Mrs. Fields Franchising v. MFGPC

Filing 188

MEMORANDUM DECISION AND ORDER granting 147 Motion for Preliminary Injunction. Signed by Judge Jill N. Parrish on 3/19/2019. (jds)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

MRS. FIELDS FRANCHISING, LLC, a
Delaware limited liability company; and MRS.
FIELDS FAMOUS BRANDS, LLC, a
Delaware limited liability company, dba
Famous Brands International,
MEMORANDUM DECISION AND
ORDER GRANTING PRELIMINARY
INJUNCTION

Plaintiffs,
v.

Civil No. 2:15-cv-0094-JNP-DBP
MFGPC, INC., a California corporation,
Judge Jill N. Parrish
Magistrate Judge Dustin B. Pead

Defendant.
MFGPC, INC., a California corporation,
Counterclaimant,
v.
MRS. FIELDS FRANCHISING, LLC, a
Delaware limited liability company; and MRS.
FIELDS FAMOUS BRANDS, LLC, a
Delaware limited liability company, dba
Famous Brands International,
Counterclaim Defendants.

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This matter is before the court on the Motion for Preliminary Injunction (ECF No. 147)
filed by Defendant and Counterclaim Plaintiff MFGPC, Inc. (“MFGPC”) seeking relief against
Plaintiffs and Counterclaim Defendants Mrs. Fields Franchising, LLC and Mrs. Fields Famous

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Although originally filed as a motion for a Temporary Restraining Order (“TRO”), the court treats
this as a motion for Preliminary Injunction under Fed. R. Civ. P. 65(a) because
Plaintiffs/Counterclaim Defendants had notice of the motion and the opportunity to present
evidence and brief the matter.
1

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Brands International (collectively “Mrs. Fields”) on October 13, 2018. The court conducted a full
evidentiary hearing on the motion on January 14, 2019 (“the Hearing”).
At the Hearing, MFGPC was represented by Brian M. Rothschild and Cedar Cosner of
Parsons Behle & Latimer. Mrs. Fields was represented by Rod N. Andreason of Kirton McConkie.
At the hearing the court received MFGPC’s Exhibits A–H, M–Q, and S–JJ, and Mrs. Fields’
Exhibits 1–33 and 35–45. The court heard from the following witnesses: Christopher Lindley,
Cameron Broadbent, Bradford Kullberg, Betsy Schmandt, Dustin Lyman, and Joshua Kirschbaum.
The court has reviewed and considered the pleadings and orders on file, the testimony of
the witnesses, exhibits received into evidence, and the parties’ proposed findings of facts and
conclusions of law. The court concludes that MFGPC has established each of the required elements
for the court to grant temporary injunctive relief: 1) likelihood of success on the merits; 2)
irreparable harm; 3) the potential harm to MFGPC outweighs any potential harm to Mrs. Fields;
and 4) the requested injunction is not adverse to the public interest. MFGPC’s Motion for
Preliminary Injunction is hereby granted, and MFGPC is hereby restored to all of its rights under
the Trademark License Agreement dated April 30, 2003 between the parties.
FINDINGS OF FACT
1.

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Mrs. Fields is the owner of the “Mrs. Fields” trademark (“Trademark”), a highly

recognizable and established brand of snack food cookie products. Prelim. Inj. Hr’g Tr. at 21:23–
22:6, Jan 14, 2019. (“Hr’g Tr.”).

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MFGPC also moved for entry of a preliminary injunction against “Doe Defendants.” But no “Doe
Defendants” were given notice or afforded the opportunity to present evidence. What is more, the
court denied MFGPC’s motion to amend its counterclaim complaint to add Doe Defendants. For
these reasons, this order will not be entered against any Doe Defendants.
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To the extent any finding of fact constitutes a conclusion of law, it is adopted as such.

2

2.

MFGPC is an operating company that was founded by Christopher Lindley to

manufacture and produce prepackaged popcorn products bearing the Mrs. Fields Trademark. Hr’g
Tr. 8:2–22.
3.

MFGPC and Mrs. Fields are parties to the Trademark License Agreement, dated

April 30, 2003, a binding and enforceable written contract between MFGPC and Mrs. Fields
comprising 21 single-spaced pages, under which the parties performed for more than 10 years.
Ex. O (the “Trademark License Agreement”); Memorandum Decision and Order Granting
MFGCP’s Motion for Summary Judgment (“Order Mot. S.J.”) at 2, ECF No. 132; Memorandum
Decision and Order Granting in Part MGFPC’s Motion to Amend (“Order Mot. Amend”) at 3,
ECF No. 171; Hr’g Tr. 6:25–7:7, 8:23–9:12.
4.

