Software Vault: The Sapphire Collection/Software Vault (Sapphire Collection) (Digital Impact).ISO/cdr14/tsrcase.zip/TSRCASE.LAW

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Subject: T$R in COURT for REAL--past cases
Date: Sun, 11 DEC 94 20:36:42 -0500
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These are some cases that I researched on the Westlaw research database.  I claim no credit for
the content.  It is not my work. These are actual cases however, some of which never made it into
the official case reporeters.  I edited some of them for clarity, took out some useless verbiage
pertaining to the download, etc...
The content was intended for myself as a way to learn about copyright law pertaining to
roleplaying games.  I thought that some of you might actually like to see what a real judge has
decided.  I took me a few months of reading cases in my law school in order to understand all the
nuances of them.  Donm't worry if you don't get everything.  Not all of it is relevant to the
discussion about copyright law.  It is interesting though.  Good luck.

Joe Dimech




Copyright (C) 1994 by West Publishing Company.  Copyright is not claimed as to
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Insta-Cite.  WIN natural language is protected by U.S. Patent No. 5,265,065.




               TSR, INC., Plaintiff-Appellant and Cross-Appellant,
                                       v.
   WILLIAM J. NIEBLING, Defendant-Third Party Plaintiff-Respondent and Cross-
                                   Appellant,
                                       v.
                      E. GARY GYGAX, Third Party Defendant,
 BRIAN J. BLUME and KEVIN B. BLUME, Third Party Defendants and Co-Appellants and
                               Cross-Respondents.
                                    87-0393.
                         Court of Appeals of Wisconsin.
                                 April 12, 1988.
  Circuit Court, Walworth County
  Affirmed
  Appeal and CROSS-APPEAL from a judgment of the circuit court for Walworth
 county:  ROBERT D. READ, Judge.

  BEFORE CANE, P.J., LAROCQUE AND MYSE, JJ.

  CANE, P.J.
  **1 TSR, Inc., appeals a judgment for breach of an employee stock option
 contract granted to William Niebling.  TSR primarily challenges the sufficiency
 of the evidence concerning the jury's valuation of the stock and alleges that
 there was insufficient consideration to support the option contract.  TSR also
 complains of several evidentiary errors.  Brian Blume and Kevin Blume, former
 directors of TSR, appeal a judgment for intentional interference with that
 contract.  The Blumes perceive thirteen allegedly prejudicial trial court
 errors.  We reject the arguments and affirm.
  TSR, known for producing the fantasy adventure game "DUNGEONS & DRAGONS," was
 founded in the late 1960's by Gary GYGAX and operated initially out of GYGAX'
 basement.  The Blumes joined the company in the early 1970's and were involved
 in the original incorporation of TSR.
  William Niebling was a pharmacist and game enthusiast when he met GYGAX and
 Brian Blume at a game show convention in 1975.  From the outset, GYGAX was
 anxious to have Niebling join TSR.  This interest was enhanced as GYGAX and
 Blume observed Niebling deal with industry representatives and the public at
 conventions and hobby shows. However, Niebling was reluctant to consider
 employment with the company because of its small size and speculative financial
 outlook.
  In early 1979, TSR took a serious approach to securing Niebling's employment.
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   2
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **1 (WIS.APP.))
 GYGAX informed Niebling that although the company could only offer him a small
 salary, they would work out a suitable method of assuring Niebling's
 participation in future growth to make up for the substantial drop in salary
 Niebling would realize.  Further conversation and correspondence resulted in
 Niebling accepting a $16,000 per year salary and a ten-year option to purchase
 500 shares of TSR stock at $125 per share.  A document confirming this
 agreement was prepared and signed by Niebling, and Brian Blume on behalf of
 TSR.
  Between 1979 and 1982, TSR'S annual sales increased from $2.3 million to $22
 million.  TSR'S stock value increased accordingly from $125 per share to $3,000
 per share.  It is undisputed that Niebling's performance contributed to this
 growth.
  In September, 1982, Niebling expressed fears that the company might be
 thinking of reneging on his stock options.  He also expressed anxiety over
 growing tensions within TSR and an erosion of his ability to work with Kevin
 Blume.
  On November 11, 1982, Kevin Blume went to Niebling's office and presented him
 with a demand for him to resign and a stack of papers he instructed Niebling to
 sign.  When Niebling raised the issue of his option contract, Kevin Blume told
 Niebling that it was the company's position that the option was invalid.  He
 then demanded that Niebling sign all the documents and, when he refused, Blume
 fired him.
  TSR'S attorneys later filed an action seeking a declaratory judgment that the
 document was not an option contract.  Niebling counterclaimed for damages.
 Niebling also asserted claims against GYGAX and the Blumes for intentional
 interference with the contract.
  **2 The jury found that Niebling held a valid option to purchase 500 shares
 of TSR stock and that the contract had been breached.  The jury also determined
 that the value of TSR stock at the time of breach was $3,000 per share.
 Finally, the jury found that the Blumes intentionally interfered with the
 contract and assessed each of the Blumes $25,000 in punitive damages.
  TSR argues on appeal that the evidence was insufficient to support the jury's
 valuation of the stock.  We note initially that TSR omits and mischaracterizes
 facts and testimony unfavorable to their position.  We emphasize that on
 appeal, we search the record for evidence to sustain the jury's verdict, not
 for evidence to sustain a verdict the jury could have but did not reach.
 Fehring v. Republic Ins. Co., 118 Wis.2d 299, 305-06, 347 N.W.2d 595, 598
 (1984).  The damage award is to be affirmed if there is any credible evidence,
 viewed in the light most favorable to the prevailing party, that supports the
 jury's determination.  This is especially true when, as here, the trial court
 has reviewed the verdict and sustained it over claims of excessiveness.  See
 id. at 306, 347 N.W.2d at 598.
  A proper review of the record reveals overwhelming evidence supporting the
 jury's valuation of $3,000 per share.  Niebling attempted to exercise his stock
 option on November 11, 1982, when TSR was in the forefront of the expanding
 hobby and fantasy game industry, enjoying remarkable growth due in part to
 Niebling's contributions.  TSR sales were $2.3 million in 1979, when Niebling
 joined the company; $14 million in 1981; $22 million in 1982; and $29 million
 in the fiscal period ending June, 1983.
  TSR had a limited number of shareholders.  Of the 2,208 shares outstanding in
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   3
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **2 (WIS.APP.))
 November, 1982, GYGAX owned 671, Brian Blume owned 775, and Kevin Blume owned
 205.  All of its shares were subject to a shareholder agreement dated August 1,
 1975.  That shareholder agreement, in essence a buy-sell agreement, gave the
 corporation and in turn other shareholders a right of first refusal if
 shareholders wished to sell or transfer shares.  The shares could be purchased
 at the lower of the proposed sale price or what is referred to in the agreement
 as the specified value.  The agreement also required the corporation to buy the
 shares of a deceased shareholder at the specified value.  Paragraph 2(b) of the
 agreement required the shareholders to annually establish a value for the stock
 that would serve as the specified value.
  The shareholders adopted a specified value based upon the recommendations of
 the company's treasurer and upon the directors' and the chief officers'
 assessment of the company's worth at the end of the year.  As of 1982, those
 persons were GYGAX, Brian Blume and Kevin Blume.  These individuals were
 familiar with the company's outstanding stock options.
  The specified value of the company increased consistently with its tremendous
 growth and financial success.  TSR'S specified value increased from $125 in
 November, 1978, to $250 in 1979, $1,000 in 1980, $2,000 in 1981, and $3,000 in
 1982.  The stock was again valued at $3,000 per share at the November, 1983,
 shareholders' meeting when the board of directors was expanded to add three
 outside directors.  It was not until the November, 1984, shareholders' meeting
 that any lower valuation was placed on the company's stock.  At that time, the
 valuation was reduced from $3,000 to $2,500 per share.
  **3 There was also extensive evidence concerning stock transactions
 contemporaneous with the breach of Niebling's option contract. Between
 November, 1982, and November, 1984, TSR was engaged in an extensive buy-back
 program.  During this time, TSR specifically represented the value of its stock
 at $3,000 per share.  Between November, 1982, and November, 1986, the company
 acquired 262 shares.  In every case, the company paid at least $3,000 per
 share.  In some instances, TSR paid nonrefundable premiums of up to $5,000 to
 acquire options to purchase stock at $3,000 per share.
  There was also evidence of the price TSR acquired by selling or exchanging its
 stock.  In July, 1983, the company sold 120 shares to the TSR profit sharing
 trust for $360,000.  On November 11, 1982, when Niebling was asked to resign,
 Kevin Blume on behalf of TSR offered to purchase ten shares then owned by
 Niebling and his wife for $30,000.
  We reject TSR'S contention that the jury was required to accept the
 "uncontradicted" opinions of its experts regarding the value of TSR stock and
 the company's purported inability to purchase a 500-share block.  The jury was
 free to reject TSR'S expert testimony.  First, the jury was entitled to take
 into consideration any professional or pecuniary interest that TSR'S experts
 might have in the case, including chief financial officer Williard Martens, who
 testified for the company.  See P.C. Monday Tea Co. v. Milwaukee County Expry.
 Comm'n, 24 Wis.2d 107, 113, 128 N.W.2d 631, 635 (1964).
  Second, the testimony presented by TSR'S experts was discredited.  For
 instance, Martens acknowledged that the financial chart he had prepared did not
 reflect the borrowing potential that the company actually enjoyed in late
 1982.  Martens also conceded that the amount of cash that a company has on hand
 at any given time does not determine the value of the company.  Thus, the mere
 fact that TSR did not have sufficient cash on hand did not mean that it could
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   4
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **3 (WIS.APP.))
 not purchase Niebling's stock for $3,000 per share.
  Jan Grayson, an accountant retained by TSR shortly before trial, testified
 that if certain assumptions were made, the value of TSR at the time of breach
 was between $2 million and $2.5 million.  Grayson admitted, however, that if
 alternative variables were selected from the same data base, the result could
 have been a valuation exceeding $13 million.  Grayson also admitted that there
 were certain factual errors in his analysis and that his valuation methods had
 certain inherent deficiencies.
  Furthermore, Grayson testified that he had been provided with and reviewed a
 valuation that was conducted for TSR in June, 1983, by a company named
 Valuation Research.  Although he disagreed with its conclusion that TSR was
 then worth in excess of $10 million, he conceded that the report had employed
 the same methodology.
  TSR and the Blumes assert that the reference to the Valuation Research report
 was barred by the hearsay rule.  We disagree. Cross-examination of Grayson
 elicited that he had reviewed the earlier valuation report, and that a whole
 page of his work papers was devoted to a discussion of the earlier valuation.
 Section 907.05, Stats., allows for the disclosure on cross-examination of facts
 or data underlying an expert's opinion.
  **4 TSR next contends for the first time on appeal that it should have been
 allowed to question Niebling concerning income tax consequences of exercising
 his option.  However, TSR failed to make an offer of proof at trial as to the
 specific testimony it desired to elicit and its evidentiary basis.  The issue
 therefore was not properly preserved.  Section 901.03(1)(b), Stats.  We reject
 TSR'S suggestion that the substance of the evidence was apparent.
  Finally, TSR argues that the contract lacked sufficient consideration.  We
 disagree.  The test of mutuality of obligation and therefore sufficiency of
 consideration is not to be applied at the time the respective promises are
 made, but rather at the time the promise is sought to be enforced.  First
 Wisconsin Nat'l Bank v. Oby, 52 Wis.2d 1, 8, 188 N.W.2d 454, 458 (1971); see
 also Klug v. Flambeau Plastics Corp., 62 Wis.2d 141, 152 n.9, 214 N.W.2d
 281, 286 n.9 (1974).  When Niebling sought enforcement of the stock option
 contract in November, 1982, he had given up a profession as a pharmacist for a
 job with an organization that provided no job security and a substantially
 reduced salary.  In return for Niebling's services, TSR promised him
 participation in future growth.  This was sufficient consideration to support
 the contract.
  The next issue concerns the applicable statute of limitations as to the action
 against the Blumes.  The Blumes argue that their actions were "intentional
 torts" and thus barred by the two-year limitation under sec. 893.57.  We
 conclude that the issue is controlled by Segall v. Hurwitz, 114 Wis.2d 471,
 339 N.W.2d 333 (Ct. App. 1983), where we held that a six-year limitation
 applied to actions for intentional interference with contract. Id. at 487,
 339 N.W.2d at 341.
  The Blumes contend that Segall is inapplicable because that decision applied
 sec. 893.19(5), Stats. (1977), which has since been repealed, recreated, and
 significantly revised.  We disagree.
  Chapter 323, sec. 28, of the Laws of 1979, repealed sec. 893.19(5), Stats.
 (1977), and split it into two provisions.  The portion of the six-year statute
 cited in Segall was renumbered as sec. 893.53, Stats.  This renumbering of sec.
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   5
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **4 (WIS.APP.))
 893.19(5) occurred as a part of the repeal and recreation of ch. 893 in its
 entirety. As stated by the Judicial Council Committee's Note-1979 in Wis. Stat.
 Ann., sec. 893 (West 1983), the purpose of repealing and recreating the chapter
 was to "restructure it into a more logical sequence for clarity and ease of
 application of its provisions."  The note goes on to state that:
   The previous provisions of ch. 893 are found in the recreated chapter in the
 same form that they previously existed or are redrafted only for greater
 clarity and ease of application except as otherwise noted.
  Id. (emphasis added).
  Indeed, the very argument the Blumes raise here, that wrongful interference
 with the contract is "an intentional tort to the person" within the context of
 sec. 893.57, was raised and rejected in Elbe v. Wausau Hosp. Center, 606 F.
 Supp. 1491, 1503 (W.D. Wis. 1985).  We agree with the district court's
 conclusion that "[i]n the absence of any clear indication that another statute
 of limitations would be preferable, I will follow the Segall decision." Id.
  **5 Next, the Blumes argue that they cannot be held liable for intentional
 interference with the contract since they acted only in their capacity as
 directors of TSR.  We conclude that ample evidence supports the jury's finding
 that the Blumes acted in their personal capacity.  We again note that the
 Blumes have omitted from their briefs unfavorable facts and circumstances.  For
 instance, the Blumes continually insist that "the evidence shows that all the
 Blumes did was vote as directors of TSR to follow the advice of the company's
 attorneys and submit the matter to a court of law." However, the jury heard
 testimony that the immediate response to Niebling's attempt to exercise the
 option on November 11, 1982, was Kevin Blume's statement that the option would
 not be honored.
  The jury was properly instructed on the law of intentional interference with
 the contract.  The trial court has wide discretion in the selection and
 formulation of jury instructions, and they will not be upset on appeal if they
 comport with the facts of the case and a correct statement of the law.
 Northwestern Nat'l Ins. Co. v. Nemetz, 135 Wis.2d 245, 263-64, 400 N.W.2d
 33, 41 (Ct. App. 1986).  The instructions adequately covered the law under the
 facts of this case.  The court did not err by refusing the Blumes' proposed
 instructions.
  The jury was not confused by the instruction on good faith.  As the
 instruction properly states, every contract has an implied obligation of good
 faith.  That obligation is not limited to Uniform Commercial Code-type
 contracts.  See Estate of Chayka, 47 Wis.2d 102, 107-08 n.7, 176 N.W.2d 561,
 564 n.7 (1970). Furthermore, the Blumes themselves requested a jury instruction
 that would have specifically told the jury to determine whether they acted in
 good faith.
  The Blumes next argue that the trial court improperly allowed portions of Mary
 Blume's testimony, contrary to the husband-wife privilege, sec. 905.05, Stats.
 We point out that although the issue of marital privilege is raised by both
 Blumes, any privilege could only run to Kevin Blume.  In any case, we agree
 with the trial court that the privilege was waived by Kevin Blume's voluntary
 disclosures of the marital conversations at his depositions.  Under sec.
 905.11, Stats., a waiver can be found if the holder discloses any significant
 part of the matter or communication.
  During Kevin Blume's July 14, 1986, deposition, he disclosed without objection
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   6
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **5 (WIS.APP.))
 that he spoke with his wife on several occasions concerning the deposition
 testimony she gave in November, 1983.  On July 13, 1986, the day before his
 deposition, he spoke to his wife "to find out from her what she meant by some
 of the statements that she made in the deposition."  Blume disclosed that
 during their July 13 conversation, she remembered the conversation they had
 after the wedding reception.  He then went over with her the portion of her
 deposition transcript dealing with the conversation.  He related that
 conversation as follows:
   **6 [W]hen she asked me about the document, that I became upset and
 essentially told her it was none of her business, that, you know, Will had been
 talking about business matters, and that you know, I assumed that's what it had
 to do with, but, you know, it was none of her concern, and that I was fairly
 irritated about it.
  On the same occasion, he asked her for clarification of several other aspects
 of her deposition testimony, including various events and discussions at the
 wedding reception that concerned Niebling and the option.  When asked why he
 had talked to his wife about her deposition, he explained it was because he had
 difficulty understanding it.  When asked whether he recalled any prelitigation
 conversations with his wife concerning Niebling's option, he responded that he
 may have told her on the day Niebling was terminated that he claimed to have a
 stock option and had attempted to exercise it.
  The assertion that Kevin Blume's voluntary disclosure of significant portions
 of the marital conversations did not constitute a waiver of any privilege as to
 his wife's testimony is unpersuasive.  Kevin Blume essentially disclosed at his
 July, 1986, deposition everything his wife testified to at trial about their
 conversations.
  The Blumes next assert that the trial court, on its own initiative, was
 required to declare a mistrial and order a severance because TSR invoked the
 lawyer-client privilege, preventing the Blumes' counsel from questioning GYGAX
 and the Blumes regarding various discussions with company attorneys.  This
 issue was also waived.  We are satisfied that the Blumes were well aware prior
 to trial that TSR intended to invoke the attorney-client privilege.  At any
 rate, the Blumes failed to request a severance and made no offer of proof
 despite several opportunities.
  Also, we reject the assertion that the trial judge displayed prejudice toward
 the Blumes at trial.  The Blumes fail to provide references to explicit or
 implicit displays of prejudice in the presence of the jury.  The Blumes quote
 out of context excerpts from the remarks the trial judge made outside the
 jury's presence concerning Brian Blume's testimony.  What the judge suggested
 was that vigorous cross-examination was being allowed because Blume was
 equivocal and evasive in his responses and was perhaps testifying contrary to
 his deposition testimony.
  The Blumes point to the judge's comments regarding Mary Blume's testimony.
 The statement, however, reads as a courteous offer to permit Mary Blume time to
 refresh her memory.  The Blumes' insistence that the judge's tone of voice and
 inflection conveyed a bias to the jury is critically undercut again by their
 failure to move for mistrial, or even object to the alleged displays.
  Finally, the Blumes contend that punitive damages are allowed only where the
 character of the offense has the outrageousness associated with serious
 crimes.  This argument was rejected emphatically in Brown v. Maxey, 124
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425 N.W.2d 39 (Table)  AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   7
(CITE AS: 425 N.W.2D 39,  1988 WL 63845, **6 (WIS.APP.))
 Wis.2d 426, 431-32, 369 N.W.2d 677, 680-81 (1985); see also Wangen v. Ford
 Motor Co., 97 Wis.2d 260, 271, 294 N.W.2d 437, 444 (1980).
  **7 Regarding the cross-appeal, we decline to award preverdict interest.
 Preverdict interest may be allowed only if the amount of damages is
 ascertainable or determinable prior to judicial determination, that is, where
 there is a reasonably certain standard of measurement to ascertain the amount
 owed.  See Wyandotte Chem. Corp. v.  Royal Elec. Mfg., 66 Wis.2d 577, 582,
 225 N.W.2d 648, 651 (1975).  The issue of preverdict interest is a question of
 law, Murray v. Holiday Rambler, Inc., 83 Wis.2d 406, 438, 265 N.W.2d 513,
 529 (1978), that we therefore decide independently.
  Where full recovery is had on a claim and the trial involves no more than
 putting the plaintiff to his proof, the requirement that the claim be
 ascertainable may be met.  See Dahl v. Housing Authority, 54 Wis.2d 22, 32,
 194 N.W.2d 618, 623 (1972).  In the present case, there was no variance between
 the award and the claim.  However, we cannot conclude that the record shows no
 more than putting the plaintiff to his proof.  Although the jury found, and we
 agree, that the money was wrongfully withheld, we cannot say that the
 litigation was so entirely unjustified as to render the claim undisputable.
  By the Court.--Judgment affirmed.  Costs are not awarded to any of the
 parties.
  Not recommended for publication in the official reports.
END OF DOCUMENT
                          Copr. (C) West 1994 No claim to orig. U.S. govt. works

