TRADEMARK COEXISTENCE AGREEMENT
Execution Version
Effective Date: May 15, 2023
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This TRADEMARK COEXISTENCE AGREEMENT (this "Agreement") is entered into as of May 15, 2023 (the "Effective Date"), by and between:
MERIDIAN CONSUMER BRANDS LLC, a Delaware limited liability company, with its principal place of business at 450 Park Avenue South, 14th Floor, New York, New York 10016 ("MCB" or "Meridian");
and
BRINDOVAL HOME GOODS INC., a Minnesota corporation, with its principal place of business at 7200 France Avenue South, Suite 300, Edina, Minnesota 55435 ("Brindoval" or "CHG").
MCB and Brindoval are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, MCB is a consumer packaged goods company engaged in the manufacture, marketing, distribution, and sale of household cleaning, personal care, and home fragrance products throughout the United States, and has built substantial goodwill and consumer recognition in connection with its family of MERIDIAN-branded products over more than a decade of continuous commercial use;
WHEREAS, MCB is the owner of the following federally registered trademarks in International Class 3 (cleaning preparations), each of which is valid, subsisting, and enforceable on the Principal Register of the United States Patent and Trademark Office (the "USPTO"):
(i) U.S. Registration No. 4,218,506 — MERIDIAN (standard character mark), registered August 14, 2012;
(ii) U.S. Registration No. 5,034,771 — MERIDIAN CLEAN (standard character mark), registered October 18, 2016; and
(iii) U.S. Registration No. 5,589,320 — MERIDIAN (stylized logo with wave device), registered July 10, 2018;
(collectively, the "MCB Marks"), each of which is more particularly described in Exhibit A attached hereto;
WHEREAS, MCB has used the MERIDIAN mark in commerce in connection with household cleaning products continuously since approximately 2011, and the MCB Marks have acquired significant distinctiveness and consumer recognition in the marketplace for household cleaning, personal care, and home fragrance products;
WHEREAS, Brindoval is a regional home goods retailer operating one hundred forty-eight (148) retail stores across twelve (12) Midwestern and Mountain West states and an e-commerce platform at www.crestviewhomegoods.com, through which it offers range home goods and household products, including private-label lines;
WHEREAS, Brindoval filed U.S. Trademark Application Serial No. 97/412,558 for MERIDIAN FRESH (standard character mark) in International Class 3 on May 12, 2022, which application was examined by the USPTO and published for opposition in the Official Gazette on September 6, 2022 (the "Brindoval Application");
WHEREAS, Brindoval launched a private-label line of household cleaning products under the mark MERIDIAN FRESH in or about July 2022, offered for sale in Brindoval's retail store locations and on its e-commerce platform, utilizing a teal-and-white color scheme and a stylized wave device on its product packaging;
WHEREAS, MCB, upon learning of Brindoval's adoption and use of the MERIDIAN FRESH mark and its associated trade dress, determined that such use was likely to cause consumer confusion with the MCB Marks and to dilute the distinctiveness of the MERIDIAN mark;
WHEREAS, MCB timely filed a Notice of Opposition before the Trademark Trial and Appeal Board of the USPTO, Opposition No. 91/278,415, against the Brindoval Application on October 14, 2022, opposing registration of MERIDIAN FRESH on the grounds of likelihood of confusion and dilution (the "Opposition");
WHEREAS, MCB commenced a civil action against Brindoval in the United States District Court for the Southern District of New York, captioned Meridian Consumer Brands LLC v. Brindoval Home Goods Inc., Case No. 1:22-cv-09483 (Hon. Patricia M. Albright), asserting claims for federal trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), false designation of origin under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and trademark dilution under New York General Business Law § 360-l (the "Action");
WHEREAS, Brindoval filed an Answer and Counterclaim in the Action on or about November 28, 2022, denying MCB's allegations and seeking, inter alia, a declaratory judgment of non-infringement and non-dilution;
WHEREAS, the Court issued an Order on January 9, 2023 (Dkt. No. 34), granting in part MCB's Motion for Preliminary Injunction by requiring Brindoval to modify its trade dress so as to eliminate the teal-and-white color scheme and the wave device from its MERIDIAN FRESH product packaging, finding that MCB had demonstrated a likelihood of success on the merits with respect to the trade-dress claims and a likelihood of irreparable harm in the absence of preliminary relief;
WHEREAS, the Parties participated in a court-ordered mediation on February 15, 2023, before the Honorable Harold K. Novotny (Ret.) of Novotny ADR Services LLC, and reached a framework term sheet setting forth the principal commercial terms for the resolution of the disputes between them, which term sheet was non-binding and subject to the negotiation and execution of a definitive agreement;
WHEREAS, the Parties desire to resolve fully, finally, and completely all disputes between them regarding the use of the marks at issue, to establish the terms and conditions under which Brindoval may continue to use a modified version of its mark within defined channels and on defined products, and to dismiss the Action and the Opposition with prejudice, all as more fully set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article 1 shall have the meanings ascribed to them elsewhere in this Agreement.
Section 1.1 — "Action" shall mean the civil action captioned Meridian Consumer Brands LLC v. Brindoval Home Goods Inc., Case No. 1:22-cv-09483, pending in the United States District Court for the Southern District of New York before the Honorable Patricia M. Albright, together with all claims, counterclaims, cross-claims, and third-party claims asserted therein.
Section 1.2 — "Authorized Channels" shall mean, collectively, (a) Brindoval-branded retail store locations currently in operation or opened after the Effective Date under the Brindoval name, and (b) Brindoval's own e-commerce platform located at www.crestviewhomegoods.com (or any successor URL controlled and operated exclusively by Brindoval). For the avoidance of doubt, Authorized Channels specifically exclude (i) any third-party retail or e-commerce platforms, including without limitation Penmark Holdings, Walmart.com, Adriatic Corporation, Cascade Holdings.com, and any similar online marketplace operated by a person or entity other than Brindoval, and (ii) any wholesale distribution channels through which Brindoval supplies products to third-party retailers for resale.