Under the Trademark License Agreement, Mrs. Fields granted MFGPC the

exclusive, worldwide right to manufacture, market, and sell prepackaged, popcorn products
bearing the Trademark. Ex. O; Order Mot. S.J. at 2; Hearing Tr. 12:5–14, 12:21–24, 16:3–12.
5.

Under the Trademark License Agreement, if Mrs. Fields sells Mrs. Fields Branded

Popcorn, it must source that popcorn through MFGPC. Additionally, under the Trademark License
Agreement, MFGPC is permitted to sell Mrs. Fields Branded Popcorn to Mrs. Fields at a profit,
based on a most favored nations pricing structure, which is the lowest price for which MFGPC
sells the product in the marketplace. Ex. O; Hr’g Tr. 14:9–15:2.
6.

Under the Trademark License Agreement, Mrs. Fields is prohibited from

competing with MFGPC by making Mrs. Fields branded popcorn or licensing the right to use the
Mrs. Fields Trademark for use on popcorn. Ex. O.; Hr’g Tr. 15:5–8. The Trademark License
Agreement does not prohibit MFGPC from selling its business or its stock nor does it terminate
the Agreement upon a change in control. Hr’g Tr. 15:12–20.

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7.

Mrs. Fields has additional obligations relating to approval of packaging and

ingredients, which are set forth in the Trademark License Agreement. Ex. O; Hr’g Tr. 36:24–38:7.
8.

MFGPC acquired the Trademark License Agreement by paying $450,000 in

licensing fees and guaranteed royalties during the initial term of the Trademark License
Agreement. Hr’g Tr. 9:15–24.
9.

The Trademark License Agreement provided for an “Initial Term” of five years,

beginning on April 30, 2003. At the end of the Initial Term, the Agreement automatically renewed
for successive five-years terms (“Option Periods”) as long as MFGPC was not in material breach
and “until such time as either party terminates the Agreement upon no more [sic] than twenty (20)
days prior written notice.” To be effective, any attempted termination had to comport with the
termination provisions set out in section 16(b) of the Agreement. See Trademark License
Agreement § 16; Order Mot. S.J. at 4; Hr’g Tr. 16:3-11, 17:6–18.
10.

MFGPC and Mrs. Fields performed under the Agreement for over a decade.

MFGPC produced gourmet cookie popcorn that it distributed throughout the United States and
internationally in Canada and Asia. Hr’g Tr. 13:10–22, 20:24–21:19.
11.

MFGPC established relationships with co-packers, manufacturers, and retailers.

Contracts with co-packers, manufacturers and retailers are established months before distribution
can begin. Hr’g Tr. 151:4–13. MFGPC has maintained its relationship with co-packers and
manufacturers. Hr’g Tr. 24:2–14. But MFGPC lost its relationships with retailers when Mrs. Fields
wrongfully terminated its relationship with MFGPC. Hr’g Tr. 25:23–26:16.
12.

On December 22, 2014, counsel for Mrs. Fields, Avery Samet, sent a letter to

MFGPC in which Mrs. Fields purported to terminate the Agreement due to MFGPC’s alleged
failure to pay royalties. Order Mot. S.J. at 4. Mrs. Fields then filed the complaint in this case,

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seeking a declaration that it had properly terminated the Trademark License Agreement. In
response, MFGPC filed a counterclaim for breach of contract and sought a preliminary injunction
to prevent the termination. The district court denied MFGPC’s request for a preliminary injunction
and later dismissed MFGPC’s counterclaim for failure to state a claim. Mrs. Fields then voluntarily
dismissed its claim for declaratory relief on July 18, 2016. MFGPC appealed on August 10, 2016.
13.

Neither Mrs. Fields’ current senior director of licensing and franchising, Besty

Schmandt, nor current CEO, Johshua Kirschbaum, were involved in Mrs. Fields’ attempted
termination of MFGPC. Betsy Schmandt has been with Mrs. Fields for three years (since February
2016). Hr’g Tr. 119:12–120:20. Joshua Kirschbaum first started working with Famous Brands in
September 2017 and became CEO in November of 2018. Hr’g Tr. 194:3–22. Both witnesses
joined Mrs. Fields during the pendency of this litigation.
14.

While MFGPC’s appeal was pending, on September 22, 2017, Mrs. Fields entered

into a new license agreement with Perfect Snax Prime, LLC (“Perfect Snax”), granting Perfect
Snax a license to market and sell popcorn using the Mrs. Fields Trademark. Hr’g Tr. at 120:24–
121:17; see also Ex. HH, the “Perfect Snax Agreement.”
15.

