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Waiver in PTO Trademark Appeals Applies “Per Decision, Not Per Case”

By Paul Devinsky on Mar 24, 2021
Posted In Trademarks

Addressing a “narrow question of statutory interpretation,” the US Court of Appeals for the Fourth Circuit reversed the district court’s dismissal of a trademark case for lack of subject matter jurisdiction, holding that a party that appeals a Trademark Trial & Appeal Board (TTAB) decision to the US Court of Appeals for the Federal Circuit may, after remand to and issuance of a new decision by the TTAB, seek review of the new decision in federal district court. Snyder’s-Lance, Inc. v. Frito-Lay N.A., Inc., Case No. 19-2316 (4th Cir. Mar. 17, 2021) (Wynn, J.)

Princeton Vanguard, a snack food producer, applied to register its mark “Pretzel Crisps” on the principal register. Frito-Lay opposed. The TTAB denied Princeton Vanguard’s application, concluding that the mark was generic.

Under the Lanham Act, Princeton Vanguard could appeal the TTAB’s original decision to either the Federal Circuit under 15 USC § 1071(a) or federal district court under § 1071(b). Princeton Vanguard elected a direct appeal to the Federal Circuit pursuant to § 1071(a), thus waiving its right to district court review. The Federal Circuit concluded that the TTAB applied the wrong legal standard in evaluating whether Princeton Vanguard’s mark was generic and remanded the case to the TTAB. The TTAB again concluded that Princeton Vanguard’s mark was generic. This time, Princeton Vanguard appealed to a federal district court pursuant to § 1071(b).

The district court sua sponte dismissed the case for lack of subject matter jurisdiction, concluding that Princeton Vanguard’s appeal of the original decision to the Federal Circuit pursuant to § 1071(a) precluded Princeton Vanguard from appealing the second decision to a district court pursuant to § 1071(b). Princeton Vanguard appealed.

On appeal, the Fourth Circuit concluded that the statutory text of the Lanham Act supported Princeton Vanguard’s argument in favor of jurisdiction. The Court explained that Princeton Vanguard’s waiver of its right to district court review of the original TTAB decision pursuant to § 1071(a) did not apply to any subsequent decisions in the same case, and that the waiver applied “per decision, but not per case.”

The Court rejected Frito-Lay’s argument that Princeton Vanguard was taking a second bite at the apple by seeking re-review in federal district court of issues already decided by the Federal Circuit, reasoning that Princeton Vanguard was seeking district court review of the second, separate decision that had not been reviewed by the Federal Circuit. The Court stressed, however, that the Federal Circuit’s review of the TTAB’s original decision was binding as to issues it decided.

Practice Note: If the TTAB issues multiple decisions in the same proceeding, each decision is considered a separate decision for purposes of waiver under §§ 1071(a) (b), even if the decisions implicate similar issues.

A Primer on Practice at the Trademark Trial & Appeal Board

By Paul Devinsky on Jun 30, 2022
Posted In Trademarks

In a precedential decision rendered in an opposition proceeding, the Trademark Trial & Appeal Board (Board) took the lawyers for each side to task for ignoring Board rules in presentation of their case, but ultimately decided the case on a likelihood of confusion analysis. The Board found that the parties’ marks and goods were “highly similar” and sustained the opposition. Made in Nature, LLC v. Pharmavite LLC, Opposition Nos. 91223352; 91223683; 91227387 (June 15, 2022, TTAB) (Wellington, Heasley and Hudis, ALJs) (precedential).

Pharmavite sought registration of the standard character mark NATURE MADE for various foods and beverages based on allegations of bone fide intent to use in commerce. Made in Nature (MIN) opposed on the ground that Pharmavite’s mark so resembled MIN’s registered and common law “Made In Nature” marks as to cause a likelihood of confusion when used on the goods for which registration was sought.

In its brief to the Board, Pharmavite raised, for the first time, the Morehouse (or prior registration) defense. MIN objected to the Morehouse defense as untimely. The Board agreed, noting that defense is “an equitable defense, to the effect that if the opposer cannot be further injured because there already exists an injurious registration, the opposer cannot object to an additional registration that does not add to the injury.” The party asserting a Morehouse defense must show that it “has an existing registration [or registrations] of the same mark[s] for the same goods” (emphasis in original).

Here, the Board found that this defense was not tried by the parties’ express consent and that implied consent “can be found only where the non-offering party (1) raised no objection to the introduction of evidence on the issue, and (2) was fairly apprised that the evidence was being offered in support of the issue.” In this case, Pharmavite did introduce into the record its prior NATURE MADE registrations but only for the purpose of supporting Pharmavite’s “[r]ight to exclude; use and strength of Applicant’s mark.” The Board found that this inclusion did not provide notice of reliance on the Morehouse or prior registration defense at trial.

In sustaining the opposition, the Board commented extensively on the record and how it was used, “[s]o that the parties, their counsel and perhaps other parties in future proceedings can benefit and possibly reduce their litigation costs.”

Over-Designation of the Record as Confidential

The Board criticized the parties for over-designating as confidential large portions of the record, warning that only the specific “exhibits, declaration passages or deposition transcript pages that truly disclosed confidential information should have been filed under seal under a protective order.” If a party over-designates material as confidential, “the Board will not be bound by the party’s designation.”

Duplicative Evidence

The Board criticized the parties for filing “duplicative evidence by different methods of introduction; for example, once by Notice of Reliance and again by way of an exhibit to a testimony declaration or testimony deposition.” The Board noted that such practice is viewed “with disfavor.”

Overuse of [...]

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Alleged Trademark Infringer Remains Hog-Tied after Appeal

By Paul Devinsky on Feb 3, 2022
Posted In Trademarks

The US Court of Appeals for the Tenth Circuit dismissed an appeal of a district court order denying a stay of a federal action for lack of jurisdiction under 28 U.S.C. § 1291 and reversed in part the district court’s grant of a preliminary injunction. The Trial Lawyers College v. Gerry Spence Trial Lawyers College at Thunderhead Ranch, Case No. 20-8038 (10th Cir. Jan. 27, 2022) (Bacharach, Briscoe, Murphy, JJ.).

The dispute between the parties arose out of a program called The Trial Lawyers College at Thunderhead Ranch in Wyoming. The College’s board of directors split into two factions known as the “Spence Group” and the “Sloan Group.” After the split, the two groups sued each other. The Spence Group sued in state court for dissolution of the College and a declaratory judgment regarding control of the board of directors. The Sloan Group sued in federal court claiming trademark infringement under the Lanham Act.

Both groups sought relief in the federal case. The Spence Group filed a motion to stay the federal court proceedings in light of the state court proceedings, and the Sloan Group requested a preliminary injunction. The district court denied the Spence Group’s stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings.

The Tenth Circuit found that it lacked jurisdiction to review the district court’s stay denial. First, the state court resolved the dispute concerning board control, rendering part of the requested stay moot. Second, the Court determined that it lacked jurisdiction over the remaining motion for stay because it was not a final order. The Court explained that it needed to decide the appealability of the ruling based on the category of order rather than the particular facts of the case. The Court found that there was no unsettled issue of unique urgency or importance that warranted the Court exercising jurisdiction over the denial of the stay. Specifically, the Court explained that piecemeal litigation was unlikely because the state court already decided the issue of board control, and the Spence Group did not identify an unsettled issue of unique urgency.

The Tenth Circuit did exercise jurisdiction over the district court’s grant of a preliminary injunction. The Spence Group challenged the district court’s finding of irreparable harm, the order to remove sculptures bearing the College’s name, restrictions on what the Spence Group could say and the consideration of evidence presented after the hearing ended. The Court reviewed the district court’s findings under an abuse-of-discretion standard. The Court found that the district court did not abuse its discretion by finding irreparable harm, considering evidence after the hearing and enjoining the Spence Group from using words associated with the College. The Court explained that the district court reasonably found irreparable harm based on the College’s efforts to protect its name, logo and trademarks, as well as evidence of likely confusion among customers of the College based on the Spence Group’s use of those trademarks. As for the sculptures, the Court found [...]

