the merits heels of one of the items that the district court ignored even though it mentioned gave in its decision mentions mention in its decision very clearly as well as oral argument that the australian litigation that is taking place may very well impact this case there's a contract provision between the parties and a number of contract provisions based upon the separation of the business and based upon the heads of agreement that was entered into this record acknowledge that that case may very well impact whether or not the defendant in this case has the authority to sell the disputed ones if they just record even acknowledging that that was still an issue determined that there was but it is your request for relief dependent anyway i mean the fact that there was there with not a breach of contract and that matter yet we believe that it does matter because of the potential effect of license or negative license that's controlled in the contract the lanham act obviously starts with a certain set unless the parties agreed the contrary and then it goes on to state what the various rules are the courts recognise that license agreements or an effective way of trademark violation unless there's an approval by the trademark holder in the first instance there's a trademark violation the existence of a license agreement is in affirmative defen to a determination whether or not there's a trademark infringement claim so here in order to establish marcus's rights just fell off the one because that was the first day i was there just recorded knowledge the first that would require an establishment that there was a breach of the contract by the phillips parties in australia without the act mark was to simply trading on the market was full of trade marks that it no longer owns and th council we have to reach to resolve the question of how the court likely to rule i don't think so i think the australian court is is running its course and it will run its course shortly because the district court recogni client sued obviously for breach of contract in our struggle yet contends that indeed that there was a breach of contract if mark was did breach the agreement under the heads of agreement and the other collateral agreements that the parties executed mar in the contract that still is subject to interpretation in the australian courts dealing with what the markets rights may be but for the purposes of this discussion we conceded that that if in fact my clients did breach the contract mar second the question of a serious legal question going to the merits with the court's venice obligated to balance the respective hardships the court below recognised th serious legal question because there's the breach of contract but it refused to take the next step and balanced the hardships the district court concluded that there wasn't a serious legal question without consideration of the contract issue get the profits that we got the wires be entitled to my client would get those profits there are a number of cases establishing damages the problem though is as we've created in the record is the impact upon the trademark itself when you have a potential confusion in the marketplace which is taking place or did take place at the very beginning recall when this injunction was brought in the state of the record before this court no winds were here in the country these were prospect of sales and there was a stipulated this be genuine be grateful pal it seems like it's dumping wines on the market maybe it's marked with their having a dispute somebody that's on the record even wrote and said i'm going to cancel all of my orders with the grateful palate and i'm going to advise every restaurant that i do business with to cancel their orders because you're obviously selling wines of a cheaper price to someone else because you've been the exclusive distributor this is the harm in an impact that is in measurable which is how do you experts in order to attempt to determine what the impact would be upon the brain and what the impact would be upon the grateful palate as a result of the conduct of the defendants these damages of course are necessarily suspect because they do raise to be distinguished or dealt with by this court and put to where it is this is the only case that exists in any of the circuits where the first sale between the trademark holder and the party has been  eliminated by the courts every other case including some of the cases that have allowed the sale have determined that there was an implied contract between the parties that allowed it monochrome the standing out alone as the court recognized from the restatement from what mccarthy states that there was a contract at the marquee have they have the right to self wine in the united states and we have now state those sales is your client going to be liable and damages yes your honor how is that measurable and how hard is it going to be to conduct by philips then marcus would be entitled to the price of that wine plus interest which is his damages if the wind gets harmed in any fashion because philip says don't sell it and phillips turns out to be wrong those damages presume they would be your honor but i truly haven't considered backing this case i think you have to look at the entire situation with joshua tree with van we're dealing with their damages of specific loss of profits on a sale we're not talking about the harm of a trademark we're not easily calculated for markey and probably any lost profits on the sale probably easily counted by joshua tree much easier than any of the trademark damages and the harm to the brand that gets caused the other way around i'd jurisdiction it also recognized that the ninth circuit is in the minority most cases follow the all greco analysis that state that there must be a first sale of the trademark holder is protected at the point of the first sale after the sale then it becomes a different issue even if becomes so miller to the grey market cases that the district court analyzed by dealing with genuine this or product but the decisions of all courts are a product is not genuine unless it has been authorized by the trademark holder the district court found that the first sale was not for the trademark folder but rather by marquess to joshua tree  addressing the specific facts and neck in neck you had a situation where there was a sale and the goods were out of the out of the trade mark hold his hand you're awesome you point out that the first sale doctrine is that shield buyer which in this case of the trademark owner defaults that's the case here that's the case and in the mccoy case which i if i recall is a fifth circuit case identical facts you have the goods are or authorised they make the one