On January 30, 2018, the Court of Appeals for the Tenth Circuit reversed the district

court’s dismissal of MFGPC’s counterclaim, holding that MFGPC had stated a claim for breach
of contract and reinstating MFGPC’s counterclaim for breach of the Trademark License
Agreement. On remand, MFGPC seeks both specific performance of the Trademark License
Agreement and damages for Mrs. Fields’ breach of the Agreement. Mrs. Fields has no active claim,
having voluntarily dismissed its claim for declaratory relief prior to the appeal.
16.

After remand, the parties filed cross-motions for summary judgment. Mrs. Fields

filed on February 14, 2018 and MFGPC filed on May 16, 2018. While the summary judgment

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motions were pending, Mrs. Fields continued to license to Perfect Snax the Trademark to produce
and sell popcorn. But Perfect Snax failed to make required payments and, on July 3, 2018, Mrs.
Fields sent Perfect Snax a notice of default. Mrs. Fields terminated the Perfect Snax Agreement
on August 7, 2018. Ex. DD; Hr’g Tr. 124:2–6.
17.

A little over two weeks later, on August 20, 2018, this court issued its ruling on the

cross-motions for summary judgment. The court held that under the plain language of the
Agreement, MFGPC had no obligation to pay minimum Guaranteed Royalties after the initial fiveyear option period. As a result, Mrs. Fields’ attempted termination of the Agreement constituted
an improper repudiation and total breach of the Trademark License Agreement by Mrs. Fields.
Order Mot. S.J. at 21. Thus, the court entered summary judgment in favor of MFGPC on the first
three elements of its counterclaim holding that: 1) the parties’ relationship was governed by a valid
contract, 2) MFGPC had substantially performed, and 3) Mrs. Fields committed an actionable
breach by improperly repudiating the contract. Because MFGPC had not moved for summary
judgment as to the remedy, the court left the remedy issue to another time. Order Mot. S.J. at 28–
29.
18.

At the time the court entered partial summary judgment in favor of MFGPC, Mrs.

Fields was not licensing the Trademark to Perfect Snax, having terminated its licensing agreement
with Perfect Snax on August 7, 2018, nor had Mrs. Fields licensed the Trademark to anyone else.
Then, seven days after this court had entered summary judgment against Mrs. Fields, on August
27, 2018, Mrs. Fields entered into a Reinstatement Agreement with Perfect Snax, reinstating
Perfect Snax’s license under slightly more onerous terms than were contained in the parties’
original agreement. Ex. DD; Hr’g Tr. 124:2–6, 125:10–19, 126:2–4.
19.

Perfect Snax has plans to distribute a competing cookie popcorn product, Cookie

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Pop, using the Trademark in mass retail. Id. at 101:4–103:5, 104:11–105:6, 113:16–25; Ex. EE,
Emails; Ex. 43.
20.

After the reinstatement of the Perfect Snax Agreement, Perfect Snax again breached

the agreement by failing to submit the required royalty reports. At the hearing on MFGPC’s motion
for preliminary injunction, Mrs. Fields represented that it has the right to terminate the Perfect
Snax Agreement. Hr’g. Tr. 125:20–22, 126:2–4, 16–18.
21.

MFGPC’s exclusive right to market Mrs. Fields Branded Popcorn is being

wrongfully denied by Mrs. Fields’ grant of a competing license to Perfect Snax. Id. at 101:4–103:5,
104:11–105:6, 113:16–25; Ex. EE; Ex. 43.
22.

The exclusive right to market the Trademark is valuable because the Mrs. Fields

Trademark enjoys extremely high international brand recognition, high favorability, and stands for
premium quality, indulgence, and deliciousness in the baked goods category. Hr’g Tr. 59:10–19,
90:15–91:15, 91:22–92:18, 130:3–12, 194:23–195:4, 212:23–213:8.
23.

The rights granted to MFGPC under the Trademark License Agreement are

valuable to MFGPC because:
a. The Mrs. Fields Trademark is valuable;
b. MFGPC’s licensed territory was world-wide;
c. MFGPC’s license was effectively perpetual absent material breach;
d. MFGPC’s license was exclusive;
e. Mrs. Fields could not source Mrs. Fields-branded popcorn from any other
source and MFGPC could sell to Mrs. Fields at a profit; and
f. MFGPC was granted substantial latitude to sell its business without losing the
license.

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Hr’g Tr. 55:14–20; 90:3–92:18, 93:23–94:19; Ex. O.
24.

The above-described terms of the Trademark License Agreement are unusually

licensee-friendly and would be difficult, if not impossible, to obtain in today’s licensing
environment. Hearing Tr. 9:13–22; 94:11–19; 113:16–25. Because (a) the right to use the
Trademark is unusually valuable and unique, and (b) the Trademark License Agreement contains
such licensee-favorable terms, it is highly unlikely that MFGPC could replace the Trademark
License Agreement with a comparable agreement. Id. at 94:23–95:12.
25.