Section 1.3 — "Coexistence Period" shall mean the period commencing on the Effective Date and continuing in perpetuity, unless this Agreement is terminated in accordance with Article 11 hereof.
Section 1.4 — "Brindoval Application" shall mean U.S. Trademark Application Serial No. 97/412,558 for the mark MERIDIAN FRESH (standard character mark) in International Class 3, filed by Brindoval with the USPTO on May 12, 2022, as such application may be amended in accordance with Section 9.1 hereof.
Section 1.5 — "Escrow Agent" shall mean Dralvecen National Bank, located at 60 East 42nd Street, New York, New York 10165, acting in its capacity as escrow agent under the Escrow Agreement of even date herewith.
Section 1.6 — "Escrow Officer" shall mean Patricia Dolan, a duly authorized officer of Dralvecen National Bank designated to administer the escrow account established under the Escrow Agreement.
Section 1.7 — "Former Trade Dress" shall mean the teal-and-white color scheme (approximately Pantone 326 C and white) and the stylized wave device used by Brindoval on MERIDIAN FRESH products and product packaging prior to the Effective Date, as more particularly described in the Court's Order of January 9, 2023 (Dkt. No. 34) in the Action.
Section 1.8 — "MCB Marks" shall mean, collectively, U.S. Registration No. 4,218,506, U.S. Registration No. 5,034,771, and U.S. Registration No. 5,589,320, as set forth in the Recitals and more particularly described in Exhibit A hereto, together with any renewals, extensions, or continuations thereof and any additional registrations that may issue from applications claiming priority to or continuity with such registrations.
Section 1.9 — "Modified Mark" shall mean the mark BRINDOVAL MERIDIAN FRESH, as described in Section 3.1 hereof and the specifications set forth in Exhibit B hereto.
Section 1.10 — "Opposition" shall mean the opposition proceeding before the Trademark Trial and Appeal Board of the USPTO, Opposition No. 91/278,415, filed by MCB against the Brindoval Application.
Section 1.11 — "Permitted Products" shall mean household cleaning preparations classified in International Class 3 of the Nice Classification, limited exclusively to the following product categories: (a) all-purpose cleaners, (b) glass cleaners, (c) disinfecting sprays, (d) disinfecting wipes, (e) floor cleaners, and (f) dish soap. The Permitted Products are further described in Exhibit C hereto. For the avoidance of doubt, Permitted Products do not include any personal care products, home fragrance products, laundry detergent products, or any products classified outside International Class 3.
Section 1.12 — "Rebranding Deadline" shall mean the date that is one hundred twenty (120) days after the Effective Date, which the Parties agree is September 12, 2023.
Section 1.13 — "Replacement Trade Dress" shall mean any trade dress, packaging design, color scheme, label layout, graphic device, or other visual element adopted by Brindoval in connection with the Modified Mark after the Effective Date, excluding the Former Trade Dress. For the avoidance of doubt, Replacement Trade Dress includes all packaging, labeling, point-of-sale materials, and digital assets used to present or promote Permitted Products bearing the Modified Mark.
Section 1.14 — "Settlement Payment" shall mean the one-time lump sum payment of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) to be made by Brindoval to MCB pursuant to Article 2 hereof.
ARTICLE 2 — SETTLEMENT PAYMENT
Section 2.1 — Payment Amount. In consideration of the rights and licenses granted herein, and as partial consideration for the resolution of the Action and the Opposition, Brindoval shall pay to MCB a one-time lump sum settlement payment in the amount of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) (the "Settlement Payment"), to be paid in the manner set forth in this Article 2. The Settlement Payment shall be non-refundable and non-creditable upon release from escrow, except as may otherwise be required by applicable law.
Section 2.2 — Escrow Deposit. Within ten (10) business days of the Effective Date, Brindoval shall deposit the full amount of the Settlement Payment, by wire transfer of immediately available funds, into an escrow account established and maintained by the Escrow Agent (Dralvecen National Bank, Escrow Officer Patricia Dolan) pursuant to the terms and conditions of the Escrow Agreement of even date herewith among MCB, Brindoval, and the Escrow Agent, a copy of which is referenced in Exhibit E hereto. Brindoval shall bear all escrow fees and administrative costs charged by the Escrow Agent in connection with the establishment and maintenance of the escrow account. Failure by Brindoval to deposit the Settlement Payment within the time period specified in this Section 2.2 shall constitute a material breach of this Agreement.
Section 2.3 — Release of Funds. The Escrow Agent shall release the Settlement Payment to MCB by wire transfer to an account designated in writing by MCB, promptly upon the Escrow Agent's receipt of written confirmation from counsel for both Parties (or, in the alternative, a conformed copy of the Court's Order) that the Court in the Action has entered an Order of Dismissal with Prejudice dismissing all claims and counterclaims in the Action. Interest, if any, accruing on the escrowed funds during the escrow period shall be allocated in accordance with the terms of the Escrow Agreement.
Section 2.4 — Tax Treatment. Each Party shall be solely responsible for the payment of any and all taxes, including without limitation federal, state, and local income taxes, arising from or attributable to the receipt or payment of the Settlement Payment. Neither Party makes any representation or warranty to the other regarding the tax treatment or tax consequences of the Settlement Payment. Brindoval shall be responsible for issuing any IRS Form 1099 or other tax reporting document required by applicable law in connection with the Settlement Payment. Each Party agrees to cooperate with the other Party in connection with any tax reporting obligations arising hereunder.
ARTICLE 3 — MARK MODIFICATION AND USE
Section 3.1 — Adoption of Modified Mark.
(a) Brindoval shall rebrand all products currently bearing the mark MERIDIAN FRESH (without the BRINDOVAL prefix) so that such products bear the Modified Mark, BRINDOVAL MERIDIAN FRESH, in all instances of use. Such rebranding shall be completed no later than the Rebranding Deadline (September 12, 2023). This obligation applies to all product labels, packaging, point-of-sale displays, advertising and promotional materials, digital assets (including website listings, social media profiles, and digital advertisements), and any other commercial materials on which the MERIDIAN FRESH mark appears.
