Background
Benjamin Moore & Co., the well-known American paint manufacturer, sued its former Moroccan licensee B.M. Mediterranean S.A. in 2021, alleging that the company failed to pay contractually required trademark royalties under their licensing agreement. B.M. Mediterranean had been licensed to use the Benjamin Moore brand in Morocco and surrounding markets.
B.M. Mediterranean fought back with counterclaims, alleging that Benjamin Moore had misappropriated its trade secrets and tortiously interfered with its business relationships. In an earlier ruling, Judge Semper had allowed those counterclaims to proceed.
The Court’s Holding
Judge Semper granted Benjamin Moore’s motion for summary judgment on its royalty claims, awarding $4.2 million in unpaid royalties. The court found the evidence of breach was undisputed — B.M. Mediterranean owed the contractual royalty payments and had failed to make them.
In a notable move, Judge Semper also reversed his own earlier ruling that had permitted B.M. Mediterranean’s trade secret and tortious interference counterclaims to proceed. On further review, the judge determined he had applied the wrong legal standard in his prior decision and that the counterclaims could not survive summary judgment. Both counterclaims were dismissed.
Key Takeaways
- Trademark licensors with clear royalty obligations in their agreements can enforce those terms through summary judgment when the licensee’s failure to pay is undisputed — leaving little room for negotiation leverage through counterclaims.
- Courts will correct their own errors: Judge Semper’s willingness to reverse his prior ruling on the counterclaims demonstrates that summary judgment standards are applied rigorously, even when it means walking back earlier rulings.
- The decision underscores the risks for international licensees who stop paying royalties and attempt to litigate their way out through offensive counterclaims — here, those counterclaims were ultimately dismissed entirely.
Why It Matters
This ruling is significant for companies with international trademark licensing programs. It reinforces that contractual royalty obligations are enforceable even when the relationship sours, and that counterclaims alleging trade secret misappropriation must meet the proper legal standard to survive summary judgment. For brand owners licensing their marks internationally, the case provides reassurance that clear contract terms remain the strongest enforcement tool in royalty disputes.