The Velvet Underground v. The Andy Warhol Foundation for the Visual Arts, Inc.

Filing 13

FIRST AMENDED COMPLAINT amending 1 Complaint, against The Andy Warhol Foundation for the Visual Arts, Inc. with JURY DEMAND.Document filed by The Velvet Underground. Related document: 1 Complaint, filed by The Velvet Underground.(cd) (Additional attachment(s) added on 2/23/2012: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit) (rdz).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
x
THE VELVET UNDERGROUND,
a Partnership, by its General Partners,
John Cale and Lou Reed,
Plaintiff,
– against –

:
12 Civ. 0201 (AJN) (FM)
:
:
:

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

ECF Case
FIRST AMENDED
COMPLAINT

:
:

JURY TRIAL
DEMANDED

Defendant.
x
Plaintiff The Velvet Underground, by its attorneys, Christopher R. Whent and
Clifford James, for its first amended complaint, alleges as follows:

Nat u r e o f t he Action and Relief S ought
1. Defendant The Andy Warhol Foundation For The Visual Arts, Inc. (the
“Warhol Foundation”) has infringed the trademark of Plaintiff The Velvet Underground (“VU”) consisting of a certain Banana design (the ”Banana design” or
the ”Mark”), described by The New York Times (the “Times”) as ”iconic” in relation
to VU.1 The Warhol Foundation has continued to infringe the Mark by licensing
its use by third parties in a manner likely to cause confusion or mistake as to
the association of VU with the goods sold in commerce by such third parties,
or as to the sponsorship or approval by VU of such goods, despite having acknowledged, by its counsel, receipt of VU’s repeated written demands to cease
Sparks, Pop Shop | Andy Warhol for Incase, N.Y. Times, Apr. 8, 2011 (Style Magazine
section); Cator Sparks, Bananas for Apples, N.Y. Times, Apr. 24, 2011 (Style section of the
Sunday edition). See ¶ 12 & note 16; ¶ 13 & note 17.
1 Cator

infringing activities. Consequently, VU brings this action under the Lanham Act,
and the common law of New York State, for appropriate relief, including, without
limitation, an award of attorneys’ fees.
2. The Warhol Foundation has sought to justify its unlawful licensing activities involving the Mark by asserting that it has a copyright interest in the Banana
design. However, the Warhol Foundation holds no copyright rights in the Banana
design. The Banana design was first published in 1967, and continuously and
repeatedly afterwards, without any copyright notice in the name of Andy Warhol
(or any person or entity affiliated with Andy Warhol or any successor-in-interest).
Under the applicable copyright law—which is the Copyright Act in effect from
July 1, 1909 through December 31, 1977 (the ”1909 Act”)—such publication did
not give the Warhol Foundation any copyright rights in the Banana design (even
if the Banana design has not been in the public domain at all times—both before
and after its initial publication).2 Consequently, VU also seeks a declaration,
under applicable copyright law, and pursuant to 28 U.S.C. §§ 2201 and 2202, that
the Warhol Foundation has no copyright rights or interest in the Banana design.

Factual Background
3. VU is the business entity formed by the rock group “The Velvet
Underground,” 3 regularly active as musical performers from 1964 through 1973,
and often described as one of the most important and influential groups of
the 1960s. In 2003, the music magazine Rolling Stone named The Velvet Under2 See