                         David L. ARNESON, Plaintiff,
                                       v.
          Gary GYGAX, and TSR Hobbies, Inc., a corporation, Defendant.
                               Civ. No. 4-79-109.
          United States District Court, D. Minnesota, Fourth Division.
                                 July 25, 1979.
  Plaintiff brought action to recover for alleged breach of royalty agreement
 and tortious interference with royalty agreement.  On defendant's motion for
 relief from ruling denying a prior motion to dismiss, the District Court,
 Devitt, Chief Judge, held that District Court had personal jurisdiction over
 nonresident defendant in action arising out of dispute over authorship and
 royalty rights to a game and game rules, since defendant took numerous steps to
 cause the games in question to be marketed in Minnesota, several contacts in
 Minnesota initiated by defendant could properly be viewed both as corporate
 contacts and as defendant's individual contacts as coauthor, defendant availed
 himself of state laws to protect the contractual rights based on his authorship
 interest, and defendant's contacts with forum state related directly to the
 cause of action.
  Defendant's motion for relief denied.



   DEVITT, Chief Judge.
  Defendant Gary Gygax moves the court for relief, pursuant to Rule 60(b) of the
 Federal Rules of Civil Procedure, from a ruling of this court, filed May 21,
 1979, denying defendant Gygax's motion to dismiss for lack of personal
 jurisdiction.  In the alternative, defendant Gygax requests clarification of
 the court's order denying his motion to dismiss.  The motion to dismiss is
 denied for the reasons clarified below.
  This diversity action arises out of a dispute over the authorship and royalty
 rights to a game or game rules entitled "Dungeons and Dragons" and the rights
 to certain subsequently produced playing aids, game or game rules entitled
 "Advanced Dungeons and Dragons, Players Handbook" and "Dungeons and Dragons,
 Monster Manual," as well as various other publications pertaining to the above
 games.
  FACTS
  Plaintiff's complaint alleges that defendants have breached a royalty
 agreement entered into in April 1975 between plaintiff and defendant GYGAX, as
 co-authors of "Dungeons and Dragons," and TSR Hobbies, Inc., a Wisconsin
 corporation, of which GYGAX is president and a major stockholder.[FN1]
 Plaintiff alleges that since mid-1977 amounts less than those required by the
 royalty agreement have been paid to him.  Plaintiff further claims that
 defendants GYGAX and TSR Hobbies, Inc., individually and *761 in concert,
 have tortiously interfered with the royalty agreement by developing and
 marketing, in Minnesota and elsewhere, games or game rules and playing aids
 "copied in substantial part and wholly derived" from "Dungeons and Dragons,"
 and have defeated his right to the notoriety of authorship by falsely
 representing such games and playing aids to be solely authored by defendant
 GYGAX.

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473 F.Supp. 759        AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   3
(CITE AS: 473 F.SUPP. 759, *761)

      FN1. TSR Hobbies, Inc. is the successor to Tactical Studies Rules, a
     partnership of which GYGAX was a member.  The partnership was the original
     party to the contract.  It was dissolved in 1975.  The corporation assumed
     all rights and liabilities of the partnership.  Both are referred to as TSR
     herein.

