

the Act of March 4, 1909, which was the copyright law of the United States in
effect as it was amended from July 1, 1909 through December 31, 1977, 17 U.S.C.
§ 1, et seq. (The currently effective copyright law, the Copyright Revision Act of
1976, as it may have been amended from time to time, 17 U.S.C. § 101, et seq. (the
“1976 Act”), explicitly provides that it confers no copyright protection to works
that went into the public domain before its effective date of January 1, 1978.19) As
to trademarks, the action arises under The Lanham Act of 1946, as it may have
been amended from time to time, 15 U.S.C. § 1051, et seq., and more particularly
§ 1125(a). This Court has jurisdiction of the remaining claims for relief under New

York State common law pursuant to the doctrine of supplemental jurisdiction,
pursuant to 28 U.S.C. § 1367(a).

19. This Court has personal jurisdiction over defendant pursuant to principles

of general jurisdiction under the Constitutions of the United States and New York
State, and as set forth in section 301 of the Civil Practice Law and Rules of New

York State, in that defendant is domiciled in and/or resides in New York State.

20. Venue is proper under 28 U.S.C. §§ 1391(b)(1) and (2), and (c), and/or
28 U.S.C. § 1400(a), in that, upon information and belief, defendant is found and

resides in the Southern District of New York and/or a substantial part of the

events or omissions giving rise to this action occurred in this District.

19 Copyright Revision Act of 1976, Pub. L. No. 94–533, 90 Stat. 2541, sec. 103 of the
Transitional and Supplementary Provisions of that act, which, as the Copyright Of?ce
publicly states, contain provisions that do not amend title 17 of the United States Code.
See Copyright Of?ce circular 92, Appendix A.

10

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 11 of 22

CLAIMS FOR RELIEF

Count I

(The Warhol Foundation has no copyright rights in the Banana Design)

Declaratory Judgment

21. Plaintiff repeats and realleges all the allegations contained in paragraphs

1 through 20 as if fully set forth in this paragraph.

22. Plaintiff earns income annually to supplement its record royalty income

by licensing the reproduction of the Banana design. Plaintiff has conducted such
licensing for over 25 years.

23. Upon information and belief, the Warhol Foundation is the owner of all

right, title and interest in certain copyrighted works created by Andy Warhol.

24. The copyrighted works created by Andy Warhol defendant owns are

among its principal assets, upon information and belief having a current fair
market value in excess of $120 million.

25. Upon information and belief, defendant earns in excess of $2.5 million

annually by licensing rights to reproduce the copyrighted Andy Warhol works

that it owns.

26.

In or about December 2009, the Warhol Foundation’s intellectual property

counsel wrote to plaintiff describing plaintiff’s licensed uses of the Banana design

as an instance of copyright infringement.

27. Plaintiff expressly rejected defendant’s claim of a copyright interest in

the Banana design and noted in response that the Banana design had acquired

secondary meaning and was a trademark of plaintiff.

11

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 12 of 22

28.

In none of defendant’s correspondence before April 2011 did defendant’s

intellectual property counsel admit that defendant had included the Banana

design when licensing Andy Warhol designs for reproduction on the goods of

third parties.

29.

In April 2011, it came to the attention of plaintiff in consequence of an

article in the Times that defendant had licensed for reproduction on cases for

iPhones, iPads, and other products, the Banana design, which the Times described
as “the iconic 1966 banana that Warhol created for the Velvet Underground’s
self-titled album.” 20

30. Plaintiff promptly noti?ed defendant that the use of the Banana design

by defendant’s licensee was likely to cause consumer confusion, and lead con-

sumers to believe that there was an af?liation or association between plaintiff and

defendant’s licensee; plaintiff further complained that defendant was exploiting

the goodwill that plaintiff had built up over the years, and which was vested

in the Banana design, and that defendant was unfairly competing with plaintiff.

Plaintiff demanded that defendant cease and desist from its infringing acts.

31. Responding to plaintiff’s demand, defendant’s intellectual property coun-

sel for the ?rst time in the correspondence admitted that “The Banana design

has been a consistent and prominent part of the [Warhol] Foundation’s licensing

programs for a number of years.”

32. Plaintiff in turn reiterated that defendant had no copyright interest in

the Banana design and that the only intellectual property rights in the design

that could be claimed were plaintiff ’s rights of trademark, and plaintiff ’s right of

publicity.
20 See ¶ 12 & note 16.