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

2

ground’s first commercially released album entitled The Velvet Underground and
Nico the 13th “Greatest Album of All Time,” and described the album as the
“most prophetic rock album ever made.” 4 In 2006, The Velvet Underground and
Nico album was made part of the National Recording Registry of the Library of
Congress.5 The album is commonly known as The Banana Album because its cover
artwork featured the Banana design—an illustration of a banana selected for the
purpose by artist Andy Warhol from an element of an advertisement in the public
domain.
4. John Cale and Lou Reed, together with Sterling Morrison and Angus
MacLise, formed the band in or about January 1965 under the name “The Warlocks” or “The Falling Spikes.” In or about November 1965, the band changed
its name to “The Velvet Underground,” and Maureen Tucker replaced Angus
MacLise. In or about December 1965, Andy Warhol attended performances by
The Velvet Underground, and began a collaborative association with the band.
The Velvet Underground became regular habitués of the Warhol studio known as
The Factory, and as such the band contributed soundtracks to motion pictures by
Andy Warhol, and were engaged as part of a Warhol-directed light show know as
the “Exploding Plastic Inevitable.” In or about February 1966, in an interview
for WNET, Andy Warhol announced that he was sponsoring a “new band, The
Velvet Underground.”
4 http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time-196
91231; http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time
-1969 1231/the-velvet-underground-the-velvet-underground-and-nico-19691231.
The Beatles’ album Abbey Road was rated 14th, and Miles Davis’s Kind of Blue was rated
12th.
5 The National Recording Registry quotes critic Lester Bangs as follows: “Modern music
starts with the Velvets, and the implications and influence of what they did seem to go
on forever.” http://www.loc.gov/rr/record/nrpb/registry/nrpb-masterlist.html.

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5. During 1966, the band recorded the songs that were later to be included
on The Velvet Underground and Nico album (at the suggestion of Andy Warhol,
Christa Paeffgen, professionally known as Nico, sang three of the songs). The
band conveyed the exclusive rights to the recordings to the record division of
Metro-Goldwyn-Mayer, Inc. (“MGM Records”) pursuant to a royalty contract
dated May 2, 1966 that provided for an advance of $3,000, which the band split
with Andy Warhol in part in consideration for his furnishing the illustration for
the record cover.6
6. The illustration Andy Warhol furnished for the front cover of The Velvet
Underground and Nico album consisted of a banana design and a stylized
“Andy Warhol” signature.7 In March 1967, MGM Records published The Velvet Underground and Nico album on its Verve imprint. Upon information and
belief, such publication was unaccompanied by any copyright notice in the name,
or for the benefit, of Andy Warhol (or any person or entity affiliated with Andy
Warhol). After release, the album was briefly withdrawn in consequence of a
claim that a back cover photograph furnished by Andy Warhol (having nothing
whatever to do with the Banana design) was infringing; the album was later
republished with changes to the back cover, and, again without any copyright
6 According

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

4

notice in the name, or for the benefit, of Andy Warhol, any person or entity
affiliated with him, or any successor-in-interest, including, without limitation, the
Warhol Foundation. A copy of the iconic Banana design as it appeared on the
album (taken from the Internet) is annexed as Exhibit 1.8
7. This debut album by The Velvet Underground was not a commercial
success on its initial release, despite its Warhol-designed cover and sponsorship.
However, its uncompromising and iconoclastic version of rock music did catch
the attention of young musicians; one prominent musician commented that the
“album only sold ten thousand copies, but everyone who bought it formed a
band.” 9 Twenty years after its first release, The Banana Album was recognized, as
noted, as one of the great rock albums, and The Velvet Underground as one of
the most influential of rock bands.
8. The Velvet Underground broke up as a performing unit in 1972. But, while
its members followed diverse career paths after that, they were ever afterwards
identified in the public eye as “former members of The Velvet Underground,” in
large part because of the respect and affection engendered by their uncompromising attitude towards their music, and their rejection of compromise needed
to achieve immediate commercial success. Their reputation as members of The
Velvet Underground continued to grow and, in the 1980s, due to the accolades
that their music had continued to garner, Polygram Records, Inc., which by then
owned the assets of MGM Records (for whom The Velvet Underground made
most of its recordings), reissued all those recordings in new editions together
image on the Internet appears as a “thumbnail,” with a stated resolution of 350 ×
350 pixels, and the legend, “No higher resolution available.” This is the reason the words
“Peel Slowly and See,” appearing immediately to the right of the stem of the banana, are
not legible.
9 The statement is usually attributed to Brian Eno or Peter Buck, and has even been
attributed to Courtney Love.
8 This

