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Playboy Wins Trademark Infringement Claims

When business deals go bad, the parties have the option of suing for breach of contract, depending on how much money was at stake and whether they can prove the other party failed to uphold their end of the bargain. But those who consider taking their grievances to court would be well advised to make sure they were the only injured party. Otherwise they could find themselves being forced to pay the people they’re trying to sue, which is exactly what happened to Play Beverages and CirTran after they filed a lawsuit against Playboy for an alleged breach of contract.

In fall of 2006, Playboy entered into a license agreement with Play Beverages that gave exclusive international distribution rights to the beverage company. The contract was for 20 years and included an option for the parties to renew the agreement ever five years.

Almost a year after this contract was signed, Play Beverages signed a contract with CirTran giving it limited rights to the manufacture and distribution of Playboy’s energy drink.

By the time they filed their lawsuit against Playboy, Play Beverages and CirTran allege they had successfully launched Playboy’s beverage in more than 30 countries and acquired distributors for an additional 80 countries. Despite these gains, the plaintiffs admitted they had not managed to meet the minimum sales target required by the license agreement.

Nevertheless, the complaint alleges that, because of the successful market development, Playboy had made informal promises to renew its contract with the distributors.

But, according to the complaint, Playboy allegedly came under new management in 2011, at which point the company became less willing to approve the distributors’ use of Playboy’s brand name and trademark. The complaint listed several allegations, including breach of contract, tortious interference with a contract, and breach of implied agreement of good faith.

But rather than merely defend its actions, Playboy went on the offensive and filed counterclaims against the two distribution companies. Playboy’s lawsuit alleged Play Beverages and CirTran were trying to obtain relief for a contract in which they failed to uphold their end of the deal. Playboy further alleged it had suffered other problems as a result of its association with Play Beverages and CirTran, including receiving complaints from vendors and distributors from countries across the globe.

In addition to failing to fulfill their contractual promises to Playboy, the counterclaims further allege the distribution companies had not fulfilled their obligations to other parties, including failing to properly compensate multiple distributors. What’s more, Playboy alleges that both Play Beverages and CirTran had similarly disappointed other business partners. Playboy pointed to numerous lawsuits involving both of the distribution companies involving alleged breaches of contract or failure to make payments, including a bankruptcy petition against Play Beverages in 2011.

Playboy’s counterclaims included, not only breach of contract, but also false advertising and trademark infringement, among other allegations.

Not only did the jury find Playboy innocent of the allegations against it, but it also ruled in favor of Playboy’s counterclaims and awarded it a total of $7 million for its claims against Playboy Beverages and CirTran.Super Lawyers named Illinois business trial attorneys Peter Lubin and Vincent DiTommaso Super Lawyers in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso Lubin Austermuehle’s Illinois business trial lawyers have over a quarter of century of experience in litigating complex class action, copyright, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes including lawsuits between businesses or between shareholders and owners of the same business.  Our Wheaton, Carol Stream, and Naperville business dispute lawyers handle emergency business law suits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0000 or our toll free number (877) 990-4990.  You can also contact us online here.