PWInsider - WWE News, Wrestling News, WWE

WWE LAWSUIT OVER EUROPEAN LICENSING DISMISSED

A 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 8/30 as a result of an interesting defense by Ramos - that WWE couldn't prove it was responsible for the allegations brought against them until a lawsuit filed AGAINST WWE in France was resolved.

Here's the back story: 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.

As it turned out, Sun City had purchased the clothing from J.F. Ramos, who WWE alleges passed off unapproved merchandise as the real thing.

After Sun filed their lawsuit against WWE in France, WWE opted to bring their own lawsuit against J.F. Ramos on 9/2/10 in the United States District Court of Connecticut, blaming Ramos for the French proceedings and requesting that their licensing agreement be severed (that agreement contractually expired in December 2010 and was no longer an issue).

In their suit against Ramos, 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.

In their initial filing, WWE 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."

Those actions by Ramos, according to WWE, led to the aforementioned Sun City lawsuit filed against them in France. WWE claimed that the French lawsuit is "relying upon the fraudulent approval sheets submitted to it by Ramos, contends that the Counterfeit Clothing was, in fact, not counterfeit, but was approved by WWE and therefore lawfully obtained from Ramos. Sun City further claims, among other things, that WWE engaged in unfair commercial practices by “succeeding in diverting Sun City’s customers through false accusations of counterfeiting to the clients of the plaintiff.” Sun City’s allegations are false; contrary to Sun City’s allegations, the product sold by Ramos to Sun City, and then by Sun City to its customers, was the Counterfeit Clothing—i.e., WWE never approved for sale the Counterfeit Clothing."

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.

Ramos filed a motion to dismiss the WWE lawsuit this past February, citing the currently ongoing legal issues in France. In short, Ramos' argument was that since the French judicial system requires that the losing party in a lawsuit covers the winner's losses and court costs, Ramos shouldn't be on the hook. The Ramos argument was that should WWE win, the ruling against Sun City would cover anything WWE would deserve related to the case. However, should WWE lose against Sun City, only then would a lawsuit against Ramos need to be heard. Ramos' argument was also that until the French proceedings with Sun City are resolved, there's no way WWE can argue for damages, because nothing has been proven.

On 8/30, the Court sided with Ramos, noting, "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."

WWE has the right to appeal the court's decision.

If you enjoy PWInsider.com you can check out the AD-FREE PWInsider Elite section, which features exclusive audio updates, news, our critically acclaimed podcasts, interviews and more by clicking here!

• Tweet