Value Selling Associates, LLC, et al. v. Temple, 2009 U.S. Dist. LEXIS 104174 (S.D. Cal. 2009)
Defendant sold its business to Plaintiff including all intellectual property rights and entered into a consulting agreement with Plaintiff. The consulting arrangement was later terminated with a settlement agreement. All agreements contained clauses stating that any dispute arising under or related to the agreement would be submitted to arbitration. The Court ruled that trademark infringement claims for intellectual property that was part of the sale of the business related to the agreements and were therefore subject to the arbitration clauses.
In determining whether an arbitration clause applies, the court looks to the facts underlying the plaintiff’s claims and not the type of cause of action. In this case, the dispute over trademarked and copyrighted materials were directly connected to the Defendant’s status as a former owner and licensee of the trademark and copyright material. Additionally, defendant only had access to the copyrighted material through his contractual relationship with plaintiffs. Therefore the claims are dependant on the contracts entered into by the parties, all containing arbitration clauses and are subject to arbitration.