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with material that had been recorded in the late 1960s but never released.10 Since
then, The Velvet Underground’s recordings have remained available throughout
the world and continue to sell to their decidedly strong and loyal audience, which
constantly grows. The goodwill of The Velvet Underground’s activities, and of its
constituent members, has in reality become global, extending to all parts of the
world.
9. Concomitant with that, the Banana design became a symbol, truly an icon,
of The Velvet Underground. What had been the cover design for one album,
The Velvet Underground and Nico, became an element of multiple different CD
and DVD recordings embodying music by The Velvet Underground, and, more
broadly, a symbol of the group The Velvet Underground and its members even
in non-musical contexts. For example, the Banana design became a recurring
visual theme in connection with The Velvet Underground reunion performing
tour in Europe in 1993,11 and the cover design for the compact disc albums, the
VHS tape and the DVD that resulted from that tour, used the Banana design.12
As previously noted,13 the 5 CD retrospective tribute album entitled Peel Slowly
And See that was released in 1995 also used the Banana design, expressly noting
in the booklet packaged with the CD that the design was a trademark of VU.14
In 2001, licensed by VU, Absolut vodka used the Banana design in an “Absolut
10 For

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

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Underground” national advertisement; the advertisement noted that the Banana
design is a trademark of VU.15
10. The Banana design is a significant element of VU’s ongoing licensed
merchandising activity. VU’s use and application of the design to symbolize
the group and its whole body of work has been exclusive, continuous, and
uninterrupted for more than 25 years. As a result, the symbol has become so
identified with The Velvet Underground and its members as a group, and of their
identity as creators and the goodwill associated with them, that members of the
public, and particularly those who listen to rock music, immediately recognize
the Banana design as the symbol of The Velvet Underground, and link the same
to The Velvet Underground and its members, such that the Banana design has
developed and now possesses secondary and distinctive meaning to purchasers
of goods bearing the Banana design.
11. Recognizing its responsibilities to the public purchasing goods bearing
the Banana design, VU reviews each licensed use of its Mark and retains control
over such uses to protect the buyers, and to assure themselves that the goods in
question are of the quality, and type that the implied endorsement warrants.
12. Within the past year, VU learned from an article in the Times, dated April
8, 2011, that:
[T]he Andy Warhol Foundation [has] agreed to lend [Warhol’s] work to
a new series of iPhone and iPad cases, sleeves and bags from Incase.
For the first in a series of four, they chose to focus on the iconic 1966
banana that Warhol created for the Velvet Underground’s self-titled
album . . . .16
15 The

