Topps Co. v. Cadbury Stani S.A.I.C.

06-5316-cv Topps Co. v. Cadbury Stani S.A.I.C. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT [3] 4 _______________ [5] 6 August Term, 2007 [7] 8 (Argued: December 12, 2007 Decided: May 15, 2008) [9] 10 Docket No. 06-5316-cv [11] 12 _______________ [13] 14 The Topps Company, Inc., [15] 16 Plaintiff-Appellant, [17] 18 v. [19] 20 Cadbury Stani S.A.I.C., f/k/a Productos Stani 21 Sociedad Anonima Industrial y Comercial, [22] 23 Defendant-Appellee. [24] 25 _______________ 26 Before: 27 CARDAMONE, and POOLER, Circuit Judges, 28 and KEENAN,* District Judge. [29] 30 _______________ [31] 32 Plaintiff appeals from the judgment of the United States 33 District Court for the Southern District of New York (Haight, 34 J.), entered November 8, 2006, dismissing claims for breach of 35 contract and misappropriation of trade secrets. [36] 37 Reversed and remanded. [38] 39 _______________ [44] 45 _______________ [46] 47 * Honorable John F. Keenan, United States District Judge for 48 the Southern District of New York, sitting by designation. 1 _______________ [2] 3 DAVID G. EBERT, New York, New York (Patricia Hewitt, Mioko 4 Tajika, Caitlin L. Bronner, Ingram Yuzek Gainen Carroll & 5 Bertolotti, LLP, New York, New York, of counsel), for 6 Plaintiff-Appellant. [7] 8 DENNIS P. ORR, New York, New York (Stefan W. Engelhardt, John 9 W.R. Murray, Morrison & Foerster LLP, New York, New York, of 10 counsel), for Defendant-Appellee. [11] 12 _______________ 1 CARDAMONE, Circuit Judge: 2 Plaintiff appeals from a grant of summary judgment in favor 3 of defendant in litigation between two multinational 4 corporations. This litigation concerns chewing gum, principally 5 "Bazooka" bubble gum, known in this country by its small -- less 6 than an inch -- paper-wrapped package and accompanying comic 7 strip. Chewing gum is a pastime engaged in since ancient times 8 when the substance chewed was a resin taken directly from certain 9 trees. Nowadays people generally chew the industrially-produced 10 version. They do so for a variety of reasons, including: to 11 cleanse teeth and freshen breath; to focus the mind during 12 athletic competitions; to calm the stomach; and to take the place 13 of smoking. One's inability to chew gum while simultaneously 14 carrying out other routine activities, such as walking, is 15 sometimes used as an epithet. And, of course, because gum is 16 today a sugary confection it is sweet and chewing gum is 17 enjoyable and fun. 18 Such a widely enjoyed product is a big seller in the 19 marketplace and a dispute over the manufacture and distribution 20 of "Bazooka" bubble gum and another brand in parts of South 21 America is what precipitated the instant litigation. On this 22 appeal we review a grant of summary judgment to defendant, which 23 had been licensed for many years by plaintiff to make and sell 24 these products. In reaching its decision the United States 25 District Court for the Southern District of New York (Haight, J.) 26 relied heavily on an analysis of trademark rights and the sale of [2] 1 goodwill that led it into a complex and evolving area of the law. 2 We believe it erred here as well as in other aspects of its 3 reasoning. Yet, it is not our purpose in this opinion to plant 4 new guideposts into the trademark terrain. We write, rather, 5 simply to explain why this case was not ripe for summary 6 judgment. 7 BACKGROUND 8 The Topps Company, Inc. (Topps or plaintiff) is a New York 9 corporation that makes and sells chewing gum under a number of 10 brand names, including the "Bazooka" brand. Cadbury Stani 11 S.A.I.C., f/k/a Productos Stani Sociedad Anonima Industrial y 12 Comercial (Stani or defendant) is an Argentinian corporation to 13 which, beginning in 1957, Topps granted, through a series of 14 licensing agreements, the exclusive right to manufacture, sell 15 and distribute "Bazooka" and other Topps chewing gum brands in 16 five South American countries: Argentina, Bolivia, Chile, 17 Paraguay and Uruguay. See Topps Co. v. Cadbury Stani S.A.I.C., [18] 454 F. Supp. 2d 89, 91 (S.D.N.Y. 2006). 19 A. The Licensing Agreements 20 The original 1957 licensing agreement provided for Topps to 21 share with Stani "the know-how, formulae, processes and 22 techniques used by Topps" in return for royalties on Stani's 23 sales. The 1957 agreement was set to expire after 20 years. But 24 in 1976, one year short of the contract's termination, the 25 parties executed a new agreement, providing for the continued 26 sharing of "manufacturing technology, marketing concepts and [3] 1 techniques, administrative and consultive assistance and 2 trademark use" in return for Stani paying a yearly license fee. 3 The 1976 agreement had a term of ten years, with an option for 4 Stani to extend it for another ten years. 5 Four years later, in 1980, the parties simultaneously 6 executed two additional agreements that are the subject of the 7 present dispute. One was an Amended and Restated License 8 Agreement. It contained terms similar to those set out in the 9 1976 license agreement, but extended the license until April 30, 10 1996. Paragraph 2 of the 1980 license agreement stated that 11 Topps granted to Stani 12 the exclusive non-assignable right and 13 license to manufacture in Argentina, Bolivia, 14 Chile, Paraguay and Uruguay and sell within 15 the Territory, during the continuance of this 16 Agreement, Licensed Products employed by 17 TOPPS in [enumerated locations] and in any 18 subsequent established affiliated plants of 19 TOPPS. [20] 21 This language was nearly identical to that of paragraph 2 of the 22 1976 license agreement, except that the 1976 agreement referred 23 to "Licensed Products utilizing TOPPS Technology" (emphasis 24 added) while the 1980 agreement referred simply to "Licenced 25 Products." 26 Paragraph 3 of the 1980 license agreement stated 27 [t]he TOPPS Trademarks and the TOPPS 28 Technology shall at all times remain the 29 exclusive property of TOPPS or its assigns 30 and the rights hereby granted to STANI shall 31 be by way of license or, if required by 32 trademark regulations within the Territory, 33 by way of registered user rights. [4] 1 Again, this language was nearly identical to that used in the 2 1976 licensing agreement. In addition, both agreements defined 3 Topps Trademarks as "all Chewing Gum and Other Topps Products 4 trademarks, owned, used or originated by TOPPS," and they defined 5 Topps Technology as "the specialized knowledge and experience of 6 TOPPS applicable to the manufacture and/or sale of Licensed 7 Products," including "formulae, recipes, processes, equipment 8 utilization, labour and equipment standards, ingredient 9 specifications, factory management and production planning 10 techniques, factory facility design and layout and quality 11 control procedures, including gum base technology." 12 The 1980 and 1976 license agreements provided for early 13 termination by either party on certain grounds, and both 14 specified that upon termination Stani, among other things, would 15 have no further right "to use any of the TOPPS Trademarks or the 16 TOPPS Technology except for use in connection with selling and 17 disposing of Licensed Products on hand" under specified 18 conditions. 19 Further, Paragraph 30 of the 1980 license agreement (like 20 Paragraph 32 of the 1976 agreement) contained the following 21 language 22 All the terms of the Agreement between the 23 parties are herein set forth and no 24 modification, amendment alteration or 25 variation of the terms of this Agreement 26 shall be valid unless in writing signed by 27 TOPPS and STANI. No agreement, letter or 28 other communication between the parties shall 29 be deemed to be a modification or amendment 30 of this Agreement or any terms hereof, unless [5] 1 such agreement, letter or other communication 2 expressly provides that it is intended to be 3 a modification or amendment of this 4 Agreement. [5] 6 B. The Escrow Agreement 7 On the same day the 1980 license agreement was executed, the 8 parties also signed what they termed an Escrow Agreement. This 9 escrow agreement set out the terms by which the minute book, 10 stock book, and stock certificates of one Verco Holding 11 Corporation would be held in escrow and delivered to Stani's 12 owner on May 31, 1996 unless Stani defaulted under the 1980 13 license agreement or other enumerated events occurred. The 14 preamble to the escrow agreement stated, "Topps has transferred 15 legal title to the registration in Argentina of the trademarks 16 'Bazooka', 'Topps' and related trademarks to the Verco Holding 17 Corp., a New York corporation, all of the capital stock of which 18 is issued in the name of [Stani's owner]." In exchange for the 19 transfer, Stani paid Topps $100,000. Topps, 454 F. Supp. 2d at 20 98. 21 C. The Dispute 22 The 1980 license agreement expired by its own terms on April 23 30, 1996, and it appears the escrow agent, as provided in the 24 escrow agreement, transferred the stock and corporate papers to 25 Stani's owner on May 31, 1996. Topps, 454 F. Supp. 2d at 98 . 26 Three years later, in 1999, Topps brought the present suit 27 against Stani, contending that Stani continued to use Topps 28 chewing gum formulas (considered Topps Technology under the [6] 1 license agreements) after April 30, 1996, and that it transferred 2 these formulas and other Topps Technology to its parent company, 3 Cadbury, all in breach of the 1980 license agreement. Topps 4 maintained Stani's conduct constituted wrongful misappropriation 5 of trade secrets under New York tort law. Stani responded by (1) 6 denying it continued to use Topps chewing gum formulas, and (2) 7 arguing that even if it had, such conduct was neither a breach of 8 the agreement nor a wrongful misappropriation because the 9 agreement granted it the right to use plaintiff's formulas. 10 Topps, 454 F. Supp. 2d at 99 . 11 On Stani's motion, the district court granted it summary 12 judgment on all but one of Topps' claims. Id. at 108 . The court 13 separated these claims from the one remaining claim in order to 14 render a final, appealable judgment. Topps Co. v. Cadbury Stani, 15 S.A.I.C., 2006 WL 3247360 , at *4 (S.D.N.Y. 2006). The trial 16 court concluded that the 1980 licensing agreement, read in 17 conjunction with both the contemporaneously signed escrow 18 agreement and the prior (1976) licensing agreement, unambiguously 19 gives Stani the right to continue using Topps chewing gum 20 formulas even after the 1996 expiration date. Topps, 454 F. 21 Supp. 2d at 101-07. Reasoning from this conclusion, it went on 22 to hold there was neither a breach of contract, nor a wrongful 23 misappropriation of trade secrets. Id. at 107-08. From the 24 ensuing dismissal of its claims, Topps now appeals. [7] 1 DISCUSSION 2 I Standard of Review 3 We review a grant of summary judgment de novo applying the 4 same tests used by the district court. See, e.g., Compagnie 5 Financiere de CIC et de L'Union Europeenne v. Merrill Lynch, 6 Pierce, Fenner & Smith Inc., 232 F.3d 153, 157 (2d Cir. 2000). 7 Imposing this procedural remedy is appropriate only when there is 8 no genuine issue with regard to any material fact and the moving 9 party is entitled to judgment as a matter of law. Fed. R. Civ. 10 P. 56 (c). When deciding a summary judgment motion, a court must 11 construe all the evidence in the light most favorable to the 12 nonmoving party, in this case Topps, and draw all inferences and 13 resolve all ambiguities in that party's favor. LaSalle Bank 14 Nat'l Ass'n v. Nomura Asset Capital Corp., 424 F.3d 195, 205 (2d 15 Cir. 2005). 16 This generally means that a motion for summary judgment may 17 be granted in a contract dispute only when the contractual 18 language on which the moving party's case rests is found to be 19 wholly unambiguous and to convey a definite meaning. See 20 Compagnie Financiere, 232 F.3d at 157-58 . Ambiguity here is 21 defined in terms of whether a reasonably intelligent person 22 viewing the contract objectively could interpret the language in 23 more than one way. Sayers v. Rochester Tel. Corp. Supplemental 24 Mgmt. Pension Plan, 7 F.3d 1091 , 1095 (2d Cir. 1993). To the 25 extent the moving party's case hinges on ambiguous contract 26 language, summary judgment may be granted only if the ambiguities [8] 1 may be resolved through extrinsic evidence that is itself capable 2 of only one interpretation, or where there is no extrinsic 3 evidence that would support a resolution of these ambiguities in 4 favor of the nonmoving party's case. See Compagnie Financiere, [5] 232 F.3d at 158 . We turn next to resolve those issues. 6 II The 1980 License Agreement 7 A. Its Ambiguity 8 On its face, the 1980 license agreement contains no terms 9 expressly granting or denying Stani the right to Topps chewing 10 gum formulas after April 1996, and its provisions bearing on the 11 issue point in different directions. On the one hand, the 12 agreement states, "[t]he TOPPS Trademarks and the TOPPS 13 Technology" -- the latter defined to include Topps chewing gum 14 formulas -- "shall at all times remain the exclusive property of 15 TOPPS or its assigns." And further, where Paragraph 2 grants 16 Stani the right to use Topps formulas, it grants this right only 17 "during the continuance" of the agreement. These provisions 18 strongly suggest Stani had no right to continue using Topps 19 formulas after the agreement's April 1996 expiration date. On 20 the other hand, there is no language in the 1980 agreement 21 expressly stating that Stani's right to the formulas would end 22 with the April 1996 expiration date. By way of contrast, this 23 agreement expressly addresses the loss of Stani's right to these 24 formulas in the event of early termination. Hence, the absence 25 of such express language in the agreement with respect to the [9] 1 regular expiration date could be read to mean Stani's rights to 2 the formulas would continue. 3 As a consequence, the 1980 license agreement is amenable to 4 two different interpretations. Because we believe a reasonably 5 intelligent person viewing this agreement objectively could 6 choose either interpretation, we hold the agreement is ambiguous. 7 See Compagnie Financiere, 232 F.3d at 158 ; Sayers, 7 F.3d at 8 1095. 9 B. The Role of Extrinsic Evidence 10 Given our conclusion that the 1980 license agreement is 11 ambiguous, we look next to the record to determine whether any 12 relevant extrinsic evidence is so one-sided in defendant's favor 13 as to allow Stani's interpretation to prevail on summary 14 judgment. As a preliminary matter, we address Topps' contention 15 that the 1980 escrow agreement and 1976 license agreement are 16 inadmissible for this purpose under the parol evidence rule. 17 It is conceded that New York law governs the interpretation 18 of the 1980 license agreement. New York's parol evidence rule 19 generally bars admission of extrinsic evidence to vary or 20 contradict the terms of a fully integrated writing. See Primex 21 Int'l Corp. v. Wal-Mart Stores, Inc., 89 NY2d 594, 599-600 (N.Y. 22 1997). Contrary to the district court's analysis, Topps, 454 F. 23 Supp. 2d at 101 n.11, this rule of inadmissibility of extrinsic 24 evidence applies to both oral and written evidence alike. See 25 Primex, 89 NY2d at 599-600 ; Farm Stores, Inc. v. Sch. Feeding 26 Corp., 79 AD2d 504, 504-05 (1st Dep't 1980), aff'd 53 NY2d 910 [10] 1 (N.Y. 1981). Moreover, Article 30 of the 1980 license agreement 2 appears to express the parties' intent to form an integrated 3 agreement. See Primex, 89 NY2d at 596-97, 599-600 . 4 Nonetheless, extrinsic evidence may be used as a guide to 5 Stani's rights after April 1996 because the 1980 license 6 agreement is facially ambiguous as to these rights. "Even though 7 a document may be fully integrated with respect to the ultimate 8 terms of the agreement, the meaning of those terms may remain 9 unclear." U.S. Fire Ins. Co. v. Gen. Reinsurance Corp., 949 F.2d 10 569, 571 (2d Cir. 1991) (applying New York law). In such cases, 11 it is proper to consider extrinsic evidence in interpreting the 12 ambiguous terms, irrespective of the parol evidence rule. Id. 13 The extrinsic evidence in this case, however, does not 14 resolve the ambiguities over Stani's rights for purposes of its 15 summary judgment motion. The 1980 escrow agreement and the 1976 16 license agreement shed little light on the parties' intent with 17 regard to Stani's rights to Topps formulas after April 1996. In 18 fact, the strongest pieces of extrinsic evidence identified by 19 the parties are Stani's own pleadings and the statement of one of 20 its experts that it had no need for these formulas after that 21 date -- and possibly even much earlier. Far from proving Stani's 22 case, these pieces of evidence lend support to Topps' position. 23 III District Court's Analysis 24 The district court viewed the evidence in a different light. 25 It did so in the context of interpreting what it erroneously 26 believed to be unambiguous contract language. Nonetheless, we [11] 1 address its reasoning at this juncture. Were this reasoning 2 sound, it would apply equally to our evaluation of the evidence 3 for purposes of resolving the ambiguities in the 1980 license 4 agreement. 5 A. Of Trademark Law 6 The trial court relied heavily on the 1980 escrow agreement, 7 which it read in the context of what it understood to be 8 applicable principles of trademark law. It reasoned that if 9 Stani had not been given the right to continue using Topps 10 formulas after April 1996, the 1980 escrow agreement would amount 11 to nothing more than a transfer of the Topps trademarks "in 12 gross," and in that way would "violate the laws of trademark." 13 Topps, 454 F. Supp. 2d at 102 . The court concluded the parties 14 must not have intended to contract with each other in such a 15 manner. Id. 16 We think this reasoning flawed in several respects. First, 17 the district court assumed the "laws of trademark" applicable to 18 this transfer prohibited assignments "in gross." In so doing it 19 looked to U.S. trademark law for the principle that a trademark 20 is simply a symbol of goodwill and cannot be sold or assigned 21 apart from the goodwill it symbolizes. Id. at 102 (citing 22 Marshak v. Green, 746 F.2d 927, 929 (2d Cir. 1984) (citing Lanham 23 Act § 10, 15 U.S.C. § 1060 )). An assignment "in gross" is a 24 purported transfer of a trademark divorced from its goodwill, and 25 it is generally deemed invalid under U.S. law. See Marshak, 746 [12] 1 F.2d at 929. But in the case at hand the 1980 escrow agreement 2 dealt with trademarks in Argentina, not in the United States. 3 Although the escrow agreement includes a choice-of-law 4 clause pointing to New York law, the question is not whether or 5 how to enforce this agreement, but rather what was the actual 6 effect, in Argentina, of the purported transfer that the 7 agreement memorialized. The principle of territoriality is 8 fundamental to trademark law. A trademark has a separate legal 9 existence under each country's laws, and trademark rights exist 10 in each country solely according to that nation's laws. See, 11 e.g., ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 155 (2d Cir. 12 2007); Person's Co. v. Christman, 900 F.2d 1565, 1568-69 (Fed. 13 Cir. 1990). As a consequence, whether or not the transfer 14 memorialized in the escrow agreement ultimately left Stani with 15 the right to trademarks in Argentina depends on Argentinian law. 16 This is a significant matter in this litigation because 17 there has been no briefing on the relevant Argentinian law, much 18 less any notification, under Federal Rule of Civil Procedure 19 44.1, that foreign law would be at issue. Although we decline to 20 rule definitively on this issue under these circumstances, we 21 note that Argentinian trademark law (like that of many countries) 22 appears to permit assignments in gross. See 1 Trademarks 23 Throughout the World § 9:21 (5th ed. 2007); Susan Barbieri 24 Montgomery & Richard J. Taylor, Key Issues in Worldwide Trademark 25 Transfers: Law & Practice 1, 5-6 (2005); Ernesto O'Farrell & 26 Iris V. Quadrio, Argentina in id. at AR-1, AR-11; Mark A. [13] 1 Greenfield, Goodwill As a Factor in Trademark Assignments: A 2 Comparative Study, 60 Trademark Rep. 173 , 181-81 (1970). 3 Second, even were the court's ruling correct that the 4 applicable law prohibited assignments in gross, it is not evident 5 the transfer at issue required a concomitant transfer of Topps 6 chewing gum formulas to avoid qualifying as such an assignment. 7 The goodwill requirement in U.S. law does not mean the assignee's 8 products must be identical to those of the assignor. Instead, 9 they need only be "substantially similar" such that "consumers 10 would not be deceived or harmed." Marshak, 746 F.2d at 930 . 11 Stani's own pleadings and the statements of one of its experts 12 strongly suggest a substantially similar product could be 13 produced without using the Topps formulas. At the very least, 14 this question of fact could not be resolved in Stani's favor on 15 Stani's motion for summary judgment. 16 Third, even if applicable law prohibited assignments in 17 gross and even if the transfer here would have qualified as such 18 without a concomitant transfer of Topps formulas, there still is 19 insufficient proof, for summary judgment purposes, that the 20 parties intended to give Stani the right to these formulas. It 21 could well have been that the parties were attempting an 22 assignment in gross despite the law. In fact it appears 23 businesses take this risk frequently. See Irene Calboli, 24 Trademark Assignment "With Goodwill": A Concept Whose Time Has 25 Gone, 57 Fla. L. Rev. 771 , 774 (2005); Nathan Isaacs, Traffic in 26 Trade-Symbols, 44 Harv. L. Rev. 1210 , 1210-21 (1931). And, to [14] 1 the extent the parties were looking to U.S. law when they 2 negotiated the escrow agreement, they may well have relied on the 3 then-recent trend toward a more flexible definition of the 4 goodwill necessary to avoid the prohibition against assignments 5 in gross. See Calboli, supra, at 791 ("[B]y the beginning of the 6 1970s, most courts . . . started to declare assignments valid as 7 long as sufficient continuity or substantial similarity, rather 8 than identity, existed between the marked goods."); Stephen L. 9 Carter, The Trouble With Trademark, 99 Yale L.J. 759 , 785-87 10 (1990) (criticizing this trend). As with the other issues 11 involved in the district court's trademark analysis, this 12 question of the parties' intent was a subject not suitably 13 resolved on summary judgment. 