United States: Federal Court Holds Highway Sign Does Not Harm State

Last Updated: June 2 2017
Article by Gabriella S. Paglieri

Facts

In State of Michigan v M22 LLC, 1:16-CV-1084 (WD MI April 21 2017), Michigan retail company M22 LLC registered the road signs of a well-known Michigan highway, M-22, for use on apparel for sale. The trademarks contained imitations of the road signs, which bear the name M-22 in a diamond symbol.

Initially, the State of Michigan filed a petition with the US Patent and Trademark Office Trial and Appeal Board (TTAB) seeking to cancel M22's registered trademarks. The state moved for summary judgment, arguing that M22's use of the marks violated state and federal laws because it was contrary to certain provisions under the Manual on Uniform Traffic Control Devices ‒ a federal manual promulgated by the Federal Highway Administration and adopted by the State of Michigan that sets standards for the use of traffic control devices installed on state roads, including road signs. To receive federal highway funding, states must comply with the manual or their equivalent state manual. The State of Michigan Manual on Uniform Traffic Control Devices provides that:

"Any traffic control device design or application provision contained in this Manual shall be considered to be in the public domain. Traffic control devices contained in this Manual shall not be protected by a patent, trademark, or copyright."

Since the manual includes the M-22 road sign, the state argued that, under the manual, M22 could not register the road sign and thus the marks should be cancelled. The TTAB disagreed and denied summary judgment on the basis that there were genuine disputes of fact as to whether the manual applies to a private party's actions and, if so, whether M22's use of the marks violated state and federal law.

The state filed an action in Michigan state court seeking declaratory judgment that:

  • the Manual on Uniform Traffic Control Devices applied to M22; and
  • M22's marks violated state and federal law.

M22 then removed the case to the US District Court for the Western District of Michigan.

Decision

Lack of declaratory judgment jurisdiction – no actual controversy

The question before the district court was whether it had subject-matter jurisdiction to hear the state's declaratory relief action. Under the US Declaratory Judgment Act of 1934, an action for declaratory judgment will not constitute an impermissible advisory opinion such that a federal court may grant declaratory relief if the case at issue presents an "actual controversy". Whether an actual controversy exists depends on whether the constitutional 'case or controversy' requirement under Article III is met. As the district court noted, under the Supreme Court's decision in MedImmune, Inc v Genentech, Inc (549 US 118 (2007)), the decisive question is:

"[W]hether the facts alleged, under all the circumstances, show that there is substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment."

The state argued that this case presented an actual controversy under MedImmune, because without a declaratory judgment that registering its M-22 road sign violated state and federal law, the state was at risk of being sued by M22 for trademark infringement under the Lanham Act. In addition, the state argued that the district court had jurisdiction because such a declaratory judgment would prevent the state from being irreparably harmed by the loss of federal highway funding, which it claimed would necessarily result from M22's alleged violation of the provisions of the Manual on Uniform Traffic Control Devices.

The district court disagreed. First, it noted that the state failed to put forth any allegations or evidence showing that:

  • M22 had threatened to sue the state for trademark infringement; or
  • the state was planning to do anything that would subject it to an infringement suit by M22 (eg, selling t-shirts with the M-22 road sign).

Therefore, the district court held that the state's alleged harm was only theoretical and no actual controversy existed.

Lack of constitutional standing – no concrete injury

In addition to the lack of declaratory judgment jurisdiction, the district court held that it could not hear the case because the state lacked constitutional standing to sue under Article III. Article III standing requires that the plaintiff show:

  • an injury in fact;
  • a causal relationship between the injury and the defendant's actions; and
  • the likelihood that a favourable decision by the court will redress the injury.

According to the district court, the state's alleged injury was speculative at best. The court noted that the state had failed to allege any facts showing that it was facing real threats of losing federal funding or of being sued for its use of the M-22 road signs. Specifically, the state had not:

  • alleged any facts showing how M22's marks would prevent the State from complying with the Manual on Uniform Traffic Control Devices such that it would be subject to losing federal highway funds; or
  • cited any legislation granting it the power to enforce the Manual on Uniform Traffic Control Devices against private third parties.

Therefore, the district court held that the state had failed to allege a concrete injury and thus lacked Article III standing to bring suit.

Without an actual controversy or constitutional standing, the district court held that it lacked jurisdiction over the state's claim for declaratory relief. However, since state courts are not limited by the requirements of Article III, the district court remanded the case back to Michigan state court to decide whether to hear the case.

Comment

Although the district court's decision in M22 turned mainly on the justiciability issues, the case shows that without the concrete threat of an infringement suit or other imminent harm, trademarks of state-owned signs are not harmful to the state. This case will support the position of any private party seeking to register public state signs as trademarks for commercial purposes.

This article was first published on World Trademark Review Daily. For further information please go to: www.WorldTrademarkReview.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions