Sunshine Kids Foundation v. Sunshine Kids Juv Prod, Inc.

Filing

UNPUBLISHED OPINION FILED. [12-20576 Affirmed ] Judge: JES , Judge: JLD , Judge: SAH Mandate pull date is 10/21/2013 [12-20576]

Case: 12-20576

Document: 00512391565

Page: 1

Date Filed: 09/30/2013

IN THE UNITED STATES COURT OF APPEALS
United States Court of Appeals
FOR THE FIFTH CIRCUIT
Fifth Circuit

FILED
No. 12-20576

September 30, 2013
Lyle W. Cayce
Clerk

THE SUNSHINE KIDS FOUNDATION,
Plaintiff–Appellee,
versus
SUNSHINE KIDS JUVENILE PRODUCTS, L.L.C.,
Now Known as Diono, L.L.C.,
Defendant–Appellant.

Appeals from the United States District Court
for the Southern District of Texas
USDC No. 4:09-CV-2496

Before SMITH, DENNIS, and HIGGINSON, Circuit Judges.
PER CURIAM:*

Diono, L.L.C. (“Diono”), previously known as Sunshine Kids Juvenile

*

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.

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No. 12-20576
Products, L.L.C., appeals the denial of a motion to enforce its settlement agreement with Sunshine Kids Foundation (“SKF”). Because the agreement expressly
excludes any release of Diono’s retailers, we affirm.

I.
SKF, a charitable organization dedicated to enriching the lives of children
with cancer, brought a trademark-infringement action against Diono, a manufacturer of car seats, in 2009. In September 2011, the parties executed a settlement
agreement and agreed to a stipulated permanent injunction providing that in
exchange for a release of liability for trademark infringement, Diono would cease
using the “Sunshine Kids” mark in connection with its seats after December 31,
2011. The agreement also stated that “[t]he Release contained in . . . this Settlement Agreement shall not be construed to extend to the promotion or sale by any
of [Diono’s] customers or purchasers or purchasers of products that may bear the
SUNSHINE KIDS Marks.”
In January 2012, SKF claims to have discovered that certain Diono retailers were promoting and reselling Diono seats with the “Sunshine Kids” mark.
Soon thereafter, SKF sent letters demanding the cessation of that practice. In
response, Diono filed a post-judgment motion to enforce the settlement agreement. The district court denied the motion, concluding that Diono’s retailers did
not have a right to use the “Sunshine Kids” mark to promote and resell the seats
under the First Sale Doctrine.

II.
Although the district court relied on the First Sale Doctrine in denying
Diono’s motion, we need not address whether the doctrine applies in this case
because a motion to enforce a settlement agreement cannot be granted to enforce

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No. 12-20576
a term that is not included in the settlement at issue.1 Diono argues that in
authorizing the use of the “Sunshine Kids” mark in selling its car seats through
December 31, 2011, the agreement impliedly includes a term authorizing its
retailers’ use of the mark as well. Therefore, the argument continues, it is this
implied authorization that should be enforced.
Even if the settlement-agreement release as originally written could be
construed as impliedly covering Diono’s retailers, however, that implication does
not survive the present, express language to the contrary.2 The settlement
agreement, according to its own terms, does not “extend [the release] to the promotion or sale by any of [Diono’s] customers or purchasers of products that may
bear the SUNSHINE KIDS mark.” As a result, the agreement does not deny the
right of SKF to pursue a trademark infringement action against Diono’s retailers, and it may not be enforced to that effect. Our decision should not be misconstrued to hold that Diono’s retailers do not have the right to use the “Sunshine
Kids” mark in promoting and reselling car seats sold by Diono through December 31, 2011—that question is not before us—but only that Diono cannot legally
enjoin SKF’s actions regarding Diono’s retailers via a motion to enforce the settlement agreement.
The order denying the motion to enforce settlement is AFFIRMED.

1

We may affirm for any reason supported by the record, even if not relied on by the
district court. LLEH, Inc. v. Wichita Cnty., Tex., 289 F.3d 358, 364 (5th Cir. 2002).
2

See Delta Seaboard Well Servs., Inc. v. Am. Int’l Specialty Lines Ins. Co., 602 F.3d 340,
343 (5th Cir. 2010) (“The plain language of a[ ] . . . contract[ ] must be given effect when the
parties’ intent may be discerned from the plain language.”).

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