(b) In all uses of the Modified Mark, including without limitation on product packaging, labeling, advertising, promotional materials, and digital media, the word "BRINDOVAL" shall appear in typeface that is no less than seventy-five percent (75%) of the x-height and cap-height of the typeface used for the words "MERIDIAN FRESH." The word "BRINDOVAL" shall appear immediately preceding the words "MERIDIAN FRESH" on the same line of text or, where layout constraints require, on the line immediately above "MERIDIAN FRESH," in each case without any intervening text, symbols, graphic elements, or other visual separation that would tend to diminish the visual prominence or association of the word "BRINDOVAL" with the words "MERIDIAN FRESH." Detailed specifications for the Modified Mark are set forth in Exhibit B hereto.
(c) After the Rebranding Deadline, Brindoval shall not use the standalone mark MERIDIAN FRESH (without the BRINDOVAL prefix) on any products, product packaging, labeling, advertising, promotional materials, digital media, signage, or any other medium, whether in commerce or otherwise. Any use of the word "MERIDIAN" by Brindoval after the Rebranding Deadline must be exclusively as part of the Modified Mark in full compliance with the requirements of this Section 3.1.
Section 3.2 — Transition Period. During the period commencing on the Effective Date and ending on the Rebranding Deadline (the "Transition Period"), Brindoval may continue to sell through existing finished-goods inventory bearing the MERIDIAN FRESH mark (without the BRINDOVAL prefix) that was manufactured or ordered prior to the Effective Date, provided that: (a) Brindoval shall use commercially reasonable efforts to deplete such existing inventory as expeditiously as practicable; (b) Brindoval shall not manufacture, order, print, or procure any additional product packaging, labels, or other materials bearing the MERIDIAN FRESH mark (without the BRINDOVAL prefix) after the Effective Date; (c) Brindoval shall maintain records of existing inventory quantities as of the Effective Date and shall make such records available to MCB upon reasonable request; and (d) any inventory bearing the MERIDIAN FRESH mark (without the BRINDOVAL prefix) that remains unsold as of the Rebranding Deadline shall be destroyed or defaced so as to render the MERIDIAN FRESH mark illegible, and Brindoval shall provide MCB with a written certification of destruction within ten (10) business days following the Rebranding Deadline.
ARTICLE 4 — CHANNEL RESTRICTIONS
Section 4.1 — Authorized Channels Only. Brindoval may use the Modified Mark (BRINDOVAL MERIDIAN FRESH) solely within the Authorized Channels, which consist exclusively of: (a) Brindoval-branded retail store locations, meaning physical retail stores operated by Brindoval or its wholly owned subsidiaries under the Brindoval name, and (b) Brindoval's own e-commerce platform located at www.crestviewhomegoods.com (or any successor URL controlled and operated exclusively by Brindoval). All sales, offers for sale, advertising, and promotion of products bearing the Modified Mark shall be confined to these Authorized Channels.
Section 4.2 — Prohibited Channels. Brindoval shall not use, display, advertise, offer for sale, or sell any product bearing the Modified Mark or any mark incorporating the word "MERIDIAN" through any of the following channels (collectively, "Prohibited Channels"):
(a) Any third-party retail or e-commerce platform, including without limitation Penmark Holdings, Walmart.com, Adriatic Corporation, Cascade Holdings.com, Cobalt Ridge Corporation, or any similar online marketplace operated by a person or entity other than Brindoval;
(b) Any wholesale distribution channel, including without limitation distribution to grocery stores, convenience stores, drug stores, mass merchandisers, club stores, dollar stores, or any other retail establishment not branded under the Brindoval name; or
(c) Any retail location, physical or virtual, that is not branded under the Brindoval name and operated by Brindoval or its wholly owned subsidiaries.
For the avoidance of doubt, the channel restrictions set forth in this Article 4 apply to all uses of the Modified Mark and to any mark incorporating the word "MERIDIAN," regardless of whether such use is on product packaging, point-of-sale materials, advertising, or any other medium.
Section 4.3 — Online Advertising. Brindoval may engage in digital advertising, including search engine marketing (e.g., Strathmore Systems, Ashbury Holdings Advertising), social media advertising (e.g., Kestrel Services Inc., Northpoint Services Inc., Pinterest), and programmatic display advertising, for the purpose of directing consumers to www.crestviewhomegoods.com to purchase Permitted Products bearing the Modified Mark, provided that: (a) all such advertising uses only the Modified Mark in full compliance with the requirements of Section 3.1(b); (b) no such advertising appears on, is displayed within, or directs consumer traffic to any Prohibited Channel; and (c) Brindoval does not bid on or purchase the keyword "MERIDIAN" as a standalone search term in any search engine marketing campaign, but may bid on the phrase "BRINDOVAL MERIDIAN FRESH" as a complete phrase. MCB reserves the right to monitor Brindoval's digital advertising for compliance with this Section 4.3 and to raise objections in accordance with the dispute resolution procedures set forth in Article 14.
ARTICLE 5 — PRODUCT-CATEGORY RESTRICTIONS
Section 5.1 — Permitted Products. Brindoval may use the Modified Mark exclusively on Permitted Products, which are defined as household cleaning preparations classified in International Class 3 of the Nice Classification, and which are specifically limited to the following product categories: (a) all-purpose cleaners, (b) glass cleaners, (c) disinfecting sprays, (d) disinfecting wipes, (e) floor cleaners, and (f) dish soap. A complete enumeration of the Permitted Products is set forth in Exhibit C hereto. Brindoval shall not expand the scope of Permitted Products without the prior written consent of MCB.
