FKB’s Spencer A. Richards successfully obtained a decision from the United States Court of Appeals for the Second Circuit affirming a pre-answer dismissal of a Complaint alleging fraud on the court filed in the United States District Court for the Southern District of New York, against FKB’s client, a prominent trademark attorney, arising out of FKB’s client’s representation of a well-known beach accessory store operating across the country.

In the Underlying Action, FKB’s client prosecuted an action for breach of a licensing agreement against   a corporation for the corporation’s unauthorized use of a trademark. The Underlying Action resolved with a stipulation of settlement. However, after the corporation executed the stipulation of settlement, another well-known beach accessory store successfully claimed ownership of the registered trademark. The plaintiff corporation, thereafter, commenced a fraud on the court action against FKB’s client alleging that FKB’s client misrepresented ownership of the trademark to secure the stipulation of settlement.

On appeal, FKB successfully argued, among other things, that the corporation should have discovered the proper ownership of the trademark based upon public filings prior to resolving the Underlying Action with a stipulation of settlement.  In affirming the dismissal of the Complaint, the Second Circuit agreed with FKB’s argument and held that the corporation “should have uncovered the alleged fraud through the exercise of due diligence” in the Underlying Action.

If you have any questions about this decision, or the defense of attorneys in general, please contact Spencer A. Richards.