from the United States District Court for the Eastern
District of Texas
STEWART, Chief Judge, and WIENER and PRADO, Circuit Judges.
E. STEWART, Chief Judge
LP ("Traxxas") appeals the district court's
order rendering judgment in conformity with the jury verdict
that found it owed Feld Motor Sports, Inc. ("FMS")
additional royalties under a licensing agreement. Traxxas
argues that the district court erred in submitting the New
York law contract to a jury because the contract is
unambiguous. FMS first contends that we lack jurisdiction
over the appeal and alternatively that we should uphold the
district court's legal conclusion in denying summary
judgment. We hold that this court has jurisdiction and
case pits the maker of radio control ("RC")
vehicles against the producer of a monster truck show.
Traxxas builds RC vehicles, while FMS owns and promotes a
live monster truck show, Monster Jam
("MJ"). Traxxas makes a wide range of RC vehicles,
including the Stampede line of hobby-grade RC trucks.
2010, the parties entered into the Monster Jam Merchandise
License Agreement ("the Agreement"). Under the
Agreement, Traxxas would produce and sell certain Stampede
trucks branded with FMS's MJ intellectual property. The
Agreement had a fixed term, running from October 1, 2010 to
December 31, 2013. The parties do not dispute that the
Agreement covers the base model Stampede, with or without the
MJ branding. This base Stampede was the only one sold with
MJ-branded variations. The Stampede is a model truck that
wholesales for $150. In addition to the standard Stampede
truck, Traxxas makes other RC trucks that comprise its
Stampede line of products, which it argues are not covered by
the Agreement. The Stampede line of RC trucks is
distinguishable from other RC vehicle lines Traxxas sells.
different RC trucks in the Stampede line are at issue: the
Stampede Nitro, the Stampede VXL, the Stampede 4x4, and the
Stampede 4x4 VXL. These premium models are considerably more
expensive, wholesaling from anywhere between $220 to over
$300. The premium models differ from the base Stampede in
power source, parts, design, and method of control. For
instance, the Stampede Nitro is liquid-fuel powered, instead
of battery powered. Additionally, the Stampede 4x4 and 4x4
VXL were introduced after the parties entered into the
Agreement, in 2010 and 2013 respectively.
Agreement's Licensed Articles and Royalty Rate provisions
form the basis of the parties' dispute. Clause 2 defines
2. Licensed Articles: Hobby-grade battery-operated remote
control operated monster truck vehicles ("R/C Vehicle
Units") and monster truck vehicle bodies ("R/C
Bodies") branded with the Property. Licensed Articles
shall include a minimum of four (4) different monster truck
molds of R/C bodies each year, for each year during the Term
other than 2010.
5 sets out the royalties to be paid.
5. Royalty Rate: In determining the number of Licensed
Articles on which [FMS] will receive royalties,
"Licensed Articles" shall be deemed to include all
R/C Vehicle Units and R/C Bodies manufactured with the
Stampede chassis and/or Stampede body, whether or not branded
with the Property or "Stampede."
Agreement also exempted the first 30, 000 "Licensed
Articles" sold from royalties. Over the term of the
Agreement, Traxxas paid FMS royalties only on the standard
Stampede and MJ-branded Stampedes. After the Agreement
expired, FMS hired an outside firm to conduct an audit,
pursuant to an audit provision in the Agreement. The audit
concluded that Traxxas likely owed additional royalties on
other Stampede line vehicles that approached $1 million.