Section 5.2 — Prohibited Categories. Brindoval shall not use the Modified Mark or any mark incorporating the word "MERIDIAN" on any of the following categories of products, regardless of International Class (collectively, "Prohibited Categories"):
(a) Personal care products, including without limitation soaps, shampoos, conditioners, body washes, lotions, deodorants, cosmetics, and oral care products;
(b) Home fragrance products, including without limitation candles, reed diffusers, room sprays, wax melts, essential oil blends, and air fresheners;
(c) Laundry detergent products, including without limitation liquid laundry detergents, laundry pods, fabric softeners, dryer sheets, stain removers, and bleach products; or
(d) Any other products outside the scope of Permitted Products as defined in Section 5.1, regardless of International Class, including without limitation automotive cleaning products, industrial cleaning products, pet care products, and food-service cleaning products.
Section 5.3 — No New MERIDIAN Marks. Brindoval shall not adopt, apply for, register, or use any new trademark, service mark, trade name, domain name, social media handle, or other source identifier incorporating the word "MERIDIAN" (alone or in combination with any other words, letters, numbers, or design elements) other than the Modified Mark as specifically permitted under this Agreement. This restriction applies worldwide and is not limited to any particular class of goods or services. Without limiting the foregoing, Brindoval shall not register any domain name incorporating the word "MERIDIAN" and shall not create any social media account or profile using a name or handle that incorporates the word "MERIDIAN" other than in direct reference to the Modified Mark as part of content published within the Authorized Channels.
ARTICLE 6 — TRADE DRESS
Section 6.1 — Discontinuation of Former Trade Dress. Brindoval shall permanently and irrevocably discontinue all use of the Former Trade Dress, including the teal-and-white color scheme (approximately Pantone 326 C and white) and the stylized wave device, on all products, product packaging, labeling, advertising, promotional materials, point-of-sale displays, e-commerce listings, social media content, and any other medium in which the Former Trade Dress has been used. Such discontinuation shall be complete no later than the Rebranding Deadline (September 12, 2023). After the Rebranding Deadline, Brindoval shall not use any trade dress that incorporates both the teal-and-white color combination and the wave device, whether in connection with products bearing the Modified Mark or otherwise.
Section 6.2 — Replacement Trade Dress Review.
(a) Before using any Replacement Trade Dress in commerce for the first time, Brindoval shall submit to MCB representative specimens of the proposed Replacement Trade Dress, including product packaging mock-ups, label proofs, or digital renderings in sufficient detail to permit meaningful review, at least thirty (30) days prior to any commercial use of such Replacement Trade Dress. Specimens shall be submitted to MCB's General Counsel at the address specified in Section 15.8 or by email to such email address as MCB may designate in writing from time to time.
(b) MCB may raise written objections to any proposed Replacement Trade Dress within such thirty (30)-day review period if MCB reasonably believes that the proposed Replacement Trade Dress is confusingly similar to MCB's trade dress, the MCB Marks, or any element thereof. MCB's written objections shall identify with reasonable specificity the elements of the proposed Replacement Trade Dress to which MCB objects and the basis for MCB's belief that such elements are confusingly similar.
(c) If MCB raises objections pursuant to Section 6.2(b), the Parties shall negotiate in good faith to resolve the dispute within fifteen (15) days following Brindoval's receipt of MCB's written objections. During such fifteen (15)-day negotiation period, Brindoval shall not commence commercial use of the disputed Replacement Trade Dress. If the Parties are unable to reach agreement within such fifteen (15)-day period, either Party may seek resolution of the dispute pursuant to the dispute resolution procedures set forth in Article 14 hereof.
(d) For the avoidance of doubt, MCB's right under this Section 6.2 is a right of review and objection, not a right of approval or veto. If MCB does not raise written objections within the thirty (30)-day review period, Brindoval may proceed with commercial use of the proposed Replacement Trade Dress. MCB's failure to object to a particular Replacement Trade Dress shall not be deemed a waiver of MCB's rights with respect to any subsequent Replacement Trade Dress or any future modification of a previously reviewed Replacement Trade Dress.
ARTICLE 7 — QUALITY MONITORING
Section 7.1 — Annual Product Samples. In order to enable MCB to monitor the quality of products sold under the Modified Mark and to protect the goodwill associated with the MERIDIAN mark, Brindoval shall provide MCB with representative samples of each product sold under the Modified Mark once per calendar year during the Coexistence Period, at Brindoval's sole expense (including shipping and handling). Such samples shall be delivered to MCB at the address specified in Section 15.8 no later than March 31 of each calendar year, commencing March 31, 2024. Each shipment of samples shall include at least one (1) unit of each SKU then being sold under the Modified Mark, together with a written list identifying each SKU by product name, product type, and date of manufacture.
Section 7.2 — Quality Inspection. MCB shall be entitled to conduct one (1) quality inspection per calendar year at any facility owned, operated, or controlled by Brindoval (or any contract manufacturer engaged by Brindoval) where Permitted Products bearing the Modified Mark are manufactured, packaged, stored, or prepared for distribution. MCB shall provide Brindoval with at least thirty (30) days' prior written notice of any such inspection, specifying the proposed date, time, and location. Inspections shall be conducted during normal business hours (Monday through Friday, 8:00 a.m. to 5:00 p.m. local time) and shall not unreasonably interfere with Brindoval's manufacturing, warehousing, or other business operations. MCB's inspection team shall not exceed three (3) individuals, each of whom shall comply with Brindoval's reasonable facility access and safety protocols. MCB shall bear its own costs and expenses in connection with any inspection conducted pursuant to this Section 7.2.
Section 7.3 — Remediation. If, as a result of MCB's review of product samples provided under Section 7.1 or an inspection conducted under Section 7.2, MCB identifies quality deficiencies that MCB reasonably believes reflect negatively on the goodwill associated with the MERIDIAN mark — including, without limitation, defective packaging, contaminated product, mislabeling, or failure to comply with applicable regulatory requirements — MCB shall notify Brindoval in writing, describing the nature of the quality deficiency with reasonable specificity. Brindoval shall use commercially reasonable efforts to cure such deficiencies within sixty (60) days of receipt of MCB's written notice. Brindoval shall provide MCB with a written report describing the corrective actions taken and the results thereof within ten (10) business days following completion of the remediation. Failure by Brindoval to cure a material quality deficiency within the sixty (60)-day cure period shall constitute a material breach of this Agreement.
