int'l importers v int'l spirits - adopting r&r

7/31/2019 Int'l Importers v Int'l Spirits - Adopting R&R

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

Case No. 10-61856-CIV-JORDAN

INTERNATIONAL IMPORTERS, INC.,

Plaintiff

v.

INTERNATIONAL SPIRITS & WINES, LLC

and DAQUINO GROUP OF COMPANIES,

Defendants

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ORDERADOPTING REPORT AND RECOMMENDATION

Afterde novo review of the briefs and evidence, Magistrate Judge OSullivans report and

recommendation [D.E. 37] is ADOPTED with the following modifications. International Spirits &

Wines, LLCs and DAquino Group of Companies motion to dismiss [D.E. 22] is GRANTED IN PART

AND DENIED IN PART, and International Importers, Inc.s motion to substitute the real party in interest

under Rule 17 and for sanctions [D.E. 24] is DENIED. International Importers shall file an amended

complaint by October 8, 2011 and shall serve the parties to the amended complaint by January 16,

2012.

After reviewing the evidence introduced in the parties supplemental briefing, Judge

OSullivan found that Fernbrew Pty. Limited owned, at least, a 25% interest in the Wallaby Creek

trademark. He then found, as most courts have found, that the co-owner of a trademark is a necessary

party to a trademark-infringement case. Judge OSullivan also rejected International Importers

argument that the trademarks co-owner abandoned the trademark. The evidence, he correctly

concluded, did not show any intent by Fernbrew Pty. to abandon the trademark and, in fact, showed

use of the trademark. In addition, at least one case has held that a trademarks co-owner cannot

abandon that trademark so long as the other co-owner uses the trademark. Finally, because

International Importers did not even contend that it properly served DAquino Group, he granted the

Case 0:10-cv-61856-AJ Document 42 Entered on FLSD Docket 09/26/2011 Page 1 of 4


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motion to dismiss under Rule 12(b)(4) and (5). I agree with Judge OSullivans analysis and

conclusions.

The report and recommendation, however, did not consider a standing issue raised by

International Spirits and DAquino Group because they prevailed on their other arguments. Because

standing raises an Article III concern about my authority to hear this case and to address any of the

other substantive issues, I must address it first. See Fla. Family Policy Council v. Freeman, 561 F.3d

1246, 1253 (11th Cir. 2009); Baloco v. Drummond Co., 631 F.3d 1350, 1354 (11th Cir. 2001).

International Spirits and DAquino Group cast the absence of the trademark co-owners as a

standing issue. According to International Spirits and DAquino Group, in patent cases, failure to

bring suit alongside a co-inventor of a patent raises prudential-standing concerns. By analogy, the

argument continues, the same principle applies in trademark cases. I disagree.

To be sure, in patent cases, for prudential reasons, a co-inventor of a patent must sue with

all her co-inventors or else she lacks standing to sue for infringement. See Prima Tek II, LLC v. A-

Roo Co., 222 F.3d 1372, 137677 (Fed. Cir. 2000). But this prudential-standing doctrine arises from

concerns relevant to patent law. See Isr. Bio-Engg Project v. Amgen Inc., 475 F.3d 1256, 126365

(Fed. Cir. 2007); Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1468 (Fed. Cir. 1998).

International Spirits and DAquino Group have not linked the concerns found in patent law to

concerns found in trademark law. Any prudential concerns, moreover, are allayed by Rule 12(b)(7),

which allows dismissal for failure to join a party under Rule 19. And, in fact, where an owner of a

trademark is not involved in a case, courts have dismissed under Rule 19, not the prudential-standing

doctrine. See, e.g.,May Apparel Grp. v. Ava Imp.-Exp., Inc., 902 F. Supp. 93, 96 (M.D.N.C. 1995).

Accordingly, I reject the standing argument.

In its objections, International Importers raises one overarching objection. Essentially, it

attacks the evidence introduced by International Spirits and DAquino Group in their supplemental

briefing. International Importers asserts that this evidence is inconclusive and cannot show that the

assignment was proper.

