Guccione Collection: Damages Owed By ‘Penthouse’ Related To Intellectual Property

by Tara Arick on September 27, 2013 · 0 comments

in Bankruptcy

The Guccione Collection LLC (TGC) filed an adversary proceeding in the Chapter 11 bankruptcy of PMGI Holdings Inc., the parent company for the adult entertainment empire carrying the name “Penthouse,” seeking declaratory relief and unspecified damages related to intellectual property (In Re: PMGI Holdings Inc., No. 13-12404, Chapter 11, D. Del. Bkcy.).

PMGI filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Sept. 17.

Guccione AssetsĀ 

TGC is a group dedicated to the life of Bob Guccione, the deceased former publisher and owner of Penthouse Magazine. TGC has purchased various assets formerly belonging to Guccione, and it offers those assets for sale through a website.

Friend Finder Networks Inc. (FFN), through its subsidiary General Media Communications Inc. (GMC), claims to have purchased certain assets and property rights belonging to Penthouse, TGC argues.

According to TGC’s complaint, FFN and GMC have alleged that TGC infringes on their intellectual property rights. Moreover, TGC says FFN and GMC have issued a “takedown notice,” pursuant to the Digital Millennium Copyright Act (DMCA), 17 U.S. Code Section 512.

17 U.S. Code Section 512

TGC maintains, however, that the assets in question belonged to Guccione privately and never belonged to Penthouse. Therefore, TGC says that even if FFN and GMC purchased the assets of Penthouse, FFN and GMC cannot demonstrate that they own any intellectual property rights covering the assets owned by TGC.

Furthermore, even if FFN and GMC could show that they own the intellectual property rights in question, TGC says its use of those rights “falls squarely within the doctrine of fair use.”

In February 2012, Jeremy Frommer, one of the principals of TGC, purchased at auction the contents of a storage facility in New Jersey that contained Guccione’s photography, artwork, films, magazines and documents.

Auction

Frommer located other items as well and made them available for purchase through TGC’s website.

When PMGI filed for bankruptcy on Sept. 17, 2013, Frommer expressed an interest in purchasing Penthouse. FFN and GMC then sent a cease and desist letter to TGC and sent the “takedown notice.”

TGC argues that FFN and GMC intentionally misrepresented that TGC was infringing valid copyrights and trademarks, which resulted in TGC’s hosting company taking down the website. Consequently, TGC says it has been damaged by the actions of FFN and GMC.

TGC is represented by Christopher P. Simon and David G. Holmes of Cross & Simon in Wilmington and Stuart I. Friedman, Andrew A. Wittenstein, Paul S. Grossman and Claire L. Chau of Friedman & Wittenstein in New York. PMGI is represented by Dennis A. Meloro of Greenberg Traurig in Wilmington and Nancy A. Mitchell and Matthew L. Hinker of the firm’s office in New York.

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