  The issue raised by defendant GYGAX in his motion for relief is whether GYGAX,
 individually, had sufficient minimum contacts with Minnesota, so as to enable
 this court to exercise personal jurisdiction over him, consistent with due
 process requirements.  GYGAX asserts that all his contacts with Minnesota were
 as agent for TSR Hobbies and therefore cannot be imputed to him for purposes of
 personal jurisdiction.
  The record indicates that GYGAX is and was at all times a resident of
 Wisconsin and has no place of business, no bank account, no phone listing, and
 owns no real or personal property in Minnesota.  During 1973 and 1974 plaintiff
 and defendant GYGAX in his individual capacity collaborated on the authorship
 of "Dungeons and Dragons."  There was extensive correspondence between them by
 phone and mail during this time.  The game was first marketed in January 1974.
 The written contract was executed in April 1975.  Defendant GYGAX signed in
 Wisconsin and he was named as co-author.  His signature appears twice once as
 Editor for TSR Hobbies, Inc., and once without any agency designation, as co-
 author.  The contract assigned TSR Hobbies, Inc., the right to publish, sell,
 and distribute "Dungeons and Dragons" in exchange for a royalty of 10% of the
 cover price of each set sold, payable to the authors, GYGAX and plaintiff.
 Plaintiff's royalties were paid, pursuant to the contract, to him in Minnesota,
 from 1974 until mid-1977.  Since then further amounts, allegedly insufficient,
 have been received by plaintiff in Minnesota.
  In 1977 TSR Hobbies, Inc. began marketing "Advanced Dungeons and Dragons,
 Players Handbook" and in 1978 "Dungeons and Dragons, Monster Manual," under the
 sole authorship of Gary GYGAX.  These works were advertised and marketed in
 Minnesota.  No royalties were paid to plaintiff for sales of these works.
 Defendant GYGAX contends that these are independent creations developed and
 produced by expenditure of literally thousands of hours of his time and the
 time of the TSR Hobbies, Inc. staff.
  GYGAX has numerous contacts with Minnesota, but he claims they were all as
 agent of TSR Hobbies, Inc.  One example is a trip GYGAX took to Minnesota in
 late October or early November 1975 for the purpose of negotiating contracts
 with various Minnesota residents for games and art work.  Defendant GYGAX also
 contacted plaintiff on this occasion.
  Plaintiff also submits correspondence from GYGAX tending to show that GYGAX
 sought to have plaintiff promote sales of TSR Hobbies, Inc. products in
 Minnesota, including "Dungeons and Dragons."  In his March 5, 1974 letter GYGAX
 states ". . .  every flyer you pass out could mean more royalty dollars.
 Remember, every retail sale we make is $1.00 to you.  Put a flyer in all
 letters, right?"  It is unclear whether GYGAX wrote this letter in his
 corporate capacity or his individual capacity as co-author, or both.
  In a March 13, 1974 letter to plaintiff, GYGAX states "Seeing as how you and I
 each make a buck on a retail sale by TSR we have to be dreaming up ways to
 promote same!  Get to work! " In the same letter, GYGAX cites examples of his
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(CITE AS: 473 F.SUPP. 759, *761)
 own promotional activities, asks plaintiff if he knows of other possibilities
 for promotion, and then states: "Now if that gets going we can really do a job
 selling D & D with ads and stories (with plenty of graphic work to put it
 across with POW!)" In sum, Gygax took numerous steps, both in and out of
 Minnesota, to cause the games in question to be marketed in Minnesota.
  DISCUSSION
  The Minnesota long arm statute, Minn.Stat. s 543.19(1)(d)(2), permits the
 courts of Minnesota to exercise personal jurisdiction *762 over a non-
 resident individual if the individual commits any act outside Minnesota causing
 injury or property damage in Minnesota, except when the burden placed on the
 defendant by being brought under the state's jurisdiction would violate
 fairness and substantial justice.
  [1] The language of the statute evinces the legislative intent to permit
 the exercise of personal jurisdiction over non-residents to the maximum extent
 consistent with constitutional due process.
  [2] When personal jurisdiction is challenged, plaintiff has the burden of
 showing that he has acquired personal jurisdiction over the defendant.  A prima
 facie showing on a pretrial motion is sufficient, however.  See McQuay, Inc. v.
 Samuel Schlosberg, Inc., 321 F.Supp. 902, 904 (D.Minn.1971), and cases
 cited.
  [3] For the court to have jurisdiction over defendant Gygax, a non-resident
 individual, Gygax must have sufficient minimum contacts with Minnesota such
 that maintenance of the suit in Minnesota "does not offend 'traditional notions
 of fair play and substantial justice.' " International Shoe Co. v. Washington,
 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).  It is also
 essential in each case that there be some act by which the defendant
 purposefully availed himself of the privilege of conducting activities within
 the forum state.  Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2
 L.Ed.2d 1283 (1958).
  Further guidance is found in Toro Company v. Ballas Liquidating Co., 572
 F.2d 1267, 1270 (8th Cir. 1978), where the court laid down the requirement
 that "the defendant's forum activities be related to the plaintiff's cause of
 action, and in Aaron Ferer & Sons Co. v. American Compressed Steel Co., 564
 F.2d 1206, 1211 (8th Cir. 1977), the court stated:
   To assess compliance with due process, with respect to jurisdiction in a
 particular case, the minimum contacts relied upon must be between the defendant
 and the forum state, not simply between the defendant and a resident of the
 forum state.
  [4] In a leading case, Aftanase v. Economy Baler Co., 343 F.2d 187,
 197 (8th Cir. 1965), the Eighth Circuit adopted a five factor test to be used
 as guidelines in applying the International Shoe fair play and substantial
 justice requirement.  The first three factors are of primary significance:
   (1) the quantity of the contacts of defendant with the forum state;
   (2) the nature and quality of the contacts;
   (3) the relation of the cause of action to the contacts;
  The last two are of secondary significance:
   (4) the interest of the forum state in providing a forum for its residents;
   (5) the convenience of the parties.
  [5] Before applying these criteria to the facts of this case, one crucial
 point must be made.  In his memorandum, plaintiff emphasizes the dual capacity
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 in which defendant Gygax operated in the course of his activities relating to
 the present case.  It is a point well taken.  Defendant Gygax is co-author of
 the disputed game, entitled to royalties from its sales, and he is also the
 chief executive officer of the corporation to which he, along with plaintiff,
 assigned the right to produce, sell, and distribute the game.  Because of his
 dual capacity as co-author and chief executive officer of the corporation,
 certain activities of the corporation are intermingled and coincide with
 activities of GYGAX which furthered his individual authorship interests.  As a
 result, several contacts with the forum state that were initiated by GYGAX or
 under his direction can properly be viewed both as corporate contacts and as
 GYGAX'S individual contacts as co-author.
  This intermingling is seen in the letters from GYGAX to plaintiff quoted in
 the facts Supra.  It is also seen in the corporate decisions to devote
 substantial amounts of corporate staff time to development of the later,
 disputed works, and to devote corporate assets to advertising and marketing
 those disputed works in Minnesota and elsewhere.  The court does not rely on
 the *763 doctrine of "piercing the corporate veil," where the corporation is
 seen merely as the "alter ego" of the individual, with the result that the two
 personalities are merged.  Rather, the allegations made by plaintiff are
 sufficient, at this pre-trial stage, to create an inference that Gygax was
 acting both in his corporate capacity and in his individual capacity as co-
 author when he caused the games and game rules to be marketed in Minnesota.
 Compare Independence Tube Corp. v. Copperweld Corp., 74 F.R.D. 462, 467
 (N.D.Ill.1977); Morgan v. Eaton's Dude Ranch, 307 Minn. 280, 239 N.W.2d 761,
 762 (1976).
  Proceeding to the application of the Aftanase five factor test, the court
 finds the contacts of defendant Gygax with the forum state to be numerous and
 continuous.  Games which bear his authorship have been actively advertised and
 marketed through his efforts in Minnesota from 1974 to the present.  The
 defendant has recruited various representatives, including plaintiff, to
 promote sales of corporate products including the disputed works herein.  He
 traveled to Minnesota in November 1975, and one purpose of that trip was
 apparently to contract for art work for the game "Dungeons and Dragons" which
 he co-authored with plaintiff.  Defendant Gygax also contacted plaintiff during
 that trip to Minnesota.
  The second factor, the quality and nature of the contacts, considers the
 contacts insofar as they indicate "whether defendant has purposefully invoked
 the benefits and protection of the forum state's law and has set off a chain of
 events that it should foresee could have effects in the forum state.  For these
 reasons, there is a clear tendency in the cases to hold a nonresident corporate
 seller subject to the jurisdiction of the courts of a state where the seller
 has caused his goods to be sold in the forum state."  Munsingwear, Inc. v.
 Damon Coats, Inc., 449 F.Supp. 532, 535 (D.Minn.1978), and cases cited.
 Those cases involved corporate sellers but would appear to apply to individuals
 as well.  In the instant case Gygax as co-author of "Dungeons and Dragons" and
 allegedly sole author of the later, disputed works, caused them to be developed
 by the corporation, and advertised and marketed in Minnesota.  By causing games
 to be marketed and advertised in Minnesota, which he either claimed to have co-
 authored or solely authored, Gygax availed himself of the state laws to protect
 the contractual rights based on his authorship interests.
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  Plaintiff alleges that the royalties paid to him in Minnesota for sales of
 "Dungeons and Dragons" for the last half of 1978 amounted to $12,394.64.  The
 protection of defendant's authorship interest in Minnesota courts was thus an
 important benefit.  Therefore, the nature and quality of the contacts are
 substantial and significant.
  The relationship between the contacts and the cause of action leans quite
 clearly toward exercising jurisdiction.  The cause of action arises out of a
 dispute over rights under a royalty contract to various games or game rules.
 Defendant's contacts with the forum state involve promoting sales of those
 games, allegedly in derogation of that same contract.
  As to the last two factors, which are of secondary significance, Minnesota's
 interest in providing a forum for plaintiff to protect his contractual rights
 from interference or breach is clear, since plaintiff is a citizen of
 Minnesota.
  The convenience of the parties appears to be balanced.  Because of its
 secondary significance and because the three primary factors lean in favor of
 jurisdiction, this factor cannot control.
  Defendant's motion for relief under Rule 60(b) is DENIED.
END OF DOCUMENT
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Citation                          Rank(R)             Database           Mode
Not Reported in F.Supp.           R 3 OF 20           ALLCASES           Page
(CITE AS: 1993 WL 79272 (N.D.ILL.))

                              TSR, INC., Plaintiff,
                                       v.
  MAYFAIR GAMES, INC., a corporation and Darwin P. Bromley, individually and as
                  President of Mayfair Games, Inc., Defendants.
                                 No. 91 C 0417.
                United States District Court, N.D. Illinois, E.D.
                                 March 17, 1993.
                          MEMORANDUM OPINION AND ORDER

