614 F.Supp.3d 62
S.D.N.Y.2022Background
- The Surrey hotel was operated by Denihan under a long-term lease with the prior owner (the "Seller"); Denihan closed the hotel during the COVID pandemic.
- Denihan obtained a federal registration for THE SURREY in 2007; Propco alleges the registration was procured by fraud.
- In December 2020 the Seller sold the real property at 20 E. 76th St. to Surrey Propco LLC ("Propco") via a Sale-Purchase Agreement (SPA) that defined the conveyed "Premises" narrowly and expressly disclaimed representations about intellectual property.
- The SPA required the Seller to request an assignment of the service mark from Denihan after closing, suggesting IP was not transferred by the conveyance.
- Propco sued Denihan for Lanham Act infringement, declaratory judgment of ownership of THE SURREY, and cancellation of Denihan’s registration for fraud; Denihan counterclaimed for a declaration of its ownership.
- The Court granted Denihan’s motion for judgment on the pleadings: the SPA unambiguously did not transfer intellectual property; Propco lacks ownership and Article III standing; all claims and the counterclaim were dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the SPA conveyed THE SURREY trademark to Propco | SPA transferred the property and "associated intellectual property"; trademark rights run with the building | SPA's express definitions and representations exclude intellectual property; Seller disclaimed IP ownership and control | SPA is unambiguous and did not convey IP; no trademark transfer |
| Whether Propco sufficiently pleaded ownership/priority to support a Lanham Act claim | Acquiring the hotel premises confers ownership/right to THE SURREY | Propco lacks priority/use and did not acquire trademark rights in the SPA | Propco failed to plausibly allege ownership or superior right; Lanham Act claim dismissed |
| Whether Propco has standing to seek cancellation of Denihan's federal registration for fraud | Propco may challenge the registration based on alleged fraud | Propco lacks legal title or proprietary interest in the mark and thus lacks Article III standing | Court lacked subject-matter jurisdiction over cancellation claim; dismissed |
| Whether Denihan's counterclaim for declaratory judgment is justiciable | (Propco) no live dispute remains affecting Propco | Denihan seeks declaration it owns the mark | No actual controversy remains; counterclaim dismissed as unnecessary/nonjusticiable |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim)
- Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905 (2d Cir. 2010) (standard for Rule 12(c) judgment on the pleadings)
- 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400 (2d Cir. 2005) (plaintiff must own mark to state Lanham Act claim)
- ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2d Cir. 2007) (trademark rights depend on priority of use and control of quality)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III injury-in-fact requirement for standing)
- Wilton v. Seven Falls Co., 515 U.S. 277 (1995) (declaratory judgment relief is discretionary)