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Texas Hammer Nails Trademark Infringement Appeal

By Joshua Revilla on Sep 2, 2021
Posted In Trademarks

The US Court of Appeals for the Fifth Circuit reversed a district court’s dismissal of an initial confusion trademark complaint, finding that the plaintiff alleged a plausible claim of trademark infringement under the Lanham Act. Adler v. McNeil Consultants, LLC, Case No. 20-10936 (6th Cir. Aug. 10, 2021) (Southwick, J.)

Jim Adler is a personal injury lawyer who trademarked and used several terms, including JIM ADLER, THE HAMMER and TEXAS HAMMER, to market his business, including via keyword advertisements. McNeil Consultants, a personal injury lawyer referral service, purchased keyword ads using Adler’s trademarked terms, which allowed McNeil’s advertisements to appear at the top of any Google search of Adler’s trademarked terms. McNeil’s advertisements used generic personal injury terms, did not identify any particular law firm and clicking on the ads placed a phone call to McNeil’s call center rather than directing the user to a website. The call center used a generic greeting so consumers did not realize with whom they were speaking.

Adler filed suit against McNeil, asserting Texas state law claims as well as trademark infringement under the Lanham Act. McNeil moved to dismiss, arguing that its keyword ads did not create a likelihood of confusion. The district court agreed and dismissed Adler’s complaint. Adler appealed.

To successfully plead a trademark infringement claim under Fifth Circuit law, the holder of a protectable trademark must establish that the alleged infringing use “creates a likelihood of confusion as to source, affiliation, or sponsorship.” To determine whether a likelihood of confusion exists, the Court weighs a non-exhaustive list of several confusion factors, including the similarity of the marks, the similarity of the products, the defendant’s intent and the care exercised by potential consumers.

The Fifth Circuit explained that Adler alleged initial interest confusion, which exists where the confusion creates consumer interest in the infringing party’s services even where no sale is completed because of the confusion. The Court noted that this case presented the first opportunity for the Fifth Circuit to consider initial interest confusion as it pertains to search engine keyword advertising. Relying on Ninth Circuit precedent and parallel reasoning to its own opinions on initial interest confusion in the context of metatag usage, the Court concluded that Adler’s complaint alleged a plausible claim of trademark infringement under the Lanham Act.

The Fifth Circuit noted that initial interest confusion alone is not enough to raise a Lanham Act claim. The Court explained that if a consumer searches TOYOTA and is directed to search results containing a purchased ad clearly labeled as selling VOLKSWAGEN products, a consumer who clicks on the VOLKSWAGEN ad has been distracted, not confused or misled into purchasing the wrong product. Distraction does not violate the Lanham Act. However, the Court explained that where the use of keyword ads creates confusion as to the source of the advertisement—not mere distraction—an infringement may have occurred. Because McNeil’s advertisements were admittedly generic and could have been associated with any personal injury law firm, the Court found that the keyword [...]

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Hairy Situation: Trademark Act Doesn’t Provide Consumer Standing

By Eleanor B. Atkins on Jun 1, 2023
Posted In Trademarks

The US Patent & Trademark Office Trademark Trial & Appeal Board found that a consumer did not have standing to oppose an application for registration because the consumer failed to establish a commercial interest and injury that would be proximately caused by the registration of the mark. Rebecca Curtin v. United Trademark Holdings, Inc. (TTAB May 4, 2023) (Adlin, Lynch, Bunn, ATJs.)

