Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 1 of 20 PageID #: 9560
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`LUV N’ CARE, LTD. and ADMAR
`INTERNATIONAL, INC.,
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`
`
`
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`Plaintiffs, Counter-Defendants,
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`v.
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`ROYAL KING INFANT PRODUCTS CO.
`LTD.,
`
`Civil Action No. 2:10-cv-461-JRG
`
`
`
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
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`Defendant, Counter-Plaintiff.
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`
`
`
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`
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`MEMORANDUM OPINION AND ORDER
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`Before the Court are the post-trial motions pending in this case relating to liability.
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`Defendant Royal King Infant Products Co., Ltd. (“RK”) filed a (1) Motion for Judgment
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`as a Matter of Law on Plaintiff’s Count I for Breach of Contract and Royal King’s Third
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`Counterclaim for Breach of Contract, or, in the Alternative, for a New Trial on Damages on
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`Plaintiff’s Count I for Breach of Contract (Or, At Least, Reducing the Damage Award) and (2) a
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`Motion for a New Trial on Damages. (Dkt. No. 240.) Plaintiffs Luv n’ Care Ltd. and Admar
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`International, Inc. (collectively, “LNC” or “Plaintiffs”) oppose RK’s Motions. (Dkt. No. 251.)
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`
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`Also before the Court is LNC’s Renewed Motion for Judgment as a Matter of Law on
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`Defendant’s Claims for Tortious Interference. (Dkt. No. 241.) RK opposes the Motion. (Dkt. No.
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`249.)
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`The Court has addressed RK’s motion to amend the Court’s February 14, 2014
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`Memorandum Opinion and Order (Dkt. No. 234) regarding RK’s equitable estoppel defense and
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`fraudulent inducement claim separately. (Dkt. No. 282.)
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`Having reviewed the parties’ written submissions, and for the reasons stated below, the
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 2 of 20 PageID #: 9561
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`Court finds that RK’s Motions should be DENIED as to the issues of the jury’s determinations
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`that RK breached Paragraph 1 of the Settlement Agreement by under-reporting sales and
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`underpaying royalties, that RK breached Paragraph 6 of the Settlement Agreement by selling
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`versions of the Settlement Products that were likely to cause confusion with LNC’s products for
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`the period after the Settlement Agreement, and that LNC did not breach the Settlement
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`Agreement by filing the instant lawsuit. The Court further finds that LNC’s Motion should be
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`DENIED as to the issue of the jury’s determination of no intentional interference by RK and
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`GRANTED as to the issue of the jury’s determination of intentional interference by LNC.
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`The damages issues and alternative motions for new trial on damages raised by LNC and
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`RK’s Motions are CARRIED.
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`A.
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`Settlement Agreement
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`I. BACKGROUND
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`On June 22, 2009, the parties executed a settlement agreement (Dkt. No. 1-1, “Settlement
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`Agreement”) to resolve a 2008 trademark case previously before this Court. (Dkt. No. 192.)
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`Under the terms of the Settlement Agreement, RK would pay royalties on sales of certain
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`products that RK made before the Settlement Agreement and would stop making the same:
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`1) Royal King shall pay a 12% royalty on all past sales of the products
`listed on the spreadsheet attached hereto as Exhibit A (hereinafter “the
`Products”). The total royalty for all U.S. and international sales is
`$396,000 USD, based on Royal King’s representations as to the total US
`and international sales of the Products.
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`. . .
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`6) Royal King will immediately cease and desist worldwide from making,
`selling, offering to sell, marketing, and/or promoting the Products,
`including any versions of the Products or their packaging that are likely to
`cause confusion with LNC’s products or packaging. In the event that
`Royal King has any remaining Products in inventory, Royal King shall
`have 30 days from execution of this Settlement to sell-off any such
`remaining Products, shall report any sales beyond those paid for in this
`Agreement, and shall pay the 12% royalty on such sales. Any products,
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 3 of 20 PageID #: 9562
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`and the Molds for such products, remaining more than 30 days from
`execution of this Settlement shall be destroyed, and Royal King shall
`provide proof of same.