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

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VU promptly notified the Warhol Foundation that: (a) the Banana design has,
and had acquired, secondary meaning as a mark of the VU; (b) the Warhol Foundation’s purported licensing of the Mark to Incase and others was unauthorized;
and (c) the Warhol Foundation’s indiscriminate and unauthorized licensing of
the Mark was likely to lead to confusion as to the affiliation, approval or sponsorship by VU of the goods in connection with which the Warhol Foundation had
purported to license the Mark.
13. In August 2011, the Times did a follow-up story that again confirmed
VU’s protectable interest in the Banana design, and validates VU’s concerns with
the Warhol Foundation’s unlawful purported licensing of it. The Times reported
that the Warhol Foundation had expanded its licensing of Warhol designs on
Incase products for use with Apple’s iPhone and iPad and other goods. Notably,
in this article the Times referred to the earlier purported license by the Warhol
Foundation of the Banana design as: “[T]he screen print of a banana featured on
the cover of the influential album ’The Velvet Underground and Nico.’ ” 17
14. Despite VU’s repeated demands that the Warhol Foundation cease its
continuing infringement of VU’s rights in the Mark, defendant has continued to
infringe VU’s rights. For example, as of the date of the filing of this first amended
http://tmagazine.blogs.nytimes.com/2011/04/08/pop-shop-andy-warhol-for
-incase/?scp=3&sq=warhol+foundation+iphone&st=nyt.
The
Times
repeated the text of this article on April 24, 2011 in the Style section
of its Easter Sunday edition under the headline Bananas for Apples.
http://query.nytimes.com/gst/fullpage.html?res=9505E5DF1F38F937A15757C0A9679
D8B63&scp=4&sq=warhol+foundation+iphone&st=nyt.
17 Roy
Furchgott, Another 15 Minutes of Fame for an iPad Case, N.Y.
Times, Aug. 22, 2011 (“Gadgetwise” feature in the Personal Tech section).
http://gadgetwise.blogs.nytimes.com/2011/08/22/another-15-minutes-of-fame-for
-an-ipad-case/?scp=1&sq=warhol+foundation+iphone&st=nyt. This story too the
Times repeated (in print in part) on August 25, 2011 in the Business Day section.
http://query.nytimes.com/gst/fullpage.html?res=9A0CE3D91638F936A1575BC0A9679
D8B 63&scp=2&sq=warhol+foundation+iphone&st=nyt.

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complaint, the Warhol Foundation publicly advertises its supposed right and
ability to license, and includes the display of a sample image of, the Banana
design.18
15. In response to VU’s communications, the Warhol Foundation has asserted
that VU has no trademark rights in the Mark, and that the Warhol Foundation
“may have” a copyright interest in the design. Consequently, VU brings this action
under the applicable copyright laws of the United States, and under Section 43(a)
of the Lanham Act (28 U.S.C. § 1125(a)).

Parties
16. Plaintiff The Velvet Underground is a New York partnership, with its
principal office located at 270 Madison Avenue, Suite 1410, New York, NY 10016.
17. Upon information and belief, at all times relevant herein, Defendant The
Andy Warhol Foundation For The Visual Arts, Inc. was and is a New York
Not-For-Profit corporation, has its principal place of business in the Southern
District of New York, and transacts substantial business in the Southern District
of New York and New York State.

Ju r i sdiction and Venue
18. This Court has subject matter jurisdiction of this action under 28 U.S.C.
§§ 1331 and 1338(a) and (b) in that the controversy arises under Acts of Congress
relating to copyrights and trademarks, and also, with regard to trademarks, under
15 U.S.C. § 1121. As to copyrights, the action arises under the 1909 Act, namely,
18 See

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

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the Act of March 4, 1909, which was the copyright law of the United States in
effect as it was amended from July 1, 1909 through December 31, 1977, 17 U.S.C.
§ 1, et seq. (The currently effective copyright law, the Copyright Revision Act of
1976, as it may have been amended from time to time, 17 U.S.C. § 101, et seq. (the
“1976 Act”), explicitly provides that it confers no copyright protection to works
that went into the public domain before its effective date of January 1, 1978.19 ) As
to trademarks, the action arises under The Lanham Act of 1946, as it may have
been amended from time to time, 15 U.S.C. § 1051, et seq., and more particularly
§ 1125(a). This Court has jurisdiction of the remaining claims for relief under New
York State common law pursuant to the doctrine of supplemental jurisdiction,
pursuant to 28 U.S.C. § 1367(a).
19. This Court has personal jurisdiction over defendant pursuant to principles
of general jurisdiction under the Constitutions of the United States and New York
State, and as set forth in section 301 of the Civil Practice Law and Rules of New
York State, in that defendant is domiciled in and/or resides in New York State.
20. Venue is proper under 28 U.S.C. §§ 1391(b)(1) and (2), and (c), and/or
28 U.S.C. § 1400(a), in that, upon information and belief, defendant is found and
resides in the Southern District of New York and/or a substantial part of the
events or omissions giving rise to this action occurred in this District.

