No Ratification Without Agreement to Be Bound: Second Circuit Clarifies Rule 17 in Trademark Suits and Limits Non‑Owner § 43(a) Standing When Enforcement Rights Are Assigned

Introduction

In Ripple Analytics Inc. v. People Center, Inc., d/b/a Rippling (2d Cir. Aug. 26, 2025), the Second Circuit confronted a recurring but often underappreciated litigation problem: who is the proper plaintiff when trademark rights have been transferred away from the operating company? The Court affirmed dismissal of Ripple Analytics’ federal trademark infringement and unfair competition claims because Ripple had previously assigned “all right, title, and interest”—including the right to sue—to its CEO and Chairman, Noah Pusey. The Court also affirmed denial of leave to amend as futile.

The decision reinforces two core principles:

Rule 17’s real-party-in-interest requirement is unforgiving where a plaintiff no longer owns the claim. Ratification requires the real party in interest to authorize the suit and expressly agree to be bound by the result; statements of interest or benefit are not enough.
Under Lanham Act § 43(a), a non-owner can sometimes sue, but not when a governing assignment or license vests all enforcement rights in the owner. Contractual allocation of the right to sue can defeat a “user” or “implied licensee” theory of standing.

Parties: Ripple Analytics Inc. (plaintiff/appellant) and People Center, Inc., d/b/a Rippling (defendant/appellee). Judges Park, Pérez, and Nathan sat on the panel; Judge Park authored the opinion.

Summary of the Judgment

Trademark infringement claim (§ 1114) dismissed with prejudice (affirmed): Ripple was not the real party in interest because it had assigned the RIPPLE mark and all enforcement rights to Pusey. Pusey did not ratify the suit under Rule 17 because he never agreed to be bound by the judgment.
Federal unfair competition claim (§ 43(a)) dismissed without prejudice (affirmed): Ripple lacked statutory standing. Its allegations were premised on ownership it did not have, and the assignment vested all enforcement rights in Pusey.
State-law unfair competition claim (New York) dismissed without prejudice (affirmed): With no surviving federal claim, the district court properly declined supplemental jurisdiction.
Leave to amend denied as futile (affirmed): Ripple’s proposed amendment (as “user”/“implied licensee”) still could not establish standing in light of the assignment’s allocation of enforcement rights.
Interlocutory order allowing defendant to amend answer not reviewable: The district court later denied that motion as moot, and interlocutory orders remain subject to revision prior to final judgment.

Factual and Procedural Background

Ripple, a human resources software company co-founded by attorney Noah Pusey, obtained a federal registration for RIPPLE on March 27, 2018. Shortly thereafter, Ripple and Pusey executed an Assignment and Assumption Agreement (April 13, 2018) transferring to Pusey “all right, title and interest” in Ripple’s IP, including the RIPPLE mark, and crucially, “all claims, causes of action and right to sue for” infringement, whether arising before or after the Agreement. People Center (Rippling), a competitor in HR software, had used RIPPLING as its brand, having abandoned an application to register that mark.

Ripple sued People Center in 2020 for trademark infringement (§ 1114), federal unfair competition (§ 43(a)), and New York unfair competition, alleging it owned the RIPPLE mark. Discovery revealed the assignment to Pusey. The district court dismissed the § 1114 claim with prejudice under Rule 17 (Ripple was not the real party in interest and Pusey failed to ratify), dismissed the § 43(a) and state-law claims without prejudice, and denied leave to amend as futile. Ripple appealed.

