The Topps Company Inc v Cadbury Stani

At the heart of the appeal, was a judgement given in November 2006 by Senior US District Judge Charles S. Haight, JR. The plaintiff claimed misappropriation of trade secrets on the ground that the defendant continued to manufacture and sell the Bazooka bubble gum after the license ran out in 1996. Judge Haight granted a summary judgment in favor of the defendant.

The Court of Appeals in The Topps Co. Inc v Cadbury Stani determined that the case at the time of the granting of a summary judgement was not ripe for such an outcome.

A summary judgment is granted where there is no genuine issue of material fact that may be tried.

The trademark analysis taken by the District Court corresponded to licenses, the territoriality principle and the intent of parties for assignment in gross.

Addressing assignment "in gross", the Court of Appeals highlighted the fact that an assignment in gross means a "transfer of trademark divorced from the goodwill" and that such trasnfer is invalid in the U.S. However, the fact that the Agreement dealt with trademarks rights in Argentina and not in the U.S., Argentinian Law would apply.

Further, applying the principle of territoriality which states that the "trademark rights exist in each country solely according to that nations laws" (See ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2d Cir. 2007)), the choice of law question turns to the "effect in Argentina" for determination. Thus, the question of whether Stani had rights transferred to it in the license agreement would depend on Argentinian Law.

A significant point made by the Court stating that under U.S. law the goodwill requirement is that assignees product be "substantially similar" and not identical to the assignor's product. The defendant's pleading showed that the product could be made without using the plaintiff's formulas. Thus here was a triable fact, and the case was not ripe for summary judgment.

Lastly, given that the trend in 1970 for taking business risk was essentially to push the limits to attain a "flexible definition of goodwill necessary to avoid prohibition against assignments in gross", the parties intent in this case would be sufficient to disallow summary judgement.