Calculating damages for Mrs. Fields’ wrongful termination of MFGPC will be

difficult, if not impossible. First, the damages for the interruption of MFGPC’s business will be
difficult to calculate because Perfect Snax’s product, CookiePop, occupies a different product
position than MFGPC’s gourmet popcorn and cannot be readily used as a proxy for computing
damages. Hearing Tr. 98:19–99:7, 153:25–154:5, 195:5–15.
26.

There are several material differences between the brands. CookiePop does not use

real chocolate, nuts, or Mrs. Fields Cookies. Hr’g Tr. 98:19–99:7; 153: 25–154:5; 195:5–15. The
CookiePop packaging does not communicate the same high-quality indulgence associated with the
popcorn previously sold by MFGPC. Id. at 99:15–100:3. Additionally, Mrs. Fields Trademark is
a “sub-brand” on the packaging, meaning it is displayed below and smaller than the Cookie Pop
logo. Id. at 61:24–62:3; Ex. AA; Ex. G; Ex. H. Cookie Pop will also be sold at retailers such as
Wal-Mart and Sam’s Club, which are markedly different than the high end retailers where
MFGPC’s product was sold. Hr’g Tr. 13:13–13:22; 104:11–22.
27.

Calculating damages for permanent deprivation of the license will be practically

impossible and would require speculation (Hr’g Tr. at 107:20–112:4, 118:7–12) because there is
no comparable transaction in the marketplace (Id. at 105:7–107:19; 108:18–25, 112:6–22); and

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proxy measures like prior performance are of limited use because they are tainted by the great
recession preceding the breach and by a fire that significantly disrupted MFGPC’s ability to ship
its product (Hr’g Tr. 105:7–107:19).
28.

MFGPC would not be able to purchase a comparable license in the marketplace

because the licensing landscape has changed dramatically since 2003 to be much more licensorfriendly, and a comparable license likely could not be obtained. Id. at 94:11–95:12, 105:7–107:19;
108:18–25, 112:6–22.
ANALYSIS
As the party seeking a preliminary injunction, MFGPC “must show: (1) a substantial
likelihood of success on the merits; (2) irreparable harm to the movant if the injunction is denied;
(3) the threatened injury outweighs the harm that the preliminary injunction may cause the
opposing party; and (4) the injunction, if issued, will not adversely affect the public interest.” Gen.
Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1226 (10th Cir. 2007). Although Tenth
Circuit case law contemplates a higher pleading standard for certain “disfavored” types of
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injunctions, the court need not address whether this injunction is disfavored because the court

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There are three types of disfavored injunctions: “(1) preliminary injunctions that alter the status
quo; (2) mandatory preliminary injunctions; and (3) preliminary injunctions that afford the movant
all the relief that it could recover at the conclusion of a full trial on the merits.” Fish v. Kobach,
840 F.3d 710, 723–24 (10th Cir. 2016) (internal citation omitted).
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The parties only briefly discuss this issue. In Mrs. Fields’ initial opposition to MFGPC’s motion,
Mrs. Fields makes a conclusory statement that the requested injunction is disfavored because it
either seeks to alter the status quo or is mandatory, but does not elaborate further. See Opp’n Mot.
Prelim. Inj. at 18. MFGPC then correctly responds that the requested injunction would not alter
the status quo because the court must look to “the last uncontested status between the parties which
preceded the controversy” to determine the status quo. See Reply Mot. Prelim. Inj. at 11 (quoting
Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1155 (10th Cir. 2001)).
The last uncontested status in this case was before Mrs. Fields’ breach, when the Agreement was
still in effect. However, MFGPC does not address whether this is a mandatory injunction.

