144721cv(L)

Fed.TreasuryEnter.Sojuzplodoimportv.SpiritsIntlB.V.

UNITEDSTATESCOURTOFAPPEALS
FORTHESECONDCIRCUIT
AugustTerm,2015
(Argued:August24,2015Decided:January5,2016)
DocketNos.144721cv(L),15152cv(XAP)
x
FEDERALTREASURYENTERPRISE
SOJUZPLODOIMPORT,OAOMOSCOW
DISTILLERYCRISTALL
PlaintiffsCounter
DefendantsAppellants
CrossAppellees,
v.
SPIRITSINTERNATIONALB.V.F/K/ASPIRITS
INTERNATIONALN.V.,SPISPIRITSLIMITED,
SPIGROUPSA,YURISHEFLER,ALEXEY
OLIYNIK,STOLIGROUP(USA)LLP,
DefendantsCounter
ClaimantsAppellees
CrossAppellants,
WILLIAMGRANT&SONSUSA,WILLIAM
GRANT&SONS,INC.
DefendantsAppellees
CrossAppellants,

ALLIEDDOMECQINTERNATIONAL
HOLDINGSB.V.,ALLIEDDOMECQSPIRITS&
WINESUSA,INC.D/B/AALLIEDDOMECQ
SPIRITS,USA
Defendants.
x
Before:

NEWMAN,WALKER,andJACOBS,CircuitJudges.

RivalclaimstotheStolichnayatrademarkshavebeenassertedby
successorsininteresttoaSovietenterpriseandbyanagencyoftheRussian
Federation.TheprincipalissueiswhethertheagencyoftheRussianFederation
hasbeenendowedbythatgovernmentwithrightsandpowersthatsupport
standingundersection32(1)oftheLanhamAct.Thequestionhasbeenhere
before.WeconcludethattheUnitedStatesDistrictcourtfortheSouthernDistrict
ofNewYork(Scheindlin,J.)erredinconsideringwhethertheassertedbasisfor
standingtopursuethesection32(1)claimswasvalidunderRussianlaw,butthat
thedistrictcourtcorrectlydismissedalloftheotherclaimsasbarredbyres
judicataandlaches.
Affirmedinpartandvacatedandremandedinpart.

DANIELH.BROMBERG(KathleenM.
Sullivan,MarcL.Greenwald,Robert
Raskopf,andJessicaRose,QuinnEmanuel
Urquhart&SullivanLLP,NewYork,NY,
onthebrief)QuinnEmanuelUrquhart&
SullivanLLP,RedwoodShores,CAfor
PlaintiffsCounterDefendantsAppellants
CrossAppellees.
EugeneD.Gulland,BinghamB.Leverich,
andDavidM.Zionts,Covington&Burling
LLP,Washington,D.C.;EmilyJohnson
Hemm,Covington&BurlingLLP,
RedwoodShores,CA,forDefendants
CounterClaimantsAppelleesCross
Appellants.
EDWARDT.COLBERT(WilliamM.
Merone,onthebrief)Kenyon&Kenyon
LLP,Washington,D.C.forDefendants
AppelleesCrossAppellants.

DENNISJACOBS,CircuitJudge:
RivalclaimstotheStolichnayatrademarkshavebeenassertedbyan
agencyoftheRussianFederationandbysuccessorsininteresttoaSoviet
enterprise.TheprincipalissueiswhetherFederalTreasuryEnterprise
Sojuzplodoimport(FTE),anagencyoftheRussianFederation,hasbeen
endowedbythatgovernmentwithrightsandpowersthatgiveitstandingto

