Court Opinion

ID: 4665978
Source: CourtListenerOpinion
Date Created: 2021-03-09 16:01:25.205225+00
Date Added: 2024-06-11T08:02:46.343697
License: Public Domain

Case: 20-1412    Document: 74     Page: 1   Filed: 03/04/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

     AUTHENTIC APPAREL GROUP, LLC, RON
                   REUBEN,
              Plaintiffs-Appellants

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2020-1412
                  ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:15-cv-00016-MCW, Senior Judge Mary Ellen Cos-
 ter Williams.
                  ______________________

                  Decided: March 4, 2021
                  ______________________

      J. JOSEPH BAINTON, Amagansett, NY, argued for plain-
 tiffs-appellants.

     BORISLAV KUSHNIR, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee. Also repre-
 sented by JEFFREY B. CLARK, ROBERT EDWARD KIRSCHMAN,
 JR., DOUGLAS K. MICKLE; JAMES MACKEY IVES, Military
 Personnel Branch, United States Department of the Army,
 Fort Belvoir, VA.
                   ______________________
Case: 20-1412     Document: 74     Page: 2    Filed: 03/04/2021

 2           AUTHENTIC APPAREL GROUP, LLC     v. UNITED STATES

      Before LOURIE, DYK, and STOLL, Circuit Judges.
 LOURIE, Circuit Judge.
      Authentic Apparel Group, LLC (“Authentic”) and Ron
 Reuben (“Reuben”) (collectively, “Appellants”) appeal from
 the decision of the United States Court of Federal Claims
 (“the Claims Court”) granting summary judgment in favor
 of the government. Authentic Apparel Grp., LLC v. United
 States, 146 Fed. Cl. 147 (2019) (“Summary Judgment Deci-
 sion”). Appellants also appeal from the Claims Court’s de-
 cision dismissing Reuben as a co-plaintiff in the litigation.
 Authentic Apparel Grp., LLC v. United States, 123 Fed. Cl.
 92 (2015) (“Dismissal Decision”). For the reasons stated
 below, we affirm.
                        BACKGROUND
     In August 2010, the Department of the Army (“Army”)
 granted Authentic a nonexclusive license to manufacture
 and sell clothing bearing the Army’s trademarks in ex-
 change for royalties. The license agreement required the
 Army’s advance written approval of any products and mar-
 keting materials bearing the Army’s trademarks. The li-
 cense agreement stated:
     Prior to any sale or distribution, [Authentic], at its
     expense, shall submit to [the Army] all items in-
     cluding, but not limited to, products, packaging, la-
     beling, point of sale materials, trade show displays,
     sales materials and advertising (subject to Section
     14.3) bearing the PROPERTY and/or CREATIONS
     . . . for [the Army]’s advance written approval, in
     [the Army]’s sole and absolute discretion, at all
     stages listed below.
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 AUTHENTIC APPAREL GROUP, LLC       v. UNITED STATES           3

 J.A. 224 § 5.1 (emphasis added). 1 The license agreement
 also included exculpatory clauses that exempted the Army
 from liability for exercising its discretion to deny approval
 of Authentic’s products and marketing materials:
     [Authentic] shall not have any rights against [the
     Army] for damages or other remedies by reason of
     [the Army]’s failure or refusal to grant any ap-
     proval referred to in this Section 5.
 J.A. 225 § 5.1.8.
     [Authentic] shall not have any rights against [the
     Army] for damages or any other remedy by reason
     of [the Army]’s failure or refusal to grant approval
     of any advertising.
 J.A. 239 § 14.3.
     Between 2011 and 2014, Authentic submitted nearly
 500 requests for approval to the Army through The Bean-
 stalk Group LLC (“Beanstalk”), a company that the Army
 has engaged to manage its trademark licenses. The Army
 disapproved only 41 of those submissions. During that
 time, Beanstalk sent several formal notices of material
 breach to Authentic for what it stated were failures to
 timely submit royalty reports and pay royalties. Authentic
 eventually paid its outstanding royalties through 2013, but
 on November 24, 2014, Authentic’s counsel informed Bean-
 stalk that Authentic had no intention of paying outstand-
 ing royalties for 2014, and instead intended to sue the
 government for damages.
     On January 6, 2015, Authentic and Reuben filed a com-
 plaint in the Claims Court against the United States for