  SHADUR, Senior District Judge.
  *1 TSR, Inc. ("TSR") has sued Mayfair Games, Inc. ("Mayfair") and its
 President Darwin Bromley ("Bromley"), seeking injunctive relief, damages and
 contract rescission on the basis of several claims:  (1) copyright
 infringement, (2) trademark infringement, false designation and
 misappropriation, (3) unfair competition and (4) breach of contract, all
 arising from Mayfair's use on its products of TSR's "Advanced Dungeons and
 Dragons" trademark.  TSR currently moves for summary judgment on the Fourth
 Count of its Amended Complaint, which asserts that Mayfair breached a 1984
 Settlement Agreement (the "Agreement") between the parties. [FN1]  Mayfair
 responds by asking for summary dismissal of that breach of contract claim.  For
 the reasons stated in this memorandum opinion and order, each motion is granted
 in part and denied in part.
                       Fed.R.Civ.P. ("Rule") 56 Standards
  Rule 56 principles impose on the movant the burden of establishing the lack of
 a genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317,
 322-23 (1986)).  For that purpose this Court is "not required to draw every
 conceivable inference from the record--only those inferences that are
 reasonable"--in the light most favorable to the nonmovant (Bank Leumi Le-
 Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991)).  Where as here cross-
 motions are involved, that principle thus demands a dual perspective--one that
 this Court has described as Janus-like--that sometimes calls for the denial of
 both motions.
  This District Court's General Rule ("GR") 12(m) and 12(n) require factual
 statements in support of and in opposition to Rule 56 motions, and both sides
 have tendered such statements.  TSR's statement in support of its motion is
 cited "P. 12(m)," while Mayfair's responsive statement is cited "D. 12(n)."
 Mayfair's statement of additional facts in support of its cross-motion is
 cited "D. 12(m)," and TSR's responsive statement is cited "P. 12(n)." [FN2]
 Where one party's assertion within its GR 12(m) statement is admitted by the
 other party, that will be indicated here by omitting "12(m)" and "12(n)," so
 that the citation will simply read "P-D P --" or "D-P P --" (the first-listed
 party being the one whose Rule 12(m) statement has been admitted).
                                      Facts
  TSR owns trademarks for the "Advanced Dungeons and Dragons" ("AD & D") [FN3]
 and "Dungeons and Dragons" ("D & D") role-playing game systems, [FN4] which
 were created by TSR co-founder E. Gary GYGAX ("GYGAX") (P. 12(m) P 8). [FN5]
 Such a role-playing game is a system of interactive story telling using maps,
 dice and an extensive set of rules (P-D P 7).  "One participant acts as a
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 referee narrating the adventure, describing problems and controlling the
 actions of supporting characters and events.  The remaining players play out
 their roles in accordance with the rules."  (P-D P 10).  TSR places the AD & D
 trademarks on rules and accessories, as well as on adventure modules and
 supplements (P-D P 21).
  *2 In 1982 Mayfair began to produce and market adventure and reference
 books under the trademark "Role Aids" for use in playing AD & D (D.Mem. 10, P-
 D P 22).  TSR complained to Mayfair that Mayfair was making improper and
 infringing use of the AD & D trademark, and the parties signed the Agreement on
 September 28, 1984 to govern Mayfair's future use of TSR's trademarks (P-D P
 28).
  Under the Agreement Mayfair acknowledged TSR's ownership of the D & D and AD &
 D trademarks and agreed not to contest their validity (P.Ex. 1 s III, P-D P
 29).  Mayfair also agreed to use the AD & D trademarks solely in connection
 with Role Aids modules, advertising and promotional materials.  TSR's trademark
 was to appear once on an advertisement, catalog, flyer or press release, and
 only within a specific emblem form [FN6] in which Mayfair would state that the
 Role Aids product involved is for use with the AD & D role-playing game and
 that AD & D is a registered trademark of TSR, and would disclaim TSR's approval
 of that specific use of TSR's trademark by Mayfair (P.Ex. 1 s I and Ex. B, P-
 D PP 30-32).  Mayfair's own symbol was required to appear on the same page.
 Mayfair also agreed (2) to phase out all noncomplying packaging, (2) not to use
 TSR's trademark in any other manner and (3) not to include statements on Role
 Aids modules carrying the AD & D trademark that such modules were suitable for
 use with other role-playing games (P.Ex. 1 ss IV-V and Ex. B, P-D P 36).  If
 materials violating the Agreement were distributed, Mayfair was required to
 make good faith efforts to recover such materials and to withdraw and withhold
 offending materials from distribution (P.Ex. 1 s VI, P-D 12(n) P 38).  Despite
 the foregoing prohibitions, Mayfair was not prohibited from acquiring from the
 creators of Dungeons and Dragons, Arneson and Gygax, any of their rights to use
 the D & D trademark (P.Ex. 1 s V, D-P P 121).
  Unsatisfied with Mayfair's performance, on January 22, 1991 TSR filed its
 initial Complaint against Mayfair advancing the four claims described at the
 outset of this opinion.  After discovery TSR filed an Amended Complaint on
 December 19, 1991.  Only the Fourth Count is at issue on the current cross-
 motions, which dispute whether various Mayfair products violate the terms of
 the Agreement (P. 12(m) PP 40-106).
                             Breach of the Agreement
  TSR's allegations of breach of the Agreement by various Mayfair products fall
 into three categories:  (1) packaging and promotional materials for the "City
 State of the Invincible Overlord" product, (2) "Role Aids" promotional
 materials and (3) advertising materials for the "Freedom of Choice" campaign.
 This opinion addresses each in turn.
  City State of the Invincible Overlord
  In July 1987 Mayfair acquired the rights in, and began to produce and market,
 a new role-playing game called "City-State of the Invincible Overlord" (the
 "Invincible Overlord" game) (P-D P 41).  On July 9 Mayfair and GYGAX entered
 into a written agreement under which the Invincible Overlord box cover would
 state that it came "With an introduction by E. Gary GYGAX, creator of Advanced
 Dungeons & Dragons" ("GYGAX statement") (D-P P 122).  TSR'S trademark was not
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 placed within the cartouche as specified in the Agreement, and no disclaimer of
 TSR'S approval of the use of the AD & D trademark was visible (P-D P 44).
 Mayfair used the GYGAX statement in the text of a flyer promoting Invincible
 Overlord, and it used the AD & D trademark again at the bottom of the flyer to
 identify AD & D as a registered trademark of TSR (P-D P 47).  Mayfair also used
 the AD & D trademark in various promotional materials that depicted the
 Invincible Overlord box cover or described Invincible Overlord as compatible
 with AD & D, without an accompanying disclaimer of TSR'S approval of the use of
 its trademark (P-D PP 50, 52, 54, 56). [FN7]
  *3 TSR asserts that all uses of the AD & D trademark in connection with the
 Invincible Overlord game violate the Agreement.  Mayfair admits that the use of
 the AD & D trademark in the 1990 Mayfair Trade Catalog violated the Agreement
 (D. 12(n) P 51), but it denies that the other uses violate the Agreement (D.
 12(n) PP 46, 48, 53, 55).
  A. Gygax Statement
  Mayfair's use of the AD & D trademark within the Gygax statement in
 conjunction with Invincible Overlord and related advertisements contravenes the
 plain language of the Agreement, which states in part (P.Ex. 1 P I):
   Mayfair agrees that except as otherwise provided herein, any use of TSR's
 Advanced Dungeons & Dragons trademark shall be limited to use within a
 specified Trademark Statement, solely in connection with "Role Aids" modules,
 and advertising and promotional materials therefor, and strictly in compliance
 with the Trademark Use Requirements as set forth in Exhibit B attached hereto
 and incorporated herein by reference.
  Invincible Overlord is not of course a Role Aids product.  Even though the
 Agreement later went on (P.Ex. 1 P V) to carve out a total exception for rights
 acquired from GYGAX, that exception was limited to rights in the D & D
 trademark, and the AD & D trademark did not appear in the oval emblem form.
 Mayfair's Mem. 5 argues that it used the GYGAX statement based on his
 representation that under his confidential termination of employment agreement
 with TSR he had the right to allow Mayfair to use the statement.  However,
 Mayfair's belief in that respect could not of course justify a patent breach of
 the Agreement's limitations. [FN8]
  But Mayfair also contends that TSR'S acceptance of several ads for Invincible
 Overlord that showed the GYGAX statement operate as a waiver of TSR'S claim of
 a material breach (D.Mem. 10).  TSR'S own Dragon Magazine published three
 Mayfair ads for Invincible Overlord in March 1988, April 1989 and February
 1990 (D-P P 124).  TSR claims that portions of the ads with the GYGAX statement
 were not visible in the ads (P. 12(n) P 124).  While TSR admits that a lawyer
 reviews "certain advertisements" for possible misuse of trademarks, TSR'S
 attorney was employed only for "some portions of the pertinent time period" (P.
 12(n) P 123).
  Under Wisconsin law waiver requires proof of (1) a right possessed by the
 waiving party, (2) knowledge of the right by the waiving party and (3) an
 intentional and voluntary waiver (Shannon v. Shannon, 429 N.W.2d 525, 530
 (Wis.App.1988)).  Intent to waive a known right may be inferred from the
 conduct of the parties (Christensen v. Equity Coop. Livestock Sale Ass'n,
 396 N.W.2d 762, 763 (Wis.1986)).
  Under a view of the facts in the light most favorable to Mayfair, TSR's
 knowing acceptance of the Invincible Overlord advertisements, which displayed a
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 picture of the Invincible Overlord box cover with the Gygax statement, could be
 construed as a waiver of the materiality of any breach by Mayfair's packaging
 and advertising.  Mayfair used the Gygax statement on the Invincible Overlord
 box cover (P.Ex. 12) and in the Invincible Overlord flyer (P.Ex. 13), the
 Invincible Overlord product description sheet (P.Ex. 14), the Mayfair reply
 card (P.Ex. 16) and the 1990 Mayfair trade catalog (P.Ex. 17).  To the extent
 that TSR's motion for summary judgment charges Mayfair with breach of the
 Agreement by its use of the Gygax statement in Invincible Overlord advertising
 and packaging, the motion is therefore denied.
  *4 On the other side of the coin, Mayfair's motion for summary dismissal of
 that same charge on grounds of waiver by acceptance must be denied as well.  By
 definition TSR could not waive any objection to use of the GYGAX statement if
 it did not know or should not have known of that use (Shannon, 429 N.W.2d at
 530).  Although the visibility of the GYGAX statement varies within the ads, in
 all three of the ads the box cover print is greatly reduced, so that the
 statement is not as readily noticed as it would be on the full-sized box
 cover.  TSR also asserts that "the legal department at TSR had an attorney
 employee for only some portions of the pertinent time period" (P. 12(n) P
 123).  But the statement that TSR cites for that statement (Moore Dep. 18-20)
 does not really support its proposition. [FN9]  Nevertheless it remains
 possible that the TSR attorney reviewers, if any, may not have noticed the
 GYGAX statement in the Invincible Overlord ads. [FN10]
  Mayfair's Mem. 10 also contends that TSR'S failure to object to the use of the
 AD & D trademark before filing the motion for summary judgment operates as a
 waiver on delay grounds.  Although Mayfair has not labeled (nor argued) the
 contention in this fashion, this Court views the argument--waiver due to the
 passage of time--as one for the application of laches.  Wisconsin law requires
 four elements for laches to apply:  (1) unreasonable delay, (2) knowledge of
 the basis of the claim and failure to act on the part of the plaintiff, (3)
 lack of knowledge on the part of the party asserting the defense that the other
 party would assert the right on which he bases his suit and (4) prejudice to
 the party asserting the defense in the event the action is maintained
 (Jensen v. Janesville Sand & Gravel Co., 415 N.W.2d 559, 562
 (Wis.App.1987)).
  Again on a pro-Mayfair look at the facts, TSR knew of the Invincible Overlord
 ad by March 1988 but did not raise any objection until it filed its summary
 judgment motion on June 17, 1992. [FN11]  That four-year lapse before objection
 may well be unreasonable (see Money Store v. Harriscorp Finance, Inc., 689
 F.2d 666, 674 (7th Cir.1982), upholding the district court's determination that
 a 22-month delay was unreasonable). [FN12]  Such an unreasonable delay in
 trademark actions precludes recovery of damages or wrongfully derived profits
 during the period before suit was filed (James Burrough Ltd. v. Sign of the
 Beefeater, Inc, 572 F.2d 574, 578 (7th Cir.1978)).  Although injunctive relief
 and damages and profits for the period after the filing of suit may not be
 precluded (id., citing McLean v. Fleming, 96 U.S. 245 (1877)), Mayfair has
 said it ceased distribution of Invincible Overlord in June 1992 (Bromley Aff. P
 12).  If so, and if Mayfair can make the appropriate showing of prejudice due
 to TSR's delay, the laches defense would in effect be a complete bar to relief
 on the issue of breach by the Invincible Overlord product.
  To take the opposite view as was done with Mayfair's estoppel defense, the
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 defense of laches requires knowledge (or at least constructive knowledge) on
 TSR's part.  Because this opinion must assume lack of knowledge by TSR in
 considering Mayfair's motion to dismiss, [FN13] laches cannot now provide
 grounds to grant Mayfair's motion.
  B. Compatability with AD & D
  *5 TSR also alleges breach of the Agreement by two Invincible Overlord
 materials that state that the series is compatible with AD & D.  Mayfair has
 admitted that the Mayfair 1990 trade catalog, which stated that "The Invincible
 Overlord series is compatible with the Advanced Dungeons & Dragons role-playing
 game" (with the only disclaimer statement being placed in a footnote ten pages
 later) violated the Agreement.  Because Mayfair has also made no defense of
 waiver as to that catalog (see D.Mem. 10), TSR's motion for summary judgment is
 granted to the extent that it is based on breach of the Agreement by the 1990
 Mayfair trade catalog.
  TSR has also alleged violation by writers' guidelines that Mayfair distributed
 to authors and potential authors of its publications.  Those guidelines stated
 that "The Overlord and Role Aids product lines are designed for use with TSR's
 Advanced Dungeons & Dragons TM system" (P. 12(m) P 53, P.Ex. 11)).  Mayfair
 denies violation, but without any attempt at providing an explanation or
 evidence (D. 12(n) P 53).  Accordingly breach of the Agreement by the writers'
 guidelines is deemed admitted, and summary judgment is granted to that extent
 as well.
  Role Aids Promotional Materials
  In 1988 or 1989 Mayfair began a marketing drive for the Role Aids product
 line, and in 1990 it introduced the new Role Aids modules "Witches," "Psionics"
 and "Lizardmen" (P-D P 57).  TSR claims that the advertising materials for the
 Role Aids products (reply cards, trade and consumer catalogs, posters, flyers,
 slick sheets, press releases, product description sheets and Mayfair Games News
 letters) violated the terms of the Agreement (P. 12(m) PP 57-93).
  A. Violations Admitted by Mayfair
  Mayfair acknowledges many of TSR's assertions.  It admits that its reply card
 (P.Ex. 16, D. 12(n) P 59), its 1990 summer catalog (P.Ex. 18, D. 12(n) P 63), a
 flyer for the "Witches" module (P.Ex. 21, D. 12(n) P 65), the Role Aids Slick
 sheets (P.Ex. 22, D. 12(n) P 68), an advertisement for "Psionics" (P.Ex. 20, D.
 12(n) P 70), its 1990 and 1991 trade catalogs (P.Exs. 17, 19, D. 12(n) PP 72,
 74), the July 1990 and June 1992 Mayfair Games News letters (P.Exs. 25, 27, D.
 12(n) PP 79, 81) and several Role Aids product description sheets (P.Ex. 28-1
 to -4, and -6 to -15, D. 12(n) PP 84, 86, 88) all violated the Agreement.
 Mayfair also admits that the "People, Places & Things" sourcebook and "Demons"
 module product description sheets violate the Agreement (P.Exs. 29-1 and -2, D.
 12(n) PP 99, 100).
  Mayfair makes three arguments as to those admitted violations by the Role Aids
 promotional materials:  (1) TSR has waived its right to object because Mayfair
 gave TSR copies of the Role Aids promotional materials violating the Agreement
 at game conventions between 1988 and 1991, but TSR did not alert Mayfair to the
 violations until the Amended Complaint was filed in December 1991, (2) the
 breaches were not material and (3) the violations caused no injury to TSR.
 Those arguments are addressed in turn.
                                    1. Waiver
  As already indicated, Mayfair says that it provided TSR representatives with
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 copies of the Role Aids promotional materials from 1988 to 1991 (D.Mem. 11;
 Bromley Aff. P 19).  Because TSR assertedly did not notify Mayfair of the
 violations until the December 1991 filing of the Amended Complaint, Mayfair
 urges that TSR has waived its right to object to the violations (D.Mem. 11).
 Again this will be treated as an argument for the application of laches.
  *6 TSR admits that "Darwin Bromley and perhaps other representatives of
 Mayfair have passed out some catalogs and promotional materials to some
 representatives of TSR for general promotional purposes" (P. 12(n) P 135).
 However, TSR Mem. 6 argues that it did not knowingly relinquish its right to
 object to the Role Aids promotional materials.  TSR asserts that the
 promotional materials were distributed primarily during 1990 through 1992, that
 TSR filed its initial Complaint here on January 22, 1991 and that many Mayfair
 documents were not produced until Bromley's deposition was taken on October 1
 and 2, 1991, after which TSR filed its Amended Complaint expanding the Fourth
 Count on December 16, 1991 (P.R.Mem. 5, Bromley Dep. 81).
  Only one of the materials that Mayfair acknowledges as violations is dated in
 1988, with the rest dated in 1990, 1991 or 1992. [FN14]  Measured back from the
 filing of the Amended Complaint, the earliest of the undated 1990 materials
 could not have been as much as 24 months old before TSR lodged its objections.
 Case law in this circuit has noted "that two years has rarely, if ever, been
 held to be a delay of sufficient length to establish laches" (Piper Aircraft
 Corp. v. Wag-Aero, Inc., 741 F.2d 925, 933 (7th Cir.1984)).  Even if TSR knew
 of each offending Mayfair item at the time of issue (an unlikely situation, and
 certainly not established on the current record), Mayfair would have a
 potential laches defense only as to a single product description sheet dated in
 1988.  And TSR's failure to object to a single isolated item cannot form the
 basis for a laches defense.
  Thus Mayfair's motion to dismiss the breach of contract claim on the basis of
 laches must be denied.  TSR's statement that it had only limited knowledge of
 the offending materials before filing its December 1991 Amended Complaint is
 enough to negate the required element of knowledge of facts sufficient to raise
 a claim for breach.  In fact, Mayfair may have contributed to TSR's delay by
 its own delays in responding to discovery requests.
  2. Lack of Materiality
  Mayfair Mem. 11 advances a lack of materiality defense in one nonstop
 sentence:
   [T]he promotional materials showed that they were from Mayfair and the Role
 Aids modules themselves, without exception, contained the Trademark Statement
 in strict compliance with the Settlement Agreement on their front covers so as
 to put the consumer clearly on notice as to the disclaimer sentences which, in
 fact, have little impact on the consumer and are not even read by the typical
 consumer who, in making a purchase decision, does not care which particular
 company produced the role-playing product.
  That argument might have had force in the absence of the Agreement--but once
 the parties had entered into the Agreement, such a contention comes too late.
  Agreement Ex. B P 5 requires, not only as to the Role Aids modules but also as
 to all promotional materials except for sales training literature,
 correspondence and press releases, that Mayfair use the AD & D trademark only
 in the form of the cartouche with the disclaimer statement.  In the Agreement
 itself Mayfair "acknowledge[d] that its failure to remedy [a] violation in
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 accordance with the foregoing may result in immediate and irreparable damage to
 TSR" (P.Ex. 1 P VI).  Mayfair has admitted that it has disseminated materials
 using the AD & D trademark outside of the cartouche form and without the
 disclaimer statement, but also says that it has not attempted to recover the
 violating Role Aids advertising and marketing materials.
  *7 In short, this branch of Mayfair's argument would effectively render the
 Agreement a nullity by making a violation of its key terms nonactionable.  That
 contention too is rejected.
  3. Lack of Injury
  Mayfair finally contends that even if it violated the Agreement, its actions
