The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiffs, ProMex, LLC ("ProMex") and Yolanda Eustaquio ("Eustaquio" or collectively as the "Plaintiffs"), instituted this action against Defendants, Claudia Hernandez, formerly doing business as Productos Zapotol ("Hernandez") and Products Zapotol Corp. ("Zapotol" or collectively as the "Defendants"). Plaintiffs seek damages and injunctive relief resulting from Defendants' unlawful production, distribution, and sale of an anti-itch skin cream designated, QUADRYDERN N.F., in violation of Plaintiffs' registered trademark CREMA CUADRIDERMA® ("CREMA CUADRIDERMA"), Registration No. 2,906,539. Plaintiffs also aver that Defendants' alleged actions constitute breach of the Mutual Release and Settlement Agreement (the "Agreement"), as well as other violations of the Lanham Act and California statutory law.
Prior to this case, on or about December 9, 2005, Hernandez filed a complaint in this district seeking declaratory relief that the QUADRYDERN N.F. mark did not infringe on Eustaquio's CREMA CUADRIDERMA trademark. On or about March 17, 2006, Plaintiffs filed counterclaims, alleging, inter alia, trademark infringement. Ultimately, on or about February 4, 2008, the parties entered into the Agreement. Pursuant to the Agreement, all claims and counterclaims were dismissed.
In addition, under the terms of the Agreement, Defendants agreed to "restrict her use of QUADRYDERN N.F. to "Southern California." Defendants also agreed to "confer in good faith" and "take whatever steps . . . necessary or appropriate to avoid any likelihood of trade and/or consumer confusion" with respect to the CREMA CUADRIDERMA trademark. Further, Defendants agreed that the non-breaching party would be entitled to injunctive relief, in addition to monetary damages, against the breaching party for breach of the Agreement.
Based on the foregoing, the Court held a bench trial on January 11, 2011. In addition, the parties submitted further briefing on February 4, 2011 and February 11, 2011. The following constitute the Court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.
1. Plaintiffs are the owners and the exclusive licensee of CREMA CUADRIDERMA.
2. CREMA CUADRIDERMA is the mark and design for an over the counter proprietary cream for itching and inflammation, anti-fungus and antibiotic purposes.
3. Defendants use the QUADRYDERN N.F. mark in connection with its skin cream products.
4. Pursuant to the Agreement, the parties agreed, inter alia, that Defendants' products bearing the QUADRYDERN N.F. mark will not be sold beyond the geographical limitations of "Southern California."
5. The Agreement does not define "Southern California." 6. Plaintiffs propounded Requests for Admissions which included, among other things, the definition of the term, "Southern California." (See Tr. Exh. 26 at 3.)
7. In response to the Requests for Admissions, Defendants failed to make objections to the following definition: "Southern California shall mean the geographic portion of the State of California that is comprised of the following counties: Los Angeles, San Diego, ...