Surefoot Lc v. Sure Foot Corp.

• Decision Date: 08 July 2008
• Docket Number: No. 06-4294.,06-4294.
• Citation: 531 F.3d 1236
• Parties: SUREFOOT LC, Plaintiff-Appellant, v. SURE FOOT CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

531 F.3d 1236

SUREFOOT LC, Plaintiff-Appellant, v. SURE FOOT CORPORATION, Defendant-Appellee.

No. 06-4294.

United States Court of Appeals, Tenth Circuit.

July 8, 2008.

Robert W. Adams of Nixon & Vanderhye P.C., Arlington, VA (Steven Call and Carolynn Clark of Ray, Quinney & Nebeker P.C., Salt Lake City, UT, and Michael

E. Crawford, Nixon & Vanderhye P.C., Arlington, VA, with him on the briefs), for Plaintiff-Appellant.

Charles W. Jirauch of Quarles & Brady Streich Lang, LLP, Phoenix, AZ (W. LaNelle Owens of Quarles & Brady Streich Lang, LLP, Phoenix, AZ; Marcy G. Glenn of Holland & Hart LLP, Denver, CO; and Brett L. Foster, Cecilia M. Romero, and Romaine C. Marshall of Holland & Hart LLP, Salt Lake City, UT, with him on the brief), for Defendant-Appellee.

Before MURPHY, HARTZ, and GORSUCH, Circuit Judges.

GORSUCH, Circuit Judge.

In this case, two companies with similar names find themselves in the midst of a trademark dispute. Over the course of several years, Sure Foot Corp. has repeatedly accused Surefoot LC, of infringing on its trademark, occasionally threatened litigation if Surefoot LC failed to change its name, and filed five administrative petitions opposing Surefoot LC's attempts to obtain trademark registrations. Faced with uncertainty about its right to use the "Surefoot" mark, Surefoot LC filed a declaratory judgment suit against Sure Foot Corp., asking the district court to determine once and for all whether it was infringing on Sure Foot Corp.'s rights. Applying our then-governing precedent, the district court dismissed the suit for failing to present a justiciable case or controversy under Article III because it found Surefoot LC had no reasonable apprehension of an imminent lawsuit from Sure Foot Corp. After the district court issued its judgment, however, the Supreme Court, in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007), expressly rejected the "reasonable apprehension of imminent suit" test on the ground that it imposed an additional hurdle inconsistent with the Court's Article III jurisprudence. This appeal calls upon us to assess and apply MedImmune's teachings for the first time. In doing so, we conclude that a triable case or controversy within the meaning of Article III exists; accordingly, we are obliged to reverse and remand this matter to the district court for further proceedings.

I

The parties are in the foot business. Sure Foot Corp. ("Sure Foot ND"), based in North Dakota, manufactures and sells shoe traction products as well as shoe laces and insoles; it has sold products under the "Sure Foot" brand since at least 1985, when it registered a trademark for the use of "Sure Foot" in connection with non-skid shoe pads. Meanwhile, Surefoot LC ("Surefoot UT"), based in Utah, began business in 1994 and manufactures and sells custom-fit ski boots and ski boot orthotics.

By 1998, Sure Foot ND became aware of Surefoot UT's use of the "Surefoot" mark. Believing that this use infringed on its trademark rights, Sure Foot ND sent to Surefoot UT a cease and desist letter asserting that Surefoot UT's use of the "Surefoot" mark "infringe[d] on Sure Foot's rights in the SUREFOOT trademark, and create[d] a likelihood of confusion" between the companies and their products. App. at 76. It concluded by demanding that Surefoot UT cease using the "Surefoot" mark. Id.

Over the next year, Sure Foot ND and Surefoot UT corresponded in an attempt to settle their dispute. Surefoot UT insisted that its "Surefoot" brand of ski boot products was sufficiently distinct from Sure Foot ND's product line so that there was no likelihood of consumer confusion. Accordingly, Surefoot UT refused to change its name, though it did express some willingness to consider a monetary settlement. For its part, Sure Foot ND continued to assert that confusion between the two marks was likely and was already occurring in the market. It expressed a desire to resolve the matter outside of court, but on more than one occasion threatened litigation if no settlement could be reached. See, e.g., App. at 82-83 (July 20, 1999 letter) ("Sure Foot feels it has no option but to seek legal redress.... Sure Foot continues to believe that litigation is in neither party's best interest. Nevertheless, it cannot accept your absolute refusal to change your name. Absent your agreement to do so, Sure Foot will pursue other more formal avenues of relief available to it."). The parties failed to reach a settlement, and, by the end of 1999, communications between the parties essentially ceased.

