BEANSTALK GROUP, INC. V. AM GENERAL CORP. 283 F.3d 856 (7th Cir. 2002) CASE BRIEF

BEANSTALK GROUP, INC. V. AM GENERAL CORP.

283 F.3d 856 (7th Cir. 2002)

NATURE OF THE CASE: Beanstalk (P) , which serves owners of intellectual property by negotiating licenses of their property, brought this diversity suit for breach of its contract with AM General (D). The district judge granted the defendants' motion to dismiss the complaint for failure to state a claim. Fed. R. Civ. P. 12(b)(6).

FACTS: In 1997, P and D signed an agreement which made P D's sole and exclusive non-employee representative' for the purpose of licensing the Hummer trademark. The agreement entitled P to 35 percent of the 'gross receipts . . . made while the representation agreement was in force. The agreement was drafted by P. P went about its business obtaining agreements for the licensing of the Hummer trademark. In 1999, D entered into a joint-venture agreement with General Motors under which GM would design and engineer a new version of the Hummer, would make an interest-free loan of $235 million to D for the construction of a factory to manufacture the new version, would promise to buy a minimum number of the new vehicles, would obtain an option to buy up to 40 percent of D's common stock--and would acquire the Hummer trademark. GM informed P that it had not assumed any of D's obligations under the representation agreement and that it would not compensate P for any license agreements made or renewed after the effective date of the joint-venture agreement. P contends that the agreement between D and GM, although not labeled a license agreement, was one because it transferred the Hummer trademark to GM and thus was an 'agreement or arrangement, whether in the form of a license or otherwise, granting merchandising or other rights in the Property'; for the transfer gave GM the right, indeed the exclusive right, to merchandise the Hummer trademark, that is, the 'Property.' P contends that the D-GM contract is an 'agreement' that 'grant[ed]' GM 'merchandising . . . rights' in the Hummer trademark. P wants 35 percent of so much of the consideration running from GM to D as represents the value of the Hummer trademark.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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