19 Copyright

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

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C L AIMS FOR RELIEF
Count I
Declaratory Judgment
(The Warhol Foundation has no copyright rights in the Banana Design)
21. Plaintiff repeats and realleges all the allegations contained in paragraphs
1 through 20 as if fully set forth in this paragraph.
22. Plaintiff earns income annually to supplement its record royalty income
by licensing the reproduction of the Banana design. Plaintiff has conducted such
licensing for over 25 years.
23. Upon information and belief, the Warhol Foundation is the owner of all
right, title and interest in certain copyrighted works created by Andy Warhol.
24. The copyrighted works created by Andy Warhol defendant owns are
among its principal assets, upon information and belief having a current fair
market value in excess of $120 million.
25. Upon information and belief, defendant earns in excess of $2.5 million
annually by licensing rights to reproduce the copyrighted Andy Warhol works
that it owns.
26. In or about December 2009, the Warhol Foundation’s intellectual property
counsel wrote to plaintiff describing plaintiff’s licensed uses of the Banana design
as an instance of copyright infringement.
27. Plaintiff expressly rejected defendant’s claim of a copyright interest in
the Banana design and noted in response that the Banana design had acquired
secondary meaning and was a trademark of plaintiff.

11

28. In none of defendant’s correspondence before April 2011 did defendant’s
intellectual property counsel admit that defendant had included the Banana
design when licensing Andy Warhol designs for reproduction on the goods of
third parties.
29. In April 2011, it came to the attention of plaintiff in consequence of an
article in the Times that defendant had licensed for reproduction on cases for
iPhones, iPads, and other products, the Banana design, which the Times described
as “the iconic 1966 banana that Warhol created for the Velvet Underground’s
self-titled album.” 20
30. Plaintiff promptly notified defendant that the use of the Banana design
by defendant’s licensee was likely to cause consumer confusion, and lead consumers to believe that there was an affiliation or association between plaintiff and
defendant’s licensee; plaintiff further complained that defendant was exploiting
the goodwill that plaintiff had built up over the years, and which was vested
in the Banana design, and that defendant was unfairly competing with plaintiff.
Plaintiff demanded that defendant cease and desist from its infringing acts.
31. Responding to plaintiff’s demand, defendant’s intellectual property counsel for the first time in the correspondence admitted that “The Banana design
has been a consistent and prominent part of the [Warhol] Foundation’s licensing
programs for a number of years.”
32. Plaintiff in turn reiterated that defendant had no copyright interest in
the Banana design and that the only intellectual property rights in the design
that could be claimed were plaintiff ’s rights of trademark, and plaintiff ’s right of
publicity.
20 See

¶ 12 & note 16.

12

33. Defendant nevertheless continued, and continues to assert, that defendant
“may have a copyright interest in the Banana design” and that such gives it a right
to license reproduction of the Banana design.
34. To the extent the Banana design was created by Andy Warhol, it was
created in or about 1966, and published by MGM Records in 1967 as the front
cover design of the phonograph record album The Velvet Underground and Nico.
35. When it was so published, that phonograph record album bore no notice
of copyright in the name, or for the benefit, of Andy Warhol, any person or entity
affiliated with Andy Warhol, or any successor-in-interest, including, without
limitation, the Warhol Foundation, related to the front cover design.
36. Under applicable copyright law, i.e., the 1909 Act: (a) statutory copyright
law (title 17 of the United States Code) applies to any published work (i.e., after
publication, title 17 supersedes and replaces any existing common law copyright
rights that may have existed before publication); and (b) in order to obtain
statutory copyright protection, the published work must display a copyright
notice in the form prescribed by the 1909 Act. Thereafter copies must promptly
be deposited with the Copyright Office, which would then issue a certificate of
claim to copyright to the claimant. 17 U.S.C. §§ 1, 10, 11, 13, 209 (1909 Act).
37. Thus, a work published without copyright notice was both divested of
any common law copyright, and did not obtain statutory copyright—even if
otherwise copyrightable—and the work was consequently irrevocably thrust into
the public domain.21 Moreover, as noted, the 1976 Act expressly provides no
copyright protection to works that entered the public domain before the 1976 Act’s
effective date of January 1, 1978. Thus, unless the The Velvet Underground and Nico
21 See

¶ 18 & note 19.