Rebecca Curtin, a trademark law professor, has purchased various toys for her daughter. Curtin filed an opposition to United Trademark Holdings’ (UTH) application to register RAPUNZEL for use in connection with “dolls; toy figures.” Curtin alleged that RAPUNZEL fails to function as a trademark and is generic (or merely descriptive) of the identified goods and that UTH committed fraud. Curtin lamented that competition would be impeded if “private companies are allowed ‘to trademark the name of a famous fairytale character in the public domain,’” which would likely force consumers to pay higher prices for the relevant goods. Curtin also stated that allowing this registration “could chill the creation of new dolls and toys by fans of the Rapunzel fairytale, crowding out the substantial social benefit of having diverse interpreters of the fairytale’s legacy.”

More than four years ago, the Board denied UTH’s motion to dismiss, finding that Curtin had standing by relying on a case from 1999 that addressed the Trademark Act’s bar to registration for “immoral” or “scandalous” marks. Months after the Board’s initial decision, however, the Supreme Court ruled in Iancu v. Brunetti that the portion of the Trademark Act barring registration for “immoral” or “scandalous” marks was unconstitutional, and updates were issued on the “standard for determining whether a party is eligible to bring a statutory cause of action.”

A plaintiff has standing to oppose registration of a mark “when doing so is within the zone of interests protected by the statute and [opposer] has a reasonable belief in damage that would be proximately caused by registration of the mark.” Here, the Board explained that the statute at issue was the Trademark Act, which identifies its interest as regulating commerce and protecting plaintiffs with commercial interests: “[A] mere consumer that buys goods or services is not under the Trademark Act’s aegis.”

Moreover, Curtin failed to demonstrate that an injury would result from registration of the mark. The Board was unconvinced by Curtin’s explanations of the potential harm to competition and resulting higher prices for consumers, stating that the “allegations of damage are [] too remote, because the alleged damage to Opposer depends first on the alleged effect of registration on other commercial doll markets or sellers.” The Board, therefore, dismissed the opposition.

Elevate the $: Geographic Isolation Helps Defeat Trademark Infringement Claim

By Kathleen Lynch on May 25, 2023
Posted In Trademarks

In a case between similarly named banks, the US Court of Appeals for the Tenth Circuit confirmed expert disclosure requirements, conducted a de novo likelihood of confusion analysis and ultimately upheld a finding of no trademark infringement. Elevate Federal Credit Union v. Elevations Credit Union, Case No. 22-4029 (10th Cir. May 10, 2023) (Bacharach, Moritz, Rossman, JJ.)

Elevate is a federal credit union with almost 13,000 total members, operating exclusively in three rural Utah counties. Elevations is a Colorado state-chartered credit union with more than 150,000 members. The parties’ respective logos are shown below:

Elevate filed a suit seeking declaratory judgment of noninfringement, and Elevations counterclaimed for trademark infringement. After excluding testimony from Elevations’s expert, the district court found no infringement and granted summary judgment in favor of Elevate. Elevations appealed.

Elevations raised two issues on appeal:

Did the district court abuse its discretion in excluding Elevations’s expert’s testimony?
Did the district court err in granting summary judgment to Elevate on likelihood of confusion?

The Tenth Circuit affirmed the district court on the first issue. Elevations’s expert conducted a survey that involved showing marks from internet searches to consumers and asking whether they thought any came from the same company. While this survey type is legitimate, the expert did not keep records of his searches, write down his search terms, identify his search engines, or justify why he conducted multiple internet searches but showed consumers only results from Bing and the Apple App store. The Tenth Circuit found that the district court could have reasonably considered this information “facts or data” considered by the expert that needed to be—but was not—disclosed. Because the expert failed to meet his disclosure obligations and because this failure was not excused by justification or harmlessness, the lower court did not abuse its discretion.

The Tenth Circuit also affirmed the summary judgment of no likelihood of confusion. The Court conducted a de novo review and analyzed the six factors below. The Court concluded that the following five factors weighed against the likelihood of confusion:

Level of care exercised by purchasers. When customers look to open bank accounts or borrow money, they exercise a great level of care. This is especially true here because credit unions have statutory membership restrictions, meaning consumers need to confirm they qualify for membership before applying.
Strength of senior mark. While Elevations’s marks are “suggestive” and therefore “fall[] midway in the range of conceptual strength,” many other businesses in Colorado use the root term “elevat,” which weakens Elevations’s mark. Elevations’s marks also are weak where Elevate operates in Utah due to lack of advertising.
Degree of similarity. While the marks have some similarities in appearance and sound, they differ in fonts, alignment, background colors, graphics and number of syllables. The Court also stated that the “significance of the similarities fades away” in light [...]

