Ripple Analytics Inc. v. People Center, Inc., D/B/A Rippling

24-490

Ripple Analytics Inc. v. People Center, Inc., d/b/a Rippling

United States Court of Appeals

For the Second Circuit

August Term 2024

Argued: February 14, 2025

Decided: August 26, 2025

No. 24-490

RIPPLE ANALYTICS INC.,

Plaintiff-Counter-Defendant-Appellant,

v.

PEOPLE CENTER, INC., D/B/A RIPPLING,

Defendant-Counter-Claimant-Appellee.

Appeal from the United States District Court

for the Eastern District of New York

No. 2:20-cv-894

Gary R. Brown, Judge.

Before: PARK, PÉREZ, and NATHAN, Circuit Judges.

Ripple Analytics Inc. sued People Center, Inc. for trademark

infringement and unfair competition. But Ripple did not actually

own the trademark at issue—its Chairman and CEO Noah Pusey did.

So the district court (Brown, J.) dismissed with prejudice Ripple’s

trademark infringement claim under Federal Rule of Civil Procedure

17, dismissed without prejudice its unfair competition claims under

federal and state law, and denied its motion to file an amended

complaint. We reject Ripple’s arguments on appeal challenging those

decisions. First, the district court correctly dismissed Ripple’s

trademark infringement claim because Ripple was not the real party

in interest; Pusey was, and he failed to ratify the action under Rule 17.

Second, the district court correctly dismissed Ripple’s unfair

competition claims because Ripple failed to allege standing. Third,

the district court properly denied Ripple’s motion to file an amended

complaint because the proposed amendment did not resolve the

standing issue and would have been futile. Finally, the district court’s

interlocutory order granting People Center’s motion to amend its

answer is not properly before us on appeal. We thus AFFIRM.

NICOLE A. SULLIVAN, White and Williams LLP, New

York, NY (Thomas E. Butler, White and Williams LLP,

New York, NY, on the brief), for Plaintiff-Counter-

Defendant-Appellant.

JEREMY M. BYLUND, Willkie Farr & Gallagher LLP,

Washington, DC (E. Caroline Freeman, Bruce W. Baber,

King & Spalding LLP, Washington, DC and Atlanta, GA;

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Tim F. Williams, Dority & Manning, P.A., Greenville, SC,

on the brief), for Defendant-Counter-Claimant-Appellee.

PARK, Circuit Judge:

Ripple Analytics Inc. sued People Center, Inc. for trademark

infringement and unfair competition. But Ripple did not actually

own the trademark at issue—its Chairman and CEO Noah Pusey did.

So the district court (Brown, J.) dismissed with prejudice Ripple’s

trademark infringement claim under Federal Rule of Civil Procedure

17, dismissed without prejudice its unfair competition claims under

federal and state law, and denied its motion to file an amended

complaint. We reject Ripple’s arguments on appeal challenging those

decisions. First, the district court correctly dismissed Ripple’s

trademark infringement claim because Ripple was not the real party

in interest; Pusey was, and he failed to ratify the action under Rule 17.

Second, the district court correctly dismissed Ripple’s unfair

competition claims because Ripple failed to allege standing. Third,

the district court properly denied Ripple’s motion to file an amended

complaint because the proposed amendment did not resolve the

standing issue and would have been futile. Finally, the district court’s

interlocutory order granting People Center’s motion to amend its

answer is not properly before us on appeal. We thus affirm.

I. BACKGROUND

A. Factual Background

Drawing upon “nearly two decades of experience establishing

and building law firms in New York City,” attorney Noah Pusey co-

founded Ripple. App’x at 133. Ripple runs a software platform to

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assist companies with human resources-related functions, such as

employee feedback, performance tracking, and professional

development. On March 27, 2018, the U.S. Patent and Trademark

Office (“USPTO”) issued a federal trademark for the use of the word

“RIPPLE®” in connection with that software.