pursueclaimsundersection32(1)oftheLanhamAct(thesection32(1)claims).
Thequestionhasbeenherebefore.WeconcludethattheUnitedStatesDistrict
CourtfortheSouthernDistrictofNewYork(Scheindlin,J.)erredindetermining
whetherFTEsassertedbasisforstandingwasvalidunderRussianlaw.We
furtherconcludethatthedistrictcourtcorrectlydismissedallofFTEsother
claims(thenonsection32(1)claims)asbarredbybothresjudicataandlaches.
FTEandcoplaintiffOAOMoscowDistilleryCristall(Cristall)allege
thatthedefendantsunlawfullymisappropriatedandcommerciallyexploitedthe
Stolichnayatrademarksrelatedtothesaleofvodkaandotherspiritsinthe
UnitedStates(theMarks).Currently,controlovertheMarksintheUnited
StatesisexercisedbydefendantsassuccessorsininteresttoaSovietstate
enterprise:SpiritsInternationalB.V.f/k/aSpiritsInternationalN.V.,SPISpirits
Limited,SPIGroupSA,YuriShefler,andAlexeyOliynik(collectively,SPI).
TheotherdefendantsarelicenseddistributorsofSPI:WilliamGrant&SonsUSA
andWilliamGrant&Sons,Inc.(collectively,WilliamGrant);AlliedDomecq
InternationalHoldingsB.V.andAlliedDomecqSpirits&WinesUSA,Inc.d/b/a
AlliedDomecqSpirits,USA(collectively,AlliedDomecq);andStoliGroup
(USA)LLP(StoliGroup).
4

Inapriorsuit,FTEbroughtclaimsagainstSPIundersection32(1)ofthe
LanhamAct,aswellasanalogousfederalandstatelawclaims.Wedismissed
FTEssection32(1)claimsonthegroundthattheRussianFederationitself
retainedtoogreataninterestintheMarksforFTEtoqualifyasanassignwith
standingtosue.Fed.TreasuryEnter.Sojuzplodoimportv.SPISpiritsLtd.,726
F.3d62,66(2dCir.2013).FTEsnonsection32(1)claimswereeitherdismissed
onthemerits,voluntarilydismissed,ordroppedduringthecourseofthat
litigation.
Subsequently,theRussianFederationissuedadecree(theDecree),
directingtheFederalAgencyforStatePropertyManagement(StateProperty
Management)totransfertoFTEtherightsoftheRussianFederationtothe
Marks.PursuanttotheDecree,anassignmentwasexecuted(theAssignment),
purportingtotransfertheRussianFederationsentireright,title,andinterestin
andtothe[Marks]toFTE.FTEthenfiledthepresentlawsuit,onceagain
assertingbothsection32(1)andnonsection32(1)claimsagainstSPI.Defendants
movedtodismiss.
Inaseriesoforders,thedistrictcourtruledthat:(i)FTElackedstatutory
standingtoassertthesection32(1)claimsbecausetheAssignmentwasinvalid
5

underRussianlaw;(ii)FTEsnonsection32(1)claimswerebarredbyresjudicata
inlightofthepriorlitigation;and(iii)thenonsection32(1)claimswerealso
barredbylaches.
WeconcludethatthedoctrinesofcomityandactofstateprecludeaUnited
Statescourtfrominvalidatinganactionofaforeignsovereignwithrespecttoa
transferofrightsamongitsbranchesorentitiesonthegroundthatthetransferis
invalidunderthelawofthatforeignsovereign.Accordingly,becausethedistrict
courtundertooktodeterminewhethertheAssignmentfromtheRussian
FederationtoFTEwasvalidunderRussianlaw,wevacatethedistrictcourts
dismissalofFTEssection32(1)claimsforlackofstandingandremandfor
furtherproceedingsconsistentwiththisopinion.Weaffirmthedismissalof
FTEsnonsection32(1)claimsasbarredbyresjudicataandlaches.
BACKGROUND
Beginninginthe1940s,theSovietUnionmanufacturedandmarketed
premiumvodkaunderthenameStolichnaya(fromthecapitalinRussian).
In1969,aSovietstateenterprisecalledV/OSPIobtainedafederaltrademark
intheUnitedStatesforStolichnayavodka.V/OSPI(laterrenamedVVO
SPI)licensedtheuseoftheMarkstovariousdistributorsintheUnitedStates.
6

