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U.S. District Court, W.D. Texas : Spectrum Creations L.P. v. Carolyn Kinder International LLC and The Uttermost Co.

Spectrum sought $21.2 million in lost profits as of August 2006, and CKI was seeking royalties of $1 million. Each said its damages were continuing to accrue. They also sought attorney fees. Plaintiff Spectrum Creations, a seller of lamps, light fixtures, and other home decorating products, claimed that lamp designer Carolyn Kinder International (CKI) failed to provide all the designs called for in their 2003 design services agreement. CKI had longstanding design services agreements with The Uttermost Co., a competitor of Spectrum, but in early 2003, Spectrum had approached CKI and Uttermost about a possible three-way agreement under which they could sell lamps to Home Depot, where Spectrum's principal had connections in the buying department. Negotiations over the potential three-way agreement fell through, but Uttermost did allow CKI to enter into what it described as a limited design services agreement with Spectrum. Later, besides claiming that CKI breached the agreement, Spectrum claimed that Uttermost violated Spectrum's copyrights by selling certain CKI-designed lamps to Home Depot from 2004 to 2006. Spectrum sued CKI and Uttermost for conspiracy, copyright infringement, tortious interference, breach of fiduciary duty, common law unfair competition and trade secret misappropriation. Against CKI, it also asserted breach of contract. The defense denied the allegations, and CKI counterclaimed against Spectrum for breach of contract, alleging nonpayment of royalties. The case was tried to the bench. The parties agreed to obtain a decision on liability before proceeding to the damages phase of trial. Those rulings were on Feb. 13, 2008. The damages phase was not reached, because on or about May 14, the parties settled. Under the settlement, Spectrum and CKI released their claims against each other without payment. Spectrum must pay Uttermost's court costs, but is allowed to continue producing and selling CKI-designed products and need not pay royalties on them.

Full post as published by The Trade Secrets Vault on September 01, 2008 (boomark / email).