## Facts

- Berlitz Schools of Languages of America, Inc. and Berlitz Publications, Inc. (Berlitz) owned and used the “Berlitz” name in connection with language instruction and related materials.
- Charles Berlitz authored language-instruction books marketed under his own name, including a “Passport” series and later a “Step-By-Step” series, creating potential consumer confusion with Berlitz’s marks.
- In earlier New York state litigation between Berlitz and Charles Berlitz, Berlitz challenged whether a printed disclaimer stating no affiliation with Berlitz was sufficient to prevent confusion.
- The New York courts entered final judgments for Charles Berlitz, finding the disclaimer adequate to dispel confusion.
- Everest House and its president, Lewis W. Gillenson, published the later “Step-By-Step” series authored by Charles Berlitz using the same disclaimer text, though Berlitz alleged the disclaimer’s relative size and prominence on the cover was reduced.
- Berlitz filed a federal action asserting Lanham Act claims and New York unfair competition and dilution claims, sought a preliminary injunction, and then faced defendants’ motion for summary judgment based on preclusion from the state judgments.

## Issues

1. Whether prior New York judgments that found the disclaimer adequate collaterally estopped Berlitz from relitigating the disclaimer’s adequacy in a later federal action against the publisher and licensor of similar books.
2. Whether differences in the disclaimer’s size and proportions on the later book series created a materially different issue defeating issue preclusion.
3. Whether Berlitz could avoid preclusion by recasting the dispute as a Lanham Act action not previously pleaded in state court.

## Decision

- The Second Circuit affirmed summary judgment for Everest House and Gillenson.
- The court held that the adequacy of the disclaimer had been actually litigated and necessarily decided in prior state litigation, and Berlitz was barred from relitigating that issue.
- The court found the altered size and proportions of the disclaimer did not materially change the issue previously resolved because the disclaimer’s content remained the same.
- The court rejected Berlitz’s argument that Lanham Act claims escaped preclusion, reasoning that issue preclusion applies to determinations of fact or issue, not merely to specific legal theories previously asserted.
- Because preclusion foreclosed Berlitz’s likelihood-of-confusion theory, Berlitz could not show a probability of success on the merits, supporting denial of preliminary injunctive relief.

## Legal Principles

- Issue preclusion bars subsequent litigation of an issue when the issue was actually litigated, necessarily decided, and resolved by a final judgment on the merits in a court of competent jurisdiction.
- A party may be precluded from relitigating a dispositive issue even when the later action asserts a different statutory basis, if the later claims depend on the same issue already decided.
- Minor factual variations that do not change the substance of the previously decided issue do not defeat issue preclusion.
- When issue preclusion eliminates any genuine dispute of material fact on a dispositive element, summary judgment is appropriate.

## Conclusion

The court held that Berlitz could not relitigate whether the disclaimer adequately prevented confusion because that issue had already been finally resolved in prior New York litigation, and Berlitz’s later Lanham Act and state-law claims—despite modest presentational changes—were barred by collateral estoppel.


Berlitz Schs. of Languages of Am., Inc. v. Everest House, 619 F.2d 211 (2d Cir. 1980)