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`(Dkt. No. 1-1 (“Settlement Agreement”).) The terms of the Settlement Agreement also provided
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`for a release of past and present claims relating to the products at issue:
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`5) LNC and Royal King agree that this is a global settlement of all past
`and present claims LNC had or has against Royal King with respect to the
`Products up through the date of the present Agreement, and that this
`settlement and the Products in this Agreement are not limited to the colors
`in the images below, or any particular colors. . . . .
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`. . .
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`8) Subject to the provisions in this Agreement, LNC and Royal King
`hereby release, acquit and discharge one another . . . from and against any
`and all past and present claims, demands, obligations, liabilities, and
`causes of action worldwide, of any nature whatsoever, at law or in equity,
`asserted or unasserted, known or unknown arising out of or in connection
`with the Products. . . .
`
`(Settlement Agreement ¶¶ 5, 8.)
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`On November 4, 2010, LNC brought suit against RK alleging breach of contract, fraud in
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`the inducement, tortious interference with existing and prospective contractual or business
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`relations, and patent infringement. (Dkt. No. 20.) In response, RK raised a number of affirmative
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`defenses including equitable estoppel and statutes of limitation. (Dkt. No. 116.) RK also
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`counterclaimed accusing LNC of breach of contract, tortious interference with existing and
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`prospective contractual or business relations, and fraud in the inducement. (Id.)
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`B. Jury Trial
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`The Court began a jury trial in the present case on October 7, 2013. Three days later, the
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`jury returned a unanimous verdict on October 10, 2013. In its verdict, the jury found that RK had
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`violated Paragraph 1 of the Settlement Agreement by under-reporting sales and underpaying pre-
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`Agreement royalties on the Settlement Products for the period before the Settlement Agreement;
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`that RK had violated Paragraph 6 of the Settlement Agreement by selling versions of the
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 4 of 20 PageID #: 9563
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`Settlement Products that were likely to cause confusion with LNC’s products for the period after
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`the Settlement Agreement; and that $10,000,000.00 was the “sum of money, if paid now” which
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`would “adequately compensate Plaintiffs Luv N’ Care and Admar as to . . . [LNC’s claim of]
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`breach of contract.” (Dkt. No. 195 (“Verdict”) ¶¶ 1–2, 4(A).)
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`The jury further found that RK did not engage in intentional interference with LNC
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`and/or Admar’s existing or prospective contractual or business relations regarding any of LNC
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`and/or Admar’s customers; and that $0.00 was the “sum of money, if paid now” which would
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`“adequately compensate Plaintiffs Luv N’ Care and Admar as to . . . [LNC’s claim of]
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`intentional interference.” (Verdict ¶¶ 3, 4(B).)
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`The jury further found that LNC and/or Admar did not breach the Settlement Agreement
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`by filing the instant lawsuit seeking recovery for claims that were released in the Settlement
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`Agreement and that $0.00 was the “sum of money, if paid now” which would “adequately
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`compensate Defendant Royal King as to . . . [RK’s claim of] breach of contract.” (Verdict ¶¶ 7,
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`9(A).)
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`The jury further found that LNC and/or Admar did engage in intentional interference
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`with RK’s existing or prospective contractual or business relations regarding any of RK’s
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`customers but that $0.00 was the “sum of money, if paid now” which would “adequately
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`compensate Defendant Royal King as to . . . [RK’s claim of] intentional interference.” (Verdict
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`¶¶ 8, 9(B).)
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`After trial, RK filed a motion for judgment as a matter of law under Rule 50(b) on
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`liability on the contract claims (Dkt. No. 240). LNC filed a motion for judgment as a matter of
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`law under Rule 50(b) on liability on the intentional interference claims. (Dkt. No. 241.)