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finds that Mrs. Fields has made “a strong showing both with regard to the likelihood of success on
the merits and with regard to the balance of harms,” and thus has met the “heightened burden” that
is required for disfavored injunctions. Gen. Motors, 500 F.3d at 1226 (quoting O Centro Espirita
Beneficente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 976 (10th Cir. 2004) (en banc, per
curiam), aff’d, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006)); see also N.M. Dep’t of
Game & Fish v. U.S. Dep’t of Interior, 854 F.3d 1236, 1246 n.15 (10th Cir. 2017) (declining to
reach the issue).
Mrs. Fields opposes MFGPC’s motion for a preliminary injunction on the grounds that
MFGPC has not met its burden to establish its entitlement to the requested remedy and on the
grounds that MFGPC lost its right to a preliminary injunction when it failed to appeal the denial
of a preliminary injunction in 2015 by United States District Judge Dee Benson. See Opp’n Mot.
Prelim. Inj. at 10 (quoting United States v. Adesida, 129 F.3d 846, 850 (6th Cir. 1997)) (“The lawof-the-case doctrine bars challenges to a decision made at a previous stage of the litigation which
could have been challenged in a prior appeal, but were not.”). But the “law-of-the-case” doctrine
does not prevent MFGPC’s renewed motion for a preliminary injunction. Judge Benson denied the
motion for a preliminary injunction “primarily” because MFGPC “failed to meet its burden of
proving to the court . . . a likelihood of success on the merits” for its breach of contract
counterclaim. Although it is true that MFGPC did not appeal Judge Benson’s initial denial of a
preliminary injunction, MFGPC did appeal Judge Benson’s subsequent dismissal of MFGPC’s
counterclaim, and the Tenth Circuit reversed. Thus, while MFGPC could not raise Judge Benson’s
denial of its preliminary injunction on appeal, its failure to appeal the denial does not preclude this
court from issuing a preliminary injunction in MFGPC’s favor now that MFGPC’s counterclaim
has been reinstated. See Dover Elevator Co. v. Arkansas State Univ., 64 F.3d 442, 445 (8th Cir.

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1995). MFGPC’s counterclaim reinstated by the Tenth Circuit includes a claim for specific
performance of the contract and for preliminary injunctive relief. MFGPC’s amended counterclaim
includes claims for other equitable relief as well. Thus, nothing prevents the court from addressing
MFGPC’s right to a preliminary injunction.
A. Likelihood of Success on the Merits.
The first factor for consideration on a motion for preliminary injunction is the movant’s
likelihood of success on the merits. In short, MFGPC must establish that it is more probable than
not that it will be successful on the merits of its claim. Gen. Motors, 500 F.3d at 1226. Here, this
element is easily met because the court has already entered summary judgment in favor of MFGPC.
MFGPC’s counterclaim is for breach of the Licensing Agreement. Under Utah law, “[t]he elements
of a prima facie case for breach of contract are (1) a contract, (2) performance by the party seeking
recovery, (3) breach of the contract by the other party, and (4) damages.” Am. W. Bank Members,
L.C. v. State, 342 P.3d 224, 230–31 (Utah 2014) (internal citation omitted). The court has already
entered summary judgment holding that: 1) the parties’ relationship was governed by a valid
contract, 2) MFGPC had substantially performed, and 3) Mrs. Fields committed an actionable
breach by improperly repudiating the contract.
The only outstanding issue is one of remedy. The court finds that MFGPC can establish
that it has been damaged as a result of Mrs. Fields’ breach. Thus, to demonstrate a likelihood of

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Nor is MFGPC precluded from arguing irreparable harm. At the hearing before United States
District Judge Benson on MFGPC’s first motion for a preliminary injunction, MFGPC represented
that it would not be able to continue selling popcorn without an injunction from the court granting
it the right to continue and that its business would be over. Mrs. Fields argues that MFGPC’s
representations before Judge Benson preclude MFGPC from testifying that it can now continue
operating under the Trademark License Agreement. But the court finds that MFGPC’s testimony
before Judge Benson related only to whether or not MFGPC could continue operating at that time
without an injunction, not whether MFGPC could ever be restored to operations. See Benson
Prelim. Inj. Hr’g Tr. 22:21–27:23.

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success on the merits, MFGPC’s only burden is to show a likelihood that the court will award it
the equitable relief that it seeks. After considering the evidence presented at the evidentiary
hearing, the court concludes MFGPC has met its burden of showing a likelihood that the court will
order Mrs. Fields to reinstate the licensing agreement with MFGPC in addition to awarding
damages for the period during which the license was wrongfully terminated.
1. Damages
MFGPC has established that it is likely entitled to damages. MFGPC paid $450,000.00 in
consideration for the Licensing Agreement. MFGPC spent a decade establishing its business, but
since 2015, MFGPC has been unable to sell popcorn because of Mrs. Fields’ breach. While the
damages amount has yet to be determined, MFGPC will almost certainly be entitled to damages
from the date of Mrs. Fields’ breach through the date of trial.
2. Specific Performance
The court has broad discretion to order specific performance. Morris v. Sykes, 624 P.2d
681, 684 (Utah 1981) (“Specific performance is a remedy of equity which is addressed to the sense
of justice and good conscience of the court, and accordingly, considerable latitude of discretion is
allowed in his determination as to whether it shall be granted and what judgment should be entered
in respect thereto . . . .”). Under Utah law, a party seeking specific performance must prove 1) that
a contract exists; 2) that the essential terms of the contract are clear and definite; and 3) that there
is no adequate remedy available at law.

