HERZOG CREBS OBTAINS SIGNIFICANT VICTORY
FOR HANDI-CRAFT COMPANY, TERMINATING
ITS INTERNATIONAL DISTRIBUTOR
On March 24, 2005, Judge Lewis Blanton of the U.S. District Court for the Eastern District of Missouri entered rulings on a number of post-trial motions which put the finishing touches on a major jury award for Handi-Craft Company, a long-time Herzog Crebs’ client. Handi-Craft Company is the exclusive licensee of the Dr. Brown’s Natural Flow® baby bottle. The Dr. Brown’s bottle features a patented internal vent system invented by a Southern Illinois physician. The bottle, which has won praise and accolades around the world, significantly reduces colic, burping and gas in babies.
In September 2002, Peter Herzog and Michael Vitale of Herzog Crebs filed a multi-count lawsuit on behalf of Handi-Craft against Action Trading, S.A., a Panamanian corporation. Action Trading, S.A. had been appointed by Handi-Craft in 1997 as its major foreign distributor of the bottle. However, after several years of disputes between the two companies, Handi-Craft contended that Action Trading should terminated for, among other things, its breach of the license agreement, unfair competition and trademark dilution. In addition to seeking substantial damages, Handi-Craft sought a declaration that the agreement was terminated and that Action Trading was no longer licensed to sell the Dr. Brown’s bottle. Action Trading filed a counterclaim alleging breach of the license agreement on Handi-Craft’s part, seeking millions of dollars in damages and a declaration that Handi-Craft could not terminate the agreement.
For a year and a half, substantial discovery was conducted by Herzog Crebs in its thorough review of the facts, both in the U.S. and internationally. Many facets of the case were ultimately presented electronically to the jury at trial. Following a two week jury trial in May and June 2004, a U.S. District Court jury returned verdicts in Handi-Craft’s favor on its claims for breach of contract and unfair competition and awarded Handi-Craft over $518,000 in damages. The jury also found in favor of Handi-Craft and against Action Trading on Action Trading’s counterclaim. After the jury rendered its verdict, Judge Blanton ordered the license agreement terminated.
Soon after the trial, Action Trading filed motions asking that Judge Blanton order a new trial and reinstate the license agreement. Handi-Craft filed its own post-trial motions seeking attorneys’ fees and court costs from Action Trading. In his rulings on March 24, 2005, Judge Blanton denied Action Trading’s request for a new trial and awarded Handi-Craft over $1,000,000 in attorneys’ fees and over $41,000 in court costs. Judge Blanton also ruled that the license agreement should remain terminated.
