Bus. Guides, Inc. v. Chromatic Commc'ns Enters., Inc.
Facts: Business Guides was a trade magazine publisher, who also published directories for specialized areas of retail trade. Chromatic was also a publisher of specialized directories. Business Guides had a practice of inserting small errors into the listings to prevent copyright infringement. Business Guides thought that Chromatic copied its listing, when in fact, they hadn't. It took the law clerk only 1 hour to determine that what Business Guides thought were errors in Chromatic's directories that were copied from its own directories were real listings.
Procedural History: Business Guides brought suit. Applied for a temp. restraining order against Chromatic. District Ct. denied application and stayed further proceedings and referred the matter to a magistrate to determine if Rule 11 sanctions should be imposed. Magistrate said yes.
Issue: Does Rule 11 apply to represented parties as well as unrepresented?
Reasons: The represented party (Business Guides) was at fault, it should have done more research.