IP Law Bulletin

In a decision dismissing plaintiffs’ claims of service mark infringement, the District of Massachusetts held that the plaintiffs’ transfer of “goodwill” in an asset purchase agreement also transferred plaintiffs’ rights to their service marks. In Pereyra and City Fitness Group, LLC v. Sedky, et al. (No. 15-cv-12854, 2015 WL 7854061, December 3, 2015) plaintiffs City Fitness and its sole owner, Roberto Pereyra, alleged that defendants unlawfully used City Fitness’s service marks after the parties executed an Asset Purchase Agreement (APA) that did not explicitly transfer the service marks to the defendants. Pereyra and City Fitness negotiated the APA with the defendants for the sale of City Fitness’s three Eastern Massachusetts health clubs, as well as the company’s assets. City Fitness operated its health clubs under the trade name “Leap Fitness” and registered two service marks under that name. The Leap Fitness marks appeared on the company’s signage, letterhead, business cards, t-shirts and its website. Defendants continued to use the marks for identification, marketing and promotional purposes after the deal with City Fitness.