Eureka Water Co. v. Nestle Waters North America, Inc.
690 F.3d 1139
| 10th Cir. | 2012Background
- 1975 Agreement grants Eureka a royalty-free, paid-up license to use the Ozarka mark in Eureka’s territory for purified water and/or drinking water made from Ozarka concentrates.
- Agreement referencesOzarka drinking water concentrates and standards, and gives Nestle inspection and quality-control rights; spring water is not expressly included.
- Nestle (Perrier/Nestle lineage) later marketed Ozarka PET spring water in Eureka’s territory; Eureka received royalties/invasion fees from 1997 to 2007 totaling about $2.5 million.
- In 2003 Nestle reduced royalties; in 2007 Nestle announced it would cease royalties and lower prices; Eureka sued in 2007 seeking declaratory judgment, breach, tortious interference, promissory estoppel, and unjust enrichment.
- Jury awarded Eureka on contract and tortious interference; district court entered declaratory judgment that the agreement covers all Ozarka products and dismissed equitable claims.
- On appeal, the Tenth Circuit reverses in part, vacates the declaratory judgment, and remands for judgment consistent with the opinion; unjust enrichment affirmed, promissory estoppel remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 1975 Agreement cover Ozarka spring water? | Eureka contends the license covers all Ozarka products, including spring water. | Nestle argues the agreement licenses only purified/drinking water and not spring water; UCC does not apply to a trademark license. | No; the agreement covers purified/drinking water only. |
| Is extrinsic evidence admissible to interpret an unambiguous contract under Oklahoma law? | Eureka offered extrinsic evidence of parties’ course of dealing to prove broader meaning. | Oklahoma common law prohibits extrinsic evidence to create ambiguity in an unambiguous contract. | Extrinsic evidence is inadmissible; contract is unambiguous. |
| Is Nestle entitled to judgment as a matter of law on the tortious-interference claim? | Nestle’s conduct interfered with Eureka’s relationships by charging above-market prices. | Interference was privileged/justified to treat similarly situated customers; no wrongful act. | Nestle is entitled to JMOL on the tortious-interference claim. |
| Should Eureka prevail on unjust enrichment and promissory estoppel claims? | Nestle’s royalty nonpayment and promises sustained Eureka’s claims. | Unjust enrichment premised on an invalid license; promissory estoppel requires further development of evidence. | Unjust enrichment affirmed; promissory estoppel remanded for further proceedings. |
Key Cases Cited
- Specialty Beverages, L.L.C. v. Pabst Brewing Co., 537 F.3d 1165 (10th Cir. 2008) (majority rule: UCC governs distribution if goods sale is predominant)
- Pepsi-Cola Bottling Co. of Pittsburgh, Inc. v. PepsiCo, Inc., 431 F.3d 1241 (3d Cir. 2005) (bottling agreement case; conveys goods-predominance analysis under UCC)
- Lamle v. Mattel, Inc., 394 F.3d 1355 (Fed. Cir. 2005) (license for intellectual property not a sale of goods)
- Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30 (2d Cir. 2010) (copyright as intangible property; distinguishes IP from goods)
- Mercury Inv. Co. v. Woolworth Co., 706 P.2d 523 (Okla. 1985) (extrinsic evidence not allowed where contract unambiguous)