WWE Lawsuit Over European Licensing Dismissed
The lawsuit WWE filed against J.F. Ramos, a company based out of Portugal that had acquired the license to produce WWE licensed clothing was dismissed by United States District Court of Connecticut on August 30th. The case was dismissed because that WWE couldn't prove it was responsible for the allegations brought against them until a lawsuit filed against WWE in France was resolved.
WWE filed the lawsuit against Ramos in September 2010 as a result of a currently ongoing legal proceeding in France. Sun City, Inc., a French company, sued WWE for $21,632,489 in damages after World Wrestling Entertainment alleged that Sun was selling counterfeit merchandise to stores based in France. It has been stated that Sun City had purchased the clothing from J.F. Ramos, who WWE alleges passed off unapproved merchandise as the real thing. Sun had filed a lawsuit against WWE in France, WWE opted to bring their own lawsuit against J.F. Ramos in September of 2010, questing that their licensing agreement be severed.
WWE alleged that Ramos misappropriated paperwork for items the company did approve to be licensed and forged new paperwork in order to move additional shirts and other apparel that WWE did not give company approval for. WWE also noted that after they sent a cease and desist letter to Sun City regarding the unlicensed material, Sun City then went to Ramos for proof the items were indeed officially licensed. WWE claimed that, "Ramos, in response, deceptively created fraudulent approval sheets (based on prior forms where WWE had, in fact, denied Ramos approval for the distribution of certain products), and provided these fraudulent approval sheets to Sun City." WWE also demanded that Ramos be responsible for any legal costs in the French lawsuit and that Ramos be barred from trying to pass off any additional WWE-related merchandise as legitimately licensed. This led Ramos to file a motion to dismiss the lawsuit.
On August 30th, the court made the following ruling…
"The complex nature of the underlying action in this case distinguishes it from the more straightforward declaratory judgment actions which deal with an insurance coverage "paradigm." In the paradigmatic insurance case, the court may issue a declaratory judgment on the insurer's indemnification obligations despite not yet knowing whether the insured may ultimately be found liable for damages. Such a declaration serves a useful purpose in clarifying or settling the legal issues involved, because after the declaratory judgment, the insured knows out of whose pocket—his or his insurer's—any damages and costs of defense will be paid. In this case, even were the Court to determine the scope of Ramos's indemnification obligation pursuant to its licensing agreement with WWE, such a declaration would not do much to clarify which party will be responsible if Sun City prevails in the underlying litigation. Only some of Sun City's claims in the underlying litigation relate to allegations that Ramos sold products in violation of its licensing agreement. Other claims allege that the structure of WWE's licensing agreements unfairly partitioned the French market in violation of French and European law. Any declaration by this Court about the extent of Ramos's obligations under its licensing agreement with WWE would not substantially clarify who—WWE or Ramos—is obligated to pay Sun City if Sun City ultimately prevails in the French litigation. Because any declaration would, at best, only tentatively clarify legal issues involved in the underlying suit, and would not offer WWE relief from uncertainty, the Court exercises its discretion and finds this declaratory judgment action is not appropriate at this time."