ARTICLE 8 — NON-CHALLENGE COVENANT
Section 8.1 — Brindoval's Covenant. Brindoval hereby covenants and agrees that it shall not, directly or indirectly, and shall not encourage, assist, fund, or induce any third party to, challenge, contest, oppose, petition to cancel, or otherwise attack the validity, enforceability, distinctiveness, or ownership of any of the MCB Marks, including without limitation:
(i) U.S. Registration No. 4,218,506 — MERIDIAN (standard character mark);
(ii) U.S. Registration No. 5,034,771 — MERIDIAN CLEAN (standard character mark); and
(iii) U.S. Registration No. 5,589,320 — MERIDIAN (stylized logo with wave device).
This covenant encompasses any and all grounds for challenge, including without limitation claims of genericness, descriptiveness, abandonment, fraud, or prior rights.
Section 8.2 — Scope. The non-challenge covenant set forth in Section 8.1 extends to all proceedings and forums, including without limitation: (a) proceedings before the USPTO, including any inter partes review, cancellation proceeding, opposition proceeding, or expungement proceeding; (b) proceedings in any federal or state court of the United States; (c) proceedings before any administrative agency, regulatory body, or arbitral tribunal; and (d) proceedings before any foreign intellectual property office or tribunal, to the extent that such proceedings relate to the MCB Marks or any counterpart registrations or applications thereof.
Section 8.3 — Survival. The non-challenge covenant set forth in this Article 8 shall survive any termination or expiration of this Agreement for any reason and shall remain in full force and effect in perpetuity, binding upon Brindoval and its successors and assigns.
ARTICLE 9 — AMENDMENT TO BRINDOVAL APPLICATION; DISMISSAL OF PROCEEDINGS
Section 9.1 — Amendment of Brindoval Application. Within thirty (30) days of the Effective Date, Brindoval shall prepare and file an amendment to U.S. Trademark Application Serial No. 97/412,558 with the USPTO in the form substantially set forth in Exhibit D hereto, which amendment shall:
(a) Change the mark from MERIDIAN FRESH to BRINDOVAL MERIDIAN FRESH; and
(b) Amend the description of goods to read as follows: "Household cleaning preparations, namely, all-purpose cleaners, glass cleaners, disinfecting sprays, disinfecting wipes, floor cleaners, and dish soap, sold exclusively through applicant's branded retail stores and applicant's own e-commerce platform."
Brindoval shall provide MCB with a copy of the filed amendment, including the USPTO filing receipt, within five (5) business days of filing. Brindoval shall use commercially reasonable efforts to prosecute the Brindoval Application, as amended, to registration and shall keep MCB reasonably informed of the status of such prosecution. Brindoval shall not further amend the description of goods in the Brindoval Application without the prior written consent of MCB.
Section 9.2 — Withdrawal of Opposition. Promptly following execution of this Agreement by both Parties, and contingent upon Brindoval's timely filing of the amendment required by Section 9.1, MCB shall prepare and file with the Trademark Trial and Appeal Board a withdrawal with consent of its Notice of Opposition in Opposition No. 91/278,415, in form and substance reasonably acceptable to both Parties. Brindoval shall execute such consents and take such other actions as may be reasonably necessary to effectuate such withdrawal. MCB's obligation to withdraw the Opposition is expressly conditioned upon Brindoval's compliance with Section 9.1 and Brindoval's deposit of the Settlement Payment into escrow in accordance with Section 2.2.
Section 9.3 — Dismissal of Action. Promptly following execution of this Agreement by both Parties, the Parties shall jointly prepare and file a Joint Stipulation of Dismissal with Prejudice in the Action (Case No. 1:22-cv-09483, S.D.N.Y.), in form and substance satisfactory to the Court, dismissing all claims and counterclaims asserted in the Action with prejudice, with each Party to bear its own attorneys' fees, costs, and expenses, except as otherwise provided in this Agreement. Counsel for MCB shall take the lead in preparing the Joint Stipulation of Dismissal, and counsel for Brindoval shall review, approve, and co-sign such stipulation within five (5) business days of receipt. The Parties shall cooperate in good faith to satisfy any requirements imposed by the Court as a condition to entry of the dismissal order.
ARTICLE 10 — LIQUIDATED DAMAGES AND REMEDIES
Section 10.1 — Acknowledgment. The Parties acknowledge and agree that a breach by Brindoval of the channel restrictions set forth in Article 4, the product-category restrictions set forth in Article 5, or the trade-dress restrictions set forth in Article 6 would cause MCB irreparable harm, including but not limited to damage to the goodwill and distinctiveness of the MCB Marks, consumer confusion, and dilution of MCB's brand equity, that such harm would be difficult or impossible to quantify with precision, and that monetary damages alone would be an insufficient remedy for such breach.
Section 10.2 — Liquidated Damages. In the event of a breach by Brindoval of any provision of Article 4 (Channel Restrictions), Article 5 (Product-Category Restrictions), or Article 6 (Trade Dress), subject to the cure period set forth in Section 10.4 below, Brindoval shall pay to MCB liquidated damages in the amount of Five Hundred Thousand Dollars ($500,000.00) per occurrence, in addition to any actual damages sustained by MCB as a result of such breach. For purposes of this Section 10.2, each distinct product line sold through a Prohibited Channel, each distinct Prohibited Category in which a product bearing the Modified Mark is sold, and each use of the Former Trade Dress after the Rebranding Deadline shall each constitute a separate "occurrence." The Parties acknowledge and agree that the liquidated damages amount set forth in this Section 10.2 represents a reasonable estimate of the damages that MCB would suffer as a result of such breach, considering the difficulty and impracticability of calculating actual damages, and is not intended as a penalty.