 caused no injury to TSR.  Walgreen Co. v. Sara Creek Property Co., 775
 F.Supp. 1192, 1195 (E.D.Wis.1991) teaches that Wisconsin follows universal
 doctrine in that respect:
   Under Wisconsin law, a plaintiff claiming breach of contract has the burden
 of proving by a preponderance of the evidence that ... the defendant's breach
 is material and results or will result in injury.
  Mayfair says that its use of TSR's trademarks caused no customer confusion.
 To that end it presents the deposition of Stephen Winter, AD & D product group
 leader and game editor at TSR, in which he testified that he was aware of no
 customer confusion of Mayfair for TSR products since the Agreement (Winter Dep.
 43) and that consumers do not refer to "Advanced Dungeons and Dragons" as a
 generic designation for role-playing game systems (id. at 37-38). [FN15]
 Moreover, Mayfair Mem. 12-13 states, the Trademark Statement was on the cover
 of every Role Aids module, the Role Aids logo was more prominent on the front
 cover than the AD & D logo and every Role Aids module and piece of promotional
 material indicated that it came from Mayfair.  On the other hand, TSR says that
 confusion is "inevitable," and it represents (though not in evidentiary form)
 that retailers in London had "intermix[ed]" TSR and Mayfair products (P.R.Mem.
 9 & n. 3).
  For aught that appears, this may indeed be a case of minimal damage to TSR.
 So far as the ultimate consumer is concerned, Mayfair's compliance with the
 Agreement on all Role Aids modules negates any potential damage--for having
 bargained for the precise form of disclaimer that it wanted, TSR will not be
 heard to say that it has been hurt when that disclaimer has been adhered to.
 As for the sales market in which TSR and Mayfair compete, whether wholesalers
 or retailers, there has been no showing of lost sales or damage to the value of
 TSR's trademarks because of Mayfair's violations of the Agreement in
 promotional materials.  That subject remains for future determination. [FN16]
 And as stated later, the record here does not support TSR's claim for
 rescission of the Agreement.
  Accordingly the appropriate action at this point is simply to declare the
 existence of the breaches that have been admitted by Mayfair.  To that extent
 TSR is entitled to a judgment as a matter of law, with the decision as to the
 extent of any damages remedy to await further proceedings.
  B. Violations Denied by Mayfair
                                    1. Demons
  TSR contends and Mayfair denies that the cover of its new "Demons" module
 violates the Agreement (P-D P 108). [FN17]  According to TSR, Mayfair has
 failed to comply with the contractual requirement that the Mayfair trademark be
 visually more prominent than the AD & D trademark--a requirement buttressed by
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 express standards.  TSR's Supp.Mem. 2 argues that in violation of those
 standards the Role Aids logo is "almost invisible" in the upper corner of
 Demons, in gold lettering on a red background.  Mayfair admits that "[t]he
 degree of contrast of the Role Aids logo on Mayfair's Demons product cover ...
 is substantially less than it was on the final proof submitted by the printer
 and approved by Mayfair" (Bromley Aff. P 37).  Even so, Mayfair urges that the
 Role Aids logo is nonetheless visible, that the second page of Demons makes
 clear that it is a Mayfair product and that "future production runs of Demons
 will have the Role Aids logo in white on a red background" (D. 12(m) P 149,
 Bromley Aff. P 37, D.Ex. 7).
  *8 There is no ambiguity in the Agreement, which requires that "the ROLE
 AIDS trademark [be] on a color background with no less contrast than the
 contrast of the ADVANCED DUNGEONS & DRAGONS trademark to its background" (P.Ex.
 1 P I and Ex. B P 1).  Although the Role Aids logo was not visible at all in
 the photocopy of the Demons cover originally submitted to this Court, it is
 certainly legible on the Demons module itself.  But the Role Aids logo is a
 dull gold printed on a red background, while the AD & D logo is in white on a
 red background.  Mayfair's printer woes and future intentions notwithstanding,
 the cover of the present Demons module clearly does not comply with the terms
 of the Agreement.  It too constitutes a contractual breach.
                      2. Quote from Dragon Magazine Review
  TSR also asserts that Mayfair's 1990 and 1991 trade catalogs and the Undead
 product description sheet (P.Ex. 17 at 25, P.Ex. 19 at 11, P.Ex. 28-5) violate
 the Agreement by using this quote from a review of Undead in Dragon Magazine
 (P-D P 75):
   This is a quality AD & D game campaign supplement.  The setting is
 imaginative and fantastic;  the dead guys are grim and menacing;  there are
 plenty of neat new magic and monsters. [FN18]
  Mayfair denies that its use of the AD & D trademark in the context of
 quoting from Dragon Magazine amounts to a violation of the Agreement (D.
 12(n) P 76).
  Agreement P V provides in part:
   Except for use of TSR's Advanced Dungeons & Dragons trademark in accordance
 with this Agreement, Mayfair hereby agrees to cease and desist throughout the
 world from use of TSR's Advanced Dungeons & Dragons trademark or any mark
 confusingly similar thereto, in connection with any products or advertising or
 any other materials.
  If the quoted review had originated with Mayfair, there could be no
 disputing that it violated that restriction.  Mayfair would have it that the
 answer should be different because the reviewer and not Mayfair made the
 decision to describe Undead as an "AD & D game campaign supplement" (D. 12(n) P
 76, Bromley Aff. P 36).  But no use by others of the AD & D trademark in
 connection with Role Aids products can clear the way for Mayfair to do the
 same.  After all, Mayfair has curtailed its own use of the AD & D trademark in
 the Agreement.  It may not avoid those restrictions by copying the usage of
 someone who was not so inhibited, the Dragon Magazine reviewer.
  Once again Mayfair points out that TSR did not complain to Mayfair until it
 filed the present motion.  Mayfair had included the Dragon Magazine quote in
 its 1990 and 1991 catalogs, several years after issuing the product description
 sheet on October 20, 1986.  Though Mayfair has not contended that it supplied
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 TSR with a copy of that earlier document, it says that it gave TSR copies of
 the Mayfair Games catalog at trade conventions (D 12(m) P 135).  But as already
 stated, even if TSR became aware of the violation in the 1990 catalog, [FN19]
 its failure to object before it filed the Amended Complaint in December 1991 is
 not so unreasonable as to bar its current claim. [FN20]
                 3. "Suitable for Use with Any Fantasy Campaign"
  *9 According to TSR, the To Hell & Back Again product description sheet
 (P.Ex. 29-3) also violates the Agreement because it says that the product "has
 numerous locations that can be worked into any fantasy campaign" (P. 12(m) P
 100).  Mayfair disputes that, because the relevant provision of the Agreement
 prevents Mayfair only from describing Role Aids as "suitable for other role-
 playing games" (P.Ex. 1 P I and Ex. B P 6).  For that purpose "role-playing
 game" is defined as (id.):
   a structured form of social entertainment comprising a quantified interactive
 story telling game that allows the participants, within their imagination, and
 subject to the limitations of the game's rules, to adventure forward,
 attempting to satisfy their personal ambitions or fantasies through the use of
 the characteristics, perceptions and abilities of an imaginery [sic] character
 or person.
  Mayfair Mem. 6-7 urges a difference between a role-playing game and a fantasy
 campaign (D. 12(n) P 101, Bromley Aff. P 18, Winter Dep. 82, Santana Aff. P
 4).  According to Mayfair Mem. 6, "there are multiple fantasy campaigns in
 Advanced Dungeons and Dragons."  Winter Dep. 82 describes a fantasy campaign
 as "the series of adventures that's being conducted by a particular game
 referee or with a particular group of players with a rotating referee's
 position."
  Although TSR seeks to deny Mayfair's assertion that the use of the term
 "fantasy campaign" does not violate the Agreement (P. 12(m) P 130), it does
 admit that "[a] fantasy campaign is different from a fantasy role-playing
 game" (P. 12(m) P 131).  It really has advanced neither argument nor evidence
 to counter Mayfair's position that the use of the term "fantasy campaign" is a
 nonviolation.
  TSR's Mem. 29-31 explains that its purpose in preventing Mayfair from stating
 that Role Aids were suitable for use with other role-playing games as well as
 AD & D was to protect TSR's trademark from becoming generic.  Sounding another
 variation on the same theme, TSR's R.Mem. 9 asserts that "Mayfair's advertising
 campaign promoting ROLE AIDS modules as suitable 'for any fantasy role-playing
 game on the market' harms the reputation and goodwill of the ADVANCED
 DUNGEONS & DRAGONS mark as representing a unique brand of products."
  That is really nonsense.  As Mayfair's Mem. 11 asks rhetorically:
   If the producer of Gatorade claims its drink is great for football players
 and also claims it is great for participants in any high-energy sport, is it
 reasonable to argue that football is at risk of becoming generic for high-
 energy sports as a result thereof?
  Indeed, the restriction that TSR incorrectly contends was violated in the
 respect now under discussion [FN21] is the one aspect of the Agreement that
 appears to find no legitimate justification in TSR's trademark rights.  It
 seems to be purely anticompetitive and hence likely unenforceable as an
 unlawful extension of the trademarks.
  *10 For present purposes, though, that issue need not be decided.  It is
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 enough to find (as this Court has) that TSR loses as a matter of contract.
 Mayfair is entitled to dismissal of the claim that the Agreement was breached
 by the To Hell and Back Again product description sheet.
  C. Freedom of Choice Campaign
  In late 1991 Mayfair began the "Freedom of Choice" advertising campaign (D.
 12(m), P. 12(n) P 127).  Mayfair has admitted that its Freedom of Choice Poster
 that stated Role Aids products "were for use with any role-playing game"
 violated the terms of the Agreement (P.Ex. 31, D. 12(n) P 96).  But its Mem. 6
 says that once it realized that in April 1992, it promptly terminated the use
 of promotional materials having the non-complying language (Santana Aff. P 4).
  Mayfair presents no evidence that it then attempted to recall the Freedom of
 Choice materials, but its Mem. 7 states that such attempts are futile (Bromley
 Aff. P 34, Santana Aff. P 6).  TSR denies that Mayfair made good faith efforts
 to retrieve noncomplying materials (P. 12(n) PP 130, 150), pointing out that
 Bromley based his conclusion of the futility of recall attempts merely on the
 attempted recall of one shipment of Psionics (Bromley Aff. P 34).  In fact,
 Mayfair's Jennifer Santana testified that Mayfair made no attempts at recall of
 the Freedom of Choice materials (Santana Aff. P 6).  It does not necessarily
 follow from the futility of Mayfair's attempts to recall the Psionics modules
 that had been sent to stores that Mayfair would have been equally unsuccessful
 in recalling advertising materials.  After all, stores may be willing to comply
 with a request to refrain from posting an advertisement or to replace the
 advertisement with another, but may be reluctant to send back what they believe
 will be a popular product.
  Mayfair's Mem. 10 also contends that its acknowledged breach of the Agreement
 by the Freedom of Choice campaign literature is not material because "the trade
 was correctly describing Role Aids as being usable in any fantasy role-playing
 game for a long time prior thereto" (D. 12(m) P 128).  TSR denies that, but its
 denial hardly seems in good faith in light of TSR's own Ex. 33, a collection of
 catalog pages listing Mayfair Role Aids products.  Capital City's Game Buyer's
 Monthly for July 1990 and its March 1991 releases describe Mayfair's "Witches"
 and "Lizardmen" modules as suitable for "any fantasy roleplaying adventure or
 campaign" and "for use with any fantasy RPG" (P.Exs. 33-1 and -2);  Capital
 City's "The Premium Specialty Collection" May, October and December 1990 issues
 describe Role Aids products as "generic" (P.Exs. 33-19, -20, -21);  Wargames
 West's 1991 Spring catalog states that Role Aids modules "can be used with any
 fantasy role-playing system, especially TSR's Dungeons & Dragons and AD & D
 systems" (P.Ex. 33-25).  Several of the pages in P.Ex. 33 list Role Aids
 modules under the category "Generic Fantasy Source Books and Modules" (P.Exs.
 33-3 through 33-13, 33-22 and 33-23) and describe Lizardmen and Psionics as
 "universal," "for use with any RPG" or "designed to adapt to any fantasy
 roleplaying game system" (P.Ex. 33-14 through 33-16, 33-24), but no date of
 publication is shown on those exhibits.
  *11 Mayfair has presented Bromley's affidavit testimony that the only
 catalogs in P.Ex. 33 that did not precede the Freedom of Choice campaign are
 P.Ex. 33-17 and 33-18 (Bromley Aff. P 14).  Although the last page of Exhibit
 33 (left unnumbered by TSR) from the 1991-92 Winter/Spring Wargames West
 Catalog may have come out after the Freedom of Choice campaign, TSR has made no
 effort to provide the date of those materials.  However, given the substantial
 number of dated exhibits that describe Role Aids modules generically, the
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 undated exhibits provide only cumulative information.
  To be sure, the fact that others describe Role Aids in a manner that Mayfair
 agreed not to use does not release Mayfair from its promise.  But as has
 already been indicated in the discussion about the To Hell & Back Again product
 description sheet, there is more than a serious question whether that promise
 is valid and enforceable.  Indeed, the usages by others that comprise the
 various subparts of P.Ex. 33 graphically illustrate the total lack of
 connection between a statement that Role Aids has multiple uses and any
 conclusion that one of those uses--that in conjunction with AD & D--somehow
 renders AD & D generic.
  Again this Court would be strongly inclined to consider invalidating that
 component of the Agreement.  But once again it is unnecessary to take that
 step, for at worst this claimed violation of the Agreement is both de minimis
 and in the past.  It has potential relevance only on the issue of the relief to
 which TSR may be entitled.
                                    Remedies
  This opinion has earlier referred to the bifurcation of issues that has
 deferred the question of damages sustained by TSR as the result of Mayfair's
 several violations of the Agreement.  Consequently all that now remains for
 consideration is whether TSR's prayer for rescission of the Agreement should be
 granted or denied.
  Not surprisingly, Wisconsin law adheres to universal equitable principles in
 defining the conditions that entitle a party to rescission of a contract for
 its breach.  Any party who would rescind a contract must do so within a
 reasonable time following its discovery of the breach (Thompson v. Village
 of Hales Corners, 340 N.W.2d 704, 718 (Wis.1983) (six-month delay in asserting
 rights bars rescission)).  Rescission is not the appropriate remedy for every
 breach of contract--rather "the nonperformance must be substantial and the
 breach so serious as to destroy the essential objects of the contract"
 (Seidling v. Unichem, Inc., 191 N.W.2d 205, 207 (Wis.1971)).  And rescission
 must "restore the parties to the position they would have occupied if no
 contract had ever been made between them":  Each party must return to the other
 all benefits received under the contract (id. at 208;  First Nat'l Bank &
 Trust Co. v. Notte, 293 N.W.2d 530, 539 (Wis.1980)).
  Merely to state those basic principles is to demonstrate why rescission is
 inappropriate here.  Whether or not TSR acted with sufficient promptness after
 it learned of Mayfair's breaches, [FN22] the parties' many years of performance
 under the contract obviously render its unwinding far more difficult and less
 appropriate (a point elaborated on in a moment).  Next, it can hardly be said
 that the breaches identified here have "destroy[ed] the essence of the
 contract"--it will be remembered that the presentation of Mayfair's Role Aids
 products to the ultimate consumer has always (with one minor and inadvertent
 exception) adhered to the standards that TSR itself established to assure that
 Mayfair would not poach on its preserves (a point also elaborated on in a
 moment or two).
  *12 Perhaps most importantly, there is no way in which the parties can
 effectively be restored to the status quo ante contract--no way in which the
 omelet can be unscrambled and put back into the egg.  It is truly an
 impossibility, given the time span from 1984 to the present during which the
 parties have functioned under their contract, to "restore the parties to the
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 position they would have occupied if no contract had been made between them."
 In terms of the restoration of benefits, just how can TSR repay whatever
 benefit it has derived from the ongoing Role Aids advertising of AD & D as the
 only role-playing game expressly mentioned on Mayfair's products, or it has
 derived from the continued reinforcement of the AD & D trademarks over the
 intervening years without any attack by Mayfair?
  In sum, this case does not at all call for TSR to obtain the equitable benefit
 of contract rescission, beyond whatever damages (not yet established) that it
 is able to demonstrate flowing from the breaches shown here.  For over eight
 years it has derived the principal benefits that it bargained for in the
 Agreement:
   1. To the consuming public, Mayfair has meticulously observed the
 requirements marked out by TSR--standards that make plain its nonsponsorship of
 Mayfair's competing Role Aids modules, while at the same time keeping the AD &
 D name before the consumers, with TSR identified as its source. [FN23]
   2. TSR's trademarks have remained without challenge from Mayfair, promoting
 the continued entrenchment of D & D and AD & D as fixtures in the consuming
 public's minds.
  As against that, TSR has shown a number of contract breaches by Mayfair--but
 not such as to demand rescission.  In some instances Mayfair has cured the
 problems on its own, or (as in the Demons situation) has promptly stated its
 intention to correct the inadvertent error.  In one instance it terminated the
 employee responsible for misreading the Agreement's directives.  And there is
 no reason to believe that it will not promptly correct the remaining breaches
 that have been found here.
  Moreover, this opinion has twice commented on the apparent overreaching by TSR
 in one part of the Agreement:  prohibiting Mayfair's truthful advertising of
 the fact that Role Aids products may be utilized by members of the consuming
 public in conjunction with rival role-playing games as well as with AD & D.
 That restraint inhibits not only Mayfair's market among consumers who have
 purchased (or might intend to purchase) role-playing games from TSR's
 competitors but (not incidentally) also tends to lessen the demand for those
 competitive games among purchasers of Mayfair's Role Aids products.  And again
 those anti-competitive measures appear to find no rational support in TSR's
 legitimate goals for protecting the integrity of its own trademarks. [FN24]
  Whether or not those considerations invalidate that particular restraint of
 trade has not been decided here, because it need not be.  But those
 considerations do tend to place in sharper focus the effect of a rescission of
 the Agreement here.  Because of AD & D's prominence in the marketplace, any
 revocation of Mayfair's permission to refer to AD & D with appropriate
 disclaimers could bid fair to destroy Role Aids as a competitor for the
 marketplace with TSR's own products intended for use in that role-playing
 game. [FN25]  What is reflected in the total record here simply does not
 support this Court's throwing its weight into the competitive scales in that
 fashion, when TSR has a fully adequate remedy in the form of its recouping any
 damages that it can prove and its obtaining an injunction compelling Mayfair's
 correction of past violations and preventing new violations. [FN26]
                                   Conclusion
  *13 TSR's motion is granted to the extent that this Court finds the
 following materials to have violated the Agreement:  the 1990 Mayfair Trade
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 Catalog with the Invincible Overlord compatibility statement, the Invincible
 Overlord writers' guidelines, all the challenged Role Aids materials except for
 the To Hell & Back Again product description sheet and the Freedom of Choice
 materials.  TSR'S motion is denied as to Mayfair's use of the GYGAX statement
 on the Invincible Overlord materials.  Mayfair's motion is also denied as to
 that use of the GYGAX statement, while its motion is granted as to the To
 Hell & Back Again product description sheet.  As to remedies for the
 adjudicated violations, TSR'S prayer for rescission of the Agreement is denied,
 and the scope of appropriate relief is deferred pending further submissions by
 the parties.