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Pending Appeal Does Not Divest Board of Statutory Authority to Institute IPRs

By Amol Parikh on May 18, 2023
Posted In America Invents Act, Patents

In a case involving sua sponte review, the Director of the US Patent & Trademark Office (PTO) vacated an inter partes review (IPR) decision denying institution, found that the Patent Trial & Appeal Board had statutory authority to institute IPR review of a claim that had been previously found invalid by a district court under 35 U.S.C. § 101 (but under appeal), and remanded the proceeding for the Board to consider whether discretionary denial was appropriate. Volvo Penta of the Americas, LLC v. Brunswick Corp., IPR2022-01366, -01367, -01368, -01369, -01424 (PTO May 2, 2023) (Vidal, Dir.).

Brunswick owns several patents related to marine vessels. Volvo filed IPR petitions challenging the patents, which the Board ultimately denied. Prior to the Board’s decision, the District Court for the Eastern District of Virginia determined that claim 1 in each of the challenged patents was directed to patent-ineligible subject matter and thus was invalid under § 101. In denying institution, the Board concluded that it lacked authority to institute the IPRs because the challenged claims were no longer in effect and the America Invents Act (AIA) only permits a petitioner to challenge a claim, noting that “when given its plain and ordinary meaning, § 311(b) provides that only claims that are in effect may be annulled.” Although Brunswick appealed the district court’s decision, the Board determined that the challenged claims were finally adjudicated. Thus, the Board lacked authority to institute the requested IPR. The Board also determined that the multi-factor Fintiv analysis for discretionary denial under 35 U.S.C. § 214(a) was inapplicable here in view of the district court’s invalidity finding.

The Director reviewed the Board’s decision sua sponte and vacated the Board’s institution decision with instructions to analyze Fintiv factors 1 through 5 in view of the parallel district court proceeding.

The Director first addressed the Board’s § 311(b) analysis. The Director concluded that in finding the district court’s invalidity determination to be a final adjudication, the Board appeared to have borrowed from collateral estoppel principles. The Director found, however, that these principles do not apply to § 311(b) nor was there any assertion that Volvo was collaterally estopped from pursuing IPRs. The Director also determined that the challenged claims were not fully adjudicated since the district court’s decision was subject to further judicial review. Thus, the Director found that the Board had statutory authority to institute the IPRs.

Next, the Director addressed the Board’s Fintiv analysis, finding that the Board improperly interpreted Fintiv as limited to its exercise of discretion in the context of ongoing parallel district court litigation where final judgment has not yet been entered. The Director explained that the Fintiv analysis applied where, as here, the claims remain subject to further review on appeal. The Director instructed the Board to evaluate the Fintiv factors on remand and instructed that if the Board determines that these factors favor discretion to deny institution, the Board should then consider whether the case on the merits is compelling (consistent with the
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And All That Jazz: Trademark Used for One Service Doesn’t Permit Tacking for Others

By Kyle Sorenson, PhD on Apr 13, 2023
Posted In Trademarks

Reversing the Trademark Trial & Appeal Board’s decision to dismiss an opposition, the US Court of Appeals for the Federal Circuit addressed the requirements for a trademark owner to employ “tacking” based on the use of a mark for one service in the context of a trademark application listing multiple services. Bertini v. Apple Inc., Case No. 21-2301 (Fed. Cir. Apr. 4, 2023) (Moore, C.J.; Taranto, Chen, JJ.)