Once the trademark was registered, “Ripple’s shareholders and

board of directors decided that 100% of the company should be

acquired by Mr. Pusey.” Appellant’s Br. at 10. On April 13, 2018,

Ripple and Pusey entered into an Assignment and Assumption

Agreement (“Agreement”) that assigned “all right, title and interest

in and to” Ripple’s intellectual property, including trademarks, to

Pusey. App’x at 360.

Around that time, another company, People Center, applied to

the USPTO to register the mark “RIPPLING” for use in connection

with its own, similar, human resources-related software. Although

People Center eventually abandoned its effort to register the mark, it

continued to use RIPPLING as its business name.

B. Procedural History

On February 19, 2020, Ripple filed a complaint against People

Center, asserting claims for trademark infringement under 15 U.S.C.

§ 1114; unfair competition under Section 43(a) of the Lanham Act, 15

U.S.C. § 1125(a); and unfair competition under New York state law.

Ripple alleged that it “owns all right, title and interest in and to

the RIPPLE® mark” in connection with its software. App’x at 30.

Ripple further alleged that People Center had infringed on that

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trademark by using the word “RIPPLING” in connection with a

similar product. Id. at 30–31.

But during discovery, Ripple produced the Agreement, raising

questions about its alleged ownership of the trademark.

Subsequently, People Center moved for leave to amend its answer to

reflect Ripple’s lack of ownership, moved to dismiss the action under

Rule 17 for failure to prosecute in the name of the real party in interest,

and moved for summary judgment.

The district court granted People Center’s motion to dismiss

under Rule 17 and denied its other motions as moot. Special App’x

at 1. Although the district court dismissed with prejudice Ripple’s

trademark infringement claim, it dismissed without prejudice Ripple’s

unfair competition claims, despite plaintiff’s “delays and litigative

improprieties.” Id. at 11.

On August 22, 2023, Ripple moved for leave to file an amended

complaint with amended claims for unfair competition under 15

U.S.C. § 1125(a) and New York state law. On January 5, 2024, a

magistrate judge issued a Report and Recommendation denying

Ripple’s motion as futile because Ripple still lacked “the specificity

required to establish standing.” App’x at 330.

The district court adopted the Report and Recommendation

and closed the case. Ripple now appeals from the final judgment.

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II. DISCUSSION

A. Rule 17 Dismissal of Ripple’s Trademark Infringement Claim

Ripple argues that the district court erred in dismissing with

prejudice its trademark infringement claim under Rule 17. That

argument fails because Ripple is not the real party in interest—Pusey

is. And Pusey failed to ratify the action when he refused to be bound

by the result of Ripple’s lawsuit.

“A district court’s decision whether to dismiss pursuant to Rule

17(a) is reviewed for abuse of discretion.” Cortlandt St. Recovery Corp.

v. Hellas Telecomms., S.à.r.l., 790 F.3d 411, 417 (2d Cir. 2015) (cleaned

up). “A district court has abused its discretion if it has (1) based its

ruling on an erroneous view of the law, (2) made a clearly erroneous

assessment of the evidence, or (3) rendered a decision that cannot be

located within the range of permissible decisions.” Lynch v. City of

New York, 589 F.3d 94, 99 (2d Cir. 2009) (quotation marks omitted).

1. Ripple Is Not the Real Party in Interest

“An action must be prosecuted in the name of the real party in

interest.” Fed. R. Civ. P. 17(a)(1). “The real party in interest is the

party with the legal title to the claim asserted and is the party with the

stake in the controversy that is being used to invoke the court’s

jurisdiction.” Fund Liquidation Holdings LLC v. Bank of Am. Corp., 991

F.3d 370, 389 (2d Cir. 2021). Here, the district court correctly

concluded that Pusey, not Ripple, “is inarguably the real party in

interest.” Special App’x at 5.

Trademark ownership is a “necessary element[]” of a

trademark infringement claim under 15 U.S.C. § 1114, Island Software

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& Comput. Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 259 (2d Cir. 2005),

and “only the owner of the trademark is entitled to sue for its

infringement,” Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd.,

726 F.3d 62, 75 (2d Cir. 2013) (quotation marks omitted). Federal

courts may thus “adjudicate the ownership of a trademark as part of

an infringement claim.” Fed. Treasury Enter. Sojuzplodoimport v. Spirits

Int’l N.V., 623 F.3d 61, 69 (2d Cir. 2010).