Thosedistributors,whichatthetimeincludedPepsiCo,soldStolichnaya
brandedvodkaintheUnitedStatesthroughoutthe1970sand1980s.Asthe
SovietUnionbegantocollapseintheearly1990s,manySovietstateenterprises
wereprivatized.VVOSPIwaspurportedlyprivatizedbyitsdirectorsand
managersunderthenewnameVAOSPI,whichlaterbecamecontrolledby
SPI.
AstheassertedsuccessorininteresttoVVOSPI,SPIrepresenteditselfas
theowneroftheMarks.WhenPepsiCoslicenseoftheMarksendedin2000,SPI
enteredintoaseriesoflicensingagreementswithdefendantsAlliedDomecq,
WilliamGrant,andStoliGrouptodistributevodkabearingtheMarksinthe
UnitedStates:(i)AlliedDomecqfrom2001to2008;(ii)WilliamGrantfrom2008
to2014;and(iii)StoliGroupfrom2014topresent.
In2000,aRussiancourtheldthatVVOSPIwasnotvalidlyprivatized
underRussianlawandthatownershipoftheMarkshadremainedwiththe
SovietUnion,andthereforewiththeRussianFederation.In2002,theRussian
FederationformedFTEtobethelegitimatesuccessortoVVOSPI,andFTE
enteredintoanexclusivelicensingagreementwithCristalltodistributevodka
bearingtheMarksintheUnitedStates.
7

In2004,FTEandCristallfiledsuitintheUnitedStatesDistrictCourtfor
theSouthernDistrictofNewYorkagainstSPIanditsthenlicenseeAllied
Domecq,allegingviolationsofsection32(1)oftheLanhamAct,whichprovidesa
causeofactionforownersofregisteredtrademarks,andallegingviolationsof
otherprovisionsoftheLanhamActandstatelawthatdonotrequiretrademark
registration.ThedistrictcourtdismissedtheLanhamActclaims(ontheground
thattheMarkshadbeenincontestable)aswellasthestatelawclaimsoffraud
andunjustenrichment.Fed.TreasuryEnter.Sojuzplodoimportv.SpiritsIntl
N.V.,425F.Supp.2d458,46567(S.D.N.Y.2006)(FTEI).FTEsremainingstate
lawclaims(unfaircompetitionandfalsedesignationoforigin)werevoluntarily
dismissed.
Onappeal,wevacatedastotheincontestabilityissue,Fed.TreasuryEnter.
Sojuzplodoimportv.SpiritsIntlN.V.,623F.3d61,71(2dCir.2010)(FTEII),
butaffirmedthedismissaloftheclaimsforfraudandunjustenrichment,Fed.
TreasuryEnter.Sojuzplodoimportv.SpiritsIntlN.V.,400F.Appx611,614(2d
Cir.2010)(FTEIISummaryOrder).Onremand,thedefendantsconsentedto
thefilingofanamendedcomplaint,whichaddedasadefendantWilliamGrant
(whichhadsincereceivedalicensefromSPItodistributeStolichnayabranded
8

vodka)anddroppedallbutthesection32(1)claims,adeclaratoryjudgment
claim,andastatelawclaimformisappropriation.
Thedefendantssuccessfullymovedtodismissthesection32(1)claimson
thegroundthatFTElackedstatutorystandingtosueasaregistrantunderthe
LanhamAct.Fed.TreasuryEnter.Sojuzplodoimportv.SpiritsIntlN.V.,No.04
cv8510(GBD),2011WL4005321,at*1(S.D.N.Y.Sept.1,2011)(FTEIII).The
statelawmisappropriationclaimwasdismissedwithoutprejudice.FTE
appealed,arguingthatitwasanassignoftheRussianFederation,towhichthe
Markswereproperlyregistered,andthushadstandingtoassertsection32(1)
claims.WerejectedthatargumentonthegroundthattheRussianFederation
retainedtoogreataninterestintheMarksforFTEtoqualifyasanassign.Fed.
TreasuryEnter.Sojuzplodoimportv.SPISpiritsLtd.,726F.3d62,66(2dCir.
2013)(FTEIV).
FollowingFTEIV,andevidentlyinresponsetoit,theRussianFederation
issuedtheDecree,whichorderedthat:
[StatePropertyManagement]istoconcludewith[FTE]an
agreementontransferringtothesaidenterprisetherightsofthe
RussianFederationtotrademarkscontainingverbaldesignations
Stolichnayaand/orStoliusedontheterritoryoftheUnited
States(onallterritoriessubjecttothejurisdictionoftheUnitedStates
9

