International Cosmetics Exchange, Inc. v. Gapardis Health & Beauty, Inc.

International Cosmetics Exchange, Inc. (ICE) (plaintiff) was an American company that sold cosmetic products. ICE’s owner became interested in products made by CLM (defendant), a French company, sold under the Fair & White brand. ICE began selling Fair & White products in the United States and negotiated an agreement with CLM to develop and market CLM’s Fair & White products. The agreement stated that ICE owned the Fair & White trademark in the United States in recognition of its efforts to help the brand achieve popularity and awareness there and that CLM owned the trademark in France and Europe. ICE also agreed to undertake its best efforts to sell $250,000 worth of Fair & White product in the agreement’s first year and increase its sales over time. While that agreement was in place, another company, Gapardis Health & Beauty, Inc. (Gapardis) (defendant) became interested in Fair & White products and negotiated with CLM to become its exclusive distributor in the United States. CLM later learned about counterfeit Fair & White products being sold in the United States and stopped selling to ICE, believing that ICE was responsible. Having lost access to CLM’s products, ICE began working with a Spanish manufacturer to reverse engineer CLM’s products, which it sold under the Fair & White trademark. ICE sued Gapardis and CLM for trademark infringement. Gapardis and CLM counterclaimed, arguing that ICE and CLM’s agreement was an invalid assignment in gross and seeking an injunction to stop ICE from selling its Spanish-made Fair & White products. The lower court granted CLM’s request for an injunction. ICE appealed.