Federation Internationale De Football v. Nike

• Decision Date: 02 October 2003
• Docket Number: No. CIV.A. 03-2003(ESH).,CIV.A. 03-2003(ESH).
• Citation: 285 F.Supp.2d 64
• Parties: FEDERATION INTERNATIONALE DE FOOTBALL ASSOCIATION Plaintiff, v. NIKE, INC., Defendant.
• Court: U.S. District Court — District of Columbia

285 F.Supp.2d 64

FEDERATION INTERNATIONALE DE FOOTBALL ASSOCIATION Plaintiff, v. NIKE, INC., Defendant.

No. CIV.A. 03-2003(ESH).

United States District Court, District of Columbia.

October 2, 2003.

James L. Bikoff, Silverberg, Goldman & Bikoff, LLP, Washington, DC, for Plaintiff.

Warren E. Olsen, Fitzpatrick, Cella, Harper & Scinto, Washington, DC, for Defendant.

MEMORANDUM OPINION

HUVELLE, District Judge.

The 2003 Women's World Cup soccer tournament is currently under way in venues across the United States. The tournament began on September 20 and is scheduled to end on October 12. In connection with this event, its organizer, the Federation Internationale de Football Association (FIFA), sought to register the trademark "USA 2003." Claiming that Nike's use of a similar phrase ("USA 03") in connection with its sponsorship of the U.S. Women's National Soccer Team has infringed upon that trademark and amounts to unfair competition, tortious interference with contractual relations, and breach of contract, FIFA brought the present action. Plaintiff has now moved for a Temporary Restraining Order enjoining Nike from using the phrase "USA 03" on its websites, or in connection with any soccer-related goods and services, during the duration of the World Cup. Nike has requested that the Court transfer this action to the Southern District of New York, or at least stay its decision until that court rules on a declaratory judgment action that Nike has brought against FIFA. See Nike, Inc. v. FIFA, Civ. Act. No. 03-7467 (S.D.N.Y. Sept. 24, 2003). For the reasons that follow, the Court will decline to transfer or stay the case at this time, and on the merits, it will deny plaintiff's request for a TRO.

BACKGROUND

The Women's World Cup has been played every four years since 1991. The current tournament was originally scheduled for China, but concerns about the recent SARS outbreak caused FIFA to move the matches to the United States, where the successful 1999 tournament had been held. In preparation for this event, as it had for previous World Cups, FIFA sought to register a number of trademarks, including one reflecting the name of the host country and the year. Thus, after the change in venue, three trademark applications for the phrase "USA 2003" were filed with the U.S. Patent and Trademark Office (PTO); these applications are currently pending. Plaintiff has entered into licensing agreements with various sponsors of the World Cup, including the sporting goods manufacturer Adidas, which allow those companies to use FIFA's trademarks on merchandise and services related to the tournament.

Defendant Nike is not a World Cup sponsor, and has no contract with FIFA to use the latter's marks in connection with the 2003 event. Nike is, however, the sponsor of the U.S. Women's National Soccer Team, which won the 1999 World Cup and is playing in the current competition. Nike provides the team's uniforms, which prominently bear the company's famous Swoosh logo, as well as other equipment and clothing. Moreover, and of direct relevance here, Nike has designed a logo that combines the Swoosh with the phrase "USA 03." This logo has been featured in various places, including on a website owned by the company, www.usasoccer.com, as well as on limited-edition t-shirts and sweatshirts that have now been distributed to approximately 100 stores around the country. (On some of this merchandise, Nike actually uses a different phrase: "United States 2003.") According to Nike, this website was developed to give fans of the U.S. soccer team a chance to follow the players and the team as they travel and train. (Decl. of Elizabeth Valentine ¶ 5.) Although the Nike site only went active shortly before the World Cup began, it shows no pictures, and makes no mention, of either that event or to FIFA itself. And the shirts feature only the aforementioned logo, sometimes along with the soccer team emblem, and other than using the phrase "USA 03" (or "United States 2003"), they contain no reference to FIFA or to the World Cup.