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`RK and LNC assert that, in the nearly seventeen hours of testimony presented at trial, the
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 5 of 20 PageID #: 9564
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`jury did not have sufficient evidence for its findings of liability and damages on the contract and
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`tortious interference claims.
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`C. Bench Trial
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`On December 4, 2013, the Court held a bench trial to hear additional evidence presented
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`solely on RK’s fraud in the inducement claim. (See Dkt. No. 213.) The Court also heard
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`arguments relating to RK’s equitable estoppel defense. (See Dkt. No. 213 at 3–4; Dkt. No. 198 at
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`1.) On February 14, 2014, this Court entered its Findings of Fact and Conclusions of Law
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`relating to RK’s fraud in the inducement claim and equitable estoppel defense. (Dkt. No. 234.)
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`This Court found that RK had not demonstrated by a preponderance of the evidence that LNC
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`had fraudulently induced RK to enter into the Settlement Agreement, or that LNC’s breach of
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`contract claim should be barred by the doctrine of equitable estoppel. (Id.) Accordingly,
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`judgment was entered in favor of LNC on RK’s claim for fraudulent inducement and equitable
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`estoppel defense. (Id.)
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`RK moved the Court to amend, under Rule 52(b), the Court’s findings in the February 14,
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`2014 Memorandum Opinion and Order (Dkt. No. 234 (“Memorandum Opinion”)) denying RK’s
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`claim for fraud in the inducement and RK’s defense of equitable estoppel. (Dkt. No. 240.) RK
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`asserted that the Court should find additional facts which would support a finding that RK had
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`proven by a preponderance of the evidence its claim for fraud in the inducement and its defense
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`of equitable estoppel. (See Dkt. No. 240.) The Court denied RK’s motion. (Dkt. No. 282.)
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`II. APPLICABLE LAW
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`A. Judgment as a Matter of Law Under Rule 50(b)
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`Upon a party’s renewed motion for judgment as a matter of law following a jury verdict,
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`the Court asks whether “the state of proof is such that reasonable and impartial minds could
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 6 of 20 PageID #: 9565
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`reach the conclusion the jury expressed in its verdict.” Fed. R. Civ. P. 50(b); Am. Home Assur.
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`Co. v. United Space Alliance, 378 F.3d 482, 487 (5th Cir. 2004). Judgment as a matter of law is
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`appropriate only if “the facts and reasonable inferences point so strongly and overwhelmingly in
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`favor of one party that reasonable minds could not arrive at a different verdict.” Mid-Continent
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`Cas. Co. v. Eland Energy, Inc., 709 F.3d 515, 520 (5th Cir. 2013) (internal quotations omitted);
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`see also Dresser-Rand Co. v. Virtual Automation, Inc., 361 F.3d 831, 838 (5th Cir. 2004).
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`Under Fifth Circuit law, a court is to be “especially deferential” to a jury’s verdict, and
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`must not reverse the jury’s findings unless they are not supported by substantial evidence.
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`Baisden v. I’m Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012). “Substantial evidence is
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`defined as evidence of such quality and weight that reasonable and fair-minded men in the
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`exercise of impartial judgment might reach different conclusions.” Threlkeld v. Total Petroleum,
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`Inc., 211 F.3d 887, 891 (5th Cir. 2000). A motion for judgment as a matter of law must be denied
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`“unless the facts and inferences point so strongly and overwhelmingly in the movant’s favor that
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`reasonable jurors could not reach a contrary conclusion.” Baisden, 693 F.3d at 498 (citation and
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`internal quotations omitted). However, “[t]here must be more than a mere scintilla of evidence in
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`the record to prevent judgment as a matter of law in favor of the movant.” Arismendez v.
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`Nightingale Home Health Care, Inc., 493 F.3d 602, 606 (5th Cir. 2007).
