Superguide Corp. v. Kegan
| Decision Date | 08 October 1997 |
| Docket Number | No. CIV. 4:97CV181.,CIV. 4:97CV181. |
| Parties | SUPERGUIDE CORPORATION, Plaintiff, v. Daniel KEGAN, d/b/a Elan Associates, Defendant. |
| Court | U.S. District Court — Western District of North Carolina |
Julian H. Wright, Robinson, Bradshaw & Hinson, P.A., Charlotte, NC, Marc Morris, Gary J. Nelson, Christie, Parker & Hall, Pasadena, CA, for Plaintiff.
W. Thad Adams, III, John S. Evans, W. Thad Adams, III, P.A., Charlotte, NC, Daniel Kegan, Diane Lidman, Marc Fineman, Kegan & Kegan, Chicago, IL, Jeffrey J. Schwartz, J. Scott Evans, Adams Law Firm, P.A., Charlotte, NC, for Defendant.
Pursuant to 28 U.S.C. § 636(b) and the standing Orders of Designation of this Court, United States Magistrate Judge Max O. Cogburn, Jr., was designated to consider pending motions in the captioned civil action and to submit to this Court recommendations for the disposition of these motions.
On July 29, 1997, the Magistrate Judge filed a Memorandum and Recommendation in this case containing proposed findings of fact and conclusions of law in support of a recommendation denying Defendant's motion to dismiss. Defendant timely filed objections to the Memorandum and Recommendation. Thereafter, on September 25, 1997, this Court heard arguments on the motion by counsel.
After a de novo review of the pleadings, the Magistrate Judge's Recommendation, and after hearing argument on the motion to dismiss, the Court finds that the proposed findings of fact contained in the Memorandum and Recommendation are supported by the record and that the proposed conclusions of law are consistent with current case law. Accordingly, the Court hereby accepts the Magistrate Judge's Recommendation that the Defendant's motion to dismiss be denied.
IT IS, THEREFORE, ORDERED that Defendant's motion to dismiss is hereby DENIED.
THIS MATTER is before the court upon defendant's Motion Pursuant to Rules 12(b)(1), (2) and (3) to Dismiss for Lack of Subject Matter Jurisdiction, Personal Jurisdiction, and Venue. Having carefully considered that motion and reviewed the pleadings, including plaintiff's response, the undersigned enters the following findings, conclusions, and recommendation.
Defendant is the registered owner of the federally registered trademark MACGUIDE, which mark is used in connection with computer-oriented publications and a number of goods and services related to the personal computer marketplace. Using the mark "SuperGuide," plaintiff is engaged in the business of providing customers with satellite television programming information, which is delivered to the customer's television set through satellite communications, all under the name of "SuperGuide." Plaintiff's products include remote control units, television signal receivers, interface boxes, and interface cables, all marketed under the mark "SuperGuide." In short, plaintiff appears to provide the electronic equivalent of "TV Guide" to its satellite customers.
Since January 1994, plaintiff has sought federal registration of its trademark "SuperGuide" with the United States Patent and Trademark Office ("PTO"). In January 1996, the PTO published the SUPERGUIDE mark for opposition. Upon learning of the proposed registration, defendant secured several extensions of time to file opposition to the registration. As part of its application process, plaintiff identified the goods with which such mark would be associated to include "computer programs for use with television listings and related communications accessories, namely, remote controls, integrated satellite receivers, electronic interface boxes and electrical interface cables." See Defendant's Exhibit 9.
On November 18, 1996, defendant filed his Notice of Opposition, in which he alleged that the proposed mark was likely to cause confusion, mistake, or deception with his federally registered mark MACGUIDE and that he would be damaged by the proposed registration. In subsequent communication between plaintiff and defendant (which appears to be a partial basis for filing this suit), defendant informed plaintiff that he took issue with the proposed registration due to the reference in the description for use of SUPERGUIDE in relation to any computer goods or services. Defendant demanded that such reference be deleted, even if that change meant withdrawal of the application.
