Capri Sun GmbH v. American Beverage Corporation

Background

Capri Sun GmbH owns a registered trademark for a metal foil pouch containing fruit juice. American Beverage Corporation manufactures foil juice pouches. The parties’ dispute followed a 2016 settlement and license agreement between Capri Sun and American Beverage’s predecessor, Faribault Foods, Inc. Under that agreement, Capri Sun licensed pouch manufacturing rights to Faribault and later to American Beverage.

Capri Sun alleged that American Beverage later sold pouches that were confusingly similar to Capri Sun’s pouches. Capri Sun brought claims under the federal trademark statute, New York common law, and the settlement and license agreement. The agreement included a provision barring challenges to the validity of Capri Sun’s pouch trademark and another provision limiting certain damages, including lost profits and other specified categories.

The court’s earlier summary-judgment decision left Capri Sun’s central federal trademark-infringement claims for trial. In that decision, the court held that the agreement prevented Capri Sun from recovering American Beverage’s profits as direct damages on its federal trademark claims. The court also had previously struck American Beverage’s defenses and discovery requests concerning whether Capri Sun’s trademark was functional.

The Proposed Appeals

Capri Sun sought permission under 28 U.S.C. § 1292(b) for an immediate, or interlocutory, appeal before the case went to trial. It proposed asking whether the agreement’s damages provision barred Capri Sun from recovering American Beverage’s direct profits on its claims for trademark infringement, unfair competition, and false association under the federal trademark statute.

American Beverage filed a conditional motion. It sought certification of whether the agreement’s no-challenge provision was enforceable against its defense that Capri Sun’s trademark was functional. American Beverage asked for that certification only if the court certified Capri Sun’s proposed question.

Legal Standard

Section 1292(b) permits a district court to certify an interlocutory appeal when the order involves a controlling legal question, there is substantial ground for disagreement about that question, and immediate appellate review may materially advance the end of the litigation. The court explained that certification is generally disfavored and reserved for exceptional circumstances. Even when the statutory factors are met, the district court retains discretion to deny certification.

Court’s Reasoning

The court first concluded that Capri Sun had not shown that an immediate appeal would materially advance the litigation. The proposed appeal concerned only the type of damages available if Capri Sun prevailed on its trademark claims; it would not resolve the liability claims or end the case. The court was not persuaded that the appeal would materially improve settlement prospects because the court had already resolved the damages issue and other disputes, yet no settlement progress had been reported. American Beverage also opposed certification rather than jointly supporting it.

The court also rejected Capri Sun’s argument that an immediate appeal would avoid a second trial. That argument depended on several uncertain events: that a jury would find American Beverage liable, that a later appeal would reverse the court’s interpretation of the damages provision, and that a new trial on profit damages would then be necessary. An interlocutory appeal could instead delay the case and create multiple appeals. The court also found that any later proceeding about profit damages might be limited and could potentially be decided by the court rather than a jury.

The court separately held that Capri Sun had not shown a substantial ground for disagreement. Although the contract questions were matters of first impression, the court found them not particularly difficult. It continued to read the agreement as covering Capri Sun’s federal trademark claims and as excluding recovery of American Beverage’s profits because the agreement provided for a fixed royalty instead.

Disposition

The court denied Capri Sun’s motion to certify the damages question for an interlocutory appeal. Because American Beverage’s motion was conditional on granting Capri Sun’s motion, the court denied American Beverage’s motion as moot. The clerk was directed to terminate the two motions.