Stanley Steemer licensed AAA Abachman to operate a carpet and upholstery cleaning business under the Stanley Steemer name. The franchise agreement gave Abachman “the sole right to use Stanley Steemer’s ‘trademarks, service marks, patents, and trade secrets’ in its carpet and upholstery cleaning business within its assigned territory.”
After Abachman had secured this right, however, Stanley Steemer licensed a second company to operate a “duct cleaning” business in an overlapping geographic area. Abachman complained to Stanley Steemer that this second license violated its exclusive rights in the area, and, after being rebuffed, sought a declaratory judgment that this was so. The parties’ cross summary judgment motions resulted in judgment for the defendant, Stanley Steemer, on the basis that the franchise agreement granted exclusive rights only as to “carpet” and “upholstery” cleaning, not “duct” cleaning. Abachman appealed to the 11th Circuit.
The central issue in the appeal was whether the contract between Abachman and Stanley Steemer afforded Abachman an exclusive right in Stanley Steemer’s mark generally, or only as to carpet and upholstery. The relevant portion of the agreement gave “Abachman the exclusive and perpetual rights ‘to own and operate a Stanley Steemer carpet and upholstery cleaning business (hereinafter referred to as a ‘Stanley Steemer Business’) in the … ‘Franchisee’s Area’[ ] and to use the trademarks, services marks, patents, [and] trade secrets … solely in a Stanley Steemer Business in that area and in no other manner.’”
The per curiam decision affirmed the district court, holding that this language provided an exclusive right to the Stanley Steemer mark only as to “carpet and upholstery.” Relying on the language “and in no other manner,” the Court held that this unambiguous language foreclosed any broader understanding of the contract, even a subsequent term requiring payment by Abachman to Stanley Steemer for “any additional sale resulting from or associated with the name Stanley Steemer.”
Although there was a weak, facial argument that the broad language “trademarks, services marks, patents and trade secrets” is broader than only “carpet and upholstery cleaning” if done under the Stanley Steemer name, it seems clear that the Court concluded from the contract language quoted in its opinion that such use is constrained to “Stanley Steemer Business,” a term defined as “a Stanley Steemer carpet and upholstery cleaning business.”
Although neither a trendsetting case nor a departure from black letter law, this case is a good reminder that clearly written, descriptive contract language is (still) critical and definitive in disputes. Here, Stanley Steemer did a good job of providing both the breadth necessary for Abachman to run a successful franchise and at the same time limiting that franchise strictly so as to enter into a separate agreement with another entity.