Bodum USA Inc. v. La Cafetiere, Inc.

For over 40 years, Société Anciens Establissements Martin S.A. (Martin) distributed the Chambord, a French-press coffee maker. Louis-James de Viel Castel was Martin’s principal investor and manager. Castel owned other businesses, including Household Articles Ltd. (Household), a British business, which sold La Cafetière, a French-press coffee maker that was very similar to the Chambord. In 1991 Martin sold all its stock to Bodum Holding. Before Martin agreed to sell the stock, Castel insisted that Household could continue to sell La Cafetière. Jørgen Jepsen Bodum, the main investor in Bodum Holding, initially submitted a draft of the agreement that permitted Household to continue selling La Cafetière in the United Kingdom only. Castel rejected this draft. The next draft permitted Household to sell La Cafetière only in markets where Household was already marketing La Cafetière. Household also rejected this draft. The parties finally settled on an agreement in which Household could sell La Cafetière if Household did not use the trademarks or brand names of Melior and Chambord; the agreement did not mention a geographic restriction. The agreement contained a choice-of-law clause applying French law. Household then incorporated an entity in Illinois, La Cafetière, Inc. (the Household entity) (defendant), which began selling La Cafetière in the United States. Bodum USA, Inc. (plaintiff) filed suit against the Household entity, arguing that the contract prohibited the Household entity from marketing La Cafetière outside of the United Kingdom and Australia, which is what Bodum testified that he had intended the agreement to mean. The Household entity moved for summary judgment, arguing that the agreement permitted it to sell La Cafetière in the United States. Bodum argued that French law applied to the agreement, and under French law the party’s intent controlled over the literal terms of the agreements. Both Bodum USA, Inc., and the Household entity submitted expert testimony interpreting French law, with the experts supporting the respective positions of the parties that retained them. Relying only on the expert opinions, the district court granted the Household entity’s motion for summary judgment. Bodum USA, Inc., appealed.