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Tooele Assocs. Ltd. v. Tooele City, 251 P. 3d 835, 835 (Utah 2011) (a contract must exist); 1-800
CONTACTS, INC. v. Weigner, 2005 UT App 523, ¶ 8 (“Specific performance is an equitable
remedy which ‘cannot be required unless all terms of the agreement are clear. The court cannot
compel the performance of a contract which the parties did not mutually agree upon.’”) (quoting
Pitcher v. Lauritzen, 423 P.2d 491, 493 (Utah 1967)); South Shores Concession v. State, 600 P. 2d
550, 552 (Utah 1979) (there must be no adequate remedy available at law).

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As this court has previously ruled, the Trademark License Agreement is a binding and
enforceable written contract. What is more, the terms of the Trademark License Agreement, are
clear and definite. Indeed, the parties performed under the contract for over a decade. Finally, there
is not an adequate remedy at law. Although MFGPC is certainly entitled to damages due to Mrs.
Fields’ breach, these damages will very difficult, if not impossible, to calculate.
First, the value of the license itself is unclear. MFGPC acquired the license fifteen years
ago and since that time the franchising landscape has changed significantly. Replacing the license
would be difficult because there are a limited number of cookie brand franchises available. What
is more, it would be impossible for MFGPC to negotiate a new license on terms as favorable as its
old license.
Second, damages are difficult if not impossible to calculate. Damages from the date of
breach in 2015 to the present are difficult to calculate because there are no comparable products
from which such damage could be estimated. CookiePop is significantly different from MFGPC’s
gourmet cookie popcorn and Perfect Snax has only just begun selling its product over the past
year. Nor is MFGPC’s prior profitability a good prediction of its future profitability because the
great recession and the warehouse fire reduced its profits prior to the breach. And while it will be
difficult to calculate damages with a reasonable degree of certainty from the date of Mrs. Fields’
breach through the present, it would require impermissible speculation to calculate MFGPC’s
future losses.
Accordingly, it appears highly unlikely that MFGPC could be made whole through an
award of money damages because (a) it would be difficult if not impossible to accurately calculate
the damages to MFGPC of being permanently deprived of the right to use the Mrs. Fields

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Trademark for popcorn; and (b) no license for a comparable brand on such favorable terms could
be obtained. In short, money damages alone would not render substantial justice to MFGPC.
In determining whether to order specific performance, the court will also be required to
balance the potential difficulties in supervising an injunction against the benefit of specific
performance. RESTATEMENT (SECOND)

OF

CONTRACTS § 366 (1981), Effect of Difficulty in

Enforcement or Supervision (“A promise will not be specifically enforced if the character and
magnitude of the performance would impose on the court burdens in enforcement or supervision
that are disproportionate to the advantages to be gained from enforcement and to the harm to be
suffered from its denial.”). Although Mrs. Fields argues it would be impossible for Mrs. Fields and
MFGPC to resume business, the court is unconvinced that specific performance of the Trademark
License Agreement would require any supervision by the court. MFGPC has established that it is
capable of performance through its decade-long track record and Mrs. Fields’ obligations under
the license agreement are minimal. Aside from approving package designs and ingredients, its only
obligations are to allow MFGPC to use the Mrs. Fields Trademark and refrain from competing
with it or licensing any else to do so.
What is more, neither the current CEO nor the senior licensing director of Mrs. Fields could
articulate any particularized reason why they would have difficulty doing business with MFGPC.
The reality is that none of Mrs. Fields’ current executives were involved with the termination of
the Agreement. At the hearing, the executives’ only basis for testifying that it would be difficult
for them to resume business with MFGPC was that they did not want to do business with a party
with whom they had been in litigation. But it was Mrs. Fields who initially filed suit and Mrs.
Fields may not rely upon its own decision to file suit as a basis for punishing MFGPC, especially
when Mrs. Fields did not prevail on its claim. MFGPC performed its obligations and Mrs. Fields

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had no problem with MFGPC’s products. Thus, there are no irreconcilable conflicts between the
parties that could not be overcome. Unless Mrs. Fields intends to breach or find further pretense
to terminate MFGPC, further court involvement will be unnecessary. On balance, the benefit of
ordering specific performance over damages is significant.
MFGPC has established a strong likelihood that this court will order specific performance
by Mrs. Fields of the Trademark License Agreement. Thus, the court concludes that MFGPC is
likely to succeed on the merits of its claim for equitable relief.
B. Irreparable Harm
The irreparable harm requirement is the “single most important prerequisite for the
issuance of a preliminary injunction.” Dominion Video Satellite v. Echostar Satellite Corp., 356
F.3d 1256, 1260 (10th Cir. 2004). It must be “certain and great” and more than “merely serious
or substantial” in order to qualify as irreparable. Prairie Band of Potawatomi Indians v. Pierce,
253 F.3d 1234, 1250 (10th Cir. 2001). Mrs. Fields’ breach of the provision of the Trademark
License Agreement that grants MFGPC the exclusive right to use the Mrs. Fields Trademark to
sell all Mrs. Fields Branded Popcorn is the type of breach that can constitute irreparable harm.
Dominion Video, 356 F.3d at 1260-63 (10th Cir. 2004) (holding, in a case on the exclusive right
to sell DISH branded satellite receivers, that “it is clear that irreparable harm often arises from the
breach of an exclusivity clause.”). Other factors supporting irreparable harm from this type of
breach include: “inability to calculate damages, harm to goodwill, diminishment of competitive
positions in marketplace, loss of employees’ unique services, the impact of state law, and lost
opportunities to distribute unique products.” Id. at 1263. As discussed above, MFGPC has shown
that it will be irreparably harmed should the court fail to enter an injunction at this time.