     1    The license agreement provides definitions for the
 terms “PROPERTY” and “CREATION,” but for our pur-
 poses it is sufficient to assume that those terms refer to the
 Army’s trademarks.
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 4            AUTHENTIC APPAREL GROUP, LLC    v. UNITED STATES

 breach of contract. The primary allegations of breach were
 based on what Appellants stated as the Army’s denial of
 the right to exploit the goodwill associated with the Army’s
 trademarks, refusal to permit Authentic to advertise its
 contribution to certain Army recreation programs, delay of
 approval for a financing agreement for a footwear line, and
 denial of approval for advertising featuring the actor
 Dwayne “The Rock” Johnson. On August 26, 2015, the
 Claims Court dismissed Reuben as a plaintiff from the case
 for lack of standing. Dismissal Decision, 123 Fed. Cl. at
 96–97. Authentic subsequently amended its complaint to
 include an allegation that the Army breached the implied
 duty of good faith and fair dealing by not approving the sale
 of certain garments.
     On November 27, 2019, the Claims Court granted the
 government’s motions for summary judgment and denied
 Authentic’s cross motions. The Claims Court determined
 that, in view of the express exculpatory clauses in the li-
 cense agreement, Authentic could not recover damages
 from the government based on the Army’s exercise of its
 discretion regarding the approval or disapproval of prod-
 ucts and marketing materials. See Summary Judgment
 Decision, 146 Fed. Cl. at 156–57. The Claims Court then
 proceeded to separately examine and reject each allegation
 in Authentic’s amended complaint, finding that the Army’s
 conduct was in line with its obligations under the license
 agreement and was not unreasonable. Id. at 157–77. The
 Claims Court entered judgment in favor of the government.
 Authentic appealed, and we have jurisdiction under 28
 U.S.C. § 1295(a)(3).
                         DISCUSSION
                               I
     We first address Appellants’ challenge to the dismissal
 of Reuben for lack of standing. The Claims Court’s subject
 matter jurisdiction is a question of law. Bosco v. United
 States, 931 F.2d 879, 882 (Fed. Cir. 1991) (citing Phillips v.
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 AUTHENTIC APPAREL GROUP, LLC    v. UNITED STATES            5

 GSA, 924 F.2d 1577, 1579–80 (Fed. Cir. 1991)). We there-
 fore review de novo the Claims Court’s determination re-
 garding standing. Id. (citing Chevron U.S.A., Inc. v. United
 States, 923 F.2d 830, 833 (Fed. Cir. 1991)). But “[w]e re-
 view any factual findings, including those underlying the
 standing analysis . . . , for clear error.” Starr Int’l Co. v.
 United States, 856 F.3d 953, 963 (Fed. Cir. 2017) (citing
 Norman v. United States, 429 F.3d 1081, 1087 (Fed. Cir.
 2005)).
      Standing to sue the United States on a contract claim
 is limited to those in privity of contract with the govern-
 ment. See P. Gas & Elec. Co. v. United States, 838 F.3d
 1341, 1350 (Fed. Cir. 2016) (“PG&E”). In rare situations,
 a third party can have standing to sue the United States
 upon a showing that he or she is an intended third-party
 beneficiary of a contract with the government. See Flexfab,
 L.L.C. v. United States, 424 F.3d 1254, 1263 (Fed. Cir.
 2005). However, even with regard to contracts between
 private parties, third-party beneficiary status is considered
 an “exceptional privilege” that is “an exception to the gen-
 eral principle, which proceeds on the legal and natural pre-
 sumption that a contract is only intended for the benefit of
 those who made it.” German All. Ins. Co. v. Home Water
 Supply Co., 226 U.S. 220, 230 (1912). Thus, it is well set-
 tled that “the requirements to demonstrate third-party
 beneficiary status are ‘stringent.’” PG&E, 838 F.3d at 1361
 (quoting Anderson v. United States, 344 F.3d 1343, 1352
 (2003)). “In order to prove third party beneficiary status, a
 party must demonstrate that the contract not only reflects
 the express or implied intention to benefit the party, but
 that it reflects an intention to benefit the party directly.”
 Glass v. United States, 258 F.3d 1349, 1354 (Fed. Cir.
 2001). “[A]t a minimum there must be a particular, identi-
 fiable benefit that was clearly intended to flow to the third
 party.” PG&E, 838 F.3d at 1361.
      Here, it is undisputed that Reuben was not in privity
 of contract with the government because he was not a party
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 6           AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES

 to the license agreement. Thus, the only question is
 whether Reuben has established that the license agree-
 ment contained a particular benefit that was clearly in-
 tended to flow directly to him. We conclude that Reuben
 has not made such a showing.
     Importantly, the license agreement at issue in this case
 does not mention Reuben’s name (with the exception of the
 signature block on the amendments), and certainly does
 not clearly identify Reuben as an intended beneficiary.
 Moreover, the license agreement indicates in plain lan-
 guage that “all rights and duties herein are personal to
 [Authentic],” i.e., not to anyone else. See J.A. 234 § 12.1.
 Reuben, as Authentic’s chairman, undoubtedly stood to
 benefit indirectly from the license agreement. In that re-
 gard, however, he is hardly different from any other com-
 pany owner who indirectly benefits from the business
 transactions of his or her company. Under the law, such
 indirect benefit is not sufficient to establish third-party
 beneficiary status for purposes of standing. See Castle v.
 United States, 301 F.3d 1328, 1338 (Fed. Cir. 2002) (“[I]n
 order to make a shareholder a third[-]party beneficiary, the
 contract must express the intent of the promissor to benefit
 the shareholder personally, independently of his or her sta-
 tus as a shareholder.” (quoting Glass, 258 F.3d at 1354));
 see also S. Cal. Fed. Sav. & Loan Ass’n v. United States,
 422 F.3d 1319, 1331 (Fed. Cir. 2005) (“[A] corporation is
 generally considered to be a separate legal entity from its
 shareholder[.]”).
      In attempting to support his claim to third-party bene-
 ficiary status, Reuben asks us to rewind the clock to 2007,
 three years before the 2010 license agreement between Au-
 thentic and the Army. In 2007, Reuben was the chairman
 of a different company called All American Apparel, Inc.
 (“All American”) when that company entered into a differ-
 ent license agreement for use of the Army’s trademarks.
 Reuben alleges that the Army breached that 2007 license
 agreement, that the Army’s alleged breach caused All
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 AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES            7

 American to go bankrupt, and that the Army later decided
 to give Authentic—a different company—a more favorable
 royalty rate in the 2010 license to benefit Reuben “as com-
 pensation for the damages caused by the Army’s breach of
 the [2007 license with All American].” Appellants’ Br. 58.
      Distilled to its essence, Reuben’s claim to third-party
 beneficiary status rests entirely on his affiliation with two
 different companies that entered into two different license
 agreements with the Army. Reuben attempts to bridge the
 divide between those companies by implying that Authen-
 tic is in some way a successor to All American. For exam-
 ple, Reuben characterizes the two licenses—which, again,
 the Army made with two separate companies—as the
 “First License” and the “Second License.” See, e.g., Appel-
 lants’ Br. 2–3. Similarly, Reuben emphasizes the fact that
 Authentic’s license in 2010 had a lower royalty rate than
 All American’s license in 2007, and refers to the lower rate
 as a “reduction.” See id. at 15. But even accepting every
 one of Reuben’s allegations as true, he has at most demon-
 strated that his personal circumstances may have contrib-
 uted to the Army’s reasons for agreeing to certain terms in
 the 2010 license agreement with Authentic. There is no
 escaping the reality, however, that it was not Reuben him-
 self who received the direct benefit of paying a lower roy-
 alty rate. The direct benefit from the favorable contract
 terms flowed to Authentic, not to Reuben personally.
     In concluding his argument in this court, Reuben’s
 counsel posed a rhetorical question: “If the 40% [royalty
 rate] reduction wasn’t to help [Reuben], who was it there
 to help?” Oral Arg. at 13:40–13:43, http://oralarguments.
 cafc.uscourts.gov/default.aspx?fl=20-1412_01062021.mp3.
 That rhetorical question is easily answered by stating the
 obvious: the royalty rate in the 2010 license agreement
 between Authentic and the Army was intended to benefit
 the parties that entered into that license agreement—i.e.,
 Authentic and the Army. The Claims Court therefore
 correctly held that Reuben did not have third-party
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 8           AUTHENTIC APPAREL GROUP, LLC    v. UNITED STATES