Charles Bertini is a professional jazz musician who filed a notice of opposition to Apple’s application to register the mark APPLE MUSIC. Because the parties did not dispute that there was a likelihood of confusion between the two marks, the only disputed issue was which party’s mark was entitled to an earlier priority date. Bertini’s mark, APPLE JAZZ, had a priority date of June 13, 1985, for use in live music festivals and concerts. Apple’s mark, APPLE MUSIC, which was the subject of the opposition, had a priority date of June 8, 2015. In its application, Apple sought to register its mark for 15 broad service categories, including the production and distribution of sound recordings and the arranging, organizing, conducting and presenting of live musical performances.

Because Bertini’s mark had the earlier priority date, Apple attempted to use tacking to claim an earlier priority date to an APPLE mark used by Apple Corps. for gramophone records featuring music since August 1968. Apple purchased this mark from the Beatles’ Apple Corps. in 2007. Tacking allows a trademark owner to give a newly modified mark the priority date of its old mark, but only if both marks “create the same, continuing commercial impression so that consumers consider both as the same mark.” The Board found that Apple was entitled to tack back to use the 1968 date of use of the APPLE MUSIC mark and thus had priority over Bertini. The Board accordingly dismissed Bertini’s opposition. Bertini appealed.

The Federal Circuit first addressed the tacking standard in the context of trademark registration. The Court explained that in order to obtain an earlier priority date through tacking, an applicant must show that the old mark was associated with all of the goods and/or services listed in its application as of the proposed earlier priority date. The Court found that Apple failed to meet this burden. As of 1968, the APPLE mark was not associated with the service of “arranging, organizing, conducting, and presenting live musical performances.” Because this service was listed in Apple’s trademark application, the APPLE MUSIC mark application was not entitled to claim priority back to the priority date of the Apple Corps. APPLE mark. The Court noted that Bertini only needed to show priority of use of APPLE JAZZ for any service listed in Apple’s application to succeed in his opposition. Because the Court rejected Apple’s attempt to tack back to the 1968 priority date for all of Apple’s listed services where Apple could only show priority for one service listed in its application, Bertini met this burden. The Court also concluded [...]

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Charter Schools Aren’t Immune from Trademark Suits

By Amol Parikh on Mar 16, 2023
Posted In Trademarks

The US Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of a trademark suit against a charter school operator and public school district in Texas but explained that the charter school was not automatically immune from lawsuits based on sovereign immunity. Springboards to Education, Inc. v. McAllen Indep. School District, Case Nos. 21-40333; -40334 (5th Cir. Mar. 8, 2023) (Smith, Duncan, JJ.) (Oldham, J., concurring).

Springboards sells products to school districts in connection with its Read a Million Words Campaign. The campaign incentivizes school children to read books through promises of induction into the Millionaires’ Reading Club and access to rewards such as t-shirts, backpacks and fake money. Springboards’s goods typically bear any combination of trademarks that the company registered with the US Patent & Trademark Office, including “Read a Million Words,” “Million Dollar Reader,” “Millionaire Reader” and “Millionaires’ Reading Club.”

Springboards filed a complaint for trademark infringement, trademark counterfeiting and false designation of origin against McAllen Independent School District (MISD), a public school district in Texas, and IDEA Public Schools, a nonprofit organization operating charter schools in Texas. Both MISD an IDEA moved to dismiss for lack of subject matter jurisdiction, arguing that they were arms of the state and thus entitled to sovereign immunity. They also moved for summary judgment for lack of infringement. The district court ruled that only IDEA enjoyed sovereign immunity and accordingly granted IDEA’s motion to dismiss but denied MISD’s. The district court granted MISD’s motion for summary judgment after concluding that Springboards could not establish that MISD’s program was likely to cause confusion with Springboards’s trademarks. Springboards appealed.

The Fifth Circuit began with the jurisdictional issue of whether IDEA and MISD enjoyed sovereign immunity. The Court explained that determining whether an entity is an arm of the state is governed by the Clark factors, which were set forth in the Fifth Circuit’s 1986 decision in Clark v. Tarrant County. Those factors are as follows:

Whether state statutes and case law view the entity as an arm of the state
The source of the entity’s funding
The entity’s degree of local autonomy
Whether the entity is concerned primarily with local, as opposed to statewide, problems
Whether the entity has the authority to sue and be sued in its own name
Whether the entity has the right to hold and use property.