14 B. Of Contract Law 15 The district court also relied on principles of contract law 16 in reading the 1980 escrow agreement and the 1976 license 17 agreement in conjunction with the 1980 license agreement. It 18 looked to the 1980 license agreement's broad definition of "Topps 19 Technology" to include not just the chewing gum formulas at issue 20 but also "all other elements of TOPPS' knowledge and experience." 21 Topps, 454 F. Supp. 2d at 104 . The court reasoned that for the 22 agreement to be read as prohibiting Stani's continued use of 23 Topps chewing gum formulas, it would also need to be read as 24 prohibiting Stani's use of everything else defined as Topps 25 Technology, since the agreement does not differentiate between 26 these groups. Id. [15] 1 This reading, the court found, would have "put Stani out of 2 business" or at least forced it to "start over entirely in the 3 gum business, with new plants, new methods, new processes, and 4 all the technical components involved in the making of chewing 5 gum." Id. Such an outcome seemed in the trial court's view 6 inconsistent with the existence of the escrow agreement, which 7 suggested the parties' assumption that Stani would continue to 8 manufacture and sell chewing gum using the "'specialized 9 knowledge and experience' it had acquired from Topps over the 10 course of a 39-year relationship." Id. 11 The district court also focused on the contrast, noted in 12 Part II A. above, between the 1980 license agreement's express 13 language cutting off Stani's right to use Topps Technology in the 14 event of early termination, and the absence of such a cut-off 15 provision in the contract language establishing the April 1996 16 expiration date. Id. at 105 . Further, it looked to (1) the 17 absence of the words "utilizing Topps technology" in paragraph 2 18 of the 1980 licensing agreement as compared to paragraph 2 of the 19 1976 licensing agreement, (2) the fact that the 1980 licensing 20 agreement was set to expire on a date certain whereas the 1976 21 agreement had the option of renewal, and (3) the fact that Stani 22 had limited rights to terminate the 1980 licensing agreement as 23 compared to its rights to terminate the 1976 licensing agreement. [24] Id. at 105-07 . The court took all of these things as signs of 25 the parties' intent for Stani to continue using Topps Technology, 26 including chewing gum formulas, after April 1996. Id. at 107 . [16] 1 There is no question that with respect to Stani's rights 2 after April 1996 the 1980 license agreement could have been more 3 clearly written. However, the extrinsic evidence in the record 4 does not weigh so overwhelmingly in Stani's favor as to permit 5 resolution of the agreement's ambiguities on a motion for summary 6 judgment. Quite the contrary, as already noted, Stani's own 7 pleadings and the statements of one of its experts strongly 8 undercut the district court's finding that the company could not 9 remain in business without using Topps Technology. While the 10 differences in the language of the 1976 and 1980 license 11 agreements do support Stani's position to some extent, they do 12 not plainly resolve the question for purposes of summary 13 judgment. 14 CONCLUSION 15 For all of these reasons, we must reverse the district 16 court's grant of summary judgment in favor of defendant. We do 17 so with respect to the breach of contract claim (including Topps' 18 claim with regard to the alleged disclosure of Topps Technology 19 to Cadbury, which was not addressed in the district court's 20 opinion), and also with respect to the misappropriation claim, 21 since the judgment we reverse hinged as to both claims on an 22 erroneous interpretation of the 1980 license agreement. 23 Accordingly, the case is remanded to the district court for 24 further proceedings not inconsistent with this opinion.