Sunstar Incorporated v. Alberto-Culver Company ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 07-3288, 07-3289, 08-3835, 08-3836, 08-3931, 08-3936
S UNSTAR, INC.,
Plaintiff-Appellant,
Defendant-Appellant/Cross-Appellee,
v.
A LBERTO -C ULVER C OMPANY,
Defendant-Appellee,
Plaintiff-Appellee/Cross-Appellant,
and
B ANK O NE C ORPORATION,
Defendant-Appellee.
K ANEDA, K OSAN, K ABUSHIKI K AISHA,
Defendant-Appellant/Cross-Appellee.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
Nos. 01 C 736, 01 CV 5825—Ronald A. Guzmán, Judge.
A RGUED S EPTEMBER 17, 2009—D ECIDED O CTOBER 28, 2009
2 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
Before P OSNER, M ANION, and E VANS, Circuit Judges.
P OSNER, Circuit Judge. This is an immense, unwieldy,
complex, multiparty commercial case, now in its ninth year
and on its second district judge. The case has been
protracted unduly and should probably have been resolved
on summary judgment years ago.
The principal issues concern the interpretation of a
trademark licensing agreement and Japanese trade-
mark law. In 1980, Alberto-Culver, a major U.S. producer
of hair-care and skin-care products (its home page,
under hair-care brands, states that “Alberto VO5—the
company’s flagship brand after 53 years remains a
favorite of millions of women and men throughout
the world, offering solutions from daily hair care to
innovative styling products”), sold Japanese trademark
registrations, covering 13 trademarks. The buyer was a
Japanese manufacturer of such products named Sunstar
(plus an affiliate, Kaneda, Kosan, Kabushiki Kaisha, that
need not be discussed separately; we pass over other
immaterial facts as well). Most of the trademarks are
forms or variants of “VO5”; those that are not have no
bearing on the litigation. The forms or variants, as
presented in appendices to the license agreement, are as
follows:
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 3
4 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 5
The agreement of sale provided that upon receiving the
trademarks Sunstar would transfer them to Bank One
Corporation to hold in trust for 99 years, to license their
use during this period to Sunstar, and at the end of the
period to return them to Sunstar. If at any time while
the trust was in force the trustee had a “reasonable
ground” for thinking Sunstar had committed an act
that created “a danger to the value or validity of
LICENSOR’s [i.e., Bank One’s] ownership and title in
Licensed Trademarks,” Sunstar would have to stop using
the endangered trademarks until the trustee “reasonably
determined” that the danger had passed. In the event of
an actual breach of the license by Sunstar, the trustee
was to rescind the license and return the trademarks
to Alberto-Culver.
The license agreement (the terms of which were
negotiated by Sunstar and Alberto-Culver, Bank One’s
duties being limited to enforcement) calls the license
granted Sunstar a senyoshiyoken, which in English means
“exclusive-use right.” The holder of a senyoshiyoken not
only has an exclusive right to use the licensed trademarks
within the geographical scope of the license (see next
paragraph) but can sue infringers of the trademarks in its
own name. The grantor of the license—in this case the
trustee—cannot use the trademarks while the license is in
force. Japanese Trademark Act, arts. 25, 30(2), 36(1), 38,
71(1)(iii).
Sunstar, for its part, was forbidden by the agreement to
export any products bearing the licensed trademarks to
countries in which Alberto-Culver was selling products
6 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
under any of the trademarks, had granted an exclusive
license to a third party to sell such products, or had
registered or applied to register any of the trademarks
licensed to Sunstar. Although the agreement forbids
Sunstar to register (except for the purpose of defending
the licensed trademarks) “any new trademarks con-
taining the names Alberto, Alberto VO5 or VO5 or any of
the names or marks set forth in [the appendices to the
agreement],” Sunstar is not forbidden to use new
trademarks in Japan.
All the products sold under the license are made by
Sunstar; as far as the record shows, Alberto-Culver sells
no hair-care products—maybe no products, period—in
Japan. The agreement does not require Sunstar to pay
royalties for using the licensed trademarks; the entire
compensation to Alberto-Culver for the license consisted
of lump-sum payments (totaling more than $10 million)
by Sunstar made in 1980 when the license agreement
was made.
