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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 ) ______________________________________ ) ORDER ADOPTING REPORT AND RECOMMENDATION After de 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

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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. ARoo 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 2

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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 of Mears 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. In Mears, 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

International Importers steadfast insistence that the other co-owners of the trademark have 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. 3

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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 if Mears 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 23rd day of September, 2011.

_______________________ Adalberto Jordan United States District Judge Copy to: All counsel of record