Yet International Importers ignores the overwhelming evidence, which can only lead to the

inference that Fernbrew Pty. received an interest in the trademark. International Spirits and

DAquino Group introduced an affidavit stating that Fernbrew Pty. has a 50% interest in the



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International Importers steadfast insistence that the other co-owners of the trademark have1

abandoned or never received any interest in the Wallaby Creek trademark only augments

International Spirits and DAquino Groups point: Fernbrew Pty. is a necessary party to this action.

International Importer may surely question the legal validity of the assignment to Fernbrew Pty. But

if International Importer believes that Fernbrew Pty. has no interest, it should sue Fernbrew Pty. for

infringement and prove that Fernbrew Pty. has no interest instead of arguing without Fernbrew Pty.s

presence that Fernbrew Pty.s interest is defective.

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trademark [D.E. 34-1 at 34] and a letter from Maple Leaf recognizing Fernbrew Pty.s 25% interest

in the trademark [Id. at 25]. The letter then acknowledged that, upon bankruptcy, Maple Leafs 25%

interest would flow to Fernbrew Pty. Thus, according to the evidence, on May 4, 2004, Maple Leaf

promised that, once it had an interest in the Wallaby Creek trademark, Fernbrew Pty. would be

given a 25% interest [Id. at 25]. On the same date, Maple Leaf promised to assign a 50% interest in

the trademark to New World Brands, Inc. [Id. at 27]. On February 8, 2005, A.V. Imports, Inc., the

owner of the trademark at the time, assigned its full interest in the trademark to Maple Leaf. In turn,

Maple Leaf assigned 50% of its interest to New World Brands a month later [Id. at 34]. And 25%

of Maple Leafs interest vested in Fernbrew Pty. [Id. at 4].

In contrast, International Importers produced no evidence undermining the inference that

Fernbrew Pty. owns a 25% interest in the trademark. International Importers, rather, contends that

Judge OSullivan had to make the opposite inferencethat no assignment was madedespite all

the evidence to the contrary. I, like Judge OSullivan, decline to make such a counterintuitive

inference.1

International Importers remaining objections unfold upon the finding that Fernbrew Pty. has

an interest in the trademark. International Importers, for example, disagrees with the report and

recommendations application ofMears v. Montgomery, No. 02-cv-407, 2006 WL 1084347, at *9

(S.D.N.Y. Apr. 24, 2006) (Dolinger, Mag.), and argues that the co-owners abandoned the trademark.

InMears, a court concluded that a trademarks co-owner never abandoned the trademark, despite

his lack of use of the trademark, where the other co-owner actively used it. See id. at *10. Even under

Mears, International Importers asserts, a co-owner may abandon a trademark if he does not act as

a watchdog over the trademarks use. To make its argument, International Importers erroneously

focuses on another alleged co-owner of the trademark, Angostura North America, Inc.. Yet, as the



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report and recommendation correctly concluded, Fernbrew Pty. holds at least a 25% interest in the

trademark. And the evidence shows that Fernbrew Pty. zealously watched the trademark. Thus, it

acted as a watchdog.

Regardless, Fernbrew Pty. produced wine for sale in the United States throughout this period

and actively controlled the use of the trademark [D.E. 34-1 at 1]. A party abandons a trademark,

moreover, only if it stops using that trademark. See Cumulus Media, Inc. v. Clear Channel

Commcns, Inc., 304 F.3d 1167, 1173 (11th Cir. 2002). Hence, even ifMears did not apply at all,

the evidence shows that Fernbrew Pty. never abandoned the trademark, for it actively used the

trademark.

Consequently, International Spirits and DAquino Group motion to dismiss [D.E. 22] is

GRANTED IN PART AND DENIED IN PART, and International Importers motion to substitute the real

party in interest under Rule 17 and for sanctions [D.E. 24] is DENIED.

DONE and ORDERED in chambers in Miami, Florida, this 23 day of September, 2011.rd

_______________________

Adalberto Jordan

United States District Judge

Copy to: All counsel of record


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