      FN1. According to TSR'S Mem. 1 n. 1, its success on that claim "would
     subsume the relief it seeks for trademark infringement."  And because
     Mayfair is not now distributing the book that gave rise to TSR'S copyright
     infringement claim, "the crux of the current dispute would be decided"
     (id.).

      FN2. Because Mayfair's Statement of Additional Facts was appended to its
     GR 12(m) statement, the D. 12(m) and P. 12(n) numbering began where the P.
     12(m) and D. 12(n) numbering left off.

      FN3. Trademarks involved include "Advanced Dungeons and Dragons," "AD &
     D," "Dungeons and Dragons" and "D & D."  For brevity's sake, this opinion
     refers to each set of trademarks by employing only the abbreviated
     version.  But where either set of initials is used in the singular, it will
     stand for the full-length mark ("Dungeons and Dragons" or "Advance Dungeons
     and Dragons") unless otherwise specified.

      FN4. Mayfair's responsive statements have devoted a substantial amount of
     rhetoric to disputing the characterization of Advanced Dungeons and Dragons
     and Dungeons and Dragons as "games," contending in part that TSR does not
     "own" either of them (see D. 12(n) PP 7-10, 12, 14, 15, 17, 23).  For those
     propositions Mayfair cites to Bromley's Aff. P 3:
     A role-playing game is quantified, interactive storytelling, in accordance
     with a series of rules and algorithms which define how the players interact
     with one another and the game master.  A role-playing game is intangible,
     does not have a brand or trademark and is not itself sold or owned.  Books
     and reference information may be used but are not essential for a role-
     playing game.
     Interestingly, Mayfair does not dispute TSR's contention that Mayfair
     "produces its own role-playing games" (P-D P 22).  Moreover, Mayfair is not
     consistent in its own semantic insistence.  It states at D.Mem. 10 that
     "Advanced Dungeons and Dragons is different from other role-playing games
     because it is based on different rules."  As TSR has pointed out, the only
     function of Mayfair's contentions seems to be an end run around the
     Agreement's ban on its contesting the validity of the AD & D trademarks.

      FN5. David Arneson ("Arneson") was co-creator of Dungeons and Dragons.

      FN6. Although the Agreement characterized that form as an "oval," its
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     physical depiction in P.Ex. 1 Ex. B is that of an oblong cartouche drawn to
     appear three-dimensional.  It seems that the parties are better developers
     of games than they are lexicographers.  This opinion will use "cartouche"
     rather than "oval" to refer to the emblem.

      FN7. Mayfair's 1990 Trade Catalog did contain a footnote marker after the
     AD & D trademark.  Ten pages later "in small print at the bottom of the
     page" was a disclaimer of TSR's approval of Mayfair's use of its trademark
     (P-D P 50).  TSR also points out, without alleging violation of the
     Agreement, that both the 1990 Mayfair catalog and the Mayfair customer
     reply card (P.Ex. 16) identified Invincible Overlord as adaptable for use
     with any fantasy role-playing system (P. 12(m) PP 50, 56).  Although
     Agreement Ex. B P 6 prohibited Role Aids modules that utilized the
     trademark statement from also including statements that such modules are
     suitable for use with other role-playing games, TSR has not attempted to
     argue that use of the AD & D trademark on a non-Role Aids product is
     governed by a similar restriction.

      FN8. One issue that TSR has steered clear of is how, given the standards
     of trademark law as to likelihood of confusion and confusing similarity, it
     could create an unlimited exception to the Agreement's restrictions on
     Mayfair to allow Mayfair to deal with Gygax for use of the D & D
     trademarks, and yet cavil at Mayfair's acquisition of rights that Gygax
     apparently had in the AD & D trademarks.  Before TSR will be heard to make
     anything out of that aspect of Mayfair's claimed breaches (an issue
     deferred by the summary judgment context of this opinion), it has some more
     explaining to do.

      FN9. Moore testified that the legal department reviewed ads before
     placement for misuse of TSR's trademarks (Moore Dep. 18-19).  Moore also
     testified that when he took the editorship of Dragon Magazine in 1986,
     policies for review of ads may have been "in flux" and he was "not sure at
     what point they settled out" (id. at 19).

      FN10. What has just been said in the text truly gives TSR the benefit of
     the most favorable reasonable inferences.  Even though waiver law speaks of
     a party's knowledge, the concept would seem to extend to charged knowledge
     as well--to prevent a party from playing ostrich.  Indeed, Shannon, 429
     N.W.2d at 530 speaks of what the party knew or should have known.  Thus
     final resolution of the issue will require examination of whether TSR
     should have known of the Invincible Overlord ads' contents, given its keen
     awareness of the importance of its trademark rights and of the nature of
     the role-playing game industry.

      FN11. Neither TSR's original Complaint nor its Amended Complaint had
     mentioned Invincible Overlord.

      FN12. Although the analogous statute of limitations for breach of contract
     has yet to run in this case, Wisconsin law allows application of a laches
     defense within the limitations period (Schafer v. Wegner, 254 N.W.2d
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     193, 196-97 (Wis.1977)).

