Bose Corp. v. Ejaz

Bose Corporation (plaintiff) manufactured some electronic products specifically for the United States market that could be sold at higher prices in other markets. Salman Ejaz (defendant) used the website eBay to resell Bose products that were intended for the United States market to buyers in Europe. Bose sued Ejaz in the United Kingdom for trademark infringement. In settlement negotiations, Ejaz represented himself, and Bose was represented by attorneys. Bose’s attorneys told Ejaz that he was potentially liable for $250,000 for trademark infringement and that his actions had “repercussions.” Ejaz later said that he felt immense personal pressure to settle the dispute, that Bose’s attorneys seemed very intimidating, and that he believed Bose’s attorneys had implied that he would go to jail if he did not settle the dispute. Bose and Ejaz eventually signed a settlement agreement. In this settlement contract, Bose agreed to drop its current claims against Ejaz, and Ejaz agreed to stop reselling Bose products anywhere in the world. The settlement agreement also contained a liquidated-damages provision stating that if Ejaz violated the settlement terms, he would owe Bose $50,000 for each violation. However, Ejaz soon violated the settlement agreement by reselling United States Bose products in Australia. Bose sued Ejaz in federal district court in Massachusetts for breaching the settlement contract and for trademark infringement. Ejaz raised the affirmative defenses of unconscionability and duress, arguing that these defenses prevented enforcement of either the entire settlement contract or at least the liquidated-damages provision. The district court rejected these defenses and granted summary judgment to Bose. Ejaz appealed to the United States Court of Appeals for the First Circuit.