The difference between obtaining a 99-year exclusive
trademark license with no royalty obligation and buying
trademarks outright is small. Sunstar had wanted to buy
the trademarks outright but Alberto-Culver had balked
because it wanted to restrict Sunstar’s ability to use the
trademarks in countries in which Alberto-Culver used or
might want to use them (these restrictions take up
more space in the license agreement than any other
subject), and doubtless also because it wanted to be able
to recapture and then relicense the use of the trademarks
in Japan should Sunstar for some reason stop using them.
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 7
In 1989 Sunstar asked Alberto-Culver for permission to
license this new variant of the VO5 trademark:
Alberto-Culver refused. Sunstar used the variant anyway,
contending that it did not violate the license. But the
trustee said it did. Negotiations between Alberto-
Culver and Sunstar ensued, and ultimately Sunstar
agreed to pay $10 million for the right to add the variant
to the list of licensed trademarks and register it, and for
some trade secrets.
Ten years later, Sunstar started using a further variant,
consisting mainly of a different typeface for “VO5,” but
also adding a black background and a vertical bar (rather
than a space) between the “O” and the “5”:
8 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
Sunstar describes this as a “modernized” version of the
licensed VO5 trademarks, which we assume means al-
luring to modern Japanese consumers. Alberto-Culver
refused to amend the agreement to permit Sunstar to use
the modernized version, and, as before, the trustee
commanded Sunstar to desist—which it refused to do,
instead filing this suit in 2001 against both Alberto-Culver
and Bank One. The suit, which invokes federal jurisdiction
under 28 U.S.C. § 1332(a)(2) because it is between a
foreign citizen (Sunstar) and two U.S. citizens (Alberto-
Culver and Bank One), seeks a declaration that Sunstar’s
use of the mark is permitted by the license. Sunstar sought
other relief as well, including damages from Bank One, but
has abandoned the additional claims. Alberto-Culver, as
a third-party beneficiary of the license agreement, filed a
mirror-image suit against Sunstar, seeking damages and
injunctive relief, including an order that the license be
rescinded and the trademarks returned to Alberto-Culver.
The suits were consolidated, and tried to a jury.
The agreement is in English and states that disputes
arising under it are to be resolved in accordance with the
law of Illinois. But we cannot look to Illinois law to define
senyoshiyoken, a term the meaning of which is given by
Japanese law. Illinois law will not tell us whether the
holder of a senyoshiyoken can use variants of its licensed
trademarks. Alberto-Culver has taken the position that
the parties used the term merely to indicate that Sunstar
could register the license with the Japanese trademark
office, and not to confer on Sunstar the rights that a
senyoshiyoken confers on the holder under Japanese law.
The district judge agreed, and refused to instruct the jury
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 9
on the legal meaning of the Japanese term. Under Rule 44.1
of the civil rules, the judge decides the meaning of relevant
foreign law and instructs the jury on that meaning, just as
it would do in the case of issues of domestic law. The
parties had submitted affidavits from experts on Japanese
law concerning that meaning, but the judge, thinking the
Japanese legal meaning irrelevant, did not try to determine
it. Alberto-Culver argues that Sunstar forfeited any
challenge to the judge’s ruling by failing to ask him to
instruct the jury on the legal meaning of senyoshiyoken. But
he had made his position clear and Sunstar’s lawyers’
were not required to ask him to reconsider it.
In the course of its deliberations, the jury sent a note to
the judge asking: “What exclusive rights does the
Senyoshiyoken license give Sunstar PLEASE BE
EXPLICIT!” The judge declined to answer, and the jury
then returned a verdict for Alberto-Culver, except that it
awarded no damages—for the excellent reason that there
were none. The judge then enjoined Sunstar from using
the variant mark—and also ordered the license agree-
ment terminated because of Sunstar’s breach and all the
licensed trademarks therefore returned to Alberto-Culver.
Alberto-Culver’s cross-appeal is from the judge’s refusal
to grant a broader injunction; we shall not have to con-
sider the merits of the cross-appeal.
