863 F. Supp. 2d 336
S.D.N.Y.2012Background
- Harris and Conestoga sue Coleman, TCI, and others for monetary relief and ownership declarations of the Brisóle design IP and related rights.
- Counterclaims allege Coleman owns the '635 Patent; Harris/Conestoga allegedly obtained IP via a fraudulent Coleman Assignment and related documents.
- 2007 MDA between TCI and BOK licenses Brisóle footwear; royalties and direct distribution rights at issue.
- December 2009 settlement and December 1, 2009 Stock Purchase Agreement allegedly shifted rights to Conestoga; royalties to continue per agreement.
- Coleman allegedly stopped payments in 2010; A-Game formed around that time to distribute Brisóle shoes, allegedly cutting Conestoga out of royalties.
- Coleman alleges the Coleman Assignment was fabricated and not discussed with Harris/Conestoga; PTO recorded assignment on July 14, 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to seek declaratory relief | Coleman/TCI: counterclaims may seek declaration of IP ownership and rights. | Harris/Conestoga: counterclaims lack proper standing or ownership interest. | Counterclaim-plaintiffs have standing to seek declaratory relief. |
| Standing to bring fraudulent conveyance under DCL § 276 | Coleman/TCI argue they are creditors with claims arising from the conveyance. | Harris/Conestoga argue plaintiffs lack creditor status and preexisting claim. | Fraudulent conveyance claim dismissed for lack of standing. |
| Mercantile pleading of fraudulent conveyance (intent) | Coleman/TCI assert actual intent to defraud via fabricated assignment | Harris/Conestoga contend allegations insufficient to show intent or insolvency. | Fraudulent conveyance claim dismissed for failure to plead requisite intent and circumstances. |
| Conversion of IP and trademark rights | Coleman/TCI claim PTO records/assignment constitute converted property. | Harris/Conestoga argue IP and trademark are intangible; conversion not recognized here. | Conversion claim allowed for patent assignment; trademark conversion dismissed. |
| Attorney’s fees and sanctions under NY rules | Counterclaimants seek sanctions under NY rules. | Federal court does not apply NY sanctions provision § 130-1.1. | NY § 130-1.1 sanctions denied. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
- Thyroff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283 (N.Y. 2007) (electronic records may be subject to conversion)
- Ashcroft v. Iqbal cited in opinion, 556 U.S. 662 (U.S. 2009) (see above)