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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    )

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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

    Case 0:10-cv-61856-AJ Document 42 Entered on FLSD Docket 09/26/2011 Page 2 of 4

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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

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