In September 2000, Surefoot UT applied to the U.S. Patent and Trademark Office ("USPTO") to register the "Surefoot" mark in connection with certain of its products. The USPTO issued a Notice of Publication for this trademark application on June 19, 2001. No opposition was ever filed by Sure Foot ND or any other party, and the USPTO ultimately issued a trademark registration to Surefoot UT on June 25, 2002. Shortly thereafter, on August 1, 2002, Sure Foot ND filed a petition with the USPTO's Trademark Trial and Appeal Board ("TTAB"), the administrative body charged with adjudicating trademark registration disputes, seeking to cancel Surefoot UT's trademark. At the same time, Sure Foot ND filed an opposition to another trademark application by Surefoot UT that was then pending. During a one-year period from mid-2005 to mid-2006, Surefoot UT applied for three more trademark registrations for other products and services using the "Surefoot" mark, and Sure Foot ND filed oppositions with the TTAB to each of these applications. The parties eventually agreed to consolidate their various disputes in the TTAB into one proceeding, which appears to be pending currently.

Believing that Sure Foot ND would not only continue to oppose future trademark applications but would also eventually sue for trademark infringement, Surefoot UT filed a declaratory judgment action in federal district court in July 2006. In its complaint, Surefoot UT sought a declaratory judgment that (1) Surefoot UT's use of the "Surefoot" mark does not infringe on any of Sure Foot ND's trademark rights; (2) the trademark rights asserted by Sure Foot ND against Surefoot UT are invalid or limited in scope; and (3) any possible trademark infringement, unfair competition, or dilution claims by Sure Foot ND are barred by equitable doctrines. Sure Foot ND moved to dismiss the complaint, arguing, among other things, that no jurisdiction existed under the Declaratory Judgment Act. The district court agreed and dismissed the suit. Specifically, the district court held that, to establish jurisdiction under the Declaratory Judgment Act, Surefoot UT had to, but could not, show that it had a reasonable apprehension of an imminent suit by Sure Foot ND. More specifically, the district court held that, although Sure Foot ND made claims of infringement and threats of litigation during the 1998-99 period that may well have given rise to a reasonable apprehension of litigation at the time, any such apprehension dissipated by 2006. Neither, the court held, did Sure Foot ND's intervening administrative actions before the TTAB give rise to any reasonable basis on Surefoot UT's part to fear imminent litigation. Surefoot UT now appeals the dismissal of its suit.

II

The parties' disagreement in this case extends to the standard of review we must apply. Surefoot UT contends that the district court's dismissal of the case for lack of jurisdiction under the Declaratory Judgment Act should be reviewed de novo, while Sure Foot ND asserts our review may only be for abuse of discretion. To be fair, neither party is exactly incorrect.

The Declaratory Judgment Act states in pertinent part that, "[i]n a case of actual controversy within its jurisdiction ..., any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). We have previously observed that this text presents two separate hurdles for parties seeking a declaratory judgment to overcome. See Kunkel v. Cont'l Cas. Co., 866 F.2d 1269, 1273 (10th Cir.1989). First, a declaratory judgment plaintiff must present the court with a suit based on an "actual controversy," a requirement the Supreme Court has repeatedly equated to the Constitution's case-or-controversy requirement. See, e.g., Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40, 57 S.Ct. 461, 81 L.Ed. 617 (1937) ("The Declaratory Judgment Act of 1934, in its limitation to `cases of actual controversy,' manifestly has regard to the constitutional provision and is operative only in respect to controversies which are such in the constitutional sense."); MedImmune, 127 S.Ct. at 771 (same); see also infra Part III (citing additional authority); U.S. Const. Art. III § 2 ("The judicial Power shall extend to all Cases ... [and] Controversies...."). Second, even where a constitutionally cognizable controversy exists, the Act stipulates only that district courts "may" — not "must" — make a declaration on the merits of that controversy; accordingly, we have held that district courts are entitled to consider a number of case-specific factors in deciding whether or not to exercise their statutory declaratory judgment authority. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 982-83 (10th Cir. 1994) (White, J.) (stating that "the district court is not obliged to entertain every justiciable claim brought before it" and setting out the factors that a district court should consider); Public Affairs Assoc., Inc. v. Rickover, 369 U.S. 111, 112, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962) ("The Declaratory Judgment Act was an authorization, not a command. It gave the federal courts competence to make a declaration of rights; it did not impose a duty to do so."); see also infra Part V.

To the extent that the...