Court Opinion

ID: 2797900
Source: CourtListenerOpinion
Date Created: 2015-04-30 21:00:59.384454+00
Date Added: 2024-06-11T12:08:16.724196
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                APR 30 2015

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

PHILIPPE CHARRIOL                                No. 13-56854
INTERNATIONAL LIMITED,
                                                 D.C. No. 3:13-cv-01257-MMA-
              Plaintiff - Appellant,             BGS

  v.
                                                 MEMORANDUM*
A’LOR INTERNATIONAL LIMITED,

              Defendant - Appellee.

PHILIPPE CHARRIOL                                No. 14-55769
INTERNATIONAL LIMITED,
                                                 D.C. Nos. 3:13-cv-01257-
              Plaintiff - Appellee,              MMA-BGS
                                                           3:14-cv-00477-
  v.                                             MMA-BGS

A’LOR INTERNATIONAL LIMITED,

              Defendant - Appellant.

PHILIPPE CHARRIOL                                No. 14-55864
INTERNATIONAL LIMITED,
                                                 D.C. Nos. 3:13-cv-01257-
              Plaintiff - Appellant,             MMA-BGS
                                                           3:14-cv-00477-
  v.                                             MMA-BGS

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
A’LOR INTERNATIONAL LIMITED,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Southern District of California
                    Michael M. Anello, District Judge, Presiding

                      Argued and Submitted February 5, 2015
                               Pasadena, California

Before: KLEINFELD and GOULD, Circuit Judges, and GETTLEMAN, Senior
District Judge.**

      Philippe Charriol International Ltd., an Isle of Man corporation with its

principal place of business in Switzerland, sued A’lor International Ltd., a

California corporation and Philippe Charriol’s long-time licensee, for trademark

infringement, breach of contract, and other related claims. While the district court

initially declined to preliminarily enjoin A’lor from selling the allegedly infringing

jewelry abroad, the district court later partially granted Philippe Charriol’s motion

for a preliminary injunction on the basis of a breach of contract claim brought in a

later suit against A’lor. Both parties appeal; both sets of appeals concern the

district court’s decisions on motions for preliminary injunctions filed in then-

       **
             The Honorable Robert W. Gettleman, Senior District Judge for the
U.S. District Court for the Northern District of Illinois, sitting by designation.

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separate (now-consolidated) suits. We have jurisdiction under 28 U.S.C. §

1292(a)(1). We review for an abuse of discretion. Brookfield Commc’ns, Inc. v.

West Coast Entm’t Corp., 174 F.3d 1036, 1045–46 (9th Cir. 1999).

      In appeal No. 13-56854, we affirm the denial of a preliminary injunction

against A’lor’s extraterritorial sale of cable jewelry. Philippe Charriol sought to

enjoin A’lor from selling the cable jewelry outside the United States under A’lor’s

own brand. To apply the Lanham Act to foreign activities, “first, there must be

some effect on American foreign commerce; second, the effect must be sufficiently

great to present a cognizable injury to plaintiffs under the federal statute; and third,

the interests of and links to American foreign commerce must be sufficiently

strong in relation to those of other nations to justify an assertion of extraterritorial

authority.” Star-Kist Foods, Inc. v. P.J. Rhodes & Co., 769 F.2d 1393, 1395 (9th

Cir. 1985). There is no evidence on the record in the earlier case that A’lor’s cable

jewelry sold abroad flowed back to the United States and caused a cognizable

injury to Philippe Charriol within the United States. See Reebok Int’l, Ltd. v.

Marnatech Enters., Inc., 970 F.2d 552, 554–55 (9th Cir. 1992) (holding that the

sale of counterfeit shoes in Mexico had sufficient effect on American foreign

commerce where the counterfeit shoes went back to the United States regularly and

                                            3
decreased the sale of genuine shoes and the value of the plaintiff’s consolidated

holdings in the United States). Philippe Charriol failed to show a sufficient effect

of A’lor’s foreign activities on American foreign commerce to support its Lanham

Act claims. Accordingly, the district court did not abuse its discretion by finding

that Philippe Charriol failed to show a likelihood of success on the merits of its

Lanham Act claims.

