61 F. Supp. 3d 372
S.D.N.Y.2014Background
- This SDNY case addresses whether FTE has subject matter jurisdiction to pursue Lanham Act claims amid Russian-law issues.
- Second Circuit previously held FTE lacked standing to sue under Section 32(1) of the Lanham Act due to ownership/standing defects.
- Fraudulent Decree 69 and Assignment purportedly transferred trademarks from the Russian Federation to FTE, prompting a new suit.
- August 2014 Opinion denied dismissal of Lanham Act claims for lack of standing but noted need for Russian-law expert testimony.
- Rule 44.1 expert testimony was heard; a 2014 Amendment to the Civil Code (Amendment) addressed intellectual rights and ownership concepts.
- Court ultimately held that, notwithstanding expert testimony, FTE cannot hold trademarks outside operative management under Russian law and dismissed claims for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FTE have Lanham Act standing under Russian law? | Muranov: ownership outside operative management possible; Amendment supports. | Gladyshev: ownership remains within operative management; Amendment does not clarify.</br> | FTE lacks standing; no jurisdiction. |
| Does the 2014 Amendment clarify or confirm capacity to hold trademarks outside operative management? | Amendment clarifies that Section 2 rules do not apply to intellectual rights, enabling outside ownership. | Amendment is ambiguous for unitary-enterprise contexts and does not retroactively alter regime. | Amendment does not clearly permit outside ownership; not controlling. |
| Is the Assignment a blanket consent to dispose of trademarks at will under Articles 296/297 and 157.1? | Assignment language conveys full rights/consent for disposition. | Blanket consent not permitted; consent must be specific under Article 157.1. | Assignment is not a valid blanket consent; insufficient specificity. |
| Did the Assignment transfer to FTE the right to sue for past damages? | Assignment conveys broader rights including damages. | Right to sue for past damages is a property right that remains subject to operative management. | Right to sue for past damages not transferred outside operative management. |
| Does the Act of State Doctrine apply to Decree 69 transferring U.S. trademark rights? | Doctrine should not bar inquiry into foreign acts; decree affects U.S. rights. | Doctrine bars extraterritorial review of foreign acts within foreign territory only; here concerns U.S. rights. | Act of State Doctrine does not apply. |
Key Cases Cited
- Republic of Iraq v. ABB AG, 768 F.3d 145 (2d Cir. 2014) (foreign-state acts and ownership rights in property judged under U.S. law)
- Zwack v. Kraus Bros. & Co., 237 F.2d 255 (2d Cir. 1956) (doctrine of act of state not applied to foreign government declarations about U.S. rights)
- Films by Jove, Inc. v. Berov, 341 F. Supp. 2d 199 (E.D.N.Y. 2004) (act-of-state considerations in trademark disputes)
- Underhill v. Hernandez, 168 U.S. 250 (Supreme Court 1897) (classic articulation of act-of-state doctrine limitations)
- Terra Firma Investments (GP) 2 Ltd. v. Citigroup Inc., 716 F.3d 296 (2d Cir. 2013) (courts may address unsettled foreign-law questions with caution)