To prevail on a breach of contract claim under Illinois law, a plaintiff must establish (1)
the existence of a valid and enforceable contract, (2) his own performance under the terms of the
contract, (3) a breach of the contract by the defendant, and (4) an injury suffered as a result of
the defendant’s breach. Petri v. Gatlin, 997 F. Supp. 956, 963-64 (N.D. Ill. 1997).

Citing the four-part test for a breach of contract claim and Petri v. Gatlin, EchoStar
argues that a conclusory allegation of a breach is insufficient and that Polska must state the facts
underlying the breach. EchoStar argues that Polska has failed to plead facts sufficient to statea
claim for breach of contract. In making such an argument EchoStar draws attention to the fact
that Polska admits that Paragraph Two of the Agreement gave EchoStar the right to continue to
provide Polska’s programming to subscribers for up to twelve months under the terms and
conditions of the Agreement after the Agreement’s expiration. EchoStar argues that because
Polska has not alleged that EchoStar sold programming for greater than twelve months after
April 30, 2001, it has not pleaded facts sufficient to allege breach of the Agreement.

Whether a contract is clear and unambiguous is a question of law for the court. Am. Nat’
Trust Co. of Chicago v. Kentucky Fried Chicken of S. Cal., Inc., 719 N.E.2d 201, 210 (IL. App.
Ct, 1999). If the terms of a contract are not ambiguous, construction of those terms is also a
matter of law for the court to determine. Dun & Bradstreet Corp., 159 F.3d at 1035; City of
Clinton v. Moffitt, 812 F.2d 341 (7th Cir. 1987).

Illinois law is clear that “clear and unambiguous contract terms must be given their
ordinary and natural meaning,” and contracts “should be interpreted as whole, giving meaning
and effect to each provision thereof.” Srivastava v. Russell’s Barbecue, Inc., 523 N.E.2d 30, 33
Il. App. Ct. 1988); see Seward v. B.O.C. Div. of Gen. Motors Corp., 805 F. Supp. 623, 628
(N.D. Ill. 1992). The mere fact that the parties do not agree on the meaning of the contract terms
does not render it ambiguous. Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir.

1998); Allied Asphalt Paving Co. v. Village of Hillside, 731 N.E.2d 425,429 (Il. App. Ct. 2000);

4



Unfair methods of competition and unfair or deceptive acts or practices,

including but not limited to the use or employment of any deception,

fraud, false pretense, ... misrepresentation ... of any material fact, with

intent that others rely upon the concealment, suppression or omission of

such material fact, or the use or employment of an practice described in

Section 2 of the “Uniform Deceptive Trade Practices Act,” ... in the

conduct of any trade or commerce are hereby declared unlawful ....

815 ILL. Comp. STAT. 505/2.

However, the Court has found that EchoStar had the right to use Polska’s name, symbols,
logos, trade names, and trademarks to market Polska’s Programming Service to new subscribers
and to obtain additional subscribers to EchoStar’s satellite television and radio programming
after the expiration date of April 30, 2001 and during the one-year Post-Termination/Expiration
Period. As a result, such conduct on the part of EchoStar during that period cannot be
characterized as being false and misleading and therefore cannot constitute unfair methods of
competition, false representations of fact, false statements of sponsorship, affiliation, approval,

certification and status likely to create a misunderstanding among consumers generally. Thus,

EchoStar’s motion to dismiss Count III is granted? and that count is dismissed with prejudice.

D. Illinois Uniform Deceptive Trade Practices Act Claim

Polska claims that EchoStar has violated the Illinois Uniform Deceptive Trade Practices
Act, 815 ILL. Comp. STAT. 510, by using Polska’s name, symbols, logos, trade names, and
trademarks to market Polska’s Programming Service to new subscribers and to obtain additional
subscribers to EchoStar’s satellite television and radio programming despite the fact that

EchoStar no longer had the right to market Polska’s Programming Service to new subscribers.

EchoStar argues that Polska’s Consumer Fraud Act claim also fails because Polska has
not met the “consumer nexus” test by pleading facts that support that EchoStar’s alleged
deceptive practices were directed to the market generally or that the conduct complained of
otherwise relates to consumer protection issues. Because the Court has dismissed the claim on
other grounds, it need not reach this issue.



susceptible to only one interpretation. The only terms and conditions “herein” to which
Paragraph Two of the Agreement could be referring are the exact terms and conditions of the
Agreement as written.