We cannot find any basis for the proposition embraced
by the district judge that the term senyoshiyoken bears
a private meaning in the contract. Only if Sunstar was
the holder of a senyoshiyoken within the meaning that
Japanese law assigns to that term, rather than in some
10 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
idiosyncratic sense that the parties assigned to it (nor did
they say they were doing that), was it authorized to
register the license agreement, as Alberto-Culver concedes
Sunstar was authorized to do, and to sue in its own name
for infringement of the licensed trademarks, as Alberto-
Culver also concedes that Sunstar was authorized to do.
Japanese Trademark Act, arts. 36(1), 38(2); Kenneth L.
Port, Trademark and Unfair Competition Law and Policy in
Japan 94 (2007). Alberto-Culver does not argue that
Sunstar’s license is not a “real” senyoshiyoken, but only
that such a license doesn’t authorize Sunstar to use
variants of the licensed trademarks, and that is a ques-
tion of Japanese law.
When parties to a contract, especially sophisticated
parties, use a technical term, there is a presumption that
they are using it in its technical sense. Reed v. Hobbs, 3 Ill.
297 (1840); Minges Creek, LLC v. Royal Ins. Co., 442 F.3d
953, 956 (6th Cir. 2006); Mellon Bank, N.A. v. Aetna Business
Credit, Inc., 619 F.2d 1001, 1013 (3d Cir. 1980); Superior
Business Assistance Corp. v. United States, 461 F.2d 1036,
1039 (10th Cir. 1972); Restatement (Second) of Contracts
§ 202(3)(b) (1981). (That is American law—but remember
the choice of law provision in the license agreement.) If the
technical term happens to be a foreign term, the
presumption is that it is used in its foreign technical sense.
But if the technical term is a foreign technical legal term,
one might wonder what sense it bears if as in this case
the contract provides that domestic law (Illinois law in
this case) governs. The wonderment is superficial: the
parties can’t have meant that the meaning of senyoshiyoken
would be decided under Illinois law, because the word
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 11
has no meaning in that law. And as we said before, unless
senyoshiyoken was used in its technical legal sense, Sunstar
could not have registered the license agreement or
enforced the licensed trademarks against infringers.
So we must decide whether the holder of a senyoshiyoken
is permitted by Japanese law to use variants of the
licensed trademarks. Rule 44.1 makes that a question of
law. The rule permits foreign law to be proved by
testimony or affidavits of experts, and that is the route
followed in most cases. But it also permits judges to
consult other sources of foreign law, such as articles,
treatises, and judicial opinions.
Those are superior sources. When a court in one U.S.
state applies the law of another state, or when a federal
court applies state law, the court does not permit expert
testimony on the meaning of the “foreign” law, even if it
is the law of Louisiana, which is based to a significant
degree on the French Civil Code. Yet if the law to be
applied is the law of a foreign country, even if it is an
English-speaking country the legal system of which derives
from the same source as ours—England—our courts
routinely admit testimony by lawyers on the meaning of
the foreign law, see, e.g., Schexnider v. McDermott Int’l, Inc.,
868 F.2d 717, 719 n. 2 (5th Cir. 1989) (per curiam), and rely
heavily on that testimony.
But the lawyers who testify to the meaning of foreign
law, whether they are practitioners or professors, are paid
for their testimony and selected on the basis of the
convergence of their views with the litigating position of
the client or their willingness to fall in with the views
urged upon them by the client. Those are banes of expert
12 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
testimony. When the testimony concerns a scientific or
other technical issue, however, it may be unreasonable
to expect a judge to resolve it without the aid of such
testimony. But judges are experts on law, and there are
published materials on foreign law, in the form of treatises,
law review articles, and cases. Of course the most
authoritative literature on the law of a foreign country is
apt to be in a language other than English. But the parties
can have the relevant portions translated into English;
judges can handle translations, which figure prominently
in a variety of cases tried in American courts, such as drug-
trafficking and immigration cases. Relying on paid
witnesses to spoon feed judges is justifiable only when the
foreign law is the law of a country with such an obscure
or poorly developed legal system that there are no
secondary materials to which the judge could turn.
The parties presented evidence by expert witnesses
concerning the meaning of senyoshiyoken in Japanese
trademark law. But fortunately the experts cited to
scholarly literature as well, which can help us decide
whether a senyoshiyoken allows its holder to vary a licensed
trademark.
