Print PDF

Both parties are in the business of distributing educational teaching tools and review kits.  In a consent judgment from a 1999 litigation, defendant agreed to cease using the "Summit" name and not to advertise or sell its TAAS Target Practice product outside Texas.  In return, plaintiff granted defendant a license to market its product for use in Texas.  In this case, plaintiff move to enforce the consent judgment, arguing that:  (1) defendant breached the agreement by marketing, advertising, and selling the product at issue outside of Texas,  (2) although defendant changed its company name to Lone Star Learning, its website contained several references to "Summit Educational Enterprises, Inc."  (e.g., the "lonestarlearning.com" homepage stated that Lone Star was "formerly Summit Educational Enterprises, Inc." and several internal pages included "Summit Educational Enterprises, Inc." headers), and (3) defendant's use of the Internet to market its product violated the agreement because its web pages were accessible outside Texas and did not contain a disclaimer stating that the product was not for sale or use outside Texas.  Plaintiff requested preliminary and permanent injunctive relief as well as civil contempt sanctions.  The court held that in applying the unambiguous language of the agreements the compromise made by both parties was effectively made for the purpose of terminating defendant's ability to advertise, market, and sell its product for any use outside Texas.  Defendant thus violated the consent judgment by failing to provide a disclaimer on its website stating that its product was not for sale or for use outside Texas.  Further, defendant's continued use of the "Summit" name on its website violated the consent judgment.  The court granted plaintiff's motion for preliminary and permanent injunctive relief requiring defendant to cease using the "Summit" name on its website and to also include on its website "the conspicuous and prominent display of language informing the general public that this product is not for sale or use outside of [Texas]."  The court denied plaintiff's motion for civil contempt, however, because defendant believed that it acted in compliance with the settlement agreement, and its continued reference to "Summit" on its website resulted from mere inadvertence and negligence, and defendant temporarily shut down its website to correct these errors.  Finally, the court awarded plaintiff its attorney's fees and costs in bringing this motion but declined to award plaintiff any damages for sales made by defendant outside Texas.