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Luv N' Care Ltd. v. Rimar

United States District Court, W.D. Louisiana, Monroe Division

March 22, 2018

LUV N' CARE, LTD.
v.
GROUPO RIMAR, AKA SUAVINEX, SA

          KAREN L. HAYES JUDGE.

          RULING

          TERRY A. DOUGHTY JUDGE.

         This is a breach of contract case. Plaintiff Luv n' Care, Ltd. (“LNC”) filed suit against Groupo Rimar, Suavinex, SA (“Suavinex”) over an alleged breach of the parties' 2');">20');">2');">2012');">2 Termination Agreement and Mutual Release (“2');">20');">2');">2012');">2 Termination Agreement”). Before the Court is Suavinex's “Motion for Partial Summary Judgment” [Doc. No. 177]. For the following reasons, Suavinex's Motion for Partial Summary Judgment is DENIED.

         I. FACTS AND PROCEDURAL HISTORY

         LNC is a Louisiana corporation; Suavinex is a Spanish corporation. [Doc. No. 2');">20');">2');">20, 1');">p. 1]. Both companies sell and design baby products. In 2');">20');">2');">2009 the parties entered into a distribution agreement whereby Suavinex would have the right to distribute certain products in mainland Spain and Spain's national territory. [Doc. No. 82');">2-1, p. 3]. The products LNC authorized Suavinex to distribute included the orthodontic pacifier and soft top spout products at issue in this case. [Doc. No. 82');">2-2');">2, 1');">p. 11].

         The 2');">20');">2');">2009 Agreement had a term of three years. [Doc. No. 64, Exh. G, p. 8]. At some point before the agreement terminated, a dispute arose between the parties. In settlement of the dispute, the parties entered into a Termination Agreement on April 12');">2, 2');">20');">2');">2012');">2. The 2');">20');">2');">2012');">2 Termination Agreement served to terminate the 2');">20');">2');">2009 Agreement, subject to the survivability of Paragraphs 15, 16, and 19. [Doc. No. 64, Exh. H, p. 2');">2]. Surviving Paragraphs 15, specifically 15B, and 19 of the 2');">20');">2');">2009 Agreement are at issue in this case.

         Paragraph 15B concerns “Intellectual Property Rights and LNC's Product Design and Packaging.” In that provision, Suavinex agrees “not to copy or utilize any of LNC's formulae, trade secrets, product design, patents, drawings, business plans, prototypes, packaging, procedures and methods [and] any other proprietary designs or information without LNC's written permission.” [Doc. No. 64, Exh. G, p. 8 (emphasis added)].

         Paragraph 19 concerns “Use of Confidential Information” and provides:

During the term of this Agreement and continuing after the expiration or termination hereof, either party shall not disclose or make accessible to anyone, or make use of the knowledge or information which either party obtains or obtained during the term of this Agreement with respect to formulae, trade secrets, product design, patents, business plans, prototypes, procedures and methods [and] any other proprietary designs or information of the other party without the written consent of the other party. Either party acknowledges receipt of confidential and non-confidential proprietary information from the other party. During the term of this Agreement and continuing after the expiration or termination hereof, Distributor agrees not to use in any fashion said information or designs, or any colorable imitations thereof...

[Doc. No. 64, Exh. G, 1');">p. 10 (emphasis added)].

         LNC asserts that, in 2');">20');">2');">2013, it learned that Suavinex had been selling child and baby products that closely resembled its own, in violation of Paragraphs 15 and 19. [Doc. No. 2');">20');">2');">20, p. 4]. On June 6, 2');">20');">2');">2013, alleging Suavinex's sale of these products violated Paragraphs 15 and 19 of the 2');">20');">2');">2009 Agreement, LNC filed a petition for breach of contract in the Fourth Judicial District Court, Parish of Ouachita, State of Louisiana. (“Fourth Judicial District Court”) [Doc. No. 64, Exh. L]. However, that suit was voluntarily dismissed because the 2');">20');">2');">2012');">2 Termination Agreement mandated any suit related to its terms be brought in the United States District Court for the Western District of Louisiana.

         On June 14, 2');">20');">2');">2014, LNC filed a Complaint against Suavinex in this Court. [Doc. No. 1]. An Amended Complaint was filed on December 8, 2');">20');">2');">2014. [Doc. No. 2');">20');">2');">20]. The Amended Complaint alleged that certain Suavinex products so closely resembled the silicone soft top spout products and orthodontic pacifier as to violate the terms of paragraphs 15 and 19 of the 2');">20');">2');">2009 Distribution Agreement. Id. at 4. Suavinex filed an Answer denying a breach of the 2');">20');">2');">2009 Agreement or 2');">20');">2');">2012');">2 Termination Agreement. [Doc. No. 2');">26]. In its Answer, Suavinex brought a Counterclaim for Breach of Contract, alleging LNC had violated the terms of the 2');">20');">2');">2012');">2 Termination Agreement by initially bringing suit in the Fourth Judicial District Court, and a Counterclaim for a Declaratory Judgment that it had not breached the terms of the 2');">20');">2');">2009 Agreement or 2');">20');">2');">2012');">2 Termination Agreement. [Doc. No. 2');">26, 1');">p. 14-15].

         Suavinex filed a Motion for Partial Summary Judgment on July 6, 2');">20');">2');">2015, seeking summary judgment on the following: (1) Suavinex's Counterclaim for Declaratory Judgment that Suavinex did not breach the parties' 2');">20');">2');">2009 Agreement or 2');">20');">2');">2012');">2 Termination Agreement and Mutual Release, as alleged in LNC's Amended Complaint; (2');">2) that LNC had not been irreparably harmed and therefore was not entitled to a permanent injunction prohibiting Suavinex's sales outside of the United States of the orthodontic pacifier and silicone soft top spout products at issue in this action; and (3) Suavinex's Counterclaim for Breach of Contract that LNC breached the 2');">20');">2');">2012');">2 Termination Agreement by willfully filing a breach of contract action in state court, knowing that the 2');">20');">2');">2012');">2 Termination Agreement mandated such action be brought only in the United States District Court for the Western District of Louisiana. [Doc. No. 64, 1');">p. 1]. LNC opposed the Motion for Partial Summary Judgment.

         In an opinion dated September 30, 2');">20');">2');">2015, Judge Robert G. James granted Suavinex's partial summary judgment motion in its entirety, finding that there was no breach because the 2');">20');">2');">2012');">2 Termination Agreement did not apply to product designs that were already in the public domain, such as the two products at issue, and, therefore, LNC was not entitled to a permanent injunction. In a subsequent order, Judge James awarded Suavinex attorney's fees of $2');">267, 401.2');">25 as the prevailing party, pursuant to the terms of the 2');">20');">2');">2012');">2 Termination Agreement.

         LNC appealed the decision of this Court to the United States Court of Appeals, Fifth Circuit.[1" name="FN1" id="FN1">1]

         On December 16, 2');">20');">2');">2016, the Fifth Circuit reversed Judge James's decision. Luv n' Care, Ltd. v. Groupo Rimar, aka Suavinex, S.A.,2');">2');">844 F.3d 442');">2 (5th Cir. 2');">20');">2');">2016) (Doc. No. 166). The Fifth Circuit stated that the judge “erred by ignoring the plain meaning of the contract and imposing an extra-contractual requirement that LNC's product-related information already be protected by some other legal right in order to receive protection under the contract.” 844 F.3d at 447. The Fifth Circuit stated that it was making “no observation as to whether there is a meaningful difference between copying features of a ‘product design' and copying a ...


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