On September 11, 2003, after FIFA learned that Nike had been using the "USA 03" phrase on its website, it sent a cease-and-desist letter accusing Nike of trademark infringement. This triggered several exchanges of correspondence in which the parties set forth their positions in an effort to resolve the dispute short of litigation. These efforts came to an end on September 24, when Nike filed a action in the United States District Court for the Southern District of New York, seeking a declaratory judgment that its use of "USA 03" did not amount to trademark infringement under either federal or state law. (Decl. of Tila Duhaime, Ex. A.) Two days later, on September 26, FIFA filed the present action in this Court. Plaintiff's complaint asserts six counts — including trademark infringement and unfair competition in violation of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), trademark dilution in violation of the Federal Trademark Dilution Act (FTDA), 15 U.S.C. § 1125(c), tortious interference with contractual and economic relationships, and breach of contract. Plaintiff also moved for a TRO. In response, Nike filed a motion to transfer this case to the Southern District of New York, or, in the alternative, to stay the present action until that court acts on Nike's complaint. This Court heard oral arguments on these motions on September 29.

ANALYSIS

Before turning to FIFA's motion, the Court must first consider Nike's argument that the Court should transfer this case to the Southern District of New York, where Nike has filed its declaratory judgment action. It is true that when parties sue each other in different federal courts, one for trademark infringement and the other for a declaratory judgment, the so-called `first-to-file rule' generally dictates that "the first-filed declaratory judgment suit be given priority and [be] allowed to continue." McCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 32.46 (4th ed.). When this rule is heeded, the later-filed infringement action will typically either be dismissed or transferred to the forum hearing the declaratory judgment. See, e.g., 800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F.Supp. 128 (S.D.N.Y. 1994). The rule, however, is not absolute, and "special circumstances" can justify exceptions to it. Id. at 132; see also Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002, 1005 (8th Cir.1993) (noting that the rule is not intended to be "rigid, mechanical, or inflexible" and can be relaxed in "compelling circumstances").

Such circumstances include where the first-filing plaintiff has launched a "preemptive strike" declaratory judgment action in the face of an impending infringement suit. See Al-Or Int'l Ltd. v. Paul Morelli Design Inc., 53 U.S.P.Q.2d 1191, 1194-95 (C.D.Cal. Nov.30, 1999); Galileo Int'l P'ship v. Global Village Communication, Inc., 1996 WL 452273, at *3 (N.D.Ill. Aug. 8, 1996) ("But where a declaratory judgment action is filed in anticipation of an infringement action, the infringement action should proceed, even if filed later."); Serco Servs. Co. v. Kelley Co., 1994 WL 715913, 31 U.S.P.Q.2d 1795, 1797 (N.D.Tex. May 24, 1994) (holding that where the declaratory judgment action is an "anticipatory suit," the first-to-file rule is trumped). Other factors that militate against the rule are that the first action was filed in the midst of good faith settlement discussions, and that the two suits were filed closely together in time and neither has progressed very far. See Paul Morelli, 53 U.S.P.Q.2d at 1194-95; Global Village, 1996 WL 452273, at *3. Finally, the fact that a motion requiring expedited consideration has been filed only in the infringement action, and that precious time would be lost if that motion had to be refiled in the other court, argues in favor of allowing the second-filed action to proceed. See Global Village, 1996 WL 452273, at *3.

Each of these considerations leads this Court to deny defendant's motion for a transfer or a stay, at least for the time being, and act upon plaintiff's request for a TRO. There can be little doubt that Nike filed its suit in immediate anticipation of being sued by FIFA. In its last letter to Nike before the race to the courthouse began, FIFA's counsel wrote: "my client feels that it has no alternative but to seek the protection of the courts to protect its rights from further damage, unless we can find an immediate solution." (Nike's Mot. to Transfer, Ex. 7.) That letter closed with a warning: "If we do not receive the relevant information from Nike within that deadline [24 hours], my client has instructed me to inform you that it will initiate formal proceedings against Nike without further notice." (Id.) This letter was sent on September 23; the very next morning, Nike filed its declaratory judgment action in New York. Given FIFA's looming deadline, this plainly appears to have been a "preemptive strike." Moreover, the New York action is in its earliest stages; there is no indication that FIFA has filed an answer or responded in any other way to Nike's complaint. Finally, given that the World Cup has but less than two weeks to go, and that this action could largely become moot once the final whistle is heard, FIFA's motion for a TRO is extremely time-sensitive. Thus, granting Nike's motion would result only in unnecessary, and possibly prejudicial, delay.

Accordingly, the Court will now address the merits of FIFA's motion. A TRO is an extraordinary remedy and should not be granted lightly. See Experience Works, Inc. v. Chao, 267 F.Supp.2d 93, 96 (D.D.C.2003); see also FTC v. Exxon Corp., 636 F.2d 1336, 1343 (D.C.Cir. 1980). The standard for deciding whether to do so is well-established. The moving party has the burden of showing: (1) a substantial likelihood of success of the merits; (2) that it would suffer irreparable injury in the absence of such relief; (3) that the TRO would not...