Supreme Court set to decide tradename, noncompete case

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The Wisconsin Supreme Court has announced that it will release a decision tomorrow in a case that has wrestled with a number of issues related to violation of a noncompete clause and tradename infringement. Link

In 2000, M. Scott Statz and Steven Statz purchased a pier and boatlift installation business called D.L. Anderson’s Lakeside Leisure Co. Inc. The purchase agreement indicated that for seven years, Donald Anderson would not allow his name to be used in a competing business within 120 miles.

Anderson took a job working for a Minnesota-based manufacturer of piers and boatlifts and began selling under the name Anderson Marine LLC. The Statz’s filed a lawsuit against him for violation of the noncompete agreement and infringing on the tradename rights they had purchased.

A jury determined Anderson had breached the noncompete clause and awarded $15,000 in compensatory damages. It also awarded $75,000 in compensatory damages and $180,000 in punitive damages on the tradename infringement claim.

In November 2007, the Wisconsin Court of Appeals released a decision, which among other things supported the noncompete award, but found sufficient evidence to support tradename infringement. However, it found the awards were unsupported. (Related Article)

The court has indicated that the Supreme Court is reviewing a number of questions related to the case:

“The Statzes challenge the reversal of the compensatory and punitive damages awarded for trade name infringement, as well as the reduction in attorney fees.

“In a cross-petition, the Andersons ask the Supreme Court to consider, among other things, if lost profits should have been considered in the award of damages on the non-complete claim and if a non-compete claim can be upheld in this case, given the nature of the businesses.

A decision by the Supreme Court could develop the area of law involving trademark infringement, damages and noncompete clauses.”

A decision should be posted at the Supreme Court’s Web site by 9 a.m. tomorrow.