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`In evaluating a motion for judgment as a matter of law, a court must “draw all reasonable
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`inferences in the light most favorable to the verdict and cannot substitute other inferences that
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`[the court] might regard as more reasonable.” E.E.O.C. v. Boh Bros. Const. Co., L.L.C., 731 F.3d
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`444, 451 (5th Cir. 2013) (citation omitted). However, “[c]redibility determinations, the weighing
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`of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not
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`those of a judge.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). “[T]he
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 7 of 20 PageID #: 9566
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`court should give credence to the evidence favoring the nonmovant as well as that ‘evidence
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`supporting the moving party that is uncontradicted and unimpeached, at least to the extent that
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`that evidence comes from disinterested witnesses.’” Id. at 151 (citation omitted).
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`III. ANALYSIS
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`A. Whether “the Products” as Defined in the Settlement Agreement Includes the
`“Replacement Products”
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`RK asserts that the main issue in the case is whether the Settlement Agreement barred the
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`sale of the Replacement Products. (Dkt. No. 240 at 5.) The question hinges on whether or not the
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`Replacement Products were included in the definition of “the Products” as used in the Settlement
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`Agreement. If the Replacement Products were included in the definition of “the Products,” then
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`the Settlement Agreement would have provided for the release of all claims by LNC against RK
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`on the sales of those Replacement Products. However, if the Replacement Products were not
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`included in the definition of “the Products,” then the Settlement Agreement did not provide for
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`the release of such claims.
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`Paragraph 1 of the Settlement Agreement defines the term “the Products” as those fifteen
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`products identified in Exhibit A to the Settlement Agreement. (Dkt. No. 240-8, PTX 29, ¶ 1,
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`Exh. A.) The Settlement Agreement further states that RK may not sell “the Products, including
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`any versions of the Products or their packaging that are likely to cause confusion with LNC’s
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`products or packaging.” (Id. ¶ 6 (emphasis added).)
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`RK argues that LNC knew, at the time the parties signed the Settlement Agreement, that
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`RK was selling the Replacement Products and therefore the Parties’ definition of the term “the
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`Products” necessarily included the Replacement Products. (Dkt. No. 240 at 6; Dkt. No. 240-9,
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`PTX 569.)
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`LNC argues that email exchanges during the settlement negotiations made LNC’s
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 8 of 20 PageID #: 9567
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`position clear that any relevant products had to be brought to LNC’s attention and had to be
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`discussed and expressly agreed upon. (Dkt. No. 251 at 2.) Specifically, the jury considered a
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`June 15, 2009 email from LNC’s attorney to RK’s attorney during settlement negotiations:
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`If [RK] wants a release for any other products, patent applications, or
`patents, Luv n’ care needs to see them so that they can be expressly
`discussed, and we would then need to specifically list them if the parties
`can reach an agreement on them.
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`(Dkt. No. 215-3, PTX 794 at 39; 10/7/2013 P.M. Trial Tr. (Hakim), Dkt. No. 200, at 79:4–84:15,
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`88:14–93:6, 96:18–97:18) LNC further argues that RK never discussed or mentioned the
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`Replacement Products during settlement in the extensive email correspondence regarding
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`settlement, nor did RK’s attorneys take the stand in either the bench or jury trial to testify that the
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`Replacement Products were discussed with LNC during settlement negotiations. (Dkt. No. 251 at
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`2; Dkt. No. 215-3, PTX 794.)
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`The jury was presented with the Settlement Agreement, which explicitly defined “the
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`Products” as the fifteen products included as Exhibit A to the Settlement Agreement. (Dkt. No.
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`240-8, PTX 29, ¶ 1, Exh. A.) The jury was also presented with the email exchanges during
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`settlement negotiations in which the parties never contemplated that the Replacement Products
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`were to be included in the definition of “the Products.” (Dkt. No. 215-3, PTX 794 at 39.) Having
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`heard and seen all the evidence, the jury agreed with LNC over RK. The Court agrees that RK
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`has not met its post-trial burden to establish that the evidence points so strongly and
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`overwhelmingly in RK’s favor that no reasonable jury could have reached the conclusions
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`reached in this case. This Court will not substitute its judgment for that of the jury. This Court
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`does not find that no reasonable jury could have found that the “the Products,” as defined in the
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`Settlement Agreement, did not include the Replacement Products.
