Trippe Mfg. Co. v. American Power Conversion Corp.

• Decision Date: 25 January 1995
• Docket Number: No. 94-2645,94-2645
• Citation: 46 F.3d 624
• Parties: TRIPPE MANUFACTURING COMPANY, Plaintiff-Appellant, v. AMERICAN POWER CONVERSION CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 624

