## Facts

- A French manufacturer (CLM) created and sold ethnic cosmetic products under the FAIR & WHITE trademark in Europe.
- A U.S. distributor (ICE) tested CLM’s FAIR & WHITE products in the United States and obtained favorable market response.
- CLM and ICE executed a written agreement for ICE to develop and promote FAIR & WHITE in the United States; the agreement identified CLM as owner of the mark in Europe and ICE as owner in the United States, Canada, and the Caribbean, and required ICE to meet minimum sales targets.
- While the agreement was ongoing, CLM entered a separate arrangement naming Gapardis as the exclusive U.S. distributor for CLM’s FAIR & WHITE products.
- CLM learned of alleged counterfeit FAIR & WHITE products in the United States, believed ICE was involved, and stopped supplying ICE with CLM-made goods.
- ICE then procured similar products from a Spanish manufacturer and sold them in the United States under the FAIR & WHITE mark, despite not being made by CLM.
- The district court found that ICE’s sale of non-CLM goods under the identical mark caused consumer confusion, and that downstream sales by ICE affiliates further increased confusion.

## Issues

1. Whether the ICE–CLM territorial trademark agreement was enforceable or invalid as an “assignment in gross.”
2. Whether CLM and Gapardis satisfied the requirements for a preliminary injunction under trademark law to stop ICE and its affiliates from selling non-CLM goods as FAIR & WHITE.
3. Whether CLM’s earlier contractual breach foreclosed trademark-based injunctive relief against ICE’s later conduct.

## Decision

- The Eleventh Circuit affirmed the preliminary injunction entered against ICE and its affiliates.
- The court upheld the agreement as enforceable and not an assignment in gross because the territorial allocation of rights was tied to real commercial exploitation of the mark and ongoing brand-development obligations.
- The court held the record supported a likelihood of consumer confusion from ICE’s use of the FAIR & WHITE mark on non-CLM products.
- The court concluded the preliminary-injunction factors favored CLM and Gapardis, including likely success on the merits, irreparable harm from confusion, a balance of harms favoring trademark protection, and a public interest in avoiding consumer deception.
- The court rejected the argument that CLM’s earlier breach automatically barred trademark injunctive relief where ICE’s conduct threatened the mark’s goodwill and misled consumers.

## Legal Principles

- A trademark transfer or territorial allocation is not an invalid assignment in gross when the rights conveyed are connected to goodwill, continuity of product/source expectations, and concrete obligations to develop and market the brand.
- Using an identical mark on materially different goods from a different source supports a strong showing of likelihood of confusion.
- In trademark cases, a demonstrated likelihood of confusion can support irreparable harm for preliminary-injunction purposes.
- Contract disputes between business partners do not necessarily defeat trademark remedies where ongoing use of a mark misrepresents source and risks consumer confusion; contract remedies and trademark protection may proceed on separate tracks.

## Conclusion

The Eleventh Circuit upheld a preliminary injunction stopping a former distributor from selling non-authentic goods under the FAIR & WHITE mark, concluding that the territorial trademark agreement was not an assignment in gross and that preventing likely consumer confusion justified injunctive relief despite prior contractual breaches.


Int’l Cosmetics Exch., Inc. v. Gapardis Health & Beauty, Inc., 303 F.3d 1242 (11th Cir. 2002)