Because the contract did not give a popcorn manufacturer a perpetual license to sell popcorn under the Mrs. Fields trademark, the manufacturer should not have been granted a preliminary injunction ordering Mrs. Fields to comply with the contract terms.
A popcorn manufacturer did not establish a strong likelihood that it will prevail on its claim against Mrs. Fields for specific performance and would suffer irreparable harm in the absence of a preliminary injunction, the U.S. Court of Appeals in Denver has decided. The decision reversed a preliminary injunction requiring Mrs. Fields to specifically perform under a licensing agreement, which the district court entered in favor of the popcorn manufacturer after finding that the manufacturer prevailed on its breach of contract claim against Mrs. Fields. The district court erred because it based its analysis on an erroneous finding that the popcorn manufacturer had a perpetual license to sell popcorn under the Mrs. Fields brand. But the contract did not actually provide for a perpetual license and at best, the manufacturer could have expected to continue using the license only so long as Mrs. Fields allowed the contract to automatically renew. Because Mrs. Fields could prevent the contract from automatically renewing, the manufacturer’s damages were limited to the remainder of the five-year term of the contract. Therefore, the district court erred in determining that the manufacturer established a strong likelihood that it will prevail on its claim for specific performance and would suffer irreparable harm in the absence of a preliminary injunction (Mrs. Fields Famous Brands, LLC v. MFGPC, November 7, 2019, Briscoe, M.).
Case date: 07 November 2019
Case number: No. 19-4046
Court: United States Court of Appeals, Tenth Circuit
A full summary of this case has been published on Kluwer IP Law.