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album was published with a copyright notice applicable to the Banana design, in
the name, or for the benefit, of Andy Warhol (or a person or entity affiliated with
Andy Warhol), neither Andy Warhol, nor any affiliated person or entity, nor any
successor-in-interest, including, without limitation, the Warhol Foundation, can
or does have any copyright rights in the Banana Design. Upon information and
belief, The Banana Album was not published with any such copyright notice, and
therefore the Warhol Foundation has no copyright rights in the Banana Design,
even if the Banana design did not enter the public domain with that publication,
or was not irrevocably in the public domain before that publication.
38. Defendant’s claim of the right to license the reproduction of the Banana
design under color of the rights of a copyright proprietor, and its claims of
infringement of copyright against plaintiff, have created an actual, substantial
and justiciable controversy between plaintiff and defendant concerning plaintiff’s
rights to the Mark, including plaintiff’s past licensing activities and its right to
continue to license reproduction of the Banana design.
39. By reason of the foregoing, the Court should enter a declaratory judgment,
pursuant to 28 U.S.C. §§ 2201 and 2202, holding that the Banana design cannot
constitute property of the Warhol Foundation the use of which by VU would
constitute infringement of any cognizable rights of the Warhol Foundation.
40. Further, pursuant to 28 U.S.C. § 2202, plaintiff is entitled to have defendant
account for any revenues collected attributable to defendant’s licensing, or other
exploitation, of the Banana design.

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Count II
False Designation of Origin
(15 U.S.C. § 1125(a)(1)(A) [section 43(a)(1)(A) of the Lanham Act])
41. Plaintiff repeats and realleges all the allegations contained in paragraphs
1 through 40 as if fully set forth in this paragraph.
42. The Banana design is inherently distinctive, and has long-established
secondary meaning, and, as such is firmly associated with rock group The Velvet
Underground. Consistent with VU’s protectable interest in the Mark, for at least
25 years VU has exercised its rights in the Mark, and licensed the Mark’s use on
goods.
43. Defendant has unlawfully, and without any right or privilege to do so,
purported to license the Mark on consumer goods, and caused such goods to be
in interstate commerce.
44. The use of the Mark on goods purportedly licensed by defendant will
likely cause, and continue to cause, confusion, mistake or deception as to the
source or affiliation of such third party goods.
45. Defendant’s unauthorized use of the Mark falsely indicates that The Velvet Underground, its members, or VU are connected with, sponsored, endorsed,
authorized, or approved, or are in some way affiliated with defendant’s purported licensees, or that such purported licensees are connected with, sponsored,
endorsed, authorized or approved by, or otherwise affiliated with The Velvet
Underground or VU.
46. Defendant’s licensees’ unauthorized use of VU’s Mark in connection with
such licensees’ goods allows defendant and such licensees to receive the benefit of

15

VU’s goodwill, which VU has established at great labor and expense, and further
allows such licensees to gain acceptance of their goods, based not on their own
qualities, but on the reputation, investment, hard work and goodwill of VU, and
The Velvet Underground and its members.
47. Defendant’s purported licensing of VU’s Mark constitutes a false designation of origin and unfair competition in violation of Section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a).
48. Defendant’s unlawful activities have caused, and unless enjoined will continue to cause, irreparable injury to VU. Damages and other monetary amounts
alone cannot adequately remedy the injury to plaintiff caused by defendant.
49. Consequently, VU is entitled to an injunction preventing defendant, and
any person or entity affiliated with defendant or purporting to represent defendant’s interests, from asserting any right, title, or interest in the Mark, or
continuing to license, attempting to license, or exploiting the Mark in any manner.
50. In addition, pursuant to the Lanham Act, plaintiff may also recover
such damages, profits, and other monetary amounts from defendant as may be
determined at the trial of this action.
51. VU expressly reserves the right to supplement or amend this first
amended complaint, or both, as may be appropriate in light of further incidents of infringement of its rights under the Lanham Act that may be uncovered
through discovery in this action or otherwise.

