Not every trademark dispute is declaratory judgment fodder

Originally posted 2014-08-18 11:21:21. Republished by Blog Post Promoter

John Welch discusses a District Court decision (which he and his [then-]firm, Foley Hoag, helped secure) dismissing a declaratory judgment action brought by one side in a trademark dispute, seeking a ruling of “non-infringement.” Declaratory judgments (or “DJ’s”) are useful device for resolving a simmering dispute, particularly for trademark cases where the two sides have been trading threats. It allows the side that’s feeling pressure to press for a judicial resolution of the question, and has the tactical advantage of allowing the plaintiff to choose where and when issue will be joined. For instance, it may permit someone to know whether he should or should not go forward with a business built around a trademark whose validity is in question. (John links to what looks like a very useful new article on the tactics, strategies and, yes, legal issues implicated in declaratory judgment practice for trademarks.)
Doorway, Trenton federal courthouse
It is usually not difficult to establish the bona fides for bringing a DJ. Under the enabling legislation, there has to be an “actual controversy” between the parties, not just an imagined or imaginable one. That is frequently right at hand: If one side sends the other one a letter threatening legal action unless the receiving party “cease and desists” some activity, such as the use of a trademark, that’s a controversy.

In the U.S. District of Massachusetts case reported by John, you might well think there were a controversy: The parties were already in “litigation,” or at least that state of quasi-litigation known as a Trademark Trial and Appeal Board inter partes proceeding to cancel the mark in question. These are routinely stayed when “real litigation” begins.

So what happened here? The District Court “threw out” (as the papers like to say) the DJ claim for the simple reason that there was never a real threat of a trademark infringement action being filed. Was there some sort of controversy? Yes — but not one that the Declaratory Judgment Act meant. As the court suggests (though not in these words) in a footnote, if every TTAB proceeding provided a “controversy” giving rise to jurisdiction under the Declaratory Judgment Act, they could all be dumped into Federal court.

That is not (my gloss now) what Congress intended by providing for both TTAB inter partes proceedings and declaratory judgments. More importantly, said the court, the pendency of a TTAB proceeding for cancellation does not equal a justiciable controversy — merely a registration dispute, which indeed is a long way from full-bore civil litigation. Absent a real threat of an infringement suit, it has nothing to say about the matter, and the declaratory judgment case was dismissed.

By Ron Coleman

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