Detailed Analysis

Precedents Cited and Their Role in the Decision

Fund Liquidation Holdings LLC v. Bank of America Corp., 991 F.3d 370 (2d Cir. 2021): The Court recited that the real party in interest is the party with legal title to the asserted claim and the stake in the controversy. This framed the Rule 17 inquiry and underscored that the assignment shifted both legal title and enforcement stake to Pusey.
Island Software & Computer Serv., Inc. v. Microsoft Corp., 413 F.3d 257 (2d Cir. 2005): Ownership is a necessary element of a § 1114 trademark infringement claim. Because Ripple disclaimed ownership via the assignment, its § 1114 claim could not proceed.
Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., 726 F.3d 62 (2d Cir. 2013) and 623 F.3d 61 (2d Cir. 2010): These decisions recognize courts may adjudicate trademark ownership in infringement suits and define Rule 17 ratification in this Circuit: the real party in interest must (1) authorize continuation of the action and (2) agree to be bound by its result. The Court applied this test to hold Pusey’s declaration fell short.
Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11 (2d Cir. 1997): While substitutions under Rule 17 should be “liberally allowed” when merely formal and not altering facts, a district court retains discretion to dismiss when there is no reasonable basis for naming the wrong party and, critically here, when repeated opportunities to cure are ignored.
Spokeo, Inc. v. Robins, 578 U.S. 330 (2016): At the pleading stage, plaintiffs must clearly allege facts establishing standing. The Court invoked this baseline requirement in assessing Ripple’s § 43(a) claim.
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014): Section 43(a)’s cause of action extends only to plaintiffs within the statute’s zone of interests—those alleging injury to a commercial interest in reputation or sales—and who show proximate causation. The Second Circuit acknowledged that a plaintiff need not be a trademark owner to sue under § 43(a) but must satisfy Lexmark’s limits.
Souza v. Exotic Island Enters., Inc., 68 F.4th 99 (2d Cir. 2023); Berni v. Int’l Gourmet Rests. of Am., Inc., 838 F.2d 642 (2d Cir. 1988): These authorities underscore that a § 43(a) plaintiff must show injury to a commercial interest in reputation or sales—the Lexmark “zone of interests.”
Financial Investment Co. (Bermuda) Ltd. v. Geberit AG, 165 F.3d 526 (7th Cir. 1998); Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc., 920 F.3d 704 (11th Cir. 2019): The Court cited these cases, and respected treatise McCarthy on Trademarks, to confirm that where the license or assignment vests enforcement rights exclusively in the owner, a licensee/user lacks § 43(a) standing to sue independently.
Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.à.r.l., 790 F.3d 411 (2d Cir. 2015): Set the abuse-of-discretion standard for Rule 17 dismissals; the panel found no abuse.
Rajamin v. Deutsche Bank Nat’l Tr. Co., 757 F.3d 79 (2d Cir. 2014): Applied for de novo review of standing; relevant to § 43(a) evaluation.
Cangemi v. United States, 13 F.4th 115 (2d Cir. 2021): A federal court cannot exercise supplemental jurisdiction without a viable basis for original federal jurisdiction; this justified dismissal of the state-law claim.
Smith v. Hogan, 794 F.3d 249 (2d Cir. 2015): De novo review of futility-based denials of leave to amend; the Court agreed amendment would be futile.
Grace v. Rosenstock, 228 F.3d 40 (2d Cir. 2000); United States v. LoRusso, 695 F.2d 45 (2d Cir. 1982): Interlocutory orders remain subject to revision prior to final judgment; thus, earlier leave to amend an answer became moot and was non-appealable.
ICON Group, Inc. v. Mahogany Run Dev. Corp., 829 F.2d 473 (3d Cir. 1987); Wieburg v. GTE Southwest Inc., 272 F.3d 302 (5th Cir. 2001); Mutuelles Unies v. Kroll & Linstrom, 957 F.2d 707 (9th Cir. 1992); Haxtun Tel. Co. v. AT&T Corp., 57 F. App’x 355 (10th Cir. 2003): Cited collectively to demonstrate inter-circuit consensus that ratification under Rule 17 requires an express agreement by the real party to be bound by the judgment.

Legal Reasoning

1) Real Party in Interest and Rule 17 Ratification

Rule 17(a)(1) requires suit to be prosecuted in the name of the real party in interest. Ripple’s assignment to Pusey was unequivocal. It transferred “all right, title and interest” in the RIPPLE mark and, critically, all “claims, causes of action and right to sue for” infringement, whether arising before or after the assignment. That made Pusey—not Ripple—the real party in interest.

Rule 17(a)(3) offers a safety valve: after an objection, the court must allow a reasonable time for the real party to “ratify, join, or be substituted.” But ratification requires both authorization to continue and an agreement “to be bound by [the] result.” Pusey’s declaration expressed a “very strong interest” in the case and stated he “ratif[ied] all of Plaintiff’s allegations” and was “prepared to step in,” but never said he agreed to be bound by the judgment in the action filed in Ripple’s name. The Court deemed that omission dispositive. Given multiple reminders and over a year to cure, the district court did not abuse its discretion in dismissing the § 1114 claim with prejudice as to Ripple.

The opinion also acknowledges Advanced Magnetics’ instruction that Rule 17 substitutions should be liberally allowed when merely formal. But the Court emphasized that discretion remains to dismiss where there is “no semblance of any reasonable basis” for naming the wrong party and where the plaintiff refuses to correct the defect despite ample opportunity. Here, the omission was not a mere technicality; Ripple consistently declined to perfect ratification.

2) Section 43(a) Standing After an Assignment of Enforcement Rights

The Court distinguished ownership from § 43(a) standing. Under Lexmark, a plaintiff need not own the mark to sue for false designation of origin or unfair competition under § 43(a); it must, however, fall within the provision’s zone of interests (i.e., allege injury to a commercial interest in reputation or sales) and satisfy proximate cause. Ripple tried to recast itself as a “user” and “implied licensee,” asserting ongoing use of RIPPLE since 2015.

But contract governs. The assignment vested in Pusey “all right, title, and standing” to “institute and prosecute” any suit to enforce the mark. By assigning away the right to sue, Ripple left itself without the statutorily relevant interest for § 43(a) purposes. The Court, relying on McCarthy’s treatise and out-of-circuit authority (Seventh and Eleventh Circuits), held that where the agreement places enforcement exclusively with the owner, a user/licensee lacks § 43(a) standing to sue in its own name. Therefore, Ripple’s proposed amendment would be futile: as a matter of contract, Ripple could not meet Lexmark’s zone-of-interests test or otherwise claim a cognizable enforcement interest.

3) Supplemental Jurisdiction and Interlocutory Orders

With all federal claims dismissed, the district court properly declined to exercise supplemental jurisdiction over the New York unfair competition claim. As to People Center’s amended answer (asserting a standing defense), any original grant of leave was mooted by later orders; interlocutory rulings remain modifiable until final judgment and were not properly before the Court on appeal.

Impact and Practical Implications

Ratification must be explicit and complete: In the Second Circuit, a Rule 17 ratification must say the real party “authorizes continuation” of the suit and “agrees to be bound by its result.” Vague invocations of interest or benefit, or even a general “ratify the allegations” statement, are insufficient.
Corporate structuring and IP assignments carry litigation consequences: Assigning “all right, title, and interest” together with “all claims and the right to sue” cleansly moves enforcement rights to the assignee. If the operating company continues to use the mark post-assignment, it must ensure the license back or operating agreement preserves an enforcement pathway (or at least permits suit in the company’s name) if that is desired.
Licensees/users cannot outflank contract limits via § 43(a): After Lexmark, non-owners can sue under § 43(a) in some settings, but not when the license or assignment reserves enforcement exclusively to the owner. Courts will enforce the parties’ allocation of the right to sue.
Procedural diligence matters: The Court approved dismissal with prejudice of the § 1114 claim after Ripple declined, for over a year, to cure real-party defects. Parties should treat Rule 17 objections as high priority and promptly obtain a binding ratification, joinder, or substitution.
Drafting guidance for agreements:
- If the mark is assigned to an individual or parent entity, consider a written license back to the operating company that includes explicit enforcement rights (sole, concurrent, or conditional) and clarifies who may sue under § 1114 and § 43(a).
- If only the owner may sue, expect that users or licensees will lack § 43(a) standing in their own names, at least in the Second Circuit.
- When ratifying, include a sentence akin to: “The undersigned hereby authorizes continuation of the action and agrees to be bound by any final judgment, order, or settlement in the action as if originally named as plaintiff.”
Preclusion posture: The “with prejudice” dismissal of Ripple’s § 1114 claim precludes Ripple from reasserting it, but it does not automatically bar Pusey—the non-party real owner—from bringing his own action, should he choose.
Expect more early Rule 17 and § 43(a) challenges: Defendants will scrutinize chain-of-title and license terms early; plaintiffs should assemble assignment/licensing documents at the outset and align the caption with the true enforcement rightsholder.

Complex Concepts Simplified

Real Party in Interest (Rule 17): The person or entity that owns the legal claim and stands to benefit from or be bound by the judgment. A case must be brought in that party’s name.
Ratification vs. Joinder vs. Substitution:
- Ratification: The real owner authorizes the pending suit to continue in the existing plaintiff’s name and explicitly agrees to be bound by the outcome.
- Joinder: The real owner is added as a party-plaintiff.
- Substitution: The real owner replaces the misnamed plaintiff entirely.
“Statutory standing” under § 43(a) (post-Lexmark): Not all who are injured may sue; plaintiffs must fall within the statute’s “zone of interests” (commercial injury to reputation or sales) and show proximate cause. Ownership helps but is not always required—unless a contract limits enforcement rights.
Assignment of IP and “right to sue” clauses: Assignments can transfer not only the mark but also accrued and future claims and the exclusive right to enforce. That can preclude prior owners/licensees from suing, even under § 43(a), unless the contract preserves such rights.
Futility of amendment: Courts deny leave to amend when, even with new allegations, the claim would still fail—here, because the contract’s enforcement allocation defeated Ripple’s attempt to plead § 43(a) standing as a “user.”
Interlocutory orders: Non-final orders can be revised until final judgment; if later mooted or revised, they generally are not reviewable on appeal.

Key Takeaways

To cure a Rule 17 defect, obtain a written ratification that unmistakably states the real owner authorizes the suit and agrees to be bound by the result; without this, dismissal is likely.
Section 43(a) is not a backdoor for non-owners to litigate when contracts vest enforcement elsewhere. Courts will enforce the parties’ allocation of the right to sue.
Assignment and licensing agreements should be drafted with litigation strategy in mind: who can sue, in whose name, and for which claims (accrued vs. future).
Delay in curing party defects can justify with-prejudice dismissal as to the misnamed plaintiff, even in cases where substitution might otherwise be “liberally” permitted.
If federal claims fall out early, expect state-law unfair competition to be dismissed without prejudice for lack of supplemental jurisdiction.

Conclusion

Ripple Analytics v. People Center fortifies the Second Circuit’s real-party-in-interest doctrine and clarifies how contractual allocations of enforcement rights intersect with Lanham Act § 43(a). It is not enough for a non-owner to allege confusion or ongoing use of a mark; if the governing agreement vests all enforcement in the owner, § 43(a) standing fails. On the procedural side, the opinion is a cautionary tale: Rule 17 defects are curable, but only with a ratification that explicitly binds the real party to the judgment. The decision will influence both how trademark disputes are pled and how IP ownership and licensing agreements are drafted, ensuring that the party with the true stake—and the contractual right to sue—is the one before the court.