The Fifth Circuit analyzed each of the factors and concluded that IDEA was not an arm of the state. The Court found that factors 1 and 3 favored sovereign immunity while factors 2, 4, 5 and 6 did not. The Court’s decision focused heavily on factor 2, explaining that the inquiry under factor 2 has two parts: the state’s liability in the event there is a judgment against the defendant, and the state’s liability for the defendant’s general debts and obligations. The district court had concluded that factor 2 weighed in favor of immunity because 94% of IDEA’s funding came from the state and federal sources. The [...]

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No Standing to Invalidate Trademark without Threat of Infringement Suit

By Cecilia Choy, Ph.D. on Feb 23, 2023
Posted In Trademarks

The US Court of Appeals for the Ninth Circuit concluded that when a party obtains a declaratory relief finding that it does not infringe a trademark, it no longer has Article III standing to pursue invalidation of the mark. San Diego County Credit Union v. Citizens Equity First Credit Union, Case Nos. 21-55642; -55662; -56095; -56389 (9th Cir. Feb. 10, 2023) (Bea, Ikuta, Christen, JJ.)

Citizens Equity First Credit Union (CEFCU) registered a trademark for the term “CEFCU. NOT A BANK. BETTER,” and further claimed to own a nearly identical common-law trademark for “NOT A BANK. BETTER.” In 2014, San Diego County Credit Union (SDCCU) obtained a registration for “IT’S NOT BIG BANK BANKING. IT’S BETTER.” CEFCU petitioned the Trademark Trial & Appeal Board to cancel SDCCU’s registration, claiming that it covered a mark that was confusingly similar to CEFCU’s registered and alleged common-law marks.

SDCCU sought declaratory relief in the district court seeking a noninfringement finding of CEFCU’s registered and common-law marks, an invalidity finding of CEFCU’s registered and common-law marks, and a finding that CEFCU falsely or fraudulently registered its mark. CEFCU unsuccessfully filed motions to dismiss for lack of personal and subject matter jurisdiction. SDCCU persuaded the district court that during the course of the cancellation proceedings, it became apprehensive that CEFCU would sue SDCCU for trademark infringement. The district court granted SDCCU’s motion for summary judgment on noninfringement and CEFCU’s motion for summary judgment on SDCCU’s fraudulent registration claim. The parties agreed to dismiss the claim that CEFCU’s registered mark was invalid. The only issue remaining was SDCCU’s count seeking declaratory relief to invalidate CEFCU’s common-law mark. After a bench trial, the district court determined that CEFCU’s common-law mark was invalid, entered final judgment and awarded SDCCU attorneys’ fees. CEFCU appealed.

In an appeal that raised a “bevy of issues,” the Ninth Circuit concluded that the district court lacked Article III jurisdiction to invalidate CEFCU’s common-law mark following the grant of summary judgment in favor of SDCCU on its noninfringement claims. Citing the Supreme Court’s 2007 decision in MedImmune v. Genentech and Ninth Circuit precedent, the Ninth Circuit applied the “reasonable apprehension” test to determine whether a controversy exists in a declaratory judgment action regarding trademark infringement. Under this test, a party has standing to seek declaratory relief of noninfringement if the party demonstrates “a real and reasonable apprehension that [the party] will be subject to liability” if the party’s course of conduct continues. Concrete threats of a trademark infringement suit are not required to create live controversy to provide standing to seek declaratory relief action.

The Ninth Circuit concluded that justiciable controversy existed at the pleading stage, pointing to CEFCU’s cancellation petition, CEFCU’s testimony that it was just a “matter of time” before actual confusion occurred in California, and CEFCU’s affirmative refusal to stipulate that SDCCU was not infringing CEFCU’s marks. However, once the district court rendered its declaratory judgment of noninfringement, the record lacked any evidence that an ongoing threat of liability was causing [...]

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