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Ninth Circuit Limits the Scope of In-Term Covenants Not to Compete

February 9, 2009

by Adam Tullman (Sheppard Mullin Richter & Hampton) and
Jennifer G. Redmond (Sheppard Mullin Richter & Hampton)

In Comedy Club v. Improv West Associates the Ninth Circuit held that an in-term covenant not to compete (a covenant that continues during the term of a contract or relationship) in a Trademark License agreement was overbroad, but enforced a more limited version of the covenant. The Court held that while there is no exception in California's law against non-competition agreements for in-term covenants not to compete, they may be valid, at least in the context of a "franchise like" agreement. Def...

Tags: Trademarks, Licensing, Trademark Licensing