Polska argues that the express language of the Agreement provides for a three-year
contract term and to allow EchoStar to solicit new subscriptions in the Post-
Termination/Expiration Period transforms the Agreement into a four-year contract, which was
not the intent of the parties. However, the intent of the parties is to be ascertained from the clear
language of the Agreement. Although the Agreement as written does give EchoStar the right to
solicit new subscriptions for a period of up to four years, the Agreement’s language is
unambiguous and was entered into willingly by both parties. If Polska did not want EchoStar to
continue to have the right to solicit new subscriptions in the Post-Termination/Expiration Period,
a limitation on such a right should have been expressly included in the terms of the Agreement.
Alternatively, if Polska did not want to enter into what is, in effect, a four-year contract term, the
Agreement as written should not have been entered into by Polska.

With these principles in mind, the Court holds that under the clear and unambiguous
terms of the Agreement, EchoStar had the right to solicit new subscriptions to the Programming
Service in the Post-Termination/Expiration Period’ and therefore there has been no breach of
contract. Therefore, EchoStar’s motion to dismiss Count IV is granted.

Having found that Polska has not stated a claim for breach of contract because EchoStar
had the right to sell and solicit new subscriptions in the twelve-month period following the
expiration of the Agreement, Polska’s other claims also fail. As explained below, all of the

other claims are predicated on the fact that EchoStar did not have the right to market the

‘Plaintiff has neither alleged or argued nor is it reasonable to infer from the complaint
that the conduct complained of continued after the Post-Termination/Expiration Period which
ended on April 30, 2002.



Spectramed Inc. v. Gould Inc., 710 N.E.2d 1, 7 (Il. App. Ct. 1998). A contractual provision
must be reasonably susceptible to more than one interpretation to be considered ambiguous.
Bourke, 159 F.3d at 1036. When the contract’s terms are clear and unambiguous, the court must
determine the intent of the parties solely from the plain language and content of the contract.
Church v, Gen. Motors Corp., 74 F.3d 795, 799 (7th Cir. 1996); Tishman Midwest Mgmt. Corp.
v. Wayne Jarvis, Ltd., 500 N.E.2d 431,434 (Ill. App. Ct. 1986). “The rights of parties to a
contract are limited by the terms expressed in the contract; a court will not rewrite a contract to
suit one of the parties, but will enforce the terms as written.” Wright v. Chicago Title Ins. Co.,
554.N.E.2d 511, 514 (ll. App. Ct. 1990).

Applying these principles, the Court holds that the language of this Agreement is
manifestly clear and unambiguous. The Agreement, entered into on or about April 30, 1998,
provided for a contract term of three years, However, the Agreement also provided for an
additional term of up to twelve months after this three-year period if the Agreement was either
terminated by one of the parties or if the Agreement expired. The Agreement expired on April
30, 2001. During this twelve-month Post-Termination/Expiration Period EchoStar’s rights were
not limited in anyway under the Agreement. Paragraph Two of the Agreement states that during
this period of time Polska shall continue to provide EchoStar with the Programming Service
under the terms and conditions outlined herein. Under the terms and conditions of the
Agreement, EchoStar was granted the right to offer and sell subscriptions to the Programming
Service and [to] conduct customer service functions in accordance with the terms and conditions
of th[e] Agreement. (Am. Compl., Ex. A, Agreement { 1.2.1.) No limitation was placed on the
terms and conditions of the Agreement in the Post-Termination/Expiration Period. Nowhere in
Paragraph Two, or in any other provision of the Agreement, is there a restriction placed on
EchoStar’s right to solicit new subscriptions to Polska’s Programming Service in the Post-
Termination/Expiration Period. The Court finds that the plain language of Paragraph Two is

5



the Act occurred when EchoStar used Polska’s name, symbols, logos, trade names, and
trademarks to market Polska’s Programming Service to new subscribers and to obtain additional
subscribers to EchoStar’s satellite television and radio programming during the Post-
Termination/Expiration Period. Polska claims that such actions on the part of EchoStar violates
the Lanham Trademark Act because under the terms of the Agreement, EchoStar no longer had
the right to market Polska’s Programming Service to new subscribers or solicit the sale of new
subscriptions for the Programming Service after the termination date. However, the Court has
found that, under the clear and unambiguous language of the contract, EchoStar had the right to
market the Programming Service up to, and no later than, April 30, 2002. Asa result, EchoStar
could not have made a false statement of fact in a commercial advertisement about its own or
another’s product during that period, and therefore could not have violated Section 43(a) of the
Lanham Act. Thus, EchoStar’s motion to dismiss Count I is granted and that count is dismissed

with prejudice.

