Civil Cases
AARP v. 200 Kelsey Assocs., LLC,
2009 WL 47499 (S.D.N.Y. Jan. 8, 2009)
ABSTRACT
The Southern District of New York held that although potential infringers—not trademark owners—typically bring declaratory judgment actions seeking declarations of noninfringement, a plaintiff may seek a declaration of infringement where the defendant has not yet actually sold or distributed an allegedly infringing product. Where a defendant’s activities evidence “a definite intent and apparent ability” to commence use of an allegedly infringing trademark on a product, a justiciable controversy exists. Moreover, activities such as actively seeking licensees to publish a magazine, and conducting an extensive analysis of the publishing industry in preparation for the launch of such a magazine, constitute “use in commerce” for the purposes of sufficiently alleging a trademark infringement claim.
CASE SUMMARY
FACTS
Plaintiff AARP, a nonprofit organization dedicated to addressing the needs and interests of senior citizens, sued defendants for trademark infringement regarding their upcoming publication of Modern Maturity, a new magazine intended for senior citizens. AARP also sought a declaration that its MODERN MATURITY mark for a bimonthly magazine had been infringed by the defendants. Moving to dismiss for lack of jurisdiction and failure to state a claim, defendants Michael Reich and 200 Kelsey Associates, LLC (collectively “Associates”) argued that because they had not actually published or begun selling their Modern Maturity magazine, AARP had shown neither the existence of a case or controversy sufficient to confer declaratory judgment jurisdiction nor “use in commerce” of the MODERN MATURITY mark required to state a claim for trademark infringement. In response, AARP argued that it did not have to wait for the defendants to actually publish or distribute their Modern Maturity magazine before bringing a declaratory judgment action. Rather, AARP argued that Associates’ prepublication activities were sufficient to show that an actual controversy existed between the parties, and that the defendants had used the MODERN MATURITY mark “in commerce” for the purposes of alleging a trademark infringement claim.
ANALYSIS
The Declaratory Judgment Act permits a federal court to “declare the rights and other legal relations” of parties to “a case of actual controversy.” 28 U.S.C. § 2201. In this case, the court first noted that potential infringers—not trademark owners—typically bring declaratory judgment actions. The court determined, however, that if the “controversy” requirement is met, a plaintiff should not be precluded from seeking a declaration of infringement if the defendant could have maintained such an action in the same circumstances. Accordingly, the court adopted the following “converse test” used in the patent context from Lang v. Pacific Marine & Supply Co., 895 F.2d 761, 764 (Fed. Cir. 1990):
(1) the defendant must be engaged in an activity directed toward making, selling, or using subject to an infringement charge under [the Patent Act], or be making meaningful preparation for such activity; and
(2) acts of the defendant must indicate a refusal to change the course of its actions in the face of acts by the patentee sufficient to create a reasonable apprehension that a suit will be forthcoming.
The court noted that there was “no persuasive reason” not to apply the Lang test in the trademark infringement context.
In considering the first prong of the Lang test, the court applied the reasoning in Starter Corp. v. Converse, Inc., 84 F.3d 592 (2d Cir. 1996), and held that the first prong is met “where a party has engaged in a course of conduct evidencing a definite intent and apparent ability to commence use of the [allegedly infringing] marks on [a] product.” But because the “definite intent and apparent ability” test was derived from the “reasonable apprehension of imminent suit” test—a test abrogated by the U.S. Supreme Court in MedImmune Inc. v. Genentech Inc., 549 U.S. 118 (2007)—the court also considered whether MedImmune had similarly overturned the “definite intent and apparent ability” test. The court found that the “definite intent and apparent ability” test stems from the portion of the “reasonable apprehension of imminent suit” test concerning the extent to which the parties are in adversarial conflict—and MedImmune did not change the fundamental requirement of adversity. In addition, the court found that the heart of the “definite intent and apparent ability” test is the immediacy of the dispute, something MedImmune specifically upheld. Accordingly, the court found that MedImmune had not overturned the “definite intent and apparent ability” test.
Applying the “definite intent and apparent ability” test to the present case, the court found that AARP had sufficiently alleged a “definite intent and apparent ability” by the defendants to use the MODERN MATURITY mark. Specifically, the defendants had been actively seeking licensees to publish their Modern Maturity magazine and had conducted an extensive analysis of the publishing industry in advance of the magazine’s launch. Accordingly, the court found that an “actual controversy” existed between the parties and denied the defendants’ motion to dismiss for lack of jurisdiction.
Regarding the “use in commerce” requirement for a claim of trademark infringement, the court rejected Associates’ argument that “use in commerce” of the MODERN MATURITY mark did not exist without actual publication, distribution, sale, or offer for sale of their Modern Maturity magazine. Rather, the court denied defendants’ motion to dismiss for failure to state a claim because (1) trademark infringement claims are not contingent on the actual sale of an allegedly infringing product, and (2) AARP had sufficiently alleged that defendants promoted the production of their magazine through use of the MODERN MATURITY mark. Defendants had been searching for licensees to publish a magazine called Modern Maturity and had conducted an extensive analysis of the publishing industry in preparation for launching the magazine. The court held it was reasonable to infer that, in doing so, defendants had used the MODERN MATURITY mark in commerce, such as by providing mock-ups or prototypes of the magazine while pitching it to potential publishers.
Accordingly, the court found that Associates’ activities constituted “use in commerce” of the MODERN MATURITY mark for purposes of alleging a claim of trademark infringement.CONCLUSION
Although declaratory judgment actions are not typically brought by trademark owners against infringers, AARP shows that a trademark owner may seek a declaration of infringement, even where the defendant has not actually sold or distributed any allegedly infringing products. Under AARP, an “actual controversy” may exist merely where the defendant’s activities evidence “a definite intent and apparent ability” to commence use of the allegedly infringing mark in the future. Moreover, a defendant’s use of a mark in connection with product prelaunch activities may be sufficient to establish “use in commerce” for purposes of alleging a trademark infringement claim.