Section 10.3 — Injunctive Relief. Nothing in this Article 10 shall limit, restrict, or waive MCB's right to seek temporary, preliminary, or permanent injunctive relief or any other form of equitable relief from any court of competent jurisdiction in connection with any actual or threatened breach of this Agreement. Brindoval acknowledges that irreparable harm would result from a breach of Articles 4, 5, or 6, and agrees that MCB shall be entitled to seek injunctive relief without the necessity of proving actual damages or posting a bond (to the extent permitted by applicable law).
Section 10.4 — Cure Period. Before invoking the liquidated damages remedy set forth in Section 10.2, MCB shall provide Brindoval with written notice describing the alleged breach in reasonable detail, including the specific Article and Section alleged to have been breached and the factual basis therefor. Brindoval shall have thirty (30) days from receipt of such written notice to cure the breach (the "Cure Period"). If Brindoval cures the breach to MCB's reasonable satisfaction within the Cure Period, the liquidated damages for such occurrence shall not become due and payable. If the breach is not cured within the Cure Period, the liquidated damages for such occurrence shall become immediately due and payable, and MCB may pursue collection thereof, together with any actual damages, through any available legal or equitable remedy.
ARTICLE 11 — TERM AND TERMINATION
Section 11.1 — Term. This Agreement shall have a perpetual term, commencing on the Effective Date and continuing indefinitely unless terminated in accordance with the provisions of this Article 11. The Parties acknowledge that the perpetual nature of this Agreement is an essential element of the bargain and reflects the Parties' intent to establish a lasting framework for the coexistence of the MCB Marks and the Modified Mark.
Section 11.2 — Termination by Mutual Consent. This Agreement may be terminated at any time by the mutual written consent of both Parties, signed by authorized representatives of each Party. Any such mutual termination agreement shall specify the effective date of termination and any terms and conditions applicable to the wind-down of Brindoval's use of the Modified Mark.
Section 11.3 — Termination for Material Breach. Either Party may terminate this Agreement upon written notice to the other Party if the other Party commits a material breach of any provision of this Agreement and such breach remains uncured for a period of sixty (60) days after the breaching Party's receipt of written notice from the non-breaching Party specifying the nature of the breach in reasonable detail. Notwithstanding the foregoing, in the event of a material breach by Brindoval of Articles 4, 5, or 6 that Brindoval fails to cure within the Cure Period specified in Section 10.4, MCB may terminate this Agreement immediately upon expiration of such Cure Period without any additional cure period under this Section 11.3. For the avoidance of doubt, termination of this Agreement by MCB for Brindoval's material breach shall not relieve Brindoval of its obligation to pay any liquidated damages that have accrued prior to or in connection with such termination.
Section 11.4 — Effect of Termination. Upon termination of this Agreement for any reason:
(a) Brindoval shall immediately cease all use of the Modified Mark and any other mark incorporating the word "MERIDIAN," including on all products, packaging, labeling, advertising, promotional materials, digital media, social media, and e-commerce listings;
(b) Brindoval shall, within thirty (30) days of the effective date of termination, destroy or permanently deface all inventory, packaging, labels, and other materials bearing the Modified Mark or any mark incorporating the word "MERIDIAN," and shall provide MCB with a written certification of such destruction or defacement;
(c) Brindoval shall, within thirty (30) days of the effective date of termination, file a voluntary abandonment or surrender of any trademark registration or pending application for the Modified Mark or any mark incorporating the word "MERIDIAN"; and
(d) The following provisions shall survive termination and shall continue in full force and effect: Article 2 (Settlement Payment), to the extent payment has been made or remains due; Article 8 (Non-Challenge Covenant); Article 10 (Liquidated Damages and Remedies), with respect to any breaches occurring prior to termination; Article 13 (Confidentiality); and Article 15 (General Provisions).
ARTICLE 12 — REPRESENTATIONS AND WARRANTIES
Section 12.1 — Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party, as of the Effective Date, that:
(a) It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation, and is duly qualified to do business in each jurisdiction where the nature of its business requires such qualification;
(b) It has full corporate or limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement, and the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or limited liability company action on the part of such Party;
(c) The execution, delivery, and performance of this Agreement do not and will not (i) violate any provision of such Party's organizational documents, (ii) conflict with, result in a breach of, or constitute a default under any material agreement, contract, or instrument to which such Party is a party or by which it is bound, or (iii) violate any applicable law, regulation, order, judgment, or decree; and
(d) This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
Section 12.2 — MCB Representations and Warranties. MCB hereby represents and warrants to Brindoval, as of the Effective Date, that:
(a) MCB is the sole and exclusive owner of all right, title, and interest in and to the MCB Marks, free and clear of any liens, encumbrances, security interests, or adverse claims;
(b) The MCB Marks are valid, subsisting, and enforceable, and all required maintenance filings (including Sections 8 and 15 declarations, as applicable) have been timely filed with the USPTO;
(c) MCB has the authority to grant the coexistence rights set forth herein and has not entered into any prior agreement that would conflict with or restrict the rights granted to Brindoval under this Agreement; and
(d) To MCB's knowledge, no third party has asserted any claim, demand, or challenge to the validity, enforceability, or ownership of any of the MCB Marks, other than the Brindoval Application, the Opposition, and the Action.
Section 12.3 — Brindoval Representations and Warranties. Brindoval hereby represents and warrants to MCB, as of the Effective Date, that:
(a) Brindoval is the sole and exclusive owner of all right, title, and interest in and to the Brindoval Application;
(b) To Brindoval's knowledge, there are no pending or threatened proceedings, claims, demands, or challenges (other than the Opposition and the Action, both of which are being resolved pursuant to this Agreement) challenging Brindoval's right to use MERIDIAN FRESH or the Modified Mark in connection with the Permitted Products within the Authorized Channels; and
(c) Brindoval has not granted any license, sublicense, or other right to use the MERIDIAN FRESH mark or the Modified Mark to any third party.