      In cross-appeals Nos. 14-55769 & 14-55864, we conclude that the district

court abused its discretion by finding a likelihood of success on the merits of

Philippe Charriol’s breach of contract claim, and we reverse. On the record before

the district court when it partially granted Philippe Charriol’s motion for a

preliminary injunction, it was clear error to find that the 2010 Exclusive Jewelry

License Agreement covered the so-called “cable design” and, consequently, that

“the breach of contract claim was not necessarily bound to the same fate as

[Philippe Charriol’s] Lanham Act claims.” By itself, Section 1.1 of the license

agreement defines the “Trademarks” as trademarks enumerated in Schedule A and

“all other trademarks whether registered or by common law or usage which may or

may not be registered but to which marks are owned or controlled by [Philippe

Charriol].” Schedule A lists as the Trademarks three word marks, CELTIC,

                                          4
CHARRIOL, and COLVMBVS, but not the cable design. The catch-all clause of

Section 1.1, on this record, must be construed as applicable only to marks of the

same general nature or class as those enumerated. See Lawrence v. Walzer &

Gabrielson, 256 Cal. Rptr. 6, 9 (Cal. Ct. App. 1989) (explaining the doctrine of

ejusdem generis). Other sections of the license agreement confirm, on the record

before the district court when it partially granted Philippe Charriol’s motion for a

preliminary injunction,1 that the parties intended the “Trademarks” to cover only

word marks. For example, Section 2.5 provides:

      The Trademarks shall, where it is reasonable so to do, be accompanied
      by words descriptive of the Products, and the Trademarks shall be
      depicted entirely in capital letters or otherwise distinguished from
      accompanying text to indicate that the term is a trademark. (emphasis
      added).

The cable design cannot be capitalized or referred to as a “term.” Only words and

letters can be. See also Section 4.4 (containing a separate proviso regarding the

use of the cable design). This reading that the license agreement did not cover the

cable design is consistent with Section 6 of the parties’ 2002 agreement: “[Philippe

Charriol and A’lor] understand and agree that the rights to produce ‘cable jewelry’

. . . is not an exclusive right in respect of cable but is exclusive only in respect of

      1
       We note, however, that any case can look different after trial testimony of
witnesses on disputed facts, and findings of fact and conclusions of law by the
court.

                                            5
the CHARRIOL® mark.” To have found otherwise was clear error, and the district

court abused its discretion.

      Therefore, the license agreement, on its face and on the record then before

the district court, does not prohibit A’lor from selling cable jewelry under its own

brand after the termination. Section 3.1.b prohibits A’lor from selling any jewelry

that looks similar to the licensed products, but it does not, at this preliminary stage

in the proceedings, appear to intend this prohibition beyond the term of the license

agreement. There is no finding by the district court on whether A’lor’s purported

termination was effective.

      Philippe Charriol’s cross-appeal seeks a remand with instructions that the

preliminary injunction should be expanded to cover all of its word marks and that

the injunction is supported by its trademark infringement claims. Since we reverse

the grant of a preliminary injunction, and the district court did not make any

determinations on trademark infringement claims, we need not address this cross-

appeal.

                                           6
      In reaching this conclusion, we express no opinion on the ultimate merits of

the case. See, e.g., Barahona-Gomez v. Reno, 167 F.3d 1228, 1238 (9th Cir.

1999). We only conclude here that the district court abused its discretion by

finding a likelihood of success on the merits of the breach of contract claim. We

leave to the district court to decide, after further proceedings and its or a jury’s

assessment of further evidence, if any, the merits of the breach of contract claim.

      AFFIRMED IN PART, REVERSED IN PART AND REMANDED.

                                           7