Nature of the Case
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Facts
P is a Swiss corporation, which manufactures and sells high-end luxury watches in countries around the globe. D is an Oscar-winning actress and entertainer. Denver and Delilah Films (DDF) is a California corporation owned and operated by D. It acts as both a film production company and a so-called 'loan-out' corporation. A loan-out corporation enters into agreements whereby D renders services of various kinds to third-parties (i.e., is 'loaned out' to them). P entered into such an agreement with DDF. P agreed to pay to DDF three million dollars in exchange for the use of D's image in a worldwide print media advertising campaign for P's watch collection. D agreed not to wear publicly any other watches other than P watches during the Term. D also agreed that during the Term she shall not endorse or advertise watches or jewelry for any other person, entity or company including for charity. D is allowed to wear non-P product as part of her performance in a feature film and/or television show provided no merchandising or commercial tie-in campaign shall be allowed in connection with non-RW watches utilizing her name, voice and/or likeness in connection with such film or television show that is released and/or broadcast during the Term. P agreed that D shall be the sole female artist to endorse P during the Term in Europe and the United States. P sued Ds on February 5, 2007, well after the Agreement had expired by its terms. P alleged that D had breached the agreement on several occasions during its term and that Ds had fraudulently induced P to enter into the Agreement in the first place. P claims two instances of breach of the Agreement. D agreed to appear in a promotional piece for EIF, which would identify Montblanc. D participated in a photo shoot with the purpose of creating an image for the venture. Montblanc decided to photograph the actress without jewelry and then later superimpose a necklace, believing that this would produce this most in-focus image of both D and the Montblanc necklace. The finished product was incorporated into an approximately fourteen-foot-high poster displayed at a prestigious watch and jewelry trade show and exhibition, lasting six days, at which a select number of jewelers and watchmakers display their new products. The image was only displayed inside the booth, such that it was not visible to visitors passing by and was exposed only in one key entrance area. When P notified D, she immediately directed that it be removed. It had been up about 3 days, and it was removed 14-36 hours later well within the five-day cure period provided for in the Agreement. On March 14, 2006, D wore a Christian Diorwatch to the press conference --a decision she now calls 'regrettable.' Many photographs were taken of her during the press conference. One of several third parties to download the image of Theron wearing the Dior watch was LVMH Watch, and Jewelry USA, another maker of luxury goods and the owner of Dior watches. Eventually, the watch on her wrist appeared with a caption over it that reads, 'Charlize Theron wears Dior.' In the same issue, P ran an advertisement featuring the model Telma Thormasdittor. At the time the magazine appeared, DDF claims it had not relaxed the prohibition against P's use of other female artists in print advertising, although it had granted P permission to use other female artists in certain indoor and outdoor durable transparency or 'duratrans' advertising. Both parties moved for summary judgment.
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