      FN13. But see n. 10.

      FN14. TSR could not have known of many of the Role Aids items until 1990
     at the earliest.  That was the year in which Mayfair introduced the
     Witches, Psionics and Lizardmen modules.  Those promotional materials would
     include an advertisement for "Psionics" (P.Ex. 20, D. 12(n) P 70) a flyer
     for the Witches module (P.Ex. 21, D. 12(n) P 65), a product description
     sheet for Witches (P.Ex. 28-1), the 1990 summer catalog (P.Ex. 18, D.
     12(n) P 63), the 1990 and 1991 trade catalogs (P. Exs. 17, 19, D. 12(n) PP
     72, 74), and the July 1990 and June 1992 Mayfair Games News letters (P.
     Exs. 25, 27, D. 12(n) PP 79, 81).  In addition, the product description
     sheets for People, Places and Things and Demons (P.Ex. 29-1 and -2) were
     for products to be introduced in 1992 (P-D P 98).  One product description
     sheet (P.Ex. 28-2) is dated in 1988, while the rest are dated from 1983 to
     1986 (P. Exs. 28-5 to 28-15).  Some materials are undated:  Mayfair's reply
     card (P.Ex. 16), Role Aids slick sheets (P.Ex. 22) and two Role Aids
     product description sheets (P. Exs. 28-3 and -4).

      FN15. Winter was, however, aware of media use of the trademark "Dungeons
     and Dragons" to describe role-playing games generically.  Winter also
     testified that most customers would not read the disclaimer language, and
     that at least some consumers might think that a Role Aids product was
     licensed by TSR (Winter Dep. 50-51).

      FN16. This is not said to be critical.  This Court earlier entered an
     order bifurcating liability from damages.

      FN17. TSR first saw the newly-developed Demons product at a trade show in
     late August 1992, after its summary judgment motion had been filed and
     briefing was under way (P-D P 107).  TSR then obtained leave to file a
     supplemental memorandum in support of its motion, in which it addressed the
     latest of Mayfair's claimed violations of the Agreement.

      FN18. [Footnote by this Court] It may also be noted that the AD & D
     trademark in the Dragon Magazine quote in Mayfair's 1991 catalog is over
     twice as large as the print of the rest of the words in the sentence, and
     is also the largest descriptive print on the page except for the lettering
     on the photographs of the Role Aids modules.

      FN19. TSR's partial denial in its P. 12(n) P 135 is really ambiguous.
     That type of deliberate ambiguity will be construed against it, but it
     turns out to make no difference.

      FN20. Mayfair contends that TSR did not complain of Mayfair's use of the
     Dragon Magazine statement until the current motion for partial summary
     judgment was filed in June 1992 (D. 12(m) P 143).  Although TSR denies
     that (P. 12(n) P 143), its citation to Williams Dep. 40-41 really does not
     support that position.  That makes no difference, however, given the
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE  16
(CITE AS: 1993 WL 79272, *13 (N.D.ILL.))
     allegation in Amended Complaint P 57:
     Mayfair has breached the Limited Use terms of the Settlement Agreement by
     its use of the TSR Trademarks in ... connection with certain of the Role
     Aids publications and related materials.
     Under the Rules' notice pleading regime, that is enough--TSR was not
     required to plead its evidence.  And Mayfair's use of the quote from Dragon
     Magazine in describing Undead, a Role Aids product, surely comes within the
     scope of the pleading's allegation.

      FN21. As indicated earlier, that contention is incorrect as a matter of
     contract construction:  TSR has acknowledged that "fantasy campaign" is
     different from "fantasy role-playing game," so that a prohibition framed in
     terms of the latter is not violated by a statement that speaks in terms of
     the former.

      FN22. There is understandably a very different and much shorter yardstick
     for rescission purposes than for the application of laches.  Laches
     actually defeats any claim of the aggrieved party, while the denial of the
     rescission remedy still preserves for that party the benefit of being made
     whole through the recovery of damages.  In this case it would seem that TSR
     has failed to meet the timetable defined in Thompson as a precondition
     to rescission, but whether or not that is so, TSR fails on the other
     grounds discussed here.

      FN23. Although Demons has been a single exception to Mayfair's strict
     adherence to the Agreement's specifications for Role Aids modules, there is
     no reason to discredit Mayfair's explanation that the contrast between the
     Role Aids name and its background in the final product turned out to be
     less than the original printers' proofs had shown.  It will be remembered
     that the Demons product came onto the market over 18 months after this
     lawsuit was brought, and after TSR had already launched its current
     motion.  What incentive would Mayfair have, after eight years of living by
     the Agreement's standards in designing all of its other product modules, to
     depart from that practice deliberately in the face of this litigation and a
     Rule 56 motion?

      FN24. If anything, it would seem that measures that would thus tend to
     promote AD & D's market domination would make it more likely, rather than
     less likely, that AD & D might become a generic term among consumers.  It
     is only necessary to recall such examples as Eastman's fight to prevent
     "Kodak" from entering the public domain, or Bayer's like fight as to
     "Aspirin" or GE's comparable fight as to "Frigidaire."

      FN25. Absent Mayfair's joinder in AD & D's prayer for rescission, it is
     assumed here that Mayfair is willing to continue to live with the specific
     ground rules set out in the Agreement, rather than having both parties
     relegated to the principles of law (such as fair use) that would apply in
     the absence of contract.

      FN26. It should be emphasized that this point is only an added fillip that
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE  17
(CITE AS: 1993 WL 79272, *13 (N.D.ILL.))
     demonstrates the soundness of denying TSR this specific equitable relief--
     one to which it has not shown its entitlement based on the equitable
     principles that uniformly govern the availability of the rescission remedy.
END OF DOCUMENT
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                       AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   1

Citation                          Rank(R)             Database           Mode
Not Reported in F.Supp.           R 4 OF 20           ALLCASES           Page
 225 U.S.P.Q. 1252
(CITE AS: 1985 WL 442 (D.MINN.))
                          DAVID L. ARNESON, Plaintiff,
                                       v.
                  TSR HOBBIES, INC., a corporation, Defendant.
                              Civil No. 4-84-1180.
           United States District Court; D. Minnesota Fourth Division.
                                 March 27, 1985.
  MAHER J. WEINSTEIN, Esq., and MICHAEL HIRSCH, Esq., Moss & Barnett, 1200
 Pillsbury Center, Minneapolis, Minnesota 55402, appeared on behalf of
 plaintiff.
  JOHN L. BEARD, Esq., Michael, Best & Friedrich, 250 East Wisconsin Avenue,
 Milwaukee, Wisconsin 53202, appeared on behalf of defendant.
                          MEMORANDUM OPINION AND ORDER

