Geneva Intern. Corp. v. Petrof, Spol, S.R.O.
| Citation | 529 F.Supp.2d 932 |
| Decision Date | 14 December 2007 |
| Docket Number | No. 07 C 4214.,07 C 4214. |
| Parties | GENEVA INTERNATIONAL CORPORATION; Plaintiff, v. PETROF, SPOL, S.R.O. a Czech Republic corporation, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Jeffrey Todd Gilbert, Marina C. Santini, Matthew John O'Hara, Robin J. Elowe, Reed Smith, LLP, Chicago, IL, for Plaintiff.
Daniel Patrick Hogan, McCabe & Hogan, P.C., Palatine, IL, for Defendant.
The parties each move for summary judgment as to Count I of the complaint, which involves a claim of anticipatory breach of licensing agreement arising out of an exclusive license (the license) granted by Petrof, Spol. S.R.O. (Petrof) to Geneva International Corporation (Geneva), to use the PETROF® trademark in the United States. Geneva further moves for a preliminary injunction barring Petrof from using its trademark in the United States to sell pianos until the expiration of the license in 2012, For the following reasons, both parties' motions are denied.
The following facts are not in dispute. Geneva is an Illinois corporation that imports pianos for sale and distribution in the United States. Petrof is a manufacturer of pianos, and has its principal place of business in the Czech Republic. Since 1985 Geneva has been the exclusive U.S. distributor of pianos manufactured by Petrof and its predecessors in the Czech Republic, including pianos bearing the. PTROF® trademark. In 2001, Geneva and Petrofs predecessor, Tovarna na piana, as entered into a contract of exclusive sale. That contract was amended on June 10, 2003. In the fall of 2003, through the spring of 2004, various disputes arose between the parties resulting in the commencement of arbitration proceedings in the Czech Republic, whose laws governed the amended contract. The parties entered into a settlement agreement on April 29, 2004, which was executed contemporaneously with the license and additional amendments to the contract for exclusive sale (this final iteration will be referred to simply as "the contract"). Enforcement of the settlement agreement was also contingent upon the execution of these other two documents. The license provided, in pertinent part:
WHEREAS:
B. On May 24, 2001, a contract of exclusive sale ... was concluded between [Geneva] and Petrol's legal predecessor ... which document was amended by the Parties on June 10, 2003 and today's date;
C. On April 23, 2004, the Parties signed a term sheet on the basis of which they concluded a settlement agreement;
D. One of the terms and conditions to the effectiveness of the Settlement Agreement is the execution by the Parties of this Licensing Agreement through which [Geneva] will acquire an exclusive license to use the Mark solely and exclusively in the United States. NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. LICENSING OF THE MARK 1.1 For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Petrof grants [Geneva] an exclusive license to the mark within the territory of the United States of America from the date hereof through 31 December 2012 . . . 1.2 [Geneva] hereby accepts the licensing of the Mark and agrees that, so long as a member of the Petrof family ... owns a majority stake in and exercises control over Petrof and Petrof is still actively producing pianos, [Geneva] shall not use the Mark to sell pianos from other producers than Petrol.
2. FINAL PROVISIONS
2.1 This Licensing Agreement is made in accordance with and governed by the law of the State of Illinois, United States of America ...
* * * * * * 2.4 This Licensing Agreement constitutes the entirety of the agreement between the Parties with regard, to the subject matter hereof and supersedes any previous agreement or agreements whether verbal or written with regard thereto.