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`Further, the Jury’s finding does not conflict with the Court’s findings of fact on the same
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 9 of 20 PageID #: 9568
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`issue. (Dkt. No. 234 at ¶¶ 18-28.)
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`B. Whether the Replacement Products Are Versions or Iterations of “the Products” as
`Contemplated in the Settlement Agreement
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`RK asserts that no reasonable jury could have found that the Replacement Products are
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`versions or iterations of “the Products,” which the Settlement Agreement prohibits RK from
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`selling. (Dkt. No. 240 at 7–10.) LNC counters that the jury reasonably found that the
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`Replacement Products were prohibited versions of “the Products” that the Settlement Agreement
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`prohibited RK from selling. (Dkt. No. 251 at 11–15.)
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`As discussed above, RK was prohibited from selling at least the fifteen products
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`enumerated in Exhibit A to the Settlement Agreement. (Dkt. No. 240-8, PTX 29, ¶ 1, Exh. A.) In
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`addition, RK was prohibited from making products that were versions of “the Products”:
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`6) Royal King will immediately cease and desist worldwide from making,
`selling, offering to sell, marketing, and/or promoting the Products,
`including any versions of the Products or their packaging that are likely to
`cause confusion with LNC’s products or packaging. . . .
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`(Settlement Agreement ¶ 6.)
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`LNC argues that Paragraph 6 does not redefine “Products” for purposes of the Settlement
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`Agreement, but rather unambiguously sets forth what products RK may not sell in the future: (1)
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`the Products shown in Exhibit A and (2) any version of the Products or their packaging that are
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`likely to cause confusion with LNC’s products or packaging. (Dkt. No. 251 at 12, Settlement
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`Agreement ¶ 6.) As support, LNC points to Mr. Hakim’s testimony corroborating this
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`interpretation of the contract.
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`MR. GOLDBERG: If we could switch to No. 6, Paragraph 6.
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`Q. (By Mr. Goldberg) And if you’d focus on the first sentence, Mr.
`Hakim, and tell me what your understanding is of what the parties agreed
`to there.
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`A. This just says that Royal King will immediately cease and desist
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 10 of 20 PageID #: 9569
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`worldwide from making, selling, offering to sell, marketing, and/or
`promoting the products, capital P, including any versions of the products,
`which is depicted in Exhibit A, or their packaging that are likely to cause
`confusion with Luv N’ Care’s, small p, products or packaging.
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`Q. What was your understanding of the term [“]including any versions of
`the products[”]?
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`A. Well, he can’t make another knockoff or a similar version. He can’t --
`he can’t make a colorable limitation [sic]. It’s -- it clearly says just
`including any version of the product. He can’t take the cup and change a
`line on it and sell it and it’s a different product.
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`Q. And what is your understanding of the phrase [“]that are likely to cause
`confusion with Luv N’ Care’s products[”]?
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`A. He can’t make and change his item, which would still be similar to our
`product -- our products.
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`(10/7/2013 P.M. Trial Tr. (Hakim), Dkt. No. 200, at 100:19–101:18); see Dkt. No. 251 at 12.)
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`RK argues that, in construing the contract as a whole, and in particular Paragraphs 1, 6,
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`and 8, it is clear that the Parties’ intent was that the Replacement Products were not “versions of
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`the Products.” (Dkt. No. 240 at 9–10.) As support, RK points to Mr. Hakim’s testimony
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`regarding the definition of “the Products” in the release paragraph, Paragraph 8 of the Settlement
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`Agreement:
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`A. The products are the products in Exhibit A that’s attached to this
`settlement agreement.
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`Q. All right. And if the product is slightly different from what’s in Exhibit
`A, would that be covered here?