Plaintiff answered the opposition in January 1997, and in February 1997, the Trademark Trial and Appeal Board set trial dates for the opposition. Administrative discovery was commenced, and a few days before its discovery responses were due on the interrogatories, requests for production, and requests for admission, directed to whether the mark SUPERGUIDE had ever been used on computer programs, plaintiff filed this declaratory relief action.
Defendant seeks dismissal and contends that (1) this court lacks jurisdiction over the subject matter of this suit, (2) personal jurisdiction cannot be asserted over him because he has not had the minimum contacts, and (3) even if the court had subject matter and personal jurisdiction, venue would be more appropriate in the Northern District of Illinois, where he resides. Defendant's contentions will be discussed seriatim.
In the context of a declaratory relief action, defendant's Motion to Dismiss under Rule 12(b)(1) raises the issue of whether an actual case or controversy existed between the parties at the time suit was filed. Such an inquiry is of particular importance in declaratory relief actions in light of the time-tested mandate that federal courts avoid "advisory opinion." Where a declaratory relief action involves trademarks, the test for an "actual case or controversy" has two prongs:
(1) whether defendant's conduct created a real and reasonable apprehension of liability on the part of plaintiff; and
(2) whether plaintiff engaged in a course of conduct which has brought it into an adversarial conflict with the defendant.
Windsurfing Intern., Inc. v. AMF Inc., 828 F.2d 755, 757-58 (Fed.Cir.1987).
As to the first prong, defendant contends that his filing an opposition to an application with the PTO office and vigorously policing his registered mark are insufficient to satisfy this prong. In response, plaintiff contends that it has a real and reasonable apprehension of liability based on defendant's filing of requests for extension of time with the PTO, the ultimate filing of an opposition to plaintiff's application with the PTO, thinly veiled threats of litigation contained in carefully worded correspondence and accompanying enclosures, and defendant's litigious history in policing its mark.
In an initial letter to plaintiff's counsel, defendant stated that the Enclosed with that letter were a copy of defendant's trademark on the principal register for MACGUIDE and excerpted settlement agreements with big-name computer companies agreeing not to further infringe defendant's mark in exchange for avoiding litigation. A reasonable apprehension of suit can arise indirectly, as in this case, without an overt and express threat. Texas v. West Pub. Co., 882 F.2d 171, 177 (5th Cir.1989). In further support of its argument, plaintiff has listed 14 different instances of defendant vigorously policing its mark through litigation, filing for extension of time to oppose, and actual oppositions to proposed registrations.
The undersigned finds that the actions of defendant, when taken in combination, would lead a reasonable person to believe that failure to fold his or her tent quickly would result in exposure to a action for trademark infringement. The first prong appears to be satisfied.
The second prong focuses on plaintiff's actions, rather than defendant's, by asking whether plaintiff has engaged in a course of conduct which has brought it into an adversarial conflict with defendant. In this case, defendant argues that this prong cannot be satisfied because plaintiff has not yet applied the trademark SUPERGUIDE to computer goods. Indeed, he argues that this action was brought by plaintiff just days before administrative discovery was due that would have shown that plaintiff has never made use of that trademark in association with computer goods either prior to its application for registration or subsequent thereto. Plaintiff argues that the very nature of its business, i.e., the supplying of television program information via satellite, requires use of computers, computer programs, and computer related products.
This controversy is similar to the one discussed in Starter Corporation v. Converse, Inc., 84 F.3d 592, 38 U.S.P.Q.2d.1947 (2d Cir.1996). In that case, Converse contended that Starter's declaratory relief action was premature because it had not yet used the disputed mark on goods. Starter argued that actual use was not the test, and that the "imminent intention and ability" test was applicable. Adapted from patent law, the imminent intention and ability test provides, as follows:
[A]n actual case or controversy exists where a party has engaged in a course of conduct evidencing a "definite intent and apparent ability to commence use" of the marks on the product.
Id., at 595-96 (citation omitted).
In this case, plaintiff asserts in its complaint that it is entitled to use the SUPERGUIDE mark in association with its goods and services, which include computer programs and computer related products. As demonstrated by the exhibits annexed to the complaint, plaintiff or its predecessor in interest has used the SUPERGUIDE mark since 1986 in marketing its program guide service to satellite television...
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