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In the absence of an injunction, MFGPC will be deprived of an opportunity to distribute a
unique product—Mrs. Fields-branded popcorn. Mrs. Fields would be free to license to other thirdparties, and MFGPC would suffer a further diminishment of its competitive position in the
marketplace. Because manufacturing and retail contracts must be established months in advance,
further delay will continue to degrade MFGPC’s ability restart its business. MFGPC (and the court)
would have extreme difficulty calculating damages for the future and permanent deprivation of
MFGPC’s right to exclusive use of the Trademark for selling Mrs. Fields Branded Popcorn. The
speculative nature of calculating damages will only increase over time. Thus, the court concludes
that MFGPC will suffer irreparable harm if the temporary injunction is denied.
C. Balance of Harms
MFGPC must also establish that its threatened injury outweighs the harm injunctive relief
may cause Mrs. Fields. MFGPC has established that it faces irreparable harm as set forth in the
preceding discussion. The court must now balance the potential harm to Mrs. Fields and to any
third parties who will be affected, including Perfect Snax.
Mrs. Fields will be harmed because it will not be able to continue its business relationship
with Perfect Snax. But this harm to Mrs. Fields does not weigh against entering injunctive relief
because the harm is of Mrs. Fields’ own making. As has been recognized in many circuits, “the
injury a defendant might suffer if an injunction were imposed may be discounted by the fact that
the defendant brought that injury upon itself.” Novartis Consumer Health, Inc. v. Johnson &
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Johnson-Merck Consumer Pharm. Co., 290 F.3d 578, 596 (3d Cir. 2002). Any harm to Mrs. Fields

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See also Pappan Enterprises, Inc. v. Hardee’s Food Sys., Inc., 143 F.3d 800, 806 (3d Cir. 1998)
(“The self-inflicted nature of any harm suffered by [defendant] also weighs in favor of granting
preliminary injunctive relief.”) and Sierra Club, Inc. v. Bostick, 539 F. App’x 885, 893 (10th Cir.
2013) (collecting cases).

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arises from either (1) Mrs. Fields’ initial breach of the Trademark License Agreement, or (2) Mrs.
Fields’ decision to reinstate the Perfect Snax Agreement after this court granted MFGPC’s Motion
for Summary Judgment against Mrs. Fields. Mrs. Fields wrongly breached the Agreement with
MFGPC in attempting to terminate the Agreement. The effort it had to place into finding new
franchisees for cookie popcorn is a result of that wrongful action. And while Mrs. Fields’ decision
to license the trademark to Perfect Snax after Judge Benson initially dismissed the case is
understandable, Mrs. Fields is solely at fault for its decision to reinstate its previously terminated
agreement with Perfect Snax after this court had granted summary judgment in favor of MFGPC
and found that Mrs. Fields’ termination of MFGPC was invalid. In light of its behavior, Mrs. Fields
cannot now rely on the harm that will be caused by the termination of its agreement as a reason
for denying an injunction.
Neither can Mrs. Fields rely on any harm to Perfect Snax. At this juncture, Mrs. Fields has
the contractual right to terminate its licensing agreement with Perfect Snax based on Perfect Snax’s
failure to abide by the terms of that agreement. Moreover, any harm to Perfect Snax arising from
an injunction was caused by Mrs. Fields and not MFGPC. It would therefore be inappropriate to
punish MFGPC for Mrs. Fields’ behavior by allowing Mrs. Fields to continue its business with
Perfect Snax. Nor is the court precluded from entering an order that will affect a third party not
joined. See Fed. R. Civ. P. 65(d)(2) (“The order binds . . . the parties . . . [and] other presons who
are in active concert or participation with [the parties].”). Perfect Snax has an interest in the
outcome of this action, but neither existing party moved to join Perfect Snax as a required party
prior to the hearing on the motion for preliminary injunction, nor did Perfect Snax move to

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intervene. Thus to the extent that Perfect Snax’s rights may be affected by an injunction, Perfect
Snax must seek compensation from Mrs. Fields.

