Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Wanting to retire from the trucking business, the owner entered into employment contracts so that the plaintiffs would act as CEO and vice president and a stock purchase agreement. The relationship broke down while they were negotiating a buy-sell agreement. The owner fired the plaintiffs and paid benefits specified in the employment contract. The plaintiffs did not purchase stock or place $750,000 into an escrow, as they were entitled to do to secure their position. The district court ruled in favor of the owner. The Seventh Circuit affirmed, holding that neither party violated a clause in the stock purchase contract that required that they use "best efforts" to enter into a buy-sell agreement. The plaintiffs retained the right to purchase stock, but chose not to do so, which entitled the owner to terminate their employment. The owner took full advantage of his rights under the contracts, but did not exploit the plaintiffs.

For many years the owners of the original bridal shop allowed family members to operate similar businesses under the same name. The owners sold one of their own shops and the buyer agreed to pay $75,000 per year for the use of the name and marks. When the agreement expired in 2002, the buyer continued to use the name and marks, without paying. The district court dismissed a 2007 claim under the Lanham Act, 15 U.S.C. 1117, 1125. The Seventh Circuit affirmed, holding that the owners abandoned their mark by engaging in "naked licensing:" allowing others to use the mark without exercising reasonable control over the nature and quality of the goods, services, or business on which the mark is used. It was not enough that the owners had confidence in the high quality of the buyer's operation; they retained no control.