Issues of the scope of a trademark usually arise in suits
for infringement. The trademark’s owner tries to prove
that the defendant’s mark is confusingly similar to his
own, and if he succeeds, this implies that the defendant’s
variant is within the trademark’s scope—it’s so like his
trademark that no one else is entitled to use the variant in
the same market. The issue in this case is not confusion;
rather, it is whether the variant is so similar to the orig-
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 13
inal that it should be deemed to have been included in
the license to use the original.
In U.S. law, a change in a trademark’s typeface is not
considered a material alteration of the original trademark.
Drexel Enterprises, Inc. v. Richardson, 312 F.2d 525, 527 (10th
Cir. 1962); Miyano Machinery USA, Inc. v. MiyanoHitec
Machinery, Inc., 576 F. Supp. 2d 868, 882 (N.D. Ill. 2008). A
related rule, called “tacking on,” makes the use by a
trademark’s owner of a variant of his original trademark
a defense to a claim that replacing the original with the
variant constituted the abandonment (a better word
would be forfeiture) of the trademark. So in Sands, Taylor
& Wood Co. v. Quaker Oats Co., 978 F.2d 947, 955 (7th Cir.
1992), the owner of the trademark THIRST-AID “First
Aid for Your Thirst” had dropped “First Aid for Your
Thirst” and this was held not to be an abandonment of
the trademark. See also Brookfield Communications, Inc. v.
West Coast Entertainment Corp., 174 F.3d 1036, 1048 (9th
Cir. 1999); Dreyfus Fund, Inc. v. Royal Bank of Canada,
525 F. Supp. 1108, 1115 (S.D.N.Y. 1981); 3 J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competition
§§ 17:27, 17:28 (4th ed. 2009).
In a licensing case, “tacking on” becomes a guide to
interpretation of the license. A licensee would be
reluctant to agree to be prohibited from making
modest changes in the appearance or wording of the
trademark because it would prevent him from ad-
justing his marketing of the trademarked product to
unpredictable fluctuations in consumer response.
Suppose the dropped phrase in the THIRST-AID
trademark had been “First Aid for His Thirst” at a time
14 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
when the male pronoun was the default pronoun for a
person of unspecified gender. As language conventions
evolved, the licensee might think it essential, to change
“First Aid for His Thirst” to “First Aid for Your Thirst.” It
would be senseless to consider this a violation of the
parties’ understanding unless the license had explicitly
forbidden any changes.
That is American law and the issue in this case is
Japanese law. But the Japanese rule is the same as the
American. See Tokutaro Morikawa v. Foundation Ritoru
Waarudo, 1350 Hanrei Jiho 137 (Tokyo High Ct. Feb. 20,
1990) (LITTLWORLD and LITTLEWORLD), cited in
Kenneth L. Port, Japanese Trademark Jurisprudence 98 n. 16
(1998); Limoneira v. Pola Kasei Kogyo K.K., 23 Chiteki Saishu
163 (Tokyo High Ct. Feb. 28, 1991) (“the Trademark has
a large figure with two lines of letters in smaller size
below the figure: one line representing ‘POLA’ in Roman
letters and the other in katakana [a Japanese script],
whereas the Mark has smaller figure with a large Roman
letter representation of ‘POLA’ on its right and two
katakana representations . . . placed slantly at the upper-
left corner and lower-right corner of the paper
strip more than 20 cm away from the said figure and
Roman letter elements”); Heiwado Boeki Kabushiki Kaisha v.
Kabushiki Kaisaha Taihei, 10 Mutai Saishu 193 (Tokyo Dist.
Ct. May 12, 1988) (different typeface).
The longer the term of the license, moreover, the less
plausible it is to assume, in the absence of express
language, that the licensee was forbidden to make
even minute changes. The license in this case, the
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 15
senyoshiyoken, was to continue for 99 years. Over so long a
period, changes in language, typefaces, marketing
methods, and trademark style would be likely (we are
tempted to say would be certain) to require varying the
wording or appearance of the licensed mark in order
to enable the trademarked product to be marketed
effectively. The license may even have required Sunstar
to make such changes, for remember that the licensee
must do nothing that would create a “danger to the
value or validity” of the licensed marks, and stubbornly
clinging to a dowdy, old-fashioned, “unmodernized”
original mark might create an acute danger.