Ripple is not the real party in interest because it unambiguously

assigned all of its rights in any intellectual property, including

trademarks, to Pusey. The Agreement expressly states that Ripple

“assign[ed], convey[ed] and transfer[red] to [Pusey] . . . all right, title

and interest in and to” its intellectual property, including the

trademark at issue. App’x at 360. The assignment “include[d] all of

[Ripple’s] claims, causes of actions and right to sue for, as well as right

to settle or release from, the infringement by any third party of any

rights in and to” that intellectual property “whether such claims and

causes of action are filed, arose, or accrued before or after the

execution” of the Agreement. Id. Pusey is thus the real party in

interest, and Ripple has no legal title to any claim asserted here.

2. Pusey Failed To Ratify or Join the Action

Ripple argues that even if Pusey were the real party in interest,

he satisfied Rule 17 by ratifying the pleadings and agreeing to become

a plaintiff. So in dismissing the trademark infringement claim, Ripple

contends, the district court “imposed a higher standard than what is

required under Rule 17.” Appellant’s Br. at 29. We disagree.

Rule 17 requires that “[a]n action must be prosecuted in the

name of the real party in interest.” Fed. R. Civ. P. 17(a)(1). But “[t]he

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court may not dismiss an action for failure to prosecute in the name

of the real party in interest until, after an objection, a reasonable time

has been allowed for the real party in interest to ratify, join, or be

substituted into the action.” Id. at (a)(3). “After ratification, joinder,

or substitution, the action proceeds as if it had been originally

commenced by the real party in interest.” Id. “To ratify a suit, the

real party in interest must (1) authorize continuation of the action and

(2) agree to be bound by its result.” Fed. Treasury Enter., 726 F.3d at

83 (quotation marks omitted).

To be sure, a “Rule 17(a) substitution of plaintiffs should be

liberally allowed when the change is merely formal and in no way

alters the original complaint’s factual allegations as to the events or

the participants.” Advanced Magnetics, Inc. v. Bayfront Partners, Inc.,

106 F.3d 11, 20 (2d Cir. 1997). But “the district court retains some

discretion to dismiss an action where there was no semblance of any

reasonable basis for the naming of an incorrect party.” Id.

Here, Pusey failed to ratify Ripple’s action. Ripple repeatedly

asserted that any concerns about the real party in interest and

standing could be “easily” addressed by joinder or ratification, but it

stopped short of taking any steps to cure those issues. Special App’x

at 3 (quotation marks omitted). The district court gave Ripple “ample

opportunity, numerous reminders and more than a year to correct

[its] error, but [it] simply failed or refused to do so.” Id. at 6.

The closest Ripple came to ratification was to submit a

declaration by Pusey with its opposition to People Center’s motion

for leave to amend its answer. The Pusey declaration stated:

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I have been overseeing and participating in all legal

proceedings in this matter from the beginning. I have

read the complaint and am fully familiar with all of the

allegations in the complaint. Any judgment obtained in

this or any case pursuing the interests of Ripple will be

for my sole benefit; therefore I have a very strong interest

in the outcome of this case.

...

By this Declaration, I ratify all of Plaintiff’s allegations in

this case and each cause of action alleged. As a real party

in interest, I am prepared to step in immediately as

Plaintiff.

Special App’x at 3.

But that is not a ratification under Rule 17. The sine qua non of

ratification is agreeing to be bound by the result. See Fed. Treasury

Enter., 726 F.3d at 83; see also ICON Grp., Inc. v. Mahogany Run Dev.

Corp., 829 F.2d 473, 478 (3d Cir. 1987) (noting that the ratifying party

must “by acknowledgment or other ratifying instrument . . . agree to

be bound by any judgment resulting from the action”); Wieburg v.