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C ount III
Unfair Competition Under New York Common Law
52. Plaintiff repeats and realleges all the allegations contained in paragraphs
1 through 40 as if fully set forth in this paragraph.
53. As a result of defendant’s use of plaintiff’s Mark, defendant has diverted
to itself value created in the Mark by its association with plaintiff, caused confusion amongst purchasers of goods approved by plaintiff, and diminished the
value of the Mark.
54. In addition, the Warhol Foundation’s actual assets and business activities
establish defendant’s intent to compete unfairly with VU. Thus, upon information
and belief, the Warhol Foundation owns all right, title and interest in many
hundreds and possibly thousands of original designs by Andy Warhol that, as
noted, have a fair market value in excess of $120 million.
55. Upon information and belief, since in or about 2005, the Warhol Foundation has actively licensed these designs, according to a representative, for use on
a “wide array of goods, spanning stationery, calendars, clothing, watches, table
top, [sic] and . . . snowboards.” This is consistent with Andy Warhol’s statement
that he would “endorse . . . anything” for money.
56. Inasmuch as the Warhol Foundation has such a large number of Andy
Warhol designs, all of which are presumably unique works that are highly valued
in the marketplace, there would appear to be no economic need to include the
Banana design among the designs that defendant licenses based on their status
as works created by Andy Warhol.

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57. To the extent that the Banana design is considered to be a work created by
Andy Warhol, the Banana design is fungible, and may be replaced or substituted
for by any of the other many works that the Warhol Foundation actually owns
and that it claims are in high demand by licensees.
58. The only reason for the Warhol Foundation to include the Banana design
in any design licensing activity, rather than any other Andy Warhol design, is
to capitalize on the goodwill established by VU and vested in the symbol. It is
not merely the graphic reproduction by Andy Warhol of a piece of fruit: it is the
“iconic” VU Banana.
59. Defendant’s foregoing acts infringe VU’s Mark, constitute unfair competition under the common law of the State of New York, and have been in disregard
of and with indifference to VU’s rights.
60. VU is entitled to recover from defendant such damages resulting from
defendant’s unfair competition, and such exemplary damages, as may be proved
at the trial of this action.
61. However, damages and other monetary amounts alone cannot adequately
remedy the injury to plaintiff caused by defendant. Defendant’s unlawful activities have caused, and unless enjoined will continue to cause, irreparable injury to
VU.
62. Consequently, VU is entitled to an injunction preventing defendant, and
any person or entity affiliated with defendant or purporting to represent defendant’s interests, from asserting any right, title, or interest in the Mark, or
continuing to license, attempting to license, or exploiting the Mark in any manner.

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63. VU expressly reserves the right to supplement or amend this first
amended complaint, or both, as may be appropriate in light of further incidents of unfair competition that may be uncovered through discovery in this
action or otherwise.

C ount IV
Misappropriation Under New York Common Law
64. Plaintiff repeats and realleges all the allegations contained in paragraphs
1 through 40, and 53 through 63, as if fully set forth in this paragraph.
65. Defendant has diverted to itself value created in the Mark by the Mark’s
association with plaintiff.
66. Defendant’s acts in doing so constitute misappropriation of plaintiff’s
benefits and property rights in the Mark and its potential earnings in realization
thereof.
67. VU is entitled to recover from defendant such damages resulting from
defendant’s misappropriation, and such exemplary damages, as may be proved
at the trial of this action.
68. However, damages and other monetary amounts alone cannot adequately
remedy the injury to plaintiff caused by defendant. Defendant’s unlawful activities have caused, and unless enjoined will continue to cause, irreparable injury to
VU.
69. Consequently, VU is entitled to an injunction preventing defendant, and
any person or entity affiliated with defendant or purporting to represent de-