  MURPHY, District Judge.
  *1 Plaintiff, David L. Arneson, brought this action for declaratory relief
 against defendant, TSR Hobbies, Inc. (TSR), alleging breach of contract.
 Jurisdiction is alleged under 28 U.S.C. s 1332 and 28 U.S.C. s 2201. TSR
 has filed a counterclaim for declaratory and injunctive relief. This matter is
 now before the court upon the parties' cross-motions for summary judgment on
 the complaint and on one of the counts contained in the counterclaim.
                                   Background
  The facts leading up to the publication of Monster Manual II, the subject
 matter of this royalties dispute are basically undisputed. Arneson and Gary
 GYGAX collaborated in the development of a fantasy role-playing game entitled
 'Dungeons and Dragons'. In 1980, Arneson brought an action against TSR and Gary
 GYGAX, its principal officer, director, and shareholder, to recover damages and
 royalties relating to the publication of 'Dungeon and Dragons' and 'Advanced
 Dungeon and Dragons'. In 1981 the lawsuit was settled by means of the March 6,
 1981 agreement. This action seeks a declaration that TSR is in breach of that
 agreement.
                                A. The Agreement
  There are two main provisions in the agreement for royalties payable to
 Arneson. At issue in this action is the royalty provision applicable to a
 series of works published as 'Advanced Dungeons and Dragons'. The provision
 provides that defendant is obligated to provide royalties payments up to a
 maximum of $1,200,000.
  One of the works covered by this provision is a work entitled Official
 Advanced Dungeon & Dragons Monster Manual (Monster Manual). Monster Manual
 contains descriptions of a large number of creatures, over 300, that may be
 used in playing Advanced Dungeons and Dragons. It also contains the game rules
 for the use of the monsters in the play of the game. The work was copyrighted
 in 1977 and 1978, and Arneson has received substantial royalties from its sale.
  Paragraph 6(g) of the agreement provides that TSR will pay Arneson a royalty
 of 2 1/2 % of the cover price for every copy sold of Monster Manual. Monster
 Manual is defined in paragraph 7(f) of the agreement to include 'the book
 currently published by TSR entitled 'ADVANCED DUNGEONS & DRAGONS Monster
 Manual' (2009) and any revised edition or foreign language translation
 thereof.' Paragraph 7(a) defines 'revised edition' to mean 'a printed work
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   2
(CITE AS: 1985 WL 442, *1 (D.MINN.))
 having a title the same as or similar to the related earlier work, revised to
 include changes or additions to the text, but continuing to include
 substantially the same rules and subject matter as contained in the earlier
 work.'
  The royalties are to be paid quarterly as provided in paragraph 11. Paragraph
 17 expressly provides that 'failure to pay, when due, any and all amounts
 required to be paid pursuant to paragraph 6 and 15 above' constitutes a default
 on the part of TSR under the agreement, if not remedied by TSR within 30 days
 after receiving written notice of said failure to pay from Arneson. Paragraph
 17(h) creates a limited exception to this procedure:
   *2 If there is a good faith dispute as to Arneson's royalty or
 compensation entitlement to a new item which does not currently exist and which
 does not constitute a revised edition or a foreign language translation of a
 currently existing item, but said new item is alleged by Arneson to fall under
 a more general definition contained herein, then TSR's failure to make payments
 on said new item shall not be deemed to be a default until there is a written
 agreement resolving the disputes to said new item between the parties, or until
 final resolution of the good faith dispute by a Court, but only if not remedied
 by TSR within thirty (30) days after a final resolution requiring TSR to make
 payments on the new item.
                                 B. The Dispute
  In 1983, TSR published Official Advanced Dungeons & Dragons Monster Manual II
 (Monster Manual II). This work contains the description of over 300 new
 creatures. These are new monsters that are to be used in addition to the
 monsters listed in Monster Manual in playing Dungeons and Dragons. It also
 contains the same game rules as in Monster Manual and includes an index to all
 creatures listed in Monster Manual, Monster Manual II and the Fiend Folio Tome.
  The dispute between the parties centers on whether Monster Manual II is a
 'revised edition' of Monster Manual under the terms of the settlement agreement
 between the parties. TSR initially, for a period of approximately one year,
 made royalty payments to Arneson on Monster Manual II totalling $108,703.50.
 These payments stopped on November 2, 1984 when TSR sent a letter to Arneson
 stating that the payments on Monster Manual II had been made inadvertently and
 by mistake because it is not a 'revised edition' of Monster Manual. The letter
 went on to state that TSR was therefore crediting the overpayment against the
 $60,238.68 third quarter (1982) royalty otherwise due on other works and that
 there remained an overpayment of $48,464.82, which would be credited by TSR
 against subsequent quarterly royalty amounts. Arneson, through his attorney,
 responded in a letter dated November 5, 1984 informing TSR that it has no right
 to credit or offset royalty payments owing on items other than Monster Manual
 II and that such actions have placed TSR in default under paragraph 17 of the
 contract. This action was filed on November 14, 1984.
  TSR has filed a counterclaim against Arneson seeking a declaration of its
 right to set-off the $108,703.50 and also asserts three other counterclaims
 that are not part of these motions before the court. [FN1]
                                   Discussion
  Under Rule 56 of the Federal Rules of Civil Procedure, a motion for summary
 judgment may be granted only if the pleadings and affidavits show that 'there
 is no genuine issue as to any material fact and that the moving party is
 entitled to judgment as a matter of law.' Fed. R. Civ. P. 56(c). Disputes
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   3
(CITE AS: 1985 WL 442, *2 (D.MINN.))
 involving the interpretation of unambiguous contracts are approriate cases for
 summary judgment. Jackson v. Roosevelt Federal Savings & Loan Ass'n, 702
 F.2d 674, 684 (8th Cir. 1982); Parish v. Howard, 459 F.2d 616, 618 (8th Cir.
 1972). Construction of a contract is essentially one of determining the intent
 of the parties; it is normally a matter of law for the court. Armstrong v.
 Colleti, 88 Wis.2d 148, 276 N.W.2d 364, 366 (Wis. Ct. App. 1979). However,
 where a contract is ambiguous, summary judgment is not appropriate. Champale,
 Inc. v. Joseph S. Pickett & Sons, Inc., 599 F.2d 857, 859 (8th Cir. 1979).
 Contract language is ambiguous only when it is reasonably susceptible of more
 than one meaning. Patti v. Western Machine Co., 72 Wis. 2d 348, 241 N.W.2d
 158, 160 (1976).
  *3 Both parties claim that the language of the 1981 agreement is
 unambiguous but argue for opposite conclusions.
  Arneson asserts that at a minimum he is entitled to royalties at 2 1/2 % for
 the works admittedly covered by the settlement agreement without any right of
 impoundment or set-off by TSR for royalties it claims to have erroneously paid
 on Monster Manual II. He claims that TSR is in default on the agreement
 regardless of whether Monster Manual II is a revised edition because TSR has
 failed to pay the $60,238.68 admittedly owing. He also asserts that even if
 the $108,703.50 in royalties was paid by mistake, TSR cannot recover any of the
 money because it was a mistake of law.
  Arneson's main contention is that he is entitled to royalties at 2 1/2 % on
 the sales of Monster Manual II because it is a 'revised edition' of Monster
 Manual as defined in paragraph 7(a) of the agreement. Arneson states that the
 only issue is whether Monster Manual II includes substantially the same subject
 matter as Monster Manual. Arneson argues that both manuals purport to be an
 alphabetical compendium or listing of the monsters found in Advanced Dungeons
 and Dragons. He claims that the preface in Monster Manual II written by the
 author, Gary GYGAX, makes it clear that the new manual is simply an expansion
 of Monster Manual which will some day comprise three or four books as
 additional monsters continue to be added. Finally, he argues that the identical
 formats and purpose of the manuals establishes that Monster Manual II involves
 the same subject matter and that the new monsters are merely additions to the
 original text.
  TSR contends that paragraph 17(h) allows it to withhold payments made for
 Monster Manual II. It claims that Monster Manual II is a 'new work' and by
 crediting the mistaken payments made against royalties otherwise due, it is
 availing itself of the provision in 17(h) that 'failure to make payments on
 said new item shall not be deemed to be a default . . .' It therefore can
 continue to withhold payments and is not in default on the agreement.
  TSR argues that Monster Manual II does not include substantially the same
 subject matter as Monster Manual and therefore is not a revised edition. It
 also argues that Monster Manual II does not include changes or additions to the
 text, but rather that the vast majority (97%) was an entirely new work. It
 notes that the definition of 'subject matter' is 'the substance of a . . .
 book . . . as distinguished from its form or style' rather than the 'subject of
 a . . . book' as erroneously stated by Arneson. It finds this distinction
 crucial: while Monster Manual II may have the same general 'subject', i.e.,
 monsters, the 'substance' of the books, namely the descriptions of monsters,
 are not the same. TSR concludes that if Monster Manual II is not a revised
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   4
(CITE AS: 1985 WL 442, *3 (D.MINN.))
 edition it can properly recover the $108,703.50 already paid in royalties,
 because the payments involved a mistake of fact. Furthermore, TSR claims the
 right to extinguish this debt by withholding future royalties on other items
 because mutual debts extinguish each other by operation of law.
  *4 The language of the 1981 agreement between the parties is controlling on
 the issues raised by the parties. The court has carefully reviewed the disputed
 contractual provisions and all of the materials submitted by the parties and
 finds that the contract is unambiguous and compels a finding that Arneson is
 entitled to summary judgment. Under paragraphs 6(g) and 7(a) Monster Manual II
 is a revised edition of Monster Manual, and Arneson is entitled to royalties
 for its sales. The failure of TSR to make payments on royalties admittedly
 owing, because it was withholding them as an off-set to the payments it had
 made on Monster Manual II, constitutes a default under paragraph 17 of the
 agreement on the part of TSR.
  In order to be entitled to royalty payments on Monster Manual II, Arneson must
 establish that as a matter of law this work constitutes a 'revised edition' of
 Monster Manual, as that term is defined in paragraph 7(a) of the settlement
 agreement. There is no dispute that the two works have the same or similar
 title and include substantially the same rules. TSR, however, argues that
 Monster Manual II does not satisfy the remaining criteria for a revised
 edition.
  Under any reasonable interpretation of the language of the agreement, the
 subject matter of the works are substantially the same. Words appearing in a
 contract are to be given their plain ordinary meaning. North Gate Corp. v.
 National Food Stores, Inc., 30 Wis. 2d 317, 140 N.W.2d 744 (1966); In re
 All-Star Ins. Corp., 112 Wis. 2d 329, 332 N.W.2d 828 (Wis. Ct. App. 1983).
 Subject matter is defined as 'the substance of a discussion, book, writing,
 etc., as distinguished from its form or style.' Random House Dictionary 1415.
 [FN2] It is also defined as 'matter presented for consideration; as a: the
 essential facts, data or ideas that constitute the basis of spoken, written, or
 artistic expression or representation; often; the substance as distinguished
 from the form of an artistic or literary production.' Webster's Third
 International Dictionary 2276.
  The substance of both these works is a listing and description of monsters to
 be used in playing Advanced Dungeons and Dragons. Both works are identical in
 their purpose and application; they are to be used as a reference source for
 the playing of Advanced Dungeons and Dragons. TSR contends, however, that while
 the manuals may have the same general 'subject', the 'substance' of the two
 works is the specific descriptions of monsters and these are completely
 different. Obviously, the new monsters differ from the ones contained in
 Monster Manual and also from each other. Each monster has different
 capabilities that come to bear on the playing of the game. Yet, those same
 differences exist between each of the monsters listed in Monster Manual itself.
 While the substance of the description of each monster is different, a common
 theme exists for the complete work.
  The unifying basis of the two works, their essential idea, is that these parts
 make up a whole; an encyclopedia of creatures for the Advanced Dungeons and
 Dragons game system. See Preface to Monster Manual II. Just as the editions of
 an encyclopedia are published every few years, Monster Manual has been expanded
 to include new creatures. Id. TSR's decision to place these new monsters in a
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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   5
(CITE AS: 1985 WL 442, *4 (D.MINN.))
 separate volume is a difference of mere form and does not alter or impact on
 the substance of the material within. If the new creatures had been
 interspersed alphabetically into the existing volume, it would have been
 apparent at first glance that the addition of monsters involves identical
 subject matter. The inclusion in Monster Manual II of a common index of all
 monsters and charts rating monsters from both volumes further demonstrates the
 unity of the two works.
  *5 This decision is supported by the language of the Monster Manual itself.
 The definition of revised edition and the foreward and preface to the Monster
 Manual evidence that additions to the work were contemplated and that,
 specifically, the addition of new monsters was forseen. Indeed, from 1977 on,
 the author, Gary GYGAX, was 'designing and collecting monsters with the aim of
 publishing a second volume.' Preface to Monster Manual II. The addition of new
 monsters is also consistent with the proclaimed subject matter of Monster
 Manual as 'AN ALPHABETICAL COMPENDIUM OF ALL OF THE MONSTERS FOUND IN
ADVANCED
 DUNGEONS & DRAGONS . . ..' (emphasis supplied by the court). Under any
 reasonable interpretation of the agreement, Monster Manual II is an addition to
 the text and it involves substantially the same subject matter.
  This ruling makes it necessary to resolve only one other issue now raised by
 the parties. TSR argues that its set-off of payments admittedly owing was not a
 breach of paragraph 17 of the agreement placing it in default. Its reliance on
 paragraph 17(h) is misplaced in this instance, however. Under the plain meaning
 of 17(h) payment can be withheld only on the contested 'new' item. TSR withheld
 payments on royalties admittedly owing and thus is in default on the agreement
 under paragraph 17. [FN3]
                                      ORDER
  Accordingly, based upon the above and all the files, records, and proceedings
 herein,
  IT IS HEREBY ORDERED that
  1. The motion of plaintiff David L. Arneson for summary judgment is granted.
  2. David L. Arneson is entitled to royalties from the sales of Monster Manual
 II at the rate and in the amount provided for in the March 6, 1981 agreement.
  3. The actions of TSR Hobbies, Inc., in withholding quarterly royalty payments
 as a credit on overpayment of royalties on Monster Manual II place it in
 default under paragraph 17 of the March 6, 1981 agreement.
  4. The motion of defendant TSR Hobbies, Inc. for summary judgment is denied.
  5. Summary judgment is entered in favor of David L. Arneson on the first
 counterclaim of TSR Hobbies, Inc.

      FN1 TSR alleges in its second and third counterclaims that Arneson is
     preparing a derivative work from Dungeons and Dragons in violation of the
     agreement and the copyright laws. The fourth counterclaim alleges that
     Arneson has improperly attempted to convey and conveyed rights to use TSR'S
     Dungeon and Dragon trademark.

      FN2 TSR makes a great deal out of Arneson's misquote of this definition
     as 'the subject of a discussion' rather than the substance. While TSR
     claims the distinction is crucial, the differences it attempts to draw are
     tenuated and of no bearing on the result because the subject matters are
     substantially the same even under the definitions put forth by TSR.
                          Copr. (C) West 1994 No claim to orig. U.S. govt. works



Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   6
(CITE AS: 1985 WL 442, *5 (D.MINN.))

      FN3 TSR has moved for summary judgment on its first counterclaim which is
     the flip side of the complaint. TSR seeks a declaration that no royalties
     are owing on Monster Manual II and that it has the right to treat the
     payments made on it as an advance royalty payment against other royalties
     due, unless and until the court finally determines that royalties are owing
     on Monster Manual II. The court's analysis decides these issues in favor of
     Arneson and, accordingly, he is entitled to summary judgment on the first
     counterclaim. Northland Greyhound Lines, Inc. v. Amalgamated Ass'n, 66
     F. Supp. 431, 432-33 (D. Minn. 1946), appeal dismissed, 157 F.2d 329
     (8th Cir. 1946); see Pueblo of Santa Ana v. Mountain States Tel. & Tel.
     Co., 734 F.2d 1402, 1408 (10th Cir.), cert. granted, 105 S. Ct. 242
     (1984).
END OF DOCUMENT
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                       AUTHORIZED FOR EDUCATIONAL USE ONLY            PAGE   1

Citation                          Rank(R)              Database          Mode
Not Reported in F.Supp.           R 10 OF 20           ALLCASES          Page
(CITE AS: 1992 WL 14144 (N.D.ILL.))

                                   TSR, INC.,
                                       v.
                    MAYFAIR GAMES, INC., et al., Defendants.
                                  No. 91 C 417.
                United States District Court, N.D. Illinois, E.D.
                                 Jan. 16, 1992.
                          MEMORANDUM OPINION AND ORDER

  SHADUR, District Judge.
  *1 Defendants Mayfair Games, Inc. and its President Darwin Bromley have
 filed their Answer to Amended Complaint brought by TSR, Inc ("TSR").  This
 memorandum opinion and order is issued sua sponte because of a small number of
 troublesome aspects of that pleading.
  In a fashion typical of most complaints, Complaint P 1 begins by setting out
 what TSR "seeks"--what it is claiming.  Though defendants respond by admitting
 the nature of the relief that TSR seeks, they then "deny the remaining
 allegations contained in paragraph 1."  That is really a crabbed reading of
 those allegations, because if defendants had instead admitted Complaint P 1 in
 its entirety, that could not fairly be read as also constituting an admission
 of TSR'S entitlement to what it seeks.  Nonetheless, that is a small enough
 matter so that if it were the only arguable flaw in the Answer, this opinion
 need not have been written.
  Again in typical form, Complaint P 2 first states what sources of law "[t]his
 action arises under" and then goes on to identify the sources of this Court's
 jurisdiction.  Yet defendants deny all the allegations contained in that
 paragraph.  Even leaving aside any implied risk that might be involved in
 admitting the first quoted assertion, there is no way in which defendants can
 in objective good faith deny subject matter jurisdiction here.  For that
 purpose it is enough that TSR invokes such jurisdiction in a facially
 sufficient manner. [FN1]
  Next in response to Complaint P 3's statement that venue is proper under 28
 U.S.C. s 1391(b) ("Section 1391(b)"), defendants "admit that they reside in the
 Northern District of Illinois."  Yet they go on to "deny any remaining
 allegations contained in paragraph 3"--meaning that they dispute the assertion
 as to venue itself.  But that position cannot be taken properly by defendants
 in light of the express statement in Section 1391(b) that authorizes any
 federal-question action (such as this one) to be brought in "a judicial
 district where any defendant resides, if all defendants reside in the same
 State...."
  Those aspects of the Answer are particularly puzzling, because throughout the
 remainder of the pleading defense counsel have been meticulous in following the
 requirements of federal pleading (including their careful adherence to the
 provisions of Fed.R.Civ.P. 8(b) that are frequently misunderstood by lawyers--
 see this Court's opinion in Gilbert v. Johnston, 127 F.R.D. 145, 146
 (N.D.Ill.1989)).  Nonetheless, to eliminate the need for anyone to spend any
 time on nonissues, defense counsel are ordered to correct the defects
 identified here by an amendment to the Answer on or before January 24, 1992.

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Not Reported in F.Supp. AUTHORIZED FOR EDUCATIONAL USE ONLY           PAGE   2
(CITE AS: 1992 WL 14144, *1 (N.D.ILL.))
      FN1. It is particularly troublesome for a party to challenge subject
     matter jurisdiction without any apparent bona fide basis for doing so, as
     defendants seem to have done here.  Although subject matter jurisdiction
     cannot of course be conferred by consent, as soon as a court is placed on
     notice of a dispute in that respect it is obligated to pursue the issue.
     And there would be no justification for sending either this Court or TSR on
     such a hunt, with a concomitant waste of resources, if the existence of
     subject matter jurisdiction is clear.
END OF DOCUMENT
                          Copr. (C) West 1994 No claim to orig. U.S. govt. works