ofAmerica).
PursuanttotheDecree,theAssignmentwasexecutedthattransferredtoFTEthe
RussianFederationsentireright,title,andinterestinandtothe[Marks].
FTEandCristall(asFTEslicensee)thenbroughtthepresentlawsuit,again
assertingbothsection32(1)andnonsection32(1)claims.Thedefendantsmoved
todismiss,arguingthatFTEdidnotacquirestatutorystandingtobringthe
section32(1)claimsbecausetheRussianFederationsAssignmentwasinvalid
underRussianlaw,andthatinanyeventallofFTEsclaimswerebarredbyres
judicataandlaches.Inaseriesofdecisions,thedistrictcourtheldthatFTEstill
lackedstatutorystandingtobringitssection32(1)claimsbecausetheAssignment
wasinvalidunderRussianlaw,andthatthenonsection32(1)claimswerebarred
byresjudicataaswellaslaches.Thepartiescrossappealed.
DISCUSSION
Wereviewdenovothegrantofamotiontodismiss,CarpentersPension
TrustFundofSt.Louisv.BarclaysPLC,750F.3d227,232(2dCir.2014),anda
districtcourtsrulingsonquestionsofforeignlaw,Curleyv.AMRCorp.,153
F.3d5,11(2dCir.1998).
InFTEIV,weobservedthat,[h]adtheRussianFederationeffectedavalid
10

assignmenthere,FTEcouldsueunderSection32(1)asanassign.FTEIV,726
F.3dat79.TheAssignmentundertooktodojustthat:theRussianFederation
sells,conveys,transfers,assignsandsetsoveritsentireright,titleandinterestin
andtothe[Marks]to[FTE]andexpresslyrelinquishesanyandallright,title
andinterestinandtothe[Marks].Thedistrictcourtconcededthatitwas
somewhatuncomfortabletellingaforeigngovernmentthatavalidlyenacted
decreecannotachievetheresultthatwasclearlyintendedbyitspassage.Fed.
TreasuryEnter.Sojuzplodoimportv.SpiritsIntlB.V.,61F.Supp.3d372,386
(S.D.N.Y.2014).Weconcludethatthedistrictcourthadgoodreasonfor
discomfort.
I
Undertheprinciplesofinternationalcomity,UnitedStatescourts
ordinarilyrefusetoreviewactsofforeigngovernmentsanddefertoproceedings
takingplaceinforeigncountries,allowingthoseactsandproceedingstohave
extraterritorialeffectintheUnitedStates.PravinBankerAssoc.,Ltd.v.Banco
PopularDelPeru,109F.3d850,854(2dCir.1997);seealsoHiltonv.Guyot,159
U.S.113,164(1895).Nevertheless,courtswillnotextendcomitytoforeign
proceedingswhendoingsowouldbecontrarytothepoliciesorprejudicialtothe
11

interestsoftheUnitedStates.Pravin,109F.3dat854;seealsoAlliedBankIntl
v.BancoCreditorAgricoladeCartago,757F.2d516,522(2dCir.1985);Banco
NacionaldeCubav.Chem.BankNewYorkTrustCo.,658F.2d903,908(2dCir.
1981);RepublicofIraqv.FirstNat.CityBank,353F.2d47,51(2dCir.1965).
TheDecreeandAssignmentwereindisputablyactsofaforeign
government.ThedeclarationofaUnitedStatescourtthattheexecutivebranchof
theRussiangovernmentviolateditsownlawbytransferringitsownrightstoits
ownquasigovernmentalentity(FTE)wouldbeanaffronttothegovernmentofa
foreignsovereign.EvenaninquiryintowhetherRussianlawpermittedthe
Assignmentisabreachofcomity.Solongastheactistheactoftheforeign
sovereign,itmattersnothowgrosslythesovereignhastransgresseditsown
laws.BancodeEspanav.Fed.ReserveBankofN.Y.,114F.2d438,444(2dCir.
1940).
ExtendingcomitytotheRussianFederationsissuanceoftheDecreeand
executionoftheAssignmentwouldunderminenopolicyorinterestoftheUnited
States,whichhasnostakeinwhichinstrumentalityoftheRussianFederation
assertstrademarkclaimsovertheMarks.
WeconcludedinFTEIVthattheUnitedStateshasaninterestinenforcing
12