 beneficiary status under the 2010 license agreement, and
 the court properly dismissed Reuben for lack of standing.
                              II
     We turn to Authentic’s challenge to the Claims Court’s
 grant of summary judgment. “We review ‘the summary
 judgment of the Court of Federal Claims, as well as its in-
 terpretation and application of the governing law, de
 novo.’” Hartman v. United States, 694 F.3d 96, 101 (Fed.
 Cir. 2012) (quoting Gump v. United States, 86 F.3d 1126,
 1127 (Fed. Cir. 1996)). Summary judgment is appropriate
 when there is no genuine issue of material fact and the
 moving party is entitled to judgment as a matter of law. R.
 Ct. Fed. Cl. 56(a).
                              A
     We begin with the language of the contract itself. “Con-
 tract interpretation is a question of law generally amenable
 to summary judgment.” Premier Office Complex of Parma,
 LLC v. United States, 916 F.3d 1006, 1011 (Fed. Cir. 2019)
 (quoting Varilease Tech. Grp., Inc. v. United States, 289
 F.3d 795, 798 (Fed. Cir. 2002)). In this case, the express
 language of the license agreement is dispositive.
     The license agreement stated in no uncertain terms
 that the Army had “sole and absolute discretion” regarding
 approval of Authentic’s proposed products and marketing
 materials. J.A. 224 § 5.1. In addition to that provision, the
 license agreement also included exculpatory clauses ex-
 pressly stating that Authentic would have no right to bring
 a cause of action against the Army based on the Army’s ex-
 ercise of that discretion. J.A. 225 § 5.1.8; J.A. 239 § 14.3.
 The Claims Court relied on a Supreme Court decision up-
 holding the validity and enforceability of such an exculpa-
 tory clause with respect to the government’s liability for
 delay damages. See Wood v. United States, 258 U.S. 120
 (1922); see also Wells Bros. Co. v. United States, 254 U.S.
 83 (1920). The Supreme Court has made clear that courts
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 AUTHENTIC APPAREL GROUP, LLC      v. UNITED STATES           9

 should enforce “a plain and unrestricted covenant on the
 part of the contractor, comprehensive as words can make
 it, that it will not make any claim against the government.”
 Wells Bros., 254 U.S. at 87.
     At bottom, Authentic agreed to give the Army broad
 approval discretion, and, similar to the parties in Wells
 Bros. and Wood, Authentic agreed to bear the risk that the
 Army would exercise that discretion to Authentic’s detri-
 ment, at least so long as the government did not act arbi-
 trarily or in bad faith, a matter which we discuss below.
 Authentic’s allegation that the detriment has indeed come
 to pass is simply not a reason to uproot the parties’ bargain.
                               B
      Authentic’s primary argument for allowing its lawsuit
 to proceed despite the exculpatory clauses is based on gen-
 eral principles of trademark licensing law. Authentic ar-
 gues that even if the Army has broad approval discretion
 under the license agreement, that discretion cannot be so
 broad as to allow the Army to refuse to permit the use of
 its trademarks “for trademark purposes.” See Appellants’
 Br. 43–48. Authentic contends that the Army’s interpreta-
 tion of the breadth of its discretion, as adopted by the
 Claims Court, allowed the Army to restrict Authentic’s use
 of the marks to solely “decorative” purposes, which Authen-
 tic suggests are not “trademark purposes.” See id. In so
 doing, Authentic argues, the Army separated the trade-
 marks from their associated goodwill, and thus unlawfully
 turned the license agreement into a license “in gross,” see
 id., which it asserts invalidates the trademarks.
     We first note, in addressing this argument, that we are
 dealing with contract interpretation in this appeal, not
 evaluating the validity of trademarks. Whether the Army’s
 licensing practices impair the validity of its trademarks is
 its own business, not a matter for Authentic to complain
 about, and certainly does not nullify express clauses in the
 parties’ licensing agreement.
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 10             AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES

      But grappling with Authentic’s argument, we are not
 persuaded that the Army’s conduct was at odds with prin-
 ciples of trademark law. Authentic’s argument appears to
 rest on a premise that trademark licenses carry with them
 special considerations that make them inherently distin-
 guishable from other types of contracts, such as the con-
 struction contracts at issue in Wells Bros. and Wood. See,
 e.g., Appellants’ Reply Br. 9 (attempting to distinguish
 Wells Bros. and Wood on the basis that the contracts in
 those cases “had as their ‘object’ the construction of some-
 thing”). But we see no indication that the Supreme Court’s
 reasoning in Wells Bros. and Wood depended on the under-
 lying subject matter of the contracts at issue, nor do we dis-
 cern any reason why it would have. Rather, the Court
 relied on the principle that contract terms “cannot be
 treated as meaningless and futile and read out of the con-
 tract.” Wells Bros., 254 U.S. at 87. Contracting parties,
 including parties who contract with the government, are
 generally held to the terms for which they bargained. See
 id. That principle is equally applicable in this case.
      Even assuming, however, that there are special consid-
 erations for trademark licenses, those considerations as
 they have been argued by Authentic do not persuade us
 that the exculpatory clauses are not controlling in this
 case. Authentic’s argument is based on rights that Authen-
 tic did not have, namely, an alleged “right to identify [the
 Army] as the source/sponsor of the licensed goods.” See Ap-
 pellants’ Br. 45. Under the law, because Authentic was it-
 self the source of the licensed goods, Authentic could not
 have had the right to mislead consumers to believe that the
 Army was the “source.” See, e.g., Visa, U.S.A., Inc. v. Bir-
 mingham Tr. Nat’l Bank, 696 F.2d 1371, 1375 (Fed. Cir.
 1982) (“A key objective of the law of trademarks is protec-
 tion of the consumer against being misled or confused as to
 the source of the goods or services he acquires.”). And, un-
 der the express terms of the license agreement, Authentic
 agreed that it could not represent to the public that its
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 AUTHENTIC APPAREL GROUP, LLC    v. UNITED STATES           11

 products were made by the Army, or “supported, endorsed
 or sponsored” by the Army. J.A. 218 § 2.4; see also id. (re-
 quiring Authentic to produce all goods under its own
 name).
     Authentic presents the term “for trademark purposes”
 as if it is a term of art in the field of trademark licensing
 law with a well-established meaning. 2 But, although Au-
 thentic cites the statutory definition of the term “trade-
 mark” in the Lanham Act, see 15 U.S.C. § 1127, Authentic
 cites no legal authority that purports to define—or even
 use—the term “for trademark purposes” in the context of a
 trademark licensing dispute. More problematically, Au-
 thentic relies on an outdated model of trademark licensing
 law to push an unduly narrow interpretation of what it
 means for a licensee’s use of a trademark to be “for trade-
 mark purposes.”
      At one time it was accepted law that “a trademark’s
 sole purpose was to identify for consumers the product’s
 physical source or origin.” See K Mart Corp. v. Cartier, Inc.,
 486 U.S. 281, 313 (1988) (Brennan, J., concurring-in-part)
 (citing Macmahan Pharmacal Co. v. Denver Chem. Mfg.
 Co., 113 F. 468, 475 (8th Cir. 1901)). “‘Under this early
 “source theory” of protection, trademark licensing was
 viewed as philosophically impossible . . . .’” Id. (quoting
 1 J. McCarthy, Trademarks and Unfair Competition 826
 (2d ed. 1984)). However, in the middle of the twentieth
 century, “a trend develop[ed] approving of trademark li-
 censing—so long as the licensor controlled the quality of
 the licensee’s products—on the theory that a trademark
 might also serve the function of identifying product quality
 for consumers.” Id. at 314 (citing 1 McCarthy, Trademarks
 and Unfair Competition, at 827–29); see also 3 McCarthy
 on Trademarks and Unfair Competition § 18.40 (5th ed.

