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Ralph Lauren Corporation v. United States Polo Association, Inc.

United States District Court, S.D. New York

September 4, 2014

Ralph Lauren Corporation, PRL USA Holdings, Inc., and Polo/Lauren Company, L.P. Plaintiffs,
v.
United States Polo Association, Inc., USPA Properties Inc., and Arvind Ltd., Defendants.

OPINION

THOMAS P. GRIESA, District Judge.

Plaintiffs Ralph Lauren Corporation ("RLC") and its subsidiaries, PRL USA Holdings, Inc. ("PRL") and Polo/Lauren Company, L.P. ("PLC"), (collectively "the Polo plaintiffs") bring this action alleging breach of contract, fraudulent inducement, and unjust enrichment. Presently, there are two motions before the court: (1) defendants United States Polo Association, Inc. and USPA Properties, Inc. (collectively "USPA") have filed a motion to compel arbitration pursuant to 9 U.S.C. ยง 3 of the Federal Arbitration Act ("FAA") and to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative, to stay proceedings pending arbitration, and (2) defendant Arvind Ltd. ("Arvind Limited") has also filed a motion requesting the same relief.

For the following reasons, the court compels arbitration and dismisses the complaint.

Facts

In a motion to compel arbitration, the court applies a summary judgment standard that is not limited to the face of the pleadings, unlike a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Ramasamy v. Essar Global Ltd., No. 11-cv-3912 (JSR), 2012 WL 1681763, at *1 (S.D.N.Y. May 8, 2102) (citing Bensadoun v. Jobe-Riat , 316 F.3d 171, 175 (2d Cir. 2003)). Accordingly, the following facts are drawn from the pleadings as well as the attachments to the pleadings.

RLC is a retail business that is built around the Polo mark brand-an image of a single polo player on his horse. RLC and its wholly owned subsidiaries, including PRL and PLC, have used the RLC marks in connection with the promotion, advertising, and sale of a variety of goods and services throughout the world. RLC and its subsidiaries own trademark registrations for RLC marks in the United States and around the world.

Defendant USPA has been the governing body of the sport of polo in the United States since 1890 and owns a large portfolio of valuable trademarks related to the sport. USPA funds its activities, in part, through its international licensing program, pursuant to which the USPA trademarks are licensed for use on apparel and other goods.

RLC and the USPA have been involved in trademark litigation since 1984. The litigation has taken place in the Southern District of New York. In 2003, RLC's subsidiaries PRL and PLC executed a Settlement Agreement with the USPA. The Settlement Agreement intended to resolve disputes regarding the use by the USPA of certain names, logos, and trademarks in connection with the production and sale of apparel (the "Settlement Marks"). The Settlement Agreement is governed by New York law and binds the parties to the ongoing jurisdiction of the Southern District of New York. The Settlement Agreement also binds USPA's licensees in different international locations.

In particular, the Settlement Agreement permits the use of Settlement Marks on apparel and other specified categories provided that (1) the USPA and its licensees always display a prominent disclaimer, or hangtag, on goods showing the settlement marks that states "Not Affiliated with Polo Ralph Lauren Corp." and (2) the USPA and its licensees adhere to all other restrictions specified in the Settlement Agreement with respect to the manner in which such goods showing the Settlement Marks are promoted, advertised, and sold.

The Settlement Agreement also sets out a broad arbitration provision for resolving disputes arising between the parties:

[T]he parties agree that the sole remedy for any dispute, action, aim, or controversy of any kind hereafter arising between PRL on the one hand and any of the USPA Parties on the other hand (including any predecessors, successors, current or former parents, subsidiaries, affiliates, divisions, officers, directors, partners, retailers, licensees, sublicensees, employees, agents, assignees or any other person or entity acting on their behalf) in any way arising out of, pertaining to, or in connection with this Settlement Agreement (including, but not limited to, any claims for breach of this Settlement Agreement, claims that the party's trademark and/or trade dress rights have been infringed, and/or claims for federal or state unfair competition and/or dilution that fall within the Settlement Agreement) shall be resolved by arbitration....

Moreover, the Settlement Agreement also provides that the arbitration will be administered by the American Arbitration Association's International Centre for Dispute Resolution (ICDR) and that the arbitration is to take place before three judges in the city which is the principal place of business of the USPA licensee or sublicensee.

USPA and its Indian Licensee Arvind Limited

On September 1, 2007, Arvind Brands, a division of Arvind Limited, entered into a license agreement with USPA that permitted Arvind Brands to use the USPA marks, or the Settlement Marks, on apparel and other products in India. In accordance with the license agreement, Arvind Brands executed a Consent to the Settlement Agreement ("Consent Agreement"), thereby binding itself to the terms of the Settlement Agreement. Under the Consent Agreement, Arvind Brands could use the Settlement Marks in the manner, and with the restrictions, set forth in the Settlement Agreement. In exchange for its ability to use the Settlement Marks, Arvind Limited agreed to, among other things, (a) abide by the terms of the Settlement Agreement, (b) resolve any dispute arising from the Consent Agreement by arbitration, and (c) accept the enforcement of such an arbitration award by a court in the Southern District of New York. Since executing the Consent Agreement, Arvind Limited and the USPA have built a substantial and valuable business in India selling apparel and related items utilizing the Settlement Marks.

In 2009, Arvind Limited spun off, or demerged, its Arvind Brands division into a subsidiary named Arvind Lifestyle Brands Limited ("ALBL"). Pursuant to Indian law, under this demerger process all of the Arvind Brands division's liabilities and duties were transferred to and became the liabilities and duties of ALBL. ALBL thus assumed Arvind Limited's obligations ...


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