itsowntrademarklawswithinitsbordersandtheLanhamActsexpress
[standing]requirements.FTEIV,726F.3dat82.Butinthiscase,thequestionof
standingdependsonwhetheranagencyofaforeignsovereignhasbeen
endowedbythatgovernmentwithalltherightsandpowersitclaimsoverthe
Marks.Whetherthoserights,ifvalidlyassigned,prevailagainstalleged
infringersisverymuchanissueconfidedtotheUnitedStatescourts;thedistinct
questionwhetherthegovernmentofaforeignsovereignhaseffectivelyand
legallyallocateditsrightsandpowersamongitsagenciesandinstrumentalities
underthatforeignsovereignslaw,isnot.Considerationsofinternationalcomity
precludedthedistrictcourtfromadjudicatingthevalidityoftheAssignment.
II
ThedistrictcourtsdeterminationofthevalidityoftheAssignmentwas
likewisebarredbytheactofstatedoctrine.Thedoctrineprecludesanyreview
whateveroftheactsofthegovernmentofonesovereignStatedonewithinits
ownterritorybythecourtsofanothersovereignState.FirstNat.CityBankv.
BancoNacionaldeCuba,406U.S.759,763(1972).Thedoctrinearisesoutofthe
basicrelationshipsbetweenbranchesofgovernmentinasystemofseparationof
powersandexpressesthestrongsenseoftheJudicialBranchthatits
13

engagementinthetaskofpassingonthevalidityofforeignactsofstatemay
hinderratherthanfurtherthiscountryspursuitofgoals.BancoNacionalde
Cubav.Sabbatino,376U.S.398,423(1964).Inthissense,theactofstatedoctrine
isnotsomevaguedoctrineofabstentionbutaprincipleofdecisionbindingon
federalandstatecourtsalike;theactwithinitsownboundariesofone
sovereignState...becomes...aruleofdecisionforthecourtsofthiscountry.
W.S.Kirkpatrick&Co.v.Envtl.TectonicsCorp.,Intl,493U.S.400,406(1990)
(citationsandinternalquotationmarksomitted).Thus,theactsoftheforeign
sovereignwithinitsdominionsaredeemedvalidwhenenteredinto.Bancode
Espana,114F.2dat444.
AsweestablishedinFTEIV,theRussianFederationsDecreewastheact
ofaforeignsovereign;itwasalsodonewithintheboundariesofRussia.The
DecreeandsubsequentAssignmentdonotpurporttodecidethemeritsissueof
whetherSPIanditslicenseeshaveviolatedtheLanhamActbymisappropriating
theMarks.Rather,thevalidityoftheAssignmentdeterminesonlyFTEs
statutorystandingtoassertsuchclaimsastheRussianFederationmayhave.
ThatisaquestionofRussianlawdecidedwithinRussiasborders,ratherthana
matterofU.S.lawwithasitusintheUnitedStates,see,e.g.,FilmsbyJove,Inc.v.
14

Berov,341F.Supp.2d199,207(E.D.N.Y.2004).
Thedistrictcourt,concludingotherwise,reasonedthattheactofstate
doctrinedoesnotapplywhentheactoftheforeignsovereignconcernsaUnited
Statestrademarkbecausethetrademarkisapropertyinterestlocatedwithinthe
UnitedStates.Thedistrictcourtreliedoncasesinwhichwedeclinedtoapply
theactofstatedoctrinetoattemptsbyforeignsovereignstoconfiscateproperty
locatedintheUnitedStates.F.PalicioyCompania,S.A.v.Brush,256F.Supp.
481,488(S.D.N.Y.1966),affd,375F.2d1011(2dCir.1967);Zwackv.KrausBros.
&Co.,237F.2d255,259(2dCir.1956);seealsoFilmsbyJove,Inc.,341F.Supp.2d
at207(notingthatitiswellsettledlawthattheactofstatedoctrinedoesnot
extendtotakingsofpropertylocatedoutsidetheterritoryoftheactingstate
(emphasisadded)).Togiveextraterritorialeffecttosuchactswouldemasculate
thepublicpolicyoftheforumagainstconfiscation.Zwack,237F.2dat259.But
suchpublicpolicyconcernsarenotpresentherebecauseneithertheDecreenor
theresultingAssignmentimpairsanyonespropertyrightsoraffectsthe
jurisdictionoftheUnitedStatescourtstodecidethecompetingclaimsto
ownershipoftheMarks.Inanyevent,thelineofconfiscationcasesdoesnot
undermineapplicationoftheactofstatedoctrinehere:theDecreeworksno