12

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 13 of 22

33. Defendant nevertheless continued, and continues to assert, that defendant

“may have a copyright interest in the Banana design” and that such gives it a right

to license reproduction of the Banana design.

34. To the extent the Banana design was created by Andy Warhol, it was
created in or about 1966, and published by MGM Records in 1967 as the front

cover design of the phonograph record album The Velvet Underground and Nico.

35. When it was so published, that phonograph record album bore no notice

of copyright in the name, or for the bene?t, of Andy Warhol, any person or entity

af?liated with Andy Warhol, or any successor-in-interest, including, without

limitation, the Warhol Foundation, related to the front cover design.

36. Under applicable copyright law, i.e., the 1909 Act: (a) statutory copyright
law (title 17 of the United States Code) applies to any published work (i.e., after
publication, title 17 supersedes and replaces any existing common law copyright

rights that may have existed before publication); and (b) in order to obtain

statutory copyright protection, the published work must display a copyright
notice in the form prescribed by the 1909 Act. Thereafter copies must promptly

be deposited with the Copyright Of?ce, which would then issue a certi?cate of
claim to copyright to the claimant. 17 U.S.C. §§ 1, 10, 11, 13, 209 (1909 Act).

37. Thus, a work published without copyright notice was both divested of

any common law copyright, and did not obtain statutory copyright—even if

otherwise copyrightable—and the work was consequently irrevocably thrust into
the public domain.21 Moreover, as noted, the 1976 Act expressly provides no
copyright protection to works that entered the public domain before the 1976 Act’s
effective date of January 1, 1978. Thus, unless the The Velvet Underground and Nico
21 See ¶ 18 & note 19.

13

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 14 of 22

album was published with a copyright notice applicable to the Banana design, in

the name, or for the bene?t, of Andy Warhol (or a person or entity af?liated with

Andy Warhol), neither Andy Warhol, nor any af?liated person or entity, nor any

successor-in-interest, including, without limitation, the Warhol Foundation, can

or does have any copyright rights in the Banana Design. Upon information and

belief, The Banana Album was not published with any such copyright notice, and

therefore the Warhol Foundation has no copyright rights in the Banana Design,

even if the Banana design did not enter the public domain with that publication,

or was not irrevocably in the public domain before that publication.

38. Defendant’s claim of the right to license the reproduction of the Banana

design under color of the rights of a copyright proprietor, and its claims of

infringement of copyright against plaintiff, have created an actual, substantial

and justiciable controversy between plaintiff and defendant concerning plaintiff’s

rights to the Mark, including plaintiff’s past licensing activities and its right to

continue to license reproduction of the Banana design.

39. By reason of the foregoing, the Court should enter a declaratory judgment,
pursuant to 28 U.S.C. §§ 2201 and 2202, holding that the Banana design cannot

constitute property of the Warhol Foundation the use of which by VU would

constitute infringement of any cognizable rights of the Warhol Foundation.

40. Further, pursuant to 28 U.S.C. § 2202, plaintiff is entitled to have defendant

account for any revenues collected attributable to defendant’s licensing, or other

exploitation, of the Banana design.

14

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 15 of 22

Count II

(15 U.S.C. § 1125(a)(1)(A) [section 43(a)(1)(A) of the Lanham Act])

False Designation of Origin

41. Plaintiff repeats and realleges all the allegations contained in paragraphs

1 through 40 as if fully set forth in this paragraph.

42. The Banana design is inherently distinctive, and has long-established

secondary meaning, and, as such is ?rmly associated with rock group The Velvet

Underground. Consistent with VU’s protectable interest in the Mark, for at least
25 years VU has exercised its rights in the Mark, and licensed the Mark’s use on

goods.

43. Defendant has unlawfully, and without any right or privilege to do so,

purported to license the Mark on consumer goods, and caused such goods to be

in interstate commerce.

44. The use of the Mark on goods purportedly licensed by defendant will

likely cause, and continue to cause, confusion, mistake or deception as to the

source or af?liation of such third party goods.

45. Defendant’s unauthorized use of the Mark falsely indicates that The Vel-

vet Underground, its members, or VU are connected with, sponsored, endorsed,

authorized, or approved, or are in some way af?liated with defendant’s pur-

ported licensees, or that such purported licensees are connected with, sponsored,

endorsed, authorized or approved by, or otherwise af?liated with The Velvet

Underground or VU.