This is especially likely because the right conferred by
a senyoshiyoken is exclusive of the licensor as well as of
potential other licensees. The licensee will be the only
user of the trademark in the relevant market and the
only entity therefore with either a stake in or a feel for
the needs of that market and thus the only entity
motivated and able to preserve the value of the trademark
by adjusting its appearance. The holder of a senyoshiyoken,
standing in the shoes of the trademark owner, must
have the same right that the owner would have (were
there no senyoshiyoken) to make small changes. Indeed, the
right of a 99-year exclusive licensee to make such
changes is more needful than that of the once and far-
future owner.
Article 50(1) of the Japanese Trademark Act provides
for cancellation of a trademark registration if the
registrant—or the holder of a senyoshiyoken—has, for more
than three years, not been using the trademark. A
16 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
registered trademark “includes a trademark consisting of
the same letters having modified typefaces . . . [or] of
figures having the appearances that can be regarded as the
same, or a trademark that can be regarded as the same
as the registered trademark in question in the common
sense of the society: the same applies in subsequent
provisions of this Article.” Alternatively, and more
helpful to Alberto-Culver, a registered trademark “for the
purposes of this Article . . . includes trademarks which are
based on the registered mark but written in a different
style than the registered trademark, trademarks with the
same sound or meaning as the registered mark . . .,
trademarks considered to have the same appearance as
the registered trademark, and any other trademarks
generally accepted by society as identical to the registered
mark.” (We have cited both translations because there is
no official English translation of Japanese laws.)
Alberto-Culver relies on the passages that we have
italicized, especially the second one, which is the more
authoritative since it appears in a scholarly book—and
by one of Sunstar’s expert witnesses! Port, Japanese
Trademark Jurisprudence, supra, at 143. But whether the
quoted provision is meant to exclude variants from the
scope of a registered trademark for all purposes other
than cancellation is unclear. Such an exclusion would
make no sense, at least as applied to this case. Alberto-
Culver is not seeking the cancellation of the trademarks.
It is seeking to recapture them; and from Sunstar’s
standpoint it is all the same—if the use of a variant of a
trademark does not warrant cancellation because the
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 17
variant “can be regarded as the same as the registered
trademark in question,” why should it warrant the loss of
trademark rights?
Moreover, one expects trademark cancellation to be
easier in Japan than in the United States because Japan
permits registration of trademarks without use, unlike the
United States. Japanese Trademark Law, art. 18(1); Port,
Trademark and Unfair Competition Law and Policy in Japan,
supra, at 77-78; Masaya Suzuki, “The Trademark
Registration System in Japan: A Firsthand Review and
Exposition,” 5 Marquette Intellectual Property L. Rev. 133,
139-43 (2001); Teruo Doi, Intellectual Property Protection
and Management: Law and Practice in Japan 182-83 (1992).
A pure registration system enables the “banking” of
trademarks, which clogs the trademark registry with
trademarks that may never be used. Paul J. Heald,
“Trademarks and Geographical Indications: Exploring the
Contours of the TRIPS Agreement,” 29 Vanderbilt J.
Transnational L. 635, 659 (1996). A requirement of
continuous use is therefore more important to unblock
the trademark arteries in Japan than in the United States.
Even so, Japan does not permit a small variation to
destroy trademark rights.
Alberto-Culver further argues, however, that Sunstar
violated a provision of the license that requires it to “keep
each of the [licensed] Trademarks in continuous use and
in a manner and quantity sufficient to meet the statutory
requirements as to use.” The briefs do not say which of the
13 trademarks Sunstar failed to use continuously, but
Sunstar concedes that there were some. Yet at the oral
18 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
argument, Alberto-Culver’s lawyer conceded in turn
that the only consequence of such a failure would be the
return to his client of those trademarks. To suggest that if
Sunstar failed to use any one of the 13 trademarks (or
rather 14, because of the 1989 amendment) continuously
for 99 years the entire license would be canceled would
be ridiculous. It would be especially ridiculous since
Alberto-Culver had no financial stake in Sunstar’s use
of those trademarks, because it had no right to any
royalties or other compensation based on that success; it
therefore could not be hurt by the abandonment of some or
for that matter all of the marks.