Cc. Illinois Consumer Fraud and Deceptive Business Practices Act Claim

Polska claims that EchoStar has violated the Illinois Consumer Fraud and Deceptive
Business Practices Act (“Consumer Fraud Act”), 815 ILL. Comp. STAT. 505, by using Polska’s
name, symbols, logos, trade names, and trademarks to market Polska’s Programming Service to
new subscribers and to obtain additional subscribers to EchoStar’s satellite television and radio
programming despite the fact that EchoStar no longer had the right to market Polska’s
Programming Service to new subscribers. Polska argues that EchoStar’s actions were false and
misleading and therefore constitute unfair methods of competition, false representations of fact,
false statements of sponsorship, affiliation, approval, certification and status likely to create a
misunderstanding among consumers generally.

The Illinois Consumer Fraud and Deceptive Practices Act provides in pertinent part:

8


Minute Order Fort (05/97)

- United States District Court, Northern District of Illinois
semiueneini [Ronald A Guzman | Sear
CASE NUMBER 02 C 3293 DATE 12/13/2002
CASE Telewizja Polska USA vs. Echostar Satellite Corp.
TITLE
[In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
qd) oO Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
(3) Oo Answer brief to motion due . Reply to answer briefdue__-
(4) oO Ruling/Hearingon__setfor___—___—at
(5) a Status hearing[held/continued to] [set for/re-set for] on____setfor____at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on_____setfor___——at__— ts
(7) oO Trial[set for/re-set for]on___—_aatt
(8) oO [Bench/Jury trial] [Hearing] held/continued to __at
(9) Qo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) OLocal Rule 41.1 OFRCP41(a)(t) (C1 FRCP41(a)(2).

ao [Other docket entry) ENTER CORRECTED MEMORANDUM OPINION AND ORDER due to
pages nine and ten missing from the order entered 12/12/02. The Court grants EchoStar’s motion to
dismiss (doc.no.5-1), The case is hereby terminated. Motion to extend discovery schedule is denied as
moot.

(il) @ [For further detail see order attached to the original minute order.]
No notices required, advised in open court.

No notices required. mamber of notices

: DEC 16 2002
Notified counsel by telephone. “

a | Docketing to mail notices.
7 | Mail A0 450 form. ti initiate

Notices mailed by judge's staff.

Copy to judge/magistrate judge. und jouisia on
date piled rosie
ID6 deputy's 19:5 Wd €1 730 2
initials —
cemval Cfas Oped Wd raling deputy ‘nit



Agreement 2.) As a result, during the one-year Post-Termination/Expiration Period,
EchoStar’s actions could not have constituted deceptive trade practices, false representations of
fact, false statements of sponsorship, affiliation, approval, certification and status likely to create
a misunderstanding among consumers generally. In sum, EchoStar’s motion to dismiss Count

TV is granted and that count is dismissed with prejudice.

E. Unjust Enrichment Claim

EchoStar contends that Polska’s unjust enrichment claim should be dismissed for failure
to state a claim. The Court agrees, albeit for a slightly different reason than that posited by
EchoStar. EchoStar argues that under Illinois law, when a contract governs the parties’
relationship, a claim for unjust enrichment is barred. However, Polska’s alternative theory of
unjust enrichment is based on the contingency that the Agreement was no longer in force after
April 30, 2001 during the Post-Termination/Expiration Period. Because the Court has held that
the terms and conditions of the Agreement were in force during that period, the contingency
upon which Polska’s unjust enrichment theory is based is now an impossibility. For this reason,

the unjust enrichment claim cannot stand and Count V is dismissed with prejudice.

CONCLUSION
For the reasons set forth above, the Court grants EchoStar’s motion to dismiss [doc. no.
5-1]. This case is hereby terminated.

SO ORDERED ENTERED:

HON. RON. A.
United States Judge

MW


Polska argues that EchoStar’s actions constituted deceptive trade practices, false representations
of fact, false statements of sponsorship, affiliation, approval, certification and status likely to
create a misunderstanding among consumers generally.