     2  The term “for trademark purposes” appears more
 than 20 times in Authentic’s opening brief.
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 12             AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES

 2020) (“The quality theory permits a trademark owner to
 license the mark and allow licensees to buy supplies from
 anyone, provided the licensor maintains quality control
 over products reaching consumers under the mark.”).
     Under current prevailing law, the Army was required
 to maintain quality control over the products associated
 with its trademarks. Authentic has not alleged, or come
 forth with evidence, that such quality control measures
 were lacking in this case. Authentic concedes that the ap-
 proval provisions in the license agreement allowed the
 Army to fulfill its duty to ensure quality control and thus
 avoid a “naked license” of the trademarks. See Appellants’
 Br. 44–45. And, as Authentic’s entire complaint is based
 on allegations that the Army was overly strict in the ap-
 proval process, it cannot be disputed that the Army fulfilled
 that duty. Thus, there was no problem of naked licensing
 in this case. See Dawn Donut Co. v. Hart’s Food Stores,
 Inc., 267 F.2d 358, 367 (2d Cir. 1959) (explaining “naked
 licensing” as “the grant of licenses without the retention of
 control” (citing E.I. DuPont de Nemours & Co. v. Celanese
 Corp. of Am., 167 F.2d 484, 489 (C.C.P.A. 1948))).
      In view of the clear shift in the law toward allowing
 trademark licenses, we do not agree with Authentic that a
 “decorative” use of a trademark is necessarily divorced
 from the goodwill associated with the trademark such that
 it cannot be considered a licensed use “for trademark pur-
 poses.” We recognize, of course, that a purely decorative
 design may not qualify for trademark protection in the first
 place. See, e.g., Trademark Manual of Examining Proce-
 dure § 1202.03 (Oct. 2018) (“Subject matter that is merely
 a decorative feature does not identify and distinguish the
 applicant’s goods and, thus, does not function as a trade-
 mark . . . . This matter should be refused registration be-
 cause it is merely ornamentation and, therefore, does not
 function as a trademark, as required by §§1, 2, and 45 of
 the Trademark Act, 15 U.S.C. §§1051, 1052, and 1127.”).
 But, again, this appeal does not involve a challenge to the
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 AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES           13

 validity of the Army’s trademarks, but rather a question of
 what limitations the Army may place on the use by a licen-
 see of trademarks that the Army already owns.
      Throughout its briefing, Authentic repeatedly implies
 that the only way it could have capitalized on the goodwill
 associated with the Army’s marks would have been by giv-
 ing consumers the impression that they were getting prop-
 erty from the Army.        See, e.g., Appellants’ Br. 47;
 Appellants’ Reply Br. 16. But “[a] trademark need not be
 the name of the manufacturer of the goods and the public
 need not know the name of the owner of the mark.” In re
 Polar Music Int’l AB, 714 F.2d 1567, 1571 (Fed. Cir. 1983)
 (citing Coco-Cola Co. v. Koke Co. of Am., 254 U.S. 143, 146
 (1920)); see also Fin. Matters, Inc. v. Pepsico, Inc., 806 F.
 Supp. 480, 481 n.2 (S.D.N.Y. 1992) (“It is well-established
 that the public need not know the name of the trademark
 owner for the[re] to be goodwill in a mark, nor does the
 name of the owner have to appear on the product itself.”).
 It has become accepted law that “[a] use of a trademark
 properly may display only the licensed mark and the name
 of the licensee.” See Gen. Motors Corp. v. Gibson Chemical
 & Oil Corp., 786 F.2d 105, 110 (2d Cir. 1986) (citing
 1 McCarthy, Trademarks and Unfair Competition, at 832);
 see also 3 McCarthy on Trademarks and Unfair Competi-
 tion § 18.45.
      Authentic acknowledges that the Army’s marks are “fa-
 mous.” See Appellants’ Br. 46. And it is not disputed that
 the Army approved the majority of Authentic’s product pro-
 posals, including uses of the phrase “U.S. Army” as well as
 the Army logo. Even if the approved uses could be charac-
 terized as “decorative,” which is not entirely clear, Authen-
 tic fails to explain why that should categorically remove
 them from the class of uses that the Army should be al-
 lowed to license. On the contrary, the Army’s approvals
 seem to have been in the spirit of the law and the license
 agreement because they allowed Authentic to benefit from
 the goodwill associated with the Army’s marks while still
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 14             AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES

 requiring that Authentic sell its own products under its
 own name. To the extent Authentic asserts that there was
 a lack of consumer interest in the products that the Army
 approved, see, e.g., Oral Arg. at 10:25–10:30 (attempting to
 distinguish between “merchandizing” versus “garment de-
 sign”), that was a business problem for Authentic, not a le-
 gal problem that the Army was required to resolve.
      For the foregoing reasons, Authentic has not persuaded
 us that the Army’s exercise of its broad approval discretion
 under the license agreement is inconsistent with principles
 of trademark law. We therefore see no justification to dis-
 regard the exculpatory clauses in the license agreement.
                               C
     In addition to its trademark arguments, Authentic also
 attempts to distinguish Wells Bros. and Wood on the basis
 that the exculpatory clauses in those cases merely assigned
 risk that the parties had previously contemplated and did
 not apply to all of the government’s obligations. See Appel-
 lants’ Reply Br. 9, 11. But here too, the exculpatory clauses
 in the license agreement pertain to behavior that the par-
 ties contemplated and addressed in the license agreement,
 namely, the Army’s discretion to disapprove Authentic’s
 products and marketing materials. See J.A. 225 § 5.1.8;
 J.A. 239 § 14.3.
      We recognize that the potential for abuse may have ex-
 isted in this case because the license agreement required
 Authentic to pay minimum royalties but it did not ex-
 pressly require the Army to approve any of Authentic’s pro-
 posed products. See Oral Arg. at 3:34–3:49 (Authentic’s
 contention that it was “not reasonable for the Army to have
 insisted that [Authentic] pay guaranteed minim[um] roy-
 alties while refusing to approve any merchantable products
 from which to generate revenues from which to pay those
 [royalties]”). And we are skeptical of the government’s po-
 sition that the Army could have been in compliance with
 its contractual obligations even if it had issued arbitrary
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 AUTHENTIC APPAREL GROUP, LLC   v. UNITED STATES           15

 rejections and acted in bad faith. See id. at 15:21–17:50.
 But none of those hypothetical factual scenarios played out
 in this case. The Army approved more than 90% of Authen-
 tic’s proposals. And, as the Claims Court found that Au-
 thentic’s evidence could not even support allegations that
 the Amy acted unreasonably, see Summary Judgment De-
 cision, 146 Fed. Cl. at 152, we certainly do not see a genu-
 ine dispute of material fact about whether the Army acted
 arbitrarily or in bad faith such that its conduct might fall
 outside of the exculpatory clauses. To be sure, the govern-
 ment indeed does have an obligation of good faith and fair
 dealing in its contracting, see Dobyns v. United States, 915
 F.3d 733, 739 (Fed. Cir. 2019) (“Every contract, including
 one with the federal government, imposes upon each party
 an implied duty of good faith and fair dealing in its perfor-
 mance and enforcement.” (citing Metcalf Constr. Co. v.
 United States, 742 F.3d 984, 990 (Fed. Cir. 2014))), but Au-
 thentic has not identified evidence that could establish that
 the government violated its obligation here.
     For the foregoing reasons, Authentic’s arguments do
 not persuade us that there is a legal or factual reason to
 deviate from a plain reading of the exculpatory clauses in
 the license agreement. We therefore hold that the Claims
 Court correctly granted summary judgment in favor of the
 government.
                        CONCLUSION
     We have considered Authentic’s remaining arguments
 but we find them unpersuasive. Accordingly, the decisions
 of the Claims Court are affirmed.
                        AFFIRMED