46. Defendant’s licensees’ unauthorized use of VU’s Mark in connection with

such licensees’ goods allows defendant and such licensees to receive the bene?t of

15

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 16 of 22

VU’s goodwill, which VU has established at great labor and expense, and further

allows such licensees to gain acceptance of their goods, based not on their own

qualities, but on the reputation, investment, hard work and goodwill of VU, and

The Velvet Underground and its members.

47. Defendant’s purported licensing of VU’s Mark constitutes a false designa-
tion of origin and unfair competition in violation of Section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a).

48. Defendant’s unlawful activities have caused, and unless enjoined will con-

tinue to cause, irreparable injury to VU. Damages and other monetary amounts

alone cannot adequately remedy the injury to plaintiff caused by defendant.

49. Consequently, VU is entitled to an injunction preventing defendant, and

any person or entity af?liated with defendant or purporting to represent de-

fendant’s interests, from asserting any right, title, or interest in the Mark, or

continuing to license, attempting to license, or exploiting the Mark in any manner.

50.

In addition, pursuant to the Lanham Act, plaintiff may also recover

such damages, pro?ts, and other monetary amounts from defendant as may be

determined at the trial of this action.

51. VU expressly reserves the right to supplement or amend this ?rst

amended complaint, or both, as may be appropriate in light of further inci-

dents of infringement of its rights under the Lanham Act that may be uncovered

through discovery in this action or otherwise.

16

Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 17 of 22

Count III

Unfair Competition Under New York Common Law

52. Plaintiff repeats and realleges all the allegations contained in paragraphs

1 through 40 as if fully set forth in this paragraph.

53. As a result of defendant’s use of plaintiff’s Mark, defendant has diverted

to itself value created in the Mark by its association with plaintiff, caused con-

fusion amongst purchasers of goods approved by plaintiff, and diminished the

value of the Mark.

54.

In addition, the Warhol Foundation’s actual assets and business activities

establish defendant’s intent to compete unfairly with VU. Thus, upon information

and belief, the Warhol Foundation owns all right, title and interest in many

hundreds and possibly thousands of original designs by Andy Warhol that, as
noted, have a fair market value in excess of $120 million.

55. Upon information and belief, since in or about 2005, the Warhol Founda-

tion has actively licensed these designs, according to a representative, for use on

a “wide array of goods, spanning stationery, calendars, clothing, watches, table

top, [sic] and . . . snowboards.” This is consistent with Andy Warhol’s statement

that he would “endorse . . . anything” for money.

56.

Inasmuch as the Warhol Foundation has such a large number of Andy

Warhol designs, all of which are presumably unique works that are highly valued

in the marketplace, there would appear to be no economic need to include the

Banana design among the designs that defendant licenses based on their status

as works created by Andy Warhol.

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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 18 of 22

57. To the extent that the Banana design is considered to be a work created by

Andy Warhol, the Banana design is fungible, and may be replaced or substituted

for by any of the other many works that the Warhol Foundation actually owns

and that it claims are in high demand by licensees.

58. The only reason for the Warhol Foundation to include the Banana design

in any design licensing activity, rather than any other Andy Warhol design, is

to capitalize on the goodwill established by VU and vested in the symbol. It is

not merely the graphic reproduction by Andy Warhol of a piece of fruit: it is the

“iconic” VU Banana.

59. Defendant’s foregoing acts infringe VU’s Mark, constitute unfair competi-

tion under the common law of the State of New York, and have been in disregard

of and with indifference to VU’s rights.

60. VU is entitled to recover from defendant such damages resulting from

defendant’s unfair competition, and such exemplary damages, as may be proved

at the trial of this action.

61. However, damages and other monetary amounts alone cannot adequately

remedy the injury to plaintiff caused by defendant. Defendant’s unlawful activi-

ties have caused, and unless enjoined will continue to cause, irreparable injury to

VU.

62. Consequently, VU is entitled to an injunction preventing defendant, and

any person or entity af?liated with defendant or purporting to represent de-

fendant’s interests, from asserting any right, title, or interest in the Mark, or

continuing to license, attempting to license, or exploiting the Mark in any manner.

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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 19 of 22

63. VU expressly reserves the right to supplement or amend this ?rst

amended complaint, or both, as may be appropriate in light of further inci-

dents of unfair competition that may be uncovered through discovery in this

action or otherwise.

Count IV

Misappropriation Under New York Common Law

64. Plaintiff repeats and realleges all the allegations contained in paragraphs

1 through 40, and 53 through 63, as if fully set forth in this paragraph.

65. Defendant has diverted to itself value created in the Mark by the Mark’s

association with plaintiff.

