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Dispute Resolution Keyed to Carbonneau, 8th Ed.
Comedy Club v. Improv West Associates
Citation:
553 F.3d 1277 (2009)Facts
In 1999, Comedy Club, Inc. (CCI) and Improv West executed a Trademark License Agreement granting CCI an exclusive nationwide license to use Improv West’s trademarks for comedy clubs. The agreement contained a development schedule requiring CCI to open four Improv clubs per year from 2001 through 2003 and included a covenant not to compete that prohibited CCI from owning or operating any comedy clubs other than Improv clubs during the term of the agreement, which ran until 2019. CCI failed to meet the development schedule, opening only seven clubs instead of the required twelve. Improv West then exercised its remedy under the agreement, revoking CCI’s license to open new Improv clubs. CCI filed a declaratory judgment action seeking to invalidate the covenant not to compete. After arbitration was ordered, the arbitrator ruled that the covenant not to compete was valid and enforceable, effectively preventing CCI from opening any non-Improv comedy clubs anywhere in the United States until 2019, while also revoking CCI’s right to open new Improv clubs.
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