hundred twenty thousand cases everyone says the wine is wonderful eighty approximately eighty thousand cases are given pursuant to that agreement to the grateful power that left about thirty thousand cases of those thirty  thousand cases those also were to be delivered to the grateful palate but the grateful palate for every single case they were to get it they were supposed to hand over money well after after just over ten thousand cases the grateful palace know we're tired of this deal we don't want this deal anymore and they don't care that they left saraswati mark was stuck with with another twenty thousand cases he said no more well at that particular point under under california law  difference between the between the wind that that the just that joshua tree is selling and that the grateful palate is selling just on the quality control differences matter we have this whole case is pretext plaint this starts off with a pretext breach oh there's two point four percent of the price of product is missing which is the back in stuff is going to be live at the very very end two point four percent is missing we don't want to be involved in this anymore so we're not going to do it then and then they come up in the telling they tell the district court these are all the things that we're concerned about as far as quality is concerned but not once they say what they did about it so it's all it's all goes  with respect to the australia case that case we have a belief system is going to win but that case you have any different information from from the council on when that schedule and how th the revolver you have no idea when it's going to be resolved and i can tell you this there's no smoke no want to seeking injunctive relief in that case this is an undisputed facts that the goods are being sold in australia so that if if joe blow export or buys the goods in australia it's an authorized sale and it can be sold over here to to an important united states as i said there's no injunctive relief being sought in australia plate tha because a lot of the soul assuming that mark was to win then it's a matter of of if they're showing with their damages or as far as damage to the markets concerned if all the evidence is consistent the goods are exactly the same and the authorized goods so you're getting into an area where she is hard to show that any damage to the trademark is only damaged who had the right to trade her the best and that the that the question as to what damages they would be that  opened over manufacturers and then you have to worry about gee of these things are these things good to go with these non defective products in our particular case the entire product product package all under twenty thousand they said for first sale as a shield not not a sword with respect to the damages for the joshua tree we joshua tree would be entitled to the money it would have made were allowed to make the sales but then there's the issue of what about joshua trees reputation it is holding itself out as somebody who's entitle to sell these products it is made contracts that it may not be able to deliver on so if there is a injunction imposed upon the joshua tree there are there are damages which would be very hard to determine and those are those of you with reputation and reputation is the same type of damage that you are involved with with trademarks which trademarks stand for exactly in accordance with with with typical us law when there is a default the manufacturer has the right to sell the products she to other buyers implication can be found to the contrary money carlos stands out there alone as the only case on its facts alone that states that the first sale between a manufacturer the trademark holder does not have to be authorized that to that extent if that's how the case is being treated in the district court treated it that way it should be disapproved the any c case is a parallel import case it is a case where the first sale had been authorized abroad and in fact they were trying to protect the parallel imports became the court refers to it as and analyzes of course the grey goods cases where this court has done in a number of cases since carlow has recognized the trademark holders right as a monopoly last year in the state of idaho potato case this court stated that trademark owners have a monopoly over their marks which they can license as they se intel case the court specifically stated that one of the most valuable and important protections afforded by the lanham act is the right to control the quality of the goods manufactured and sold and the court continued trademark holder has the right to control quality of its product through its own authorized distributors one of the issues presented to the district court is wine being volatile and perishable needs to be protected if each step of the way the wind had yet to be brought into this country the district court properly found that we didn't put forth any evidence saying the joshua tree would import the wind any different from the grateful palate we had no ability to prove that but as this court has recognized it's the rest of the way the distribution of the wines the selection of the distributors who will maintain the quality the distributor selection of the retailers that is important for the protection of the brand every court has recognized including this one that the trademark holder has the right to control the distribution and vast where the control of product and the genuineness of the product comes in the district court ignored that in set forth in this develops declaration as to how and the importance of the selection of the distributors by the grateful palate in this case one of the issue of damages and i forgot to mention this before your honor is they act like the bill blass case in the third circuit the grateful palate alone offered to allow them change the labels the price to change the label on the evidence of it it was between thirteen and thirty three cents a bottle that includes the principal l part of taking the wines out of the cases in order to do that joshua tree has acknowledged that it did change the labels by at least overstepped here in part of the back label in order to show that it was the imported not the grateful palate they were required to do that by federal law so they already went through the process of engaging in the labor the cost to do that was pennies but joshua tree chose not to do that because it wanted to trade on the famous mar wind that in five years has gone from seven or eight thousand cases a year to one hundred twenty thousand cases a year a wine that has become very famous in the market place and they wanted to trade on that point is to recognize that joshua tree is a