15

confiscation,informoreffect;rather,ittransferswhateverrightstheRussian
FederationmayalreadyhaveintheMarkstoFTE.
SPIarguesthattheactofstatedoctrineisinapplicablebecausethe
Assignmentisacommercialact.Asaninitialmatter,neithertheSupremeCourt
northisCircuithaseverconcludedthatthereisacommercialexceptiontothe
doctrineofactofstate.W.S.Kirkpatrick&Co.,493U.S.at404(notingthata
majorityoftheSupremeCourthasneveradoptedacommercialexceptiontothe
doctrineofactofstate);Brakav.Bancomer,S.N.C.,762F.2d222,225(2dCir.
1985)(decliningtoopineontheexistenceofacommercialexception).
Eveniftheactofstatedoctrineissubjecttoacommercialexception,the
exceptionwouldnotapply.Tobesure,apluralityoftheSupremeCourt
advocatedforsuchacommercialexceptioninAlfredDunhillofLondon,Inc.v.
RepublicofCuba,425U.S.682,695(1976),whichconcernedCubasrepudiation
ofpurelycommercialdebts.InvokingSupremeCourtprecedentthattreateda
sovereigndifferentlywhenitactsasamerchantintheprivatemarketplace,the
pluralityconcludedthattheactofstatedoctrinedoesnotrequirethatUnited
Statescourtsrespectaforeigngovernmentsrepudiationofdebtsarisingfromits
operationofapurelycommercialbusiness.Id.at698.
16

Here,thesovereignactwasawhollyintragovernmentaltransferofrights,
executedbythesovereignactingasagovernment.TheAssignmenteffectuatesa
transferofrightstopursueclaimsfromtheforeignsovereign,theRussian
Federation,tooneofitsinstrumentalities,FTE,pursuanttoagovernmentalact,
theDecree.TheallocationbygovernmentaldecreeofsuchrightsastheRussian
Federationmayhave,andthedesignationofthegovernmententitythathas
powertoassertordefendthem,isaninternalactthataugmentsnocommercial
interestoftheRussianFederationandimpairsnocommercialinterestofanyone
else.Thesubjectmatterofthetransferredrightsistheabilitytoexploit
trademarksforcommercialgainbutthatdoesnotrenderthetransferitselfa
commercialtransaction.TheRussianFederationdidnotactasatraderor
merchant;itactedasagovernmentbyallocatingitsrightstoassertlegalclaimsto
FTE(whichisitselfabranchofthesovereign).Therefore,wehavelittletrouble
concludingthatanycommercialactivityexceptiontotheactofstatedoctrine
wouldnotencompasstheDecreeandAssignmentand,inthecircumstances
presentedhere,doesnotpermitustodeterminetheefficacyoftheDecreeand
AssignmentinvestingFTEwiththeauthoritytobringsuitpreviouslyheldbythe
RussianFederation.
17

III
Toestablishthataclaimisbarredbyresjudicata,apartymustshowthat
(1)thepreviousactioninvolvedanadjudicationonthemerits;(2)theprevious
actioninvolvedthe[parties]orthoseinprivitywiththem;[and](3)theclaims
assertedinthesubsequentactionwere,orcouldhavebeen,raisedintheprior
action.Pikev.Freeman,266F.3d78,91(2dCir.2001)(internalquotationmarks
omitted).
Inthepriorlitigation,FTEssection32(1)claimsweredismissedforlackof
statutorystanding.FTEIV,726F.3dat66.Dismissalforlackofstatutory
standingisnotonthemeritsandthereforelacksresjudicataeffect.Thelackof
statutorystandingisacurabledefect,asdemonstratedbyourobservationin
FTEIVthatFTEmightacquireLanhamActstandingbyavalidassignmentfrom
theRussianFederation.Crialesv.AmericanAirlines,Inc.,105F.3d93,98(2dCir.
1997).FTEspriorlitigationwasthusprematureforfailuretosatisfya
preconditiontosuit:obtainingsufficientrightsintheMarkstoassertthesection
32(1)claimsonitsownbehalf.Id.at97.Sincesuchdismissalsarenotonthe
merits,FTEspresentsection32(1)claimsarenotbarredbyresjudicata.
18