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`A. You mean various products? Are you asking me are there various --
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`Q. Like -- well, there’s -- there’s a sippy cup in Exhibit A. The exact sippy
`cup in Exhibit A is covered by this term. Would a sippy cup that was a
`little different from the sippy cup in Exhibit A be covered by this term, or
`is it only the exact products in Exhibit A?
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`A. Only this exact product. If I may elaborate for the jury, this does not
`cover various products, because if it were to cover various products as in
`Paragraph 6, we would have inserted various products. And known or
`unknown is not talking about products. It’s talking about other rights that
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`Luv N’ Care gave up.
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`Q. All right. So to clarify, your belief of the term, the products, covers the
`exact products shown in Paragraph -- Paragraph -- Exhibit A to the
`settlement agreement and no others?
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`A. Not only my belief, but since I drafted this with Mr. Khurana, we know
`exactly what it means.
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`(10/8/2013 A.M. Trial Tr. (Hakim), Dkt. No. 201, at 11:23–12:23); see Dkt. No. 240 at 10.)
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`However, this testimony regarding Paragraph 8 does not preclude the jury’s interpretation of
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`Paragraph 6 to include more than the Products shown in Exhibit A.
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`The jury considered the testimony of Mr. Hakim on direct and cross, as well as the four
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`corners of the Settlement Agreement, including the specific language of Paragraphs 1, 6, and 8.
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`The jury was free to weigh the testimony of Mr. Hakim and the arguments of RK. The jury
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`agreed with LNC over RK in finding that Paragraph 6 of the Settlement Agreement forbade RK
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`from making (1) the products described in Exhibit A and (2) products that were likely to cause
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`confusion with LNC’s products or packaging. The Court agrees that RK has not met its post-trial
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`burden to establish that the evidence points so strongly and overwhelmingly in RK’s favor that
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`reasonable jurors could not reach a contrary conclusion. The jury’s verdict is supported by
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`substantial evidence. This Court does not find that no reasonable jury could have found that the
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`Replacement Products were versions or iterations of the Products that RK was prohibited from
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`selling.
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`C.
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`LNC’s Claims
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`1) Breach of Contract: Pre-Agreement Royalties
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`RK first attacks the jury’s finding that RK violated Paragraph 1 of the Settlement
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`Agreement by under-reporting sales and underpaying royalties for the Settlement Products for
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`the period before the Settlement Agreement. (Dkt. No. 240 at 10–13; Verdict ¶ 1.) To prevail on
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`judgment as a matter of law, RK must show that no reasonable jury would have a legally
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`sufficient evidentiary basis to find for LNC. Fed. R. Civ. P. 50. RK argues that the parties, at the
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`time they signed the Settlement Agreement, could not have intended to bar sales of the
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`Replacement Products (products that RK began selling after it was sued in the prior litigation
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`that replaced the products on which RK originally had been sued) because the Replacement
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`Products were being sold before the signing date of the Settlement Agreement, and therefore
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`LNC waived any claims to those products by the release in paragraph 8. (Dkt. No. 240 at 5–6.)
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`LNC argues that Paragraphs 5 and 8 (“Release Paragraphs”) did not release the
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`replacement products. Specifically, LNC argues that the Products identified in the Release
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`Paragraphs did not extend beyond the definition of “Products” in Paragraph 1. The term
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`“Products” also appears in Paragraph 6, under which RK must cease and desist from selling “the
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`Products.” However, LNC further argues that Paragraph 6 does not re-define “Products” for the
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`purposes of the Settlement Agreement, but rather sets forth the products that RK may not sell in
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`the future.