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fendant’s interests, from asserting any right, title, or interest in the Mark, or
continuing to license or attempting to license the Mark.
70. VU expressly reserves the right to supplement or amend this first
amended complaint, or both, as may be appropriate in light of further incidents of misappropriation of its rights and property that may be uncovered
through discovery in this action or otherwise.

A l l e g at i o n s C oncerning Exemplary Damages
71. Defendant purported to license the Banana design with full knowledge
that VU had and has a protectable interest in that Mark, and that the Warhol Foundation has never had any copyright rights in the Mark. In so doing, The Warhol
Foundation has acted in all respects maliciously, intentionally, and wantonly, and
sought, knowingly and in bad faith, to deceive the public.
WHEREFORE, Plaintiff The Velvet Underground demands judgment as follows:
A. On Count I of the first amended complaint:
1. Declaring that:
a) The Warhol Foundation has no copyright rights in the Banana
design; and
b) The use of the Banana design by VU cannot infringe any copyright
rights that the Warhol Foundation has asserted or may attempt to
assert.
2. Compelling defendant to account for all monies received by defendant,
or any affiliated person or entity, or any agent or representative of
defendant, attributable to defendant’s claim that it owns or possesses
any right, title, or interest in a purported copyright in the Banana
design.

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3. Pursuant to 28 U.S.C. § 2202, awarding plaintiff such other and further
necessary and proper relief based on the declaratory judgment the
Court may grant.
B. On Count II of the first amended complaint:
1. Pursuant to 15 U.S.C. § 1117(a) (section 35(a) of the Lanham Act), an
award of:
a) Defendant’s profits, together with interest;
b) Damages, trebled, together with interest; and
c) The full costs incurred by VU in this action, including without
limitation, its attorneys’ fees.
2. Pursuant to 15 U.S.C. § 1116 (section 34 of the Lanham Act), enjoining
and restraining defendant from licensing or purporting to license, the
Banana design for any purpose, including, without limitation, the
manufacture, sale, or marketing of any product that exploits in any
way the Banana design, and from representing to third parties that
defendant owns, or has any right, title, or interest in, the Banana design.
3. Pursuant to 15 U.S.C. § 1118 (section 36 of the Lanham Act), ordering
defendant to destroy all copies of the infringing products in defendant’s
possession, custody or control (including, therefore, without limitation,
such products manufactured or maintained by defendant’s purported
licensees).
4. Such other and further relief pursuant to the Lanham Act as the Court
may deem just, equitable, and proper, including, without limitation,
ordering defendant to publicly disseminate such corrective materials
as may be necessary and appropriate.
C. On Counts III and IV of the first amended complaint:
1. An award of damages, and exemplary damages, in amounts to be
determined at the trial of this action, together with interest.
2. A permanent injunction, enjoining and restraining defendant from
licensing or purporting to license, the Banana design for any purpose,
including, without limitation, the manufacture, sale, or marketing of
any product that exploits in any way the Banana design, and from
representing to third parties that it owns, or has any right, title, or
interest in, the Banana design.
D. Awarding plaintiff its costs, and legal expenses, including, without limitation, reasonable attorneys’ fees.

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E. Awarding such other and further relief as the Court may deem just,
equitable, and proper.
Dated: New York, New York
February 15, 2012

Christopher R. Whent
(CW 5599)
270 Madison Avenue, Suite 1410
New York, NY IOo16-o601
(212) 68]-5320
cw [e-mail]

260 Madison Avenue, 17th Floor
New York, NY I0016-2401
[phone]
[e-mail]

Attorneys for Plaintiff
The Velvet Underground

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