ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, October 17, 2006

A bad hair day?

The New York Law Journal reports on this hairy breach of contract case from the S.D.N.Y.:

Pony Pal entered into a contract with Claire's Boutiques in September 2004 to sell "an inventive, removable hair piece comprising an elastic loop suitable to surround and bind a ponytail of a user and a connection end securing a first end of a length of hair strands to the elastic loop."

In exchange for an upfront payment of $10,000 and future royalties of 5 percent, Pony Pal agreed to let Claire's manufacture and sell its product. Claire's paid the $10,000. But the business relationship between Claire's, an international retailer with over 2,000 stores nationwide, and the Iowa-based licensor grew brittle. Claire's refused to pay royalties, and the adversaries soon were splitting hairs over patent specifics.

Claire's argued that, because it had made enough changes to Pony Pal's hair piece, it had fallen outside the scope of the patent.

The case distilled to an interpretation of the language in Pony Pal’s patent which described the removable hair piece as comprising “a length of hair strands having a first end and a second end.” 

Claire's argued that the wording of the patent called for strands of hair to be attached at one end to an elastic loop.

The two parties disagreed over the meaning of the term "end." The patent language at issue reads "a connection securing the first end of the length of hair strands to a portion of the elastic loop."

Claire's argued that "the 'first end' and 'second end' of the 'length of hair strands' must be the same as the collective ends of the hair strands themselves." Based on this reading, Claire's created a hair piece that consisted of a braid and placed the loop at a different end.

Pony Pal, in its memo of law, contended that the "first end" language should be properly construed as "the proximal end of a collection or bundle of hair strands and is not limited to end extremities of linear or unidirectional strands of hair."

After combing through the legal papers, Judge Haight concluded that the plain meaning of the words was that "one end of the length of hair is opposite to the other."

"The first end is attached to the elastic loop, the other hangs opposite to it (that is, distally from the elastic loop)," Judge Haight said. "The language of the claim, and indeed, the invention, are no more complicated than this."

Based on this interpretation, the court held that Claire's product was similar enough to Pony Pal's to fall within the patent and, therefore, Claire had breached the parties' contract by failing to pay royalties.

NYLJ article.
Full text of the opinion.

[Meredith R. Miller]

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