Resjudicatadoes,however,barFTEsnonsection32(1)claims.Allof
FTEsnonsection32(1)claimswere,orcouldhavebeen,assertedintheprior
litigation.FTEsunfaircompetitionclaimsandfederaltrademarkclaimswere
previouslybroughtbutabandoned,whileFTEsstatelawtrademark
infringementanddilutionclaimscouldhavebeenbroughtbutwerenot.Because
ouropinioninFTEIISummaryOrder,affirmingthedistrictcourtsdismissalof
FTEspriorlitigation,constitutedanadjudicationonthemerits,Pike,266F.3d
at91,allofFTEsnonsection32(1)claimsarebarred.Accordingly,resjudicata
requiresthedismissalofFTEsnonsection32(1)claims,only.
IV
ThedistrictcourtruledthatFTEsnonsection32(1)claimswerealso
barredbylaches,butthatthesection32(1)claimswerenot.Lachesisan
equitabledefense.BecausetheLanhamActdoesnotprescribeastatuteof
limitations,federalcourtsoftenlooktothemostappropriateormost
analogousstatestatuteoflimitationtodeterminewhenthepresumptionof
lachesappliestoLanhamActclaims.Conopco,Inc.v.CampbellSoupCo.,95
F.3d187,191(2dCir.1996).Ifthemostcloselyanalogousstatestatuteof
limitationshasnotrun,thepresumptionoflachesdoesnotattachandthe
19

defendantbearstheburdenofprovingthedefense.Id.Butoncetheanalogous
statestatuteoflimitationshasrun,theburdenshiftstotheplaintifftoshowwhy
lachesshouldnotapply.Id.Theultimatedeterminationofwhetherlachesbarsa
plaintiffsclaimiswithinthetrialcourtsdiscretion.TriStarPictures,Inc.v.
LeisureTimeProds.,B.V.,17F.3d38,44(2dCir.1994).
Thedistrictcourtconcludedthatthepresumptionoflachesneveraroseas
tothesection32(1)claimsbecausetheyweretolledduringthependencyofthe
priorlitigation.UnderN.Y.C.P.L.R.205(a),adismissedclaimcanbebrought
again(provideditisnotsubstantivelybarred)withinsixmonthsofthe
terminationofthepriorlitigation.Thatiswhathappenedhere.Thesection32(1)
claimsarosein2001whenSPIinstructedPepsiCototransfertheMarkstoAllied
Domecq.Thepriorlitigationwasbroughtin2004andlasteduntil2013,whenthe
section32(1)claimsweredismissedinFTEIV;FTEthencommencedthepresent
suitwithinsixmonths.BecausethemostanalogousNewYorkstatuteof
limitationsforFTEssection32(1)claimsisthesixyearstatuteoflimitationsfor
fraud,Conopco,95F.3dat191,andonlythreeyearshadlapsedbeforetheprior
suitwasbrought,FTEssection32(1)claimsweretimelyunderNewYorks
statuteoflimitations.Therefore,thepresumptionoflachesneverarose.Norhas
20

SPIproventhelachesdefenseindependentlyofthepresumption.Accordingly,
thedistrictcourtcorrectlyconcludedthatFTEssection32(1)claimswerenot
barredbylaches.
Thedistrictcourtdid,however,concludethatthepresumptionoflaches
appliedtothenonsection32(1)claims.Theseclaimswerenottolledduringthe
pendencyofthepriorlitigationbecause,underN.Y.C.P.L.R.205(a),claimsthat
arevoluntarilydismisseddonotgetthebenefitoftolling.Therefore,FTEin
effectbroughttheclaimsthirteenyearsaftertheiraccrual(2001to2014)andafter
NewYorkssixyearstatuteoflimitationsforfraudhadrun.Thedistrictcourt
furtherheldthatFTEunreasonablydelayedinbringingthenonsection32(1)
claimsandthatdefendantswouldbeprejudicedbyFTEslitigationofsuch
claimsafterthisdelay.Thedistrictcourtdidnotabuseitsdiscretionin
concludingthatthepresumptionoflachesaroseorthatthedefendantswouldbe
prejudicedwereFTEabletolitigateitsnonsection32(1)claims.
CONCLUSION
Fortheforegoingreasons,weaffirminpart,vacateinpart,andremandfor
furtherproceedingsconsistentwiththisopinion.

21