ARTICLE 13 — CONFIDENTIALITY
Section 13.1 — Confidential Treatment. The terms of this Agreement, including without limitation the Settlement Payment amount and the specific commercial and operational terms set forth herein, shall be treated as strictly confidential by both Parties and shall not be disclosed by either Party to any third party, except:
(a) As required by applicable law, regulation, legal process, or the rules of any securities exchange on which a Party's securities are listed, provided that the disclosing Party shall provide the other Party with prompt written notice of any such required disclosure (to the extent permitted by law) and shall use commercially reasonable efforts to obtain confidential treatment of the disclosed information;
(b) To each Party's officers, directors, managers, employees, accountants, auditors, financial advisors, insurance carriers, and legal counsel who have a legitimate need to know the terms of this Agreement in connection with the performance of their duties, provided that such individuals are bound by obligations of confidentiality no less restrictive than those set forth herein;
(c) To Waypoint Capital Partners LLC, MCB's equity sponsor, and its authorized representatives, directors, officers, partners, and advisors, provided that such individuals are bound by obligations of confidentiality no less restrictive than those set forth herein;
(d) In connection with the enforcement of this Agreement in any legal, arbitral, or administrative proceeding; or
(e) With the prior written consent of the other Party, which consent may be withheld in such Party's sole and absolute discretion.
Notwithstanding the foregoing, either Party may disclose the existence of this Agreement and the general nature of the resolution (i.e., that the Parties have entered into a coexistence agreement resolving their disputes), provided that such disclosure does not include the specific financial terms or detailed operational restrictions set forth herein.
Section 13.2 — Court Filings. In connection with the filing of the Joint Stipulation of Dismissal in the Action and any other court filings referencing this Agreement, the Parties shall jointly request that the Court maintain under seal any filings, exhibits, or attachments that reference the specific financial terms of this Agreement, including the Settlement Payment amount. The Parties shall cooperate in preparing any applications, motions, or proposed orders necessary to effectuate such sealing. In the event the Court declines to seal such filings, the Parties shall use commercially reasonable efforts to minimize public disclosure of the confidential terms of this Agreement.
ARTICLE 14 — DISPUTE RESOLUTION
Section 14.1 — Good-Faith Negotiation. Prior to initiating any formal dispute resolution procedure, the Parties shall attempt to resolve any dispute, controversy, or claim arising out of or relating to this Agreement, including any dispute regarding the existence, validity, interpretation, performance, breach, or termination of this Agreement, through good-faith negotiation between their respective General Counsel — Thomas R. Hennessy for MCB and Karen A. Whitfield for Brindoval (or such successor designees as may be identified by written notice) — for a period of thirty (30) days following the date on which either Party delivers to the other Party written notice of the dispute (a "Dispute Notice"). Each Dispute Notice shall describe the nature of the dispute with reasonable specificity and identify the provisions of this Agreement at issue.
Section 14.2 — Mediation. If the dispute is not resolved through good-faith negotiation within the thirty (30)-day period specified in Section 14.1, the Parties shall submit the dispute to mediation administered by Novotny ADR Services LLC (or, if Novotny ADR Services LLC is no longer available, a successor mediator mutually agreed upon by the Parties, or, in the absence of mutual agreement, a mediator selected by the American Arbitration Association in accordance with its mediation rules). The mediation shall take place in New York, New York, unless the Parties agree otherwise in writing. The costs of mediation (excluding each Party's own legal fees) shall be shared equally by the Parties. Each Party shall participate in the mediation in good faith and shall be represented by a person with authority to settle the dispute.
Section 14.3 — Litigation. If mediation does not resolve the dispute within sixty (60) days following the commencement of the mediation (or such longer period as the Parties may agree in writing), either Party may commence litigation in accordance with Section 15.2 (Jurisdiction and Venue) hereof. Nothing in this Article 14 shall prevent either Party from seeking temporary or preliminary injunctive relief from a court of competent jurisdiction at any time if such Party reasonably believes that irreparable harm will result in the absence of such relief.
ARTICLE 15 — GENERAL PROVISIONS
Section 15.1 — Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to its conflict-of-law principles or rules that would cause the application of the laws of any other jurisdiction. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.
Section 15.2 — Jurisdiction and Venue. Each Party hereby irrevocably and unconditionally consents to the exclusive jurisdiction of the United States District Court for the Southern District of New York and the state courts of the State of New York located in the County of New York (collectively, the "Designated Courts") for any action, suit, or proceeding arising out of or relating to this Agreement, and waives any objection to venue in the Designated Courts, including any objection based on inconvenient forum. Each Party further irrevocably consents to service of process in any such action by personal delivery, overnight courier, or certified mail, return receipt requested, to the address set forth in Section 15.8, and agrees that such service shall be deemed effective service of process.
Section 15.3 — Entire Agreement. This Agreement, together with the Escrow Agreement of even date herewith and the Exhibits attached hereto (each of which is incorporated herein by reference), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, term sheets, memoranda, correspondence, and other communications, whether oral or written, between the Parties relating to such subject matter, including without limitation the framework term sheet dated February 15, 2023, reached during the mediation before the Honorable Harold K. Novotny (Ret.). Neither Party has relied upon any representation, warranty, or promise of the other Party that is not expressly set forth in this Agreement.
Section 15.4 — Amendments. This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument executed by duly authorized representatives of both Parties. No course of dealing, custom, or usage of trade shall operate to amend or modify any provision of this Agreement.
Section 15.5 — Waiver. No waiver of any provision of this Agreement, and no consent to any departure from the terms hereof, shall be effective unless in writing and signed by the Party granting such waiver or consent. No failure or delay by either Party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.
Section 15.6 — Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement or the application of such provision to any other person or circumstance, and the remaining provisions of this Agreement shall continue in full force and effect. The Parties shall negotiate in good faith to replace any invalid or unenforceable provision with a valid and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid or unenforceable provision.