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Because MFGPC will suffer irreparable harm and the only harm faced by Mrs. Fields and
third parties arises from Mrs. Fields’ own breaches of its obligations and its decision to undertake
the risks associated with these breaches, the balance of harms tips decidedly in favor of MFGPC.
D. The Public Interest
The final factor to be considered in ruling on a motion for preliminary injunction is whether
the injunction is adverse to the public interest. In this case, the court concludes that the public has
a strong interest in honoring and enforcing lawful contractual obligations. See ClearOne
Commc’ns, Inc. v. Chiang, 608 F. Supp. 2d 1270, 1281 (D. Utah 2009), aff'd in part sub nom.
ClearOne Commc’ns, Inc. v. Bowers, 643 F.3d 735 (10th Cir. 2011) (“Although the court
recognizes the public has a strong interest in a competitive marketplace, the public has an even
greater interest in honoring contractual obligations and in fostering honest competition.”); Neways
Inc. v. Mower, 543 F. Supp. 2d 1277, 1290 (D. Utah 2008) (determining that the public interest
favored the issuance of an injunction where the injunction sought “only to prevent the disavowal
of existing contractual duties and to prohibit unfair competition” because of the public interest “in
fair competition and in the enforcement of lawful contractual obligations”).
The public interest favors the issuance of MFGPC’s requested injunction, especially as this
injunction will discourage Mrs. Fields from engaging in the type of behavior it has in the past.

9

MFGPC moved to join Perfect Snax as a counterclaim defendant on January 31, 2019, seventeen
days after the preliminary injunction hearing, but that motion will be decided independently of
MFGPC’s motion for preliminary injunction.
10

According to the testimony of Mrs. Fields’ employees, Mrs. Fields has the right to terminate the
agreement with Perfect Snax, meaning that Perfect Snax is not entitled to enforce its licensing
agreement with Mrs. Fields’ in any event.

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Emails sent by former CEO Dustin Lyman indicate that Mrs. Fields has a history of disregarding
the rights of its licensees. Not only did Mrs. Fields breach its agreement with MFGPC, in an email
dated August 8, 2018, Lyman ordered reinstatement of the Perfect Snax agreement so that Mrs.
Fields would have “adequate time to seek a better partner” and stated that “[i]t is easier to entice
large licensee’s [sic] when existing distribution is in place.” See Exhibit JJ. In contrast, MFGPC
seeks only to enforce Mrs. Fields’ lawful contractual obligations, prevent Mrs. Fields’ on-going
breach of those obligations, and prevent competition that is contrary to the terms of the Trademark
License Agreement. Thus, MFGPC’s requested injunction is not adverse to the public interest.
E. Conclusion
In summary, MFGPC has demonstrated each of the required elements for the issuance of a
preliminary injunction: (1) likelihood of success on the merits, (2) irreparable harm in the absence
of injunctive relief, (3) the balance of harms weighs in MFGPC’s favor, and (4) public policy
favors the issuance of the injunctive relief. The court concludes that MFGPC is entitled to its
requested injunctive relief.
ORDER
NOW THEREFORE, Mrs. Fields Franchising and Mrs. Fields Famous Brands, and their
respective officers, agents, servants, employees, and attorneys, and any other persons who are in
active concert or participation with them, are hereby ORDERED, within thirty days of the date
of this order:
I.

To refrain from using the Mrs. Fields Trademark in association with Mrs. Fields-branded
popcorn in accordance with the Trademark License Agreement;

II.

To refrain from licensing any third parties to use the Mrs. Fields Trademark in
association with Mrs. Fields-branded popcorn;

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III.

To terminate any licenses and purported licenses to third parties to manufacture, market,
and sell Mrs. Fields-branded popcorn;

IV.

To recognize MFGPC as the exclusive worldwide licensee and source of Mrs. Fieldsbranded popcorn, to enforce MFGPC’s exclusive right to use the Trademark in the worldwide territory in good faith, and to forward all orders received for Mrs. Fields-branded
popcorn to MFGPC for fulfillment, and, if it chooses to sell Mrs. Fields-branded popcorn,
to resume selling exclusively MFGPC-manufactured Mrs. Fields-branded popcorn; and

V.

To remove or cause to be removed all competing Mrs. Fields-branded popcorn using the
Mrs. Fields Trademark from sale, including from all retailers and online distributors,
worldwide.

VI.

This preliminary injunction shall be in place until the final resolution of this action at trial
unless otherwise ordered by the court.

DATED March 19, 2019.
BY THE COURT:

________________________
JILL N. PARRISH, Judge
United States District Court

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