28 F.3d 600 (7th Cir. 1994), 93-2965, Omron Healthcare, Inc. v. Maclaren Exports Ltd.

Docket Nº:93-2965.
Citation:28 F.3d 600
Party Name:31 U.S.P.Q.2d 1376 OMRON HEALTHCARE, INC., Plaintiff-Appellant, v. MACLAREN EXPORTS LIMITED, Defendant-Appellee.
Case Date:June 27, 1994
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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28 F.3d 600 (7th Cir. 1994)

31 U.S.P.Q.2d 1376

OMRON HEALTHCARE, INC., Plaintiff-Appellant,



No. 93-2965.

United States Court of Appeals, Seventh Circuit

June 27, 1994

Argued March 31, 1994.

Page 601

Marcia E. Goodman, Marian C. Haney, Jeffrey S. Fowler (argued), Mayer, Brown & Platt, Chicago, IL, for plaintiff-appellant.

John L. Conlon (argued), Schwartz, Cooper, Greenberger & Krauss, Chicago, IL, for defendant-appellee.

Before POSNER, Chief Judge, and CUMMINGS and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

A few years ago the Marshall Baby Products Division of Omron Healthcare became the exclusive distributor, in the United States, of baby strollers manufactured by Restair Maclaren Limited, a British firm. The contract allowed Maclaren to cancel on 90 days' notice. Disappointed by Omron's sales, Maclaren gave notice terminating the distributorship as of January 22, 1993. One of Omron's employees left to create a new firm, KidCo, which became Maclaren's U.S. distributor. Omron noticed that KidCo's strollers identified Omron as the distributor, and it sued Maclaren for trademark infringement.

When Omron's distributorship ended, Maclaren had on hand 2,300 strollers that had been manufactured with trademarks identifying Omron as the seller. (Each stroller also, and more prominently, identified Maclaren as the manufacturer.) Maclaren blames Omron for this situation, contending that after receiving notice of termination Omron placed firm orders for the strollers, demanded that Maclaren build them, and then refused to accept delivery; Omron denies that it is responsible for the excess inventory. Maclaren and its new distributor pasted labels over the Omron marks and included literature identifying KidCo as the reseller but did not succeed in obliterating all traces of Omron's trademarks. Omron demands a remedy. Maclaren moved to dismiss, relying on this portion of its contract with Omron:

The parties hereto agree that all disputes arising out of this Agreement which cannot

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be resolved amicably between the parties shall be referred to the High Court of Justice in England which will have exclusive jurisdiction to determine such disputes.

Omron protested that this dispute arose out of trademark infringement, not out of the contract, and that Maclaren would have been equally (if not more) liable for its conduct had there never been an agreement. To this the district court replied:

Because the instant dispute would not have arisen if Omron and Maclaren Exports had never entered into their Distribution Agreement, the case at bar "arises out of" the Distribution Agreement. The forum selection clause in the Distribution Agreement therefore deprives this court of jurisdiction over the matter. Accordingly, the case is dismissed with prejudice.

But-for causation is an unsatisfactory understanding of language referring to "disputes arising out of" an agreement. Let us suppose that while inspecting Omron's facilities, a manager of Maclaren stepped on a baby rattle and fell. Would the ensuing tort litigation go to the High Court of Justice in...

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