# Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc.

> Court of Appeals for the Second Circuit · March 20, 1953 · 202 F.2d 866

URL: https://www.frixlaw.com/law-library/cases/9443661

## Case

- **Full name:** HAELAN LABORATORIES, Inc. v. TOPPS CHEWING GUM, Inc.
- **Court:** Court of Appeals for the Second Circuit
- **Decided:** March 20, 1953
- **Citations:** 202 F.2d 866
- **Precedential status:** Published
- **Opinion:** On rehearing
- **Judges:** Swan, Clark, Frank
- **Cited by:** 110 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9443661

## Opinion text

On Defendant’s Petition for Rehearing
PER CURIAM.
1. In our original opinion, footnote 1, we said that defendant had “abandoned its cross-appeal from dismissal of its counterclaim.” But we are now satisfied that defendant had preserved its cross-appeal on the issue of impairment of its own contract rights. Therefore, if plaintiff induced breaches of exclusive agreements which defendant had made with ball-players, defendant is entitled to relief against plaintiff. Accordingly, we add the following to our mandate as additional items for determination by the trial court: (3) The *870 date and contents of each of defendant’s contracts under which defendant claims,. and whether defendant exercised ’its option to renew, and (4) plaintiffs conduct with respect to each such contract.
2. The last sentence under point 2 of our opinion might suggest that, as long as one of the parties had a contract with a ball-player giving it exclusive rights, any subsequent contract made between that player and the other party before expiration of the prior rights is necessarily invalid. This point appears to require' further clarificaton. Certainly, if the terms of one party’s contract provide that its rights shall go into effect only upon expiration of a prior grantee’s exclusive rights, the later grant would become fully effective at the time of such expiration. Indeed, in this situation no tort has been committed. However, the problem becomes more complex where the subsequent contract, by its terms, purports to go into effect before termination of any prior exclusive rights. Where the party soliciting such a subsequent contract knows of the prior rights and actually proceeds to use the grant given in violation thereof, its contract is tainted with illegality and is utterly invalid. See Reiner v. North American Newspaper Alliance, 259 N.Y. 250 , 181 N.E. 561 , 83 A.L.R. 23 . Hence such a contract would convey no rights even if it ran beyond the duration of the other party’s prior rights. But where the subsequent solicitor treated its contract as if it ¡became effective only upon expiration of any prior rights and made no effort to use the grant before then, that grant would bloom into full force as soon as the earlier rights expired. The same is true , if the subsequent grantee did not know at the time he entered into his contract that the ball-player had already given exclusive rights to another party. The validity of one party’s contracts beyond the expiration date of prior exclusive rights given the other will thus depend on the district court’s findings of fact as to the considerations we have pointed out.
On Plaintiff’s Motion for a Stay
We deny plaintiff’s motion for a temporary stay. But we have directed that our mandate shall issue forthwith in order that the trial court may immediately entertain a motion by either party for a temporary injunction. 1 Because of the seasonal character of the business here involved, the taking of evidence on such a motion should be conducted, and the decision should be made, with the utmost dispatch. Without intimating what the decision should be, it may be suggested that the trial judge in his discretion (1) may think it advisable at once to require that a party desiring to avoid being enjoined shall give a bond in a substantial amount, and (2) may deem it wise to issue a series of temporary injunctions, i.e., to enjoin thé use by one party of a particular player’s picture as and when the exclusive right of the other party to the use of such picture is established by the evidence.
On Defendant’s Motion to Stay Mandate and Plaintiff’s Motion to Award It Appellate Costs
PER CURIAM:
The motion for stay of mandate is denied and the Clerk of the Court is directed to issue the mandate forthwith.
Costs of appeal are awarded to the plaintiff-appellant, with the exception of the item for printing the Transcript of Record. As to this item only one-half the cost of printing is awarded inasmuch as it contains a great deal of matter unnecessary for adequate presentation of the questions raised by the appeal.
. We have denied defendant’s motion for a stay pending action by the Supreme Court on a petition for certiorari.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9443661. Public record. Not legal advice.