Addressing the issue of the existence of a case or controversy in a threatened trademark infringement matter, the U.S. Court of Appeals for the Tenth Circuit held that administrative actions at the Trademark Trial and Appeal Board (TTAB) by the trademark owner were a sufficient predicate to meet the case or controversy requirement for declaratory judgment relief. Surefoot LC v. Sure Foot Corp., Case No. 06-4294 (10th Cir., July 7, 2008) (Gorsuch, J.).
The defendant, Sure Foot Corp. (Sure Foot ND), is a corporation located in North Dakota and is in the business of manufacturing and selling shoe traction products as well as shoe laces. The plaintiff, Surefoot LC (Surefoot UT), is a company based in Utah and is in the business of manufacturing and selling custom-fit ski boots and ski boot orthotics. Sure Foot ND started doing business under the name Sure Foot in 1985. Surefoot UT started doing business under that brand in 1994. Sure Foot ND sent a series of cease-and-desist letters to Surefoot UT in 1998. During 1998 the parties were in settlement negotiations. In 2002 Sure Foot ND initiated a cancellation proceeding before the Trademark Trial and Appeal Board to cancel Surefoot UT's registration for "Surefoot." Further, from mid-2005 to mid-2006, Sure Foot ND filed oppositions against of three trademark applications that were filed by Surefoot UT. In July 2006 Surefoot ND filed a declaratory judgment action in federal district court.
The trial court dismissed the action, finding no threat of imminent harm and further that Sure Foot ND's intervening administrative actions before TTAB do not give rise to "any reasonable basis [for Surefoot UT] to fear imminent litigation." Surefoot UT appealed.
The 10th Circuit, quoting from the Supreme Court decision in MedImmune v. Genentech, a decision that was issued after the district court's decision here, noted that while the jurisdictional basis for a declaratory judgment suit must be "definite and concrete, touching the legal relations of the parties having adverse legal interests [and the issue must be] real and substantial [and] admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts," it requires no greater showing than is required by Article III of the Constitution, which does not require a party to take law-breaking steps before a declaratory suit can be filed. Specifically, the MedImmune Court found the "reasonable apprehension of suit" test, as applied by the Federal Circuit in the patent context, to be overly stringent. (See IP Update, Vol. 10, No. 1. )
On the facts of this case, the 10th Circuit held that Sure Foot ND had made clear that it believed Surefoot UT's use of the "Surefoot" mark causes consumer confusion in the market and therefore infringes Sure Foot ND's trademark rights. The court also noted that Sure Foot ND had not only threatened litigation against Surefoot UT, it had filed cancellation and opposition proceedings against Surefoot UT's trademark applications as well. Thus, the Court found that there was a definite and concrete dispute between the parties to support the claim for declaratory judgment relief and remanded the case to the district court, noting that even given the existence of a definite and concrete dispute, it remains within the discretion of the district court to determine whether to consider Surefoot UT's claims.
Practice Note: The 10th Circuit decision extends the Supreme Court's rejection of the "reasonable apprehension of litigation" test to trademarks (as well as patents).
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