GTE Sw. Inc., 272 F.3d 302, 307 (5th Cir. 2001) (same); Mutuelles Unies

v. Kroll & Linstrom, 957 F.2d 707, 712 (9th Cir. 1992) (same); Haxtun

Tel. Co. v. AT&T Corp., 57 F. App’x 355, 359 (10th Cir. 2003) (same); 6A

Wright & Miller’s Federal Practice & Procedure § 1555 (3d ed. 2010)

(defining ratification as “an arrangement by which the real party in

interest authorizes the continuation of an action brought by another

and agrees to be bound by its result, thereby eliminating any risk of

multiple liability”). Pusey said various things, but he never agreed to

be bound by the result of Ripple’s lawsuit. To say that one has a “very

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strong interest” in the outcome of a case or that any judgment in a

case would be for one’s “sole benefit” is not the same as agreeing to

be bound by the result of that case. Special App’x at 3.

The district court noted this deficiency “numerous times,” and

“counsel made no effort to supplement this ineffectual submission.”

Special App’x at 7. In light of the district court’s repeated efforts and

Pusey’s extensive legal experience, the failure to ratify is glaring.

Indeed, rather than complying with Rule 17, Ripple warned that

dismissal of its suit would lead to the “immediate filing by Pusey of

the exact same claims against [People Center] resulting in the parties

starting the process from scratch.” Id. The record is thus clear that

Pusey failed to ratify the suit, so the district court properly dismissed

it under Rule 17.

B. Dismissal of Ripple’s Unfair Competition Claims

Ripple argues that the district court erred in dismissing its

unfair competition claims. But the district court correctly concluded

that Ripple failed to allege standing to assert those claims.

“Where, as here, a case is at the pleading stage, the plaintiff

must clearly allege facts demonstrating” that it has standing to sue.

Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (cleaned up). “We

review de novo a decision as to a plaintiff’s standing to sue based on

the allegations of the complaint and the undisputed facts evidenced

in the record.” Rajamin v. Deutsche Bank Nat’l Tr. Co., 757 F.3d 79, 84–

85 (2d Cir. 2014).

Ripple’s unfair competition claim under Section 43(a) of the

Lanham Act fails because it was based on the allegation that Ripple

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“owns all right, title and interest in and to the RIPPLE® mark.” App’x

at 30. Ripple alleged that People Center infringed its RIPPLE® mark

and that it suffered “damage to its trademark rights.” Id. at 31.

As described above, that allegation is not accurate. The

Agreement conveyed to Pusey “all right, title and interest in and to”

the trademark, including all of Ripple’s “claims, causes of action and

right to sue for . . . the infringement by any third party of any rights

in and to the [mark] . . . and all remedies associated therewith.”

App’x at 360. This broad assignment clearly covers Ripple’s unfair

competition claims here.

As to Ripple’s state-law claim for unfair competition, the

district court properly declined to exercise supplemental jurisdiction.

See Cangemi v. United States, 13 F.4th 115, 134 (2d Cir. 2021) (“[U]nder

the supplemental jurisdiction statute, a district court cannot exercise

supplemental jurisdiction unless there is first a proper basis for

original federal jurisdiction.” (quotation marks omitted)).

C. Denial of Ripple’s Motion To File an Amended Complaint

Ripple argues that the district court erred in denying its motion

to file an amended complaint. It argues that the magistrate judge’s

Report and Recommendation concluding that such an amendment

would be futile was “based on the erroneous legal finding that a user

must maintain a ‘proprietary interest’ in the trademark to have

standing.” Appellant’s Br. at 46. Ripple asserts that it stated valid

claims as a “user” and “implied licensee” of the mark, even though it

is not an owner of the mark. Id. We disagree.

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“While ordinarily, we review denial of leave to amend under

an abuse of discretion standard, when the denial of leave to amend is

based on a legal interpretation, such as a determination that

amendment would be futile, a reviewing court conducts a de novo

review.” Smith v. Hogan, 794 F.3d 249, 253 (2d Cir. 2015) (cleaned up).

Under 15 U.S.C. § 1125(a), “any person who believes that he or

she is or is likely to be damaged” by the false or misleading use of a

trademark is authorized to bring a civil action against the wrongdoer.

“Read literally, that broad language might suggest that an action is

available to anyone who can satisfy the minimum requirements of

Article III.” Lexmark Int'l, Inc. v. Static Control Components, Inc., 572

U.S. 118, 129 (2014). But the Supreme Court has rejected “such an

expansive reading” of § 1125, holding that the “statutory cause of

action extends only to plaintiffs whose interests fall within the zone

of interests protected by the law invoked.” Id. (quotation marks

omitted). More specifically, plaintiffs “must allege an injury to a

commercial interest in reputation or sales.” Id. at 131–32; see also Souza

v. Exotic Island Enters., Inc., 68 F.4th 99, 118 (2d Cir. 2023) (“[A] plaintiff

must demonstrate injury specifically to a ‘commercial interest in

reputation or sales.’” (quoting Lexmark, 572 U.S. at 131–32)); Berni v.

Int’l Gourmet Rests. of Am., Inc., 838 F.2d 642, 648 (2d Cir. 1988) (“[A]t

a minimum, standing to bring a section 43 claim requires the potential

for a commercial or competitive injury.”).

Ripple is thus correct that it need not be the owner of the

trademark to assert a claim under § 1125. Nonetheless, the district

court correctly explained that Ripple must show that it has at least

some reasonable commercial interest to protect.

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Ripple’s proposed amended complaint fails to allege any such

interest. It alleges that Ripple “has been the continuous user of the

mark” since 2015, notwithstanding the assignment to Pusey. App’x

at 283. And it contends that People Center’s “unlawful use” of the

RIPPLE® mark was “intended to co-opt the goodwill” in the mark

and has caused “confusion, mistake and deception.” Id. at 296. That

is not enough.

The assignment to Pusey included all “right, title, and

standing” to “[i]nstitute and prosecute” any suit to “collect, assert, or

enforce any claim, right or title of any kind” to the RIPPLE® mark.

App’x at 362. So the express terms of the Agreement prohibit Ripple

from bringing suit. See generally 6 McCarthy on Trademarks and

Unfair Competition § 32:12 (5th ed. 2021) (“[I]f the license agreement

prohibits the licensee from having the right to sue, then it has no right

to sue under § 43(a).”); see also Fin. Inv. Co. (Bermuda) Ltd. v. Geberit

AG, 165 F.3d 526, 532 (7th Cir. 1998) (“Even assuming they met the

statutory requirement of being a person who believes that he or she is

likely to be damaged by a likelihood of confusion, the express terms

of the license prohibited any of them from bringing suit in their own

capacity.” (quotation marks omitted)); Kroma Makeup EU, LLC v.

Boldface Licensing + Branding, Inc., 920 F.3d 704, 708 (11th Cir. 2019)

(holding that a licensee did not have standing to sue under § 43(a)

because of “the rights granted to the licensee in the licensing

agreement” (quotation marks omitted)).

Ripple’s proposed amended complaint thus fails to establish

standing, and the district court properly denied Ripple’s motion.

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D. People Center’s Motion To Amend Its Answer

Finally, Ripple argues that the district court erred in allowing

People Center to amend its answer to assert an affirmative defense of

standing. The district court initially allowed People Center to amend

its answer, App’x at 15, but later denied the motion as moot, Special

App’x at 12. “All interlocutory orders remain subject to modification

or adjustment prior to the entry of a final judgment adjudicating the

claims to which they pertain.” Grace v. Rosenstock, 228 F.3d 40, 51 (2d

Cir. 2000). This issue is not a proper subject of appeal because the

district court’s later denial of the motion was within its authority and

obviates Ripple’s challenge of the earlier decision to grant leave to

amend. See, e.g., United States v. LoRusso, 695 F.2d 45, 53 (2d Cir. 1982)

(“[W]hether the case sub judice be civil or criminal, so long as the

district court has jurisdiction over the case, it possesses inherent

power over interlocutory orders, and can reconsider them when it is

consonant with justice to do so.” (cleaned up)).

III. CONCLUSION

For the foregoing reasons, we affirm the judgment of the

district court.

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