The Ilinois Uniform Deceptive Trade Practices Act is directed towards unfair
competition and acts which “‘unreasonably interfere with another’s conduct of his business.”
Phillips v. Cox, 632 N.E.2d 668, 670 (Ill. App. Ct. 1994) (quoting Popp v. Cash Station, Inc.,
613 N.E.2d 1150, 1156 (Ill. App. Ct. 1992)).

In pertinent part, the Act defines “deceptive trade practices” to include when a person:

(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship,

approval or certification of goods or services;

G3) causes likelihood of confusion or of misunderstanding as to affiliation, connection or

association with or certification by another;
ee

(5) represents that goods or services have sponsorship, approval, characteristics,
ingredients, uses, benefits, or quantities that they do not have or that a person has a

sponsorship, approval, status, affiliation, or connection that he does not have;
eh

(12) engages in any other conduct which similarly creates a likelihood of confusion or
misunderstanding.

810 ILL. Comp. STAT. 510/2(a)(2), (3), (5), (12).

EchoStar claims that Polska has failed to plead facts sufficient to support the claim that
EchoStar misrepresented its products as EchoStar’s own products or that EchoStar confused the
public as to the sponsorship or source of Polska’s programming and has therefore failed to plead
facts sufficient to support its allegation of violation of the Illinois Uniform Deceptive Trade
Practices Act. The Court agrees.

Under the terms of the Agreement, EchoStar had the right to offer and sell subscriptions
to the Programming Service for a period that is “the shorter of twelve (12) months or that
number of months necessary for EchoStar to provide the Programming Service to Service
Subscribers who bought a multi-month subscription to the Programming Service prior to the
receipt by EchoStar of notice of termination of the Agreement.” (Am. Compl., Ex. A,

10



Programming Service to customers or to solicit the sale of new subscriptions during the Post-

Termination/Expiration Period.

B. Lanham Act

Polska claims that EchoStar has violated Section 43(a) of the Lanham Act, 15 U.S.C. §
1125(a). Section 43(a) of the Lanham Act provides, in relevant part:

(1) Any person who, on or in connection with any goods or services, or any

container for goods, uses in commerce any word, term, name, symbol, or device

or any combination thereof, or any false designation of origin, or false or

misleading representation of fact, or false or misleading representation of fact,
which --

ee
(B) in commercial advertising or promotion, misrepresents the nature,

characteristics, qualities, or geographic origin of his or her or another
person’s goods, services, or commercial activities, shall be liable in a civil
action by any person who believes that he or she is or is likely to be
damaged by such act.

15 U.S.C. § 1125¢a).

To establish a claim under the false or deceptive advertising prong of Section 43(a) of the
Lanham Act, a plaintiff must prove: (1) a false statement of fact by the defendant in a
commercial advertisement about its own or another’s product; (2) the statement actually
deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception
is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its
false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be
injured as a result of the false statement, either by direct diversion of sales from itself to
defendant or by a loss of goodwill associated with its products. Hot Wax, Inc. v. Turtle Wax,
Inc., 191 F.3d 813, 819 (7th Cir. 1999).

Polska does not satisfy the first element of this cause of action, and therefore it cannot

state a claim based on the Lanham Act. Polska claims that the required “false statement” under



948 F. Supp. at 805. Because the Federal Rule of Civil Procedure only requires notice pleading,
and the pleadings “must be liberally construed and mere vagueness or lack of detail alone cannot
be sufficient grounds for dismissal.” Stepan, 948 F. Supp. at 805. As a result, a motion to
dismiss may be granted only if the Court concludes that the non-movant can prove no set of facts
in support of his claim which would entitle him to relief. FED. R. Crv. P. 12(b)(6); Conley v.

Gibson, 355 U.S. 41, 45-46 (1957).

A. Breach of Contract Claim

Polska claims that EchoStar has breached the Agreement entered into on April 30, 1998
by continuing to sell new subscriptions to Polska’s Programming Service and using Polska’s
trademarks for its own marketing purposes after the Agreement authorizing such use had
terminated. Polska argues that the language of Paragraph Two of the Agreement exists to permit
the parties to wind down their relationship as it affects subscribers. Polska reasons the language
imposes upon Polska an obligation to continue to provide Programming Services to EchoStar for
the shorter of twelve months or the time necessary to fulfill preexisting subscriptions (“Post-
Termination/Expiration Period”). Polska argues that the language does not grant or extend the
right to use Polska’s trademarks to market Polska’s Programming Services to EchoStar.

