Opinion ID: 3050431
Heading Depth: 4
Heading Rank: 1

Heading: The Alleged Contract Between eBay and

Text: PerfumeBay [14] “The principles of contract formation are the same in both the settlement and the nonsettlement context.” Terry v. Conlan, 131 Cal.App.4th 1445, 1458 (2005) (citation omitted). “In order for acceptance of a proposal to result in the formation of a contract, the proposal must be sufficiently definite, or must call for such definite terms in the acceptance, that the performance promised is reasonably certain.” Weddington Prod., Inc. v. Flick, 60 Cal.App.4th 793, 811 (1998) (citation omitted). “In particular, a provision that some matter shall be settled by future agreement, has often caused a promise to be too indefinite for enforcement.” Id. at 812 (citation and alteration omitted). “If an essential element is reserved for the future agreement of both parties, as a general rule the promise can give rise to no legal obligation until such future agreement. Since either party in such a case may, by the very terms of the promise, refuse to agree to anything to which the other party will agree, it is impossible for the law to affix any obligation to such a promise.” Id. (citation and alteration omitted). [15] The parties’ communications reflect that only negotiations for a potential settlement agreement occurred. Perfumebay and eBay conducted their negotiations through a series of e-mails between eBay’s counsel, and Perfumebay’s counsel. During these negotiations, Perfumebay acknowledged that it would enter into settlement negotiations if eBay would suspend its opposition to Perfumebay’s application for a trademark before the Patent and Trademark Office. Perfumebay and eBay filed with the Patent and Trademark Office a Request For Suspension providing that “[t]his request is being submitted in order to permit the parties to discuss possible setPERFUMEBAY.COM INC. v. EBAY INC. 14525 tlement.” (emphasis added). The request for suspension was made “with the option of either party to resume proceedings at any time during the suspended period.” The parties’ negotiations became increasingly problematic. They failed to agree to the time period during which Perfumebay would be permitted to use its mark; the acceptable name that Perfumebay would utilize; the duration of Perfumebay’s use of the terms “formerly known as PerfumeBay” and the use of “perfumebay” as a referring URL. At one point, eBay’s counsel observed that progress had been made on the “general contours of a mutually-agreeable settlement.” However, Perfumebay ultimately rejected eBay’s counter-proposals. [16] The parties’ conduct reflected that there were essential material terms to be negotiated, and that they had only preliminary discussions on the goals of settlement. “[M]any settlements are reached by an initial agreement on the goals of the settlement. However, agreement to the goals alone may not result in a judicially enforceable settlement agreement.” Terry, 131 Cal.App.4th at 1458 n.3. “Here, the parties’ assenting to the goals of the settlement, without agreeing to the means that were material to the settlement, demonstrates that the parties never formed an enforceable contract.” Id. at 1459.5, 6 5 eBay’s reliance on Ersa Grae Corp. v. Fluor Corp., 1 Cal.App.4th 613 (1991), is misplaced. In Fluor, the court of appeal observed that “the contract will be enforced if it is possible to reach a fair and just result even if, in the process, the court is required to fill in some gaps.” Id. at 623 (citation omitted). However, the contract’s material terms were “sufficiently set forth.” Id. Cal. Civ. Code § 1657, providing that “[i]f no time is specified for the performance of an act required to be performed, a reasonable time is allowed,” also does not support eBay’s argument, as there were other disputed material terms. 6 eBay’s argument premised on Allergan Inc. v. Mira Life Group, Inc., 72 U.S.P.Q.2d 1756 (C.D. Cal. 2004), and Kelley Blue Book v. CarSmarts, Inc., 802 F.Supp. 278 (C.D. Cal. 1992), that we should read a thirty-day time period into the alleged contract is also unavailing. Neither Allergan or Car-Smarts involved contractual interpretation. In Allergan, the district court ordered a thirty-day reporting requirement based on a default judgment for trademark infringement. 72 U.S.P.Q.2d at 1761. In Car-Smarts, the district court ordered a similar reporting requirement after finding trademark infringement. 802 F.Supp.2d at 294. Additionally, in order to read a fixed time period into the alleged contract, we would have to ignore the parties’ negotiations. 14526 PERFUMEBAY.COM INC. v. EBAY INC.