The parties presented a good deal of evidence concerning
discussions of the license agreement over the course of the
many years since it was first made. The discussions
indicate that Sunstar may not have attached much
significance to the designation of the license as a
senyoshiyoken (though that is hard to believe, since
without that designation it would not have the statutory
rights that the status conveys and that Alberto-Culver
concedes that Sunstar has, apparently without recognizing
the significance of the concession), and that it
acknowledged that its 1989 variant of VO5 violated the
license agreement until amended to allow it. The evidence
should not have been admitted. The license agreement
grants Sunstar a senyoshiyoken. This is a Japanese legal term
which, as we said, is to be given the meaning that it bears
in Japanese law. That meaning, we have decided as a
matter of law (because it is an issue of law), is that the
holder of such a license is entitled to make minor
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 19
changes in the trademark without being deemed to have
exceeded the rights conferred on it by the license.
Alberto-Culver has one more arrow in its quiver.
Remember that Sunstar continued to use the variant
trademark after being told by the trustee that the use
endangered the licensed trademarks. If that deter-
mination was based on a “reasonable ground,” then
Sunstar’s continued use of the trademark, until the danger
disappeared, was in violation of the agreement. The
trustee’s determination was unreasonable. (Whether it
was in good faith, a question relevant only to Sunstar’s
attempt to obtain damages from the trustee, is moot
now that Sunstar has abandoned the attempt.) We cannot
find anything in the record to suggest that Sunstar’s use
of the variant could reduce the value of the licensed
trademarks. Remember that the danger must be to the
value or validity of the licensor‘s, which is to say the
trustee’s—Bank One’s—interest in the trademarks. That
interest is confined to their use in Japan, or other countries
in which Alberto-Culver has no presence, because it is
only the Japanese registrations that were placed in the
trust, and they can be used only in Japan or such
countries, though people do sometimes move from
Japan to another country and their decision whether to
buy VO5 in that country might conceivably be influenced
by the variant they had seen in Japan.
Even so, we suppose (a variant of the last point) that if
Sunstar affixed “VO5” to an illegal product the trustee
could cancel the license, on the theory that the outrage
would be bound to be communicated to countries in
20 Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al.
which Alberto-Culver uses the trademark. And we
suppose it could be argued that since Alberto-Culver might
some day (before 2079, when the trademarks will be
transferred to Sunstar) obtain the return of the trade-
marks because of some future breach of the license, it
has an expectancy that would be destroyed if because of
Sunstar’s alterations of the trademark, it lost the good-
will that Japanese consumers had bestowed on it. But
the challenged variant is too close to the original (that is
to say, the 1989 variant licensed to Sunstar) to make any of
these dangers more than chimeras.
It is true that the trustee was supposed to watch out
for Alberto-Culver’s interests in other countries; it is
required to rescind the agreement if there is a breach, and
sales by Sunstar of products bearing the licensed
trademarks in forbidden countries would be a breach.
But there is no suggestion of such a violation.
Apparently Sunstar has done better in Japan than
Alberto-Culver expected, and, as in 1989, Alberto-Culver
has tried to use a hypertechnical, but more important an
unsound, interpretation of the licensing agreement to
extort additional compensation.
We are tempted simply to order all the claims in this
litigation dismissed with prejudice; that would restore
the status quo that existed before the trustee complained
about Sunstar’s use of the variant VO5 trademark. But
we’ll resist the temptation. Sunstar has not requested
such relief (just a new trial and a dismissal of the cross-
appeal), and as a result the defendants have not had an
opportunity to contest such a request. We doubt that
Nos. 07-3288, 07-3289, 08-3835, 08-3836, et al. 21
further trial proceedings are warranted, but leave that
decision to be made in the first instance by the district
court.
The judgments (including the dismissal of the cross-
appeal, as it is premature to determine what injunctive
relief if any the defendants are entitled to) are vacated
and the case is remanded. 7th Cir. R. 36 shall apply on
remand.
V ACATED AND R EMANDED.
10-28-09