Bar's Products Inc. v. Bars Products International Inc.
662 F. App'x 400
| 6th Cir. | 2016Background
- Bars Products (Bars) and Bars Products International (BPI) split markets for the "Bar’s Leaks" product line for ~30 years: Bars in U.S./Canada, BPI internationally after a series of 1973 assignments transferring foreign rights to BPI.
- Relationship soured in 2007 when Bars began selling similar products abroad (including under the Rislone brand) and BPI began attending the AAPEX trade show with its own booth in 2010.
- Bars sued BPI for trademark infringement and unfair competition; BPI counterclaimed for breach of the 1973 agreements and unfair competition.
- After extensive motion practice, the district court dismissed Bars’s trademark claim (denying leave to amend) and submitted BPI’s counterclaims to a jury; the jury awarded BPI damages for breach of contract and for unfair competition.
- On appeal Bars challenged the denial of its renewed Rule 50 motion as to BPI’s counterclaims and the district court’s refusal to allow amendment of the trademark claim.
- The Sixth Circuit affirmed the breach-of-contract verdict, reversed the unfair-competition verdict for lack of distinct damages proof, and reversed the denial of leave to amend Bars’s Lanham Act claim (remanding for further proceedings).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1973 documents cumulatively created an enforceable contract transferring all foreign business rights to BPI | Bars: only the single written agreement it signed governs; other assignments (signed by Barton/Huki Lau) do not bind Bars | BPI: the 1973 instruments should be read together and course-of-conduct shows Bars intended to transfer exclusive foreign rights | Court: Ambiguity existed; extrinsic evidence could be considered; jury reasonably found an enforceable package transfer to BPI (affirmed) |
| Whether Bars breached the 1973 agreements by selling products abroad (including Rislone) | Bars: no express non-compete or non-solicitation; Rislone was not owned in 1973 so sales cannot breach | BPI: agreements conveyed exclusive foreign rights to radiator/cooling products (present and future); Bars’s foreign sales breached that grant | Court: Both non-competition and implied non-solicitation theories were reasonably submitted to jury; evidence supports breach (affirmed) |
| Whether BPI proved unfair-competition liability and distinct damages | Bars: unfair-competition claim duplicates breach claim and BPI failed to prove separate causally connected damages | BPI: presented additional facts (trademark filings abroad, solicitations, attempts to sell raw materials to licensees) constituting unfair acts and relied on expert damages | Court: Even if unfair acts proved, BPI failed to segregate or prove damages tied to unfair conduct distinct from contract damages; judgment vacated as to unfair competition (reversed) |
| Whether district court properly denied leave to amend Bars’s Lanham Act complaint | Bars: proposed amendment alleged BPI displayed the Bar’s Leaks mark at AAPEX and that BPI was not authorized — amendment plausible | BPI: prior use/consent/acquiescence and historical guest status at Bars’s booth negates infringement | Court: Acquiescence is an affirmative, fact-bound defense not established by the complaint; denial of leave to amend was erroneous — reversal and remand to permit amendment (reversed) |
Key Cases Cited
- Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 2005) (standard of review for renewed JMOL)
- Kiphart v. Saturn Corp., 251 F.3d 573 (6th Cir. 2001) (JMOL standard articulated)
- Klapp v. United Ins. Grp. Agency, 468 Mich. 459 (Mich. 2003) (ambiguity and use of extrinsic evidence in contract interpretation)
- Worgess Agency, Inc. v. Lane, 66 Mich. App. 538 (Mich. Ct. App. 1976) (sale of business gives rise to implied non-solicitation covenant)
- Liberty Oil Corp. v. Crowley, Milner & Co., 270 Mich. 187 (Mich. 1935) (unfair competition damages must be proven with reasonable certainty)
- Allard Enters., Inc. v. Advanced Programming Res., Inc., 249 F.3d 564 (6th Cir. 2001) (prior-use/acquiescence concepts relevant to trademark defenses)