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Titanic Exhibit Creators Pick Up Steam in Court

ATLANTA (CN) - A company that organizes Titanic exhibitions may have a trademark case against a former employee's competing exhibition in China, a federal judge ruled.

The Titanic showcase from Atlanta-based Premier Exhibitions is one of the company's most prominent, offering spectators an intimate view of the doomed ship with access to artifacts salvaged from the ocean floor.

Featuring historical insight, digital duplication, and certain design and lighting patterns, Premier's exhibitions give detailed recreations of the Titanic and its surroundings, as it was or could have been. Each visitor's entry ticket also contains the biographical information of a real Titanic passenger. At the exhibit's end, Premier displays the passenger manifest so that visitors can learn the fate of the person whose ticket they held.

Premier says it negotiated with Thomas Zaller, of Georgia resident, in 2011 to organize a Titanic exhibition in Singapore.

Zaller allegedly insisted on having detailed information about the exhibit, including digital copies of materials, computer-aided-design drawings of its layout and photos. Wary of giving Zaller proprietary information, Premier says it inserted provisions in its exhibition agreement to prevent the creation of a competing enterprise.

Despite these safeguards, however, Zaller and his Nevada- and Singapore-based companies, both named Imagine Exhibitions, allegedly used the protected information and some of Premier's materials to create a copy of its exhibition in Macau, China. Premier said Zaller used underwater videos owned by Premier and photos of Premier's Singapore exhibition to promote its competing exhibition on the Internet, in the media and at trade shows in the United States.

Zaller also signed an agreement with the National Geographic Society, which had partnered with Premier in the past, to sponsor his Titanic exhibition, Premier claimed.

While Premier spent years and millions of dollars to design the exhibition, gather historical information and create stories, it said Zaller prepared his "substantially similar" exhibition in Macau in a few months, opening in October 2012. Zaller's exhibition remained open until March 2013, despite cease-and-desist notices from Premier's attorneys.

Premier and RMS Titanic Inc. sued Zaller this past February, alleging infringement of its trade secrets and intellectual property.

In an amended complaint, Premier added two more defendants: an Imagine Exhibitions company based in Georgia and another Georgia corporation named TZ Inc. They argued that all of the Imagine entities and TZ were merely alter egos of Zaller, who managed them from Atlanta.

Zaller and his companies moved to dismiss the lawsuit, claiming that the Northern District of Georgia lacked jurisdiction over the claims and was not the right venue to bring them. They also argued that most claims were pre-empted by federal copyright law and by the Georgia Trade Secrets Act.

U.S. District Judge William Duffey Jr. ruled that the court had jurisdiction over the trademark infringement claims against Zaller and the U.S. entities, but dismissed Zaller's Singapore-based company as a defendant, finding that it had acted outside the United States and had no interaction with U.S. consumers.

"Even though plaintiffs assert that Imagine-Singapore profited from the Macau exhibition, financial gain by an infringing defendant alone is insufficient to show a substantial effect on United States commerce," Duffey wrote.

What's more, the plaintiffs did not show that Zaller used Imagine-Singapore for fraudulent or improper purposes and ignored its corporate form, the Oct. 17 ruling states.

Duffey did green-light Premier and RMS Titanic's trade-dress infringement claims against Zaller and the U.S. companies, however, based on the allegations that their exhibitions include certain unique design elements and patterns, and that Zaller's similar shows may cause consumer confusion.

The Copyright Act pre-empts Premier's state-law claim for conversion, but Duffey said it is free to plead claims for conversion of tangible property in an amended complaint.

The Georgia Trade Secrets Act, which was designed to prevent the misappropriation of trade secrets, also supersedes claims for unjust enrichment, according to the 51-page ruling.

Duffey agreed that Zaller's 2011 negotiations with Premier and his promise not to use or disclose Premier's proprietary information formed the basis of an oral contract.

Although Zaller had argued that the contract was unenforceable because its ongoing nature required it to be in writing, the judge said the court was not required to determine the limits of the alleged agreement at the motion to dismiss stage.

Zaller may move to dismiss the breach of contract claim at a later time if he proves it is not supported by the facts, Duffey concluded.

He also refused to dismiss fraudulent inducement claims, noting that Zaller had made a promise to protect Premier's confidential information, but never intended to keep it.

Premier may conduct limited discovery to determine if the court has personal jurisdiction over Imagine-Nevada, the only remaining corporate defendant based outside of Georgia, according to the ruling.

The Atlanta-based federal court is the proper venue for claims against the Georgia defendants, the opinion concludes.

Duffey ordered the plaintiffs to conclude jurisdictional discovery by Nov. 30.

Premier and RMS Titanic said they planned to depose Zaller and Imagine-Nevada by Nov. 28. Imagine-Nevada agreed to respond to discovery requests by Nov. 15, according to the Oct. 28 discovery plan.

"Premier intends to pursue the remaining claims and see the case to its completion, so that justice can be served," said Brian Wainger, a Virginia Beach attorney representing Premier Exhibitions.

"Premier looks forward to beginning the discovery and prosecution phase," he added.

Attorneys for Zaller did not reply to a request for comment.

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