66. Defendant’s acts in doing so constitute misappropriation of plaintiff’s

bene?ts and property rights in the Mark and its potential earnings in realization

thereof.

67. VU is entitled to recover from defendant such damages resulting from

defendant’s misappropriation, and such exemplary damages, as may be proved

at the trial of this action.

68. However, damages and other monetary amounts alone cannot adequately

remedy the injury to plaintiff caused by defendant. Defendant’s unlawful activi-

ties have caused, and unless enjoined will continue to cause, irreparable injury to

VU.

69. Consequently, VU is entitled to an injunction preventing defendant, and

any person or entity af?liated with defendant or purporting to represent de-

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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 20 of 22

fendant’s interests, from asserting any right, title, or interest in the Mark, or

continuing to license or attempting to license the Mark.

70. VU expressly reserves the right to supplement or amend this ?rst

amended complaint, or both, as may be appropriate in light of further inci-

dents of misappropriation of its rights and property that may be uncovered

through discovery in this action or otherwise.

Allegations Concerning Exemplary Damages

71. Defendant purported to license the Banana design with full knowledge

that VU had and has a protectable interest in that Mark, and that the Warhol Foun-

dation has never had any copyright rights in the Mark. In so doing, The Warhol

Foundation has acted in all respects maliciously, intentionally, and wantonly, and

sought, knowingly and in bad faith, to deceive the public.

WHEREFORE, Plaintiff The Velvet Underground demands judgment as fol-

lows:

A. On Count I of the ?rst amended complaint:

1. Declaring that:

a) The Warhol Foundation has no copyright rights in the Banana

design; and

b) The use of the Banana design by VU cannot infringe any copyright
rights that the Warhol Foundation has asserted or may attempt to
assert.

2. Compelling defendant to account for all monies received by defendant,
or any af?liated person or entity, or any agent or representative of
defendant, attributable to defendant’s claim that it owns or possesses
any right, title, or interest in a purported copyright in the Banana
design.

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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 21 of 22

3. Pursuant to 28 U.S.C. § 2202, awarding plaintiff such other and further
necessary and proper relief based on the declaratory judgment the
Court may grant.

B. On Count II of the ?rst amended complaint:

1. Pursuant to 15 U.S.C. § 1117(a) (section 35(a) of the Lanham Act), an

award of:
a) Defendant’s pro?ts, together with interest;
b) Damages, trebled, together with interest; and
c) The full costs incurred by VU in this action, including without

limitation, its attorneys’ fees.

2. Pursuant to 15 U.S.C. § 1116 (section 34 of the Lanham Act), enjoining
and restraining defendant from licensing or purporting to license, the
Banana design for any purpose, including, without limitation, the
manufacture, sale, or marketing of any product that exploits in any
way the Banana design, and from representing to third parties that
defendant owns, or has any right, title, or interest in, the Banana design.
3. Pursuant to 15 U.S.C. § 1118 (section 36 of the Lanham Act), ordering
defendant to destroy all copies of the infringing products in defendant’s
possession, custody or control (including, therefore, without limitation,
such products manufactured or maintained by defendant’s purported
licensees).

4. Such other and further relief pursuant to the Lanham Act as the Court
may deem just, equitable, and proper, including, without limitation,
ordering defendant to publicly disseminate such corrective materials
as may be necessary and appropriate.

C. On Counts III and IV of the ?rst amended complaint:

1. An award of damages, and exemplary damages, in amounts to be

determined at the trial of this action, together with interest.

2. A permanent injunction, enjoining and restraining defendant from
licensing or purporting to license, the Banana design for any purpose,
including, without limitation, the manufacture, sale, or marketing of
any product that exploits in any way the Banana design, and from
representing to third parties that it owns, or has any right, title, or
interest in, the Banana design.

D. Awarding plaintiff its costs, and legal expenses, including, without limita-

tion, reasonable attorneys’ fees.

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Case 1:12-cv-00201-AJN Document 13 Filed 02/17/12 Page 22 of 22

E. Awarding such other and further relief as the Court may deem just,

equitable, and proper.

Dated: New York, New York

February 15, 2012

Christopher R. Whent

(CW 5599)

270 Madison Avenue, Suite 1410
New York, NY IOo16-o601
(212) 68]-5320
cw [email protected]

260 Madison Avenue, 17th Floor
New York, NY I0016-2401
(212) 532-6333
[email protected]

Attorneys for Plaintiff

The Velvet Underground

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