Section 15.7 — Assignment. Neither Party may assign, transfer, delegate, or otherwise dispose of this Agreement or any of its rights or obligations hereunder, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed, except that either Party may, without the consent of the other Party, assign this Agreement in connection with a merger, consolidation, reorganization, or sale of all or substantially all of its assets relating to the business to which this Agreement pertains, provided that the assignee expressly assumes in writing all of the obligations of the assigning Party under this Agreement. Any purported assignment in violation of this Section 15.7 shall be null and void. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
Section 15.8 — Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given: (a) upon delivery, if delivered by hand; (b) one (1) business day after deposit with a nationally recognized overnight courier service (with proof of delivery); or (c) three (3) business days after deposit in the United States mail, certified mail, return receipt requested, postage prepaid, in each case addressed as follows:
If to MCB:
Thomas R. Hennessy, General Counsel Meridian Consumer Brands LLC 450 Park Avenue South, 14th Floor New York, New York 10016
with a copy (which shall not constitute notice) to:
Alan Ngo Calderwood & Harkness LLP 1251 Avenue of the Americas, 40th Floor New York, New York 10020
If to Brindoval:
Karen A. Whitfield, General Counsel Brindoval Home Goods Inc. 7200 France Avenue South, Suite 300 Edina, Minnesota 55435
with a copy (which shall not constitute notice) to:
Gregory T. Halverson Halverson McKay & Pruitt LLP 225 South Sixth Street, Suite 4200 Minneapolis, Minnesota 55402
Either Party may change its address for notices by giving the other Party written notice of such change in accordance with this Section 15.8.
Section 15.9 — Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart by electronic transmission (including PDF or other electronic format) shall be equally as effective as delivery of an original executed counterpart, and electronic and PDF signatures shall have the same force and effect as original ink signatures for all purposes.
Section 15.10 — No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of the Parties hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any third party any right, benefit, remedy, claim, or cause of action of any kind under or by reason of this Agreement.
Section 15.11 — Construction. This Agreement was negotiated at arm's length by the Parties, each of which was represented by legal counsel, and shall not be construed more strictly against either Party as the drafter. The terms "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." References to "days" shall mean calendar days unless otherwise specified. References to "business days" shall mean days other than Saturdays, Sundays, and federal holidays observed in the State of New York.
Section 15.12 — Headings. The article and section headings contained in this Agreement are for reference and convenience only, shall not be deemed part of this Agreement, and shall not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the Effective Date first written above.
MERIDIAN CONSUMER BRANDS LLC
By: ________
Name: Thomas R. Hennessy
Title: General Counsel
Date: May 15, 2023
BRINDOVAL HOME GOODS INC.
By: ________
Name: Karen A. Whitfield
Title: General Counsel
Date: May 15, 2023
EXHIBIT A
MCB MARKS
The following table sets forth the federally registered trademarks owned by Meridian Consumer Brands LLC that are collectively referred to in this Agreement as the "MCB Marks":
All of the above registrations are on the Principal Register of the United States Patent and Trademark Office and are valid, subsisting, and enforceable as of the Effective Date. MCB has filed all required maintenance filings, including declarations of continued use under Sections 8 and 15 of the Lanham Act, as applicable.
The goods covered by the MCB Marks include, without limitation, household cleaning preparations, personal care products, and home fragrance products, as set forth in the respective registrations on file with the USPTO.
EXHIBIT B
MODIFIED MARK SPECIFICATIONS
1. Mark Composition
The Modified Mark shall consist of the words BRINDOVAL MERIDIAN FRESH, presented as a single, composite mark. The word "BRINDOVAL" shall serve as a house mark prefix and shall appear in conjunction with "MERIDIAN FRESH" in all uses of the Modified Mark.
2. Type-Size Requirements
In all uses of the Modified Mark, the word "BRINDOVAL" shall appear in typeface that is no less than seventy-five percent (75%) of the x-height and cap-height of the typeface used for the words "MERIDIAN FRESH." By way of example, if "MERIDIAN FRESH" appears in 24-point type, "BRINDOVAL" shall appear in no less than 18-point type.
3. Positioning Requirements
The word "BRINDOVAL" shall appear immediately preceding the words "MERIDIAN FRESH" on the same line of text. Where layout constraints necessitate a multi-line presentation (e.g., on narrow product labels), "BRINDOVAL" shall appear on the line immediately above "MERIDIAN FRESH." In no event shall there be any intervening text, symbols, graphic elements, dividing lines, or other visual separators between "BRINDOVAL" and "MERIDIAN FRESH" that would tend to diminish the visual association of the house mark with the product-line designation.
4. Typeface and Color
The Modified Mark may be rendered in any commercially available typeface selected by Brindoval, provided that: (a) the word "BRINDOVAL" and the words "MERIDIAN FRESH" are rendered in the same typeface family (e.g., both in sans-serif or both in serif); (b) the word "BRINDOVAL" is rendered in the same color or in a color of equal or greater visual prominence as the words "MERIDIAN FRESH"; and (c) the word "BRINDOVAL" is not rendered in a substantially lighter weight, lower contrast, or otherwise less legible manner than the words "MERIDIAN FRESH."
5. Sample Mock-Up Layout
A representative mock-up layout of the Modified Mark as it will appear on product packaging is to be appended to this Exhibit B upon finalization of the Replacement Trade Dress in accordance with Section 6.2 of the Agreement.
[Placeholder for actual design specimen to be attached upon completion of Replacement Trade Dress review process.]
EXHIBIT C
PERMITTED PRODUCTS
1. Enumeration of Permitted Products
Brindoval may use the Modified Mark (BRINDOVAL MERIDIAN FRESH) exclusively on the following household cleaning preparations, classified in International Class 3 of the Nice Classification:
(a) All-purpose cleaners — liquid, spray, or concentrate formulations designed for general household surface cleaning;
(b) Glass cleaners — liquid or spray formulations designed for cleaning glass, mirrors, and other transparent surfaces;
(c) Disinfecting sprays — spray formulations designed to disinfect and sanitize household surfaces;
(d) Disinfecting wipes — pre-moistened disposable wipes designed to disinfect and sanitize household surfaces;
(e) Floor cleaners — liquid or concentrate formulations designed for cleaning hard-surface floors, including hardwood, tile, laminate, and vinyl; and
(f) Dish soap — liquid formulations designed for hand-washing dishes, pots, pans, and kitchen utensils.