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`RK contends that LNC’s damages expert, Mr. Payne, testified that RK had sold $12
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`million worth of Replacement Products prior to signing the Settlement Agreement. (See
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`10/9/2013 P.M. Trial Tr. (Payne), Dkt. No. 204, at 149:21–150:2; Dkt. No. 240 at 6.) LNC
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`contends that RK misconstrues Mr. Payne’s testimony and that instead, Mr. Payne had made it
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`clear that, due to RK’s recordkeeping and conduct, he had no way of actually knowing how
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`many of RK’s pre-Agreement sales were for the Accused (not Replacement) Products rather than
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`the Settlement Products. (See Dkt. No. 251 at 13 (citing 10/9/2013 P.M. Trial Tr. (Payne), Dkt.
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`No. 204, at 142:8–143:12, 147:9–21, 149:5–150:6).). For instance, Mr. Payne testified as
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`follows:
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 13 of 20 PageID #: 9572
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`Q. Based upon the invoices that you’ve seen, is it your understanding that
`stores in the United States would have had more accused products from
`Royal King on their shelves than settlement products during the period
`from 2007 through June 2009?
`
`A. I -- I tried to answer that, that I think there is difficulty in fully
`segregating those, because the product numbers, the RK product item
`numbers for the settlement and accused products had not been tracked,
`other than by photographs or by, in some cases, customer numbers, but not
`the product numbers that are used on the invoices.
`
`. . . .
`
`Q. (By Mr. Wexler) Okay. And so here we have a document that shows
`$12 million in accused products and $3.8 million in settlement products; is
`that correct?
`
`A. With the provision that I just explained that that division is not
`necessarily very accurate for this period of time because of lack of
`disclosure on the product numbers from the invoices. I think it’s accurate
`in total, based on the invoices. It's the division that I disclosed had some
`issues regarding its delineation between those two groups.
`
`(10/9/2013 P.M. Trial Tr. (Payne), Dkt. No. 204, at 9:5–150:6.) Mr. Payne’s testimony is
`
`sufficient to support the jury’s finding that RK violated Paragraph 1 of the Settlement Agreement
`
`by under-reporting sales and underpaying royalties for pre-Agreement sales of Settlement
`
`Products. (Verdict ¶ 1.)
`
`Furthermore, as discussed above, the jury properly and reasonably found that (1) “the
`
`Products,” as defined in the Settlement Agreement, did not include the Replacement Products
`
`and that (2) the Replacement Products were versions or iterations of the Products that RK was
`
`prohibited from selling. (See supra Sections III.A, III.B.)
`
`The jury was properly instructed on the law, was free to judge the credibility of the
`
`witnesses, and weigh all competing evidence. After consideration of all the presented evidence,
`
`the jury found that RK violated Paragraph 1 of the Settlement Agreement by under-reporting
`
`sales and underpaying royalties for pre-Agreement sales of Settlement Products. The Court will
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 14 of 20 PageID #: 9573
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`not substitute its judgment for that of the jury under the preponderance of the evidence standard
`
`on the disputed issues of fact underlying the breach of contract decision. The Court does not find
`
`that no reasonable jury could have found that the term “Products” in the Settlement Agreement
`
`does not include the Replacement Products. The Court further does not find that no reasonable
`
`jury could have found that RK violated Paragraph 1 of the Settlement Agreement by under-
`
`reporting sales and underpaying royalties for pre-Agreement sales. Accordingly, RK’s motion
`
`for judgment as a matter of law on this issue is hereby denied. (Dkt. No. 240.)
`
`2) Breach of Contract: Post-Agreement Sales
`
`RK attacks the jury’s finding that RK violated Paragraph 6 of the Settlement Agreement
`
`by selling, post-Agreement, versions of the Settlement Products that were likely to cause
`
`confusion with LNC’s products. (Dkt. No. 240 at 10–14; Verdict ¶ 2.) As before, to prevail on
`
`judgment as a matter of law, RK must show that no reasonable jury would have a legally
`
`sufficient evidentiary basis to find for LNC. Fed. R. Civ. P. 50. RK argues that the parties, at the
`
`time they signed the Settlement Agreement, could not have intended to bar sales of the
`
`Replacement Products because the Replacement Products were being sold before the signing
`
`date of the Settlement Agreement and therefore LNC waived any claims to those products by the
`
`release in paragraph 8. (Dkt. No. 240 at 5–6.)
`
`However, as discussed above, the jury properly and reasonably found that (1). “the
`
`Products,” as defined in the Settlement Agreement, did not include the Replacement Products
`
`and (2) the Replacement Products were versions or iterations of the Products that RK was
`
`prohibited from selling. (See supra Sections III.A, III.B.)
`
`The jury was free to weigh all the competing testimony of Mr. Hakim and the arguments
`
`of RK. (See supra Section III.B.) At the trial’s conclusion, the jury agreed with LNC over RK in
`
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 15 of 20 PageID #: 9574
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`finding that Paragraph 6 of the Settlement Agreement forbade RK from making the products
`
`described in Exhibit A in addition to products that were likely to cause confusion with LNC’s
`
`products or packaging. The parties do not dispute that RK did in fact sell the Replacement
`
`Products. The Court agrees that RK has not met its post-trial burden to establish that the
`
`evidence points so strongly and overwhelmingly in RK’s favor that reasonable jurors could not
`
`reach a contrary conclusion. This Court will not substitute its judgment for that of the jury, and
`
`does not find that no reasonable jury could have found that RK violated Paragraph 6 of the
`
`Settlement Agreement by selling versions of the Settlement Products that were likely to cause
`
`confusion with LNC’s products after the Settlement Agreement was signed. Accordingly, RK’s
`
`motion for judgment as a matter of law on this issue should be and is hereby denied. (Dkt. No.
`
`240.)
`
`D.
`
`RK’s Claims and Defenses
`
`1) Breach of Contract: Bringing this Suit
`
`RK attacks the jury’s finding that LNC did not breach the Settlement Agreement by filing
`
`this lawsuit and seeking recovery for claims that were allegedly released in the Settlement
`
`Agreement. (Dkt. No. 240 at 10–14; Verdict ¶ 7.) As before, to prevail in seeking judgment as a
`
`matter of law, RK must show that no reasonable jury would have a legally sufficient evidentiary
`
`basis to find for LNC. Fed. R. Civ. P. 50.
`
`Paragraph 8 of the Settlement Agreement provides for a release of “all past and present
`
`claims . . . arising out of or in connection with the Products . . . .” (Settlement Agreement ¶ 8
`
`(emphasis added).) RK argues that LNC’s claims regarding the Replacement Products were
`
`released by Paragraph 8 because LNC’s claim for damages for the Replacement Products
`
`“aris[es] out of or [is] in connection with the Products” if they are “versions of the Products”
`
`under Paragraph 6. (Dkt. No. 240 at 12.) RK argues that LNC therefore breached the release of
`
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`Case 2:10-cv-00461-JRG Document 283 Filed 01/29/16 Page 16 of 20 PageID #: 9575
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`Paragraph 8 by bringing its claim for damages on the Replacement Products. (Id.)
`
`
`
`In response to RK’s argument, LNC argues that the release of Paragraph 8 applies only to
`
`the Settlement Products as listed in Exhibit A and does not apply to the Replacement Products.
`
`As discussed above, LNC argues that the language of Paragraph 6 merely sets forth which
`
`products RK may not sell in the future: the Products (i.e., the Settlement Products shown in
`
`Exhibit A) in addition to any versions of the Products or their packaging that are likely to cause
`
`confusion with LNC’s products or packaging. (See supra Section III.B.) LNC argues that
`
`Paragraph 6 does not re-define “Products” for the purposes of the entire Settlement Agreement,
`
`and Mr. Hakim corroborated this unambiguous meaning of the contract during trial. (10/7/2013
`
`P.M. Trial Tr. (Hakim), Dkt. No. 200, at 100:19–101:18); see also supra Section III.B.
`
`Furthermore, as discussed previously, the jury properly and reasonably found that (1)
`
`“the Products,” as defined in the Settlement Agr