An integration clause similar to that just mentioned in 2.4 above, was also laid out in the settlement agreement. The contract was amended to, among other things, expire on December 31, 2012, the same time as the license. The relevant provisions of the contract are as follows;
Section V — Buyer's obligations
* * * *
6. Supplier hereby grants to Buyer a non-exclusive, royalty-free license, to use and have its dealers use the trademarks of Supplier for the promotion of the contractual products within the contractual territory; provided that Buyer and its dealers shall not have license to use Supplier's trademarks in any derivative manner including, without limitation, utilization of Supplier's name or other marks in connection with items or goods other than the contractual products. During the effectiveness and after the termination of this Contract, the Buyer shall not apply for registration of either Supplier's trade name or trademark registered for Supplier, or trademarks used with contractual products. Also, Buyer is not entitled to transfer any intellectual property right to third parties, in whole or in part, resulting from this Contract without the explicit and written approval of Supplier. Buyer shall notify Supplier without undue delay about any breach of trademark rights known to Buyer in the contractual territory
Section VI — Supplier's obligations
* * * * * *
2. Honor Buyer's rights of exclusive sales of contractual products in the contractual territory. Without limiting the generality of the foregoing sentence, Supplier shall not directly, or indirectly through third parties, sell or supply contractual products for sale in the contractual territory to any person or entity other than Buyer.
Section XIV — Withdrawal from the Contract [the Withdrawal Provision]
1. Each Party shall be entitled to withdraw from this Contract with six-month prior notice in case of substantial infringement of obligations by the other Party .... The substantial infringement is understood to be mainly: (I) nonfulfillment of minimum annual purchases by Buyer per Section VIII; (ii) Supplier supplying contractual products directly, or indirectly through a third party, to another buyer in the contractual territory per Section VI.2 above; (iii) Buyer selling contractual products directly, or indirectly through a third party, beyond the contractual territory per Section V.8 above.
* * * * * *
4. If either of the Parties terminates the Contract in accordance with this Section XIV, and it is determined pursuant to arbitration initiated under Section XVI that such Party was not entitled to the premature termination, such arbitration decision will be accepted, and the non-terminating Party shall be entitled to require compensation of demonstrated damages for the improper, premature termination of the Contract.
By way of letters to Geneva dated February 23, 2007, and March 22, 2007, Petrof stated its intention to terminate the contract based, in part, on its belief that Geneva had failed to make the minimum purchases required in 2006. By letter dated May 21, 2007, Petrof notified Geneva that it was withdrawing from the Contract in accordance With Section XIV.1 and giving six months' notice. Since that time Petrof has publicly stated its intention to sell pianos in the United States bearing the PETROF® trademark. Geneva filed the present action alleging that Petrol's intention to begin distribution in the United States using the PETROF® trademark constitutes an anticipatory breach of the license.
We have subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332, and Petrof concedes that we also have personal jurisdiction over it. We apply Illinois law, as provided for in the choice-of-law provision of the license. Sound of Music Co. v. 3M, 477 F.3d 910, 915 (7th Cir.2007).
Summary judgment is proper where the pleadings and evidence present no genuine issue of fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. Pro. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We evaluate admissible evidence in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where, as here, both parties move for summary judgment, both are required to show that no genuine issues of fact exist, taking the facts in the light most favorable to the party opposing each motion. If issues of fact exist, neither party is entitled to summary judgment. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.1983). Where unambiguous, interpretation of a written contract is particularly amenable to summary judgment. Cherry v. Auburn Gear, Inc., 441 F.3d 476, 481 (7th Cir. 2006).
An anticipatory breach of contract occurs when a party to a contract "manifests a definite and unequivocal intent prior to the time fixed in the contract that it will not render its performance under the contract when that time arrives." Farwell Construction Company v. Ticktin, 84 Ill. App.3d 791, 405 N.E.2d 1051, 1060, 39 Ill.Dec. 916 (1st Dist.1980)." The parties agree that Petrof has unequivocally stated its intent to begin selling its pianos in the United States using the PETROF® name (Geneva Stmt. of Facts ¶ 27). Therefore, the only question is whether or not the license, as written, permits them to do so.
Geneva argues that the term "exclusive license" in the license is unambiguous on its face, and thus we need not go beyond the four corners of the license to interpret it. Geneva sets forth Black's Law Dictionary's definition of the term, which defines "exclusive license" as "[a] license that gives the licensee the sole right to perform the licensed act, often in a defined territory, and that prohibits the licensor from performing the licensed act and from granting the right to anyone else; esp, such a license of a copyright, patent or trademark right." BLACK'S LAW DICTIONARY 938 (8th ed.2004). Generally, this would be the...
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