EchoStar argues that the language of Paragraph Two of the Agreement gave EchoStar the
right to continue to provide Polska’s Programming Services to subscribers under the terms and
conditions of the Agreement for twelve months after the Agreement’s expiration. EchoStar
reasons that pursuant to the terms and conditions of the Agreement, Polska granted EchoStar a
license to use its trademarks to market Polska’s Programming Services to EchoStar’s customers,
and therefore EchoStar was not limited in selling Polska’s Programming and using Polska’s

trademarks during the twelve months after the Agreement expired.


ey

radio programming (“Programming Service”) to EchoStar through which EchoStar could sell
subscriptions for Polska’s Programming Service. (Id. ] 5.) The Agreement was for a three (3)
year term. (/d. $5.) Pursuant to the Agreement, Polska granted EchoStar a license to use its
trademarks to market the Programming Service to customers. (/d. { 6.)

Paragraph Two of the Agreement entitled “TERM” provides that:

upon the expiration or earlier termination of the Agreement, if EchoStar has

already launched the Programming Service on its Satellite, it shall continue to

provide EchoStar the Programming Service under the terms and conditions

outlined herein for a period of time that is the shorter of twelve (12) months or

that number of months necessary for EchoStar to provide the Programming

Service to service Subscribers who bought a multi-month subscription to the

Programming Service prior to the receipt by EchoStar of notice of termination of

the Agreement.
(id. Ex. A, Agreement 2.)

After the termination date of the Agreement, April 30, 2001, EchoStar used Polska’s
name, symbols, logos, trade names and trademarks to market Polska’s Programming Service to

new subscribers. (Am. Compl. { 8.)

DISCUSSION

In ruling on a motion to dismiss, the Court must accept all allegations as true and draw
all reasonable inferences in favor of the non-moving party. Hishon v. King & Spalding, 467 U.S.
69, 73 (1984). Documents incorporated by reference into the pleadings and documents attached
to the pleadings as exhibits are considered part of the pleadings for all purposes. FED. R. CIV. P.
10(c). The purpose of a motion under Rule 12(b)(6) is to test the formal sufficiency of the
statement of the claim for relief; it is not a procedure for resolving a contest about the facts or
merits of the case. Stepan Co. v. Winter Panel Corp., 948 F. Supp. 802, 805 (N.D. Ill. 1996).
This provision must be read in conjunction with Rule 8(a) which mandates a short and plain

statement of the claim showing that the pleader is entitled to relief. Fep. R. Crv. P. 8(a); Stepan,


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

TELEWIZJA POLSKA USA, INC.,
an Illinois corporation,

Plaintiff,
Judge Ronald A. Guzman
v.
02 C 3293
ECHOSTAR SATELLITE CORPORATION,
a Colorado corporation,

DOCKETED

DEC 1 6 2002

www weer eee

Defendant.
MEMORANDUM OPINION AND ORDER
Telewizja Polska USA, Inc. (“Polska”) has sued EchoStar Satellite Corporation
(“EchoStar”) for breach of contract (Count IV), violation of Section 43(a) of the Lanham
Trademark Act (“Lanham Act”) (Count I), 15 U.S.C. § 1125(a), violation of the Hlinois
Consumer Fraud and Deceptive Practices Act (Count II), 815 ILL. Comp. STAT. 505, and

violation of the Illinois Uniform Deceptive Trade Practices Act (Count II), 815 ILL. Comp.

Stat. 510, and in the alternative to its breach of contract claim, for unjust enrichment (Count V).

Before the Court is EchoStar’s motion to dismiss the amended complaint pursuant to Federal
Rule of Civil Procedure (“Rule”) 12(b)(6). For the reasons provided in this Memorandum

Opinion and Order, the Court grants the motion.

FACTS
Polska is a Delaware corporation engaged in the distribution of Polish language
television and radio programming for viewing and/or listening by the public. (Am. Compl. { 1.)
EchoStar is a Colorado corporation which broadcasts television and radio programming via
satellite to the general public throughout the United States. (Jd. §2.) On or about April 30,
1998, Polska contracted with EchoStar (“Agreement”) to provide Polish language television and

1

L