The State of Idaho Potato Commission v. G & T Terminal Packaging, Inc., the State of Idaho Potato Commission v. G & T Terminal Packaging, Inc.

In its appeal, the Idaho Potato Commission (“IPC”) challenges the district court’s ruling that a no-challenge provision in its certification mark licensing agreement with'G & T Terminal Packaging (“G & T”) is unenforceable. G & T appeals several damages awards to IPC for breach of contract and violation of the Lanham Act, as well as an award of attorney’s fees and costs. We have jurisdiction over these appeals pursuant to 28 U.S.C. § 1291 .

Agreeing with the Second Circuit in Idaho Potato Commission v. M & M Produce Farm & Sales, 335 F.3d 130 (2d Cir.2003) (M & M III), cert. denied, 541 U.S. 1027 , 124 S.Ct. 2066 , 158 L.Ed.2d 642 (2004), we hold that the no-challenge provision in IPC’s licensing agreement is unenforceable. We also affirm the district court’s $1 and $100,000 damages awards to IPC. We reverse, however, the $50,000 contract damages award to IPC, and vacate the award of attorney’s fees and costs to IPC and remand those matters to the district court for reconsideration in light of our limited reversal.

FACTS AND PROCEDURAL BACKGROUND

IPC is a statutorily-created agency of the State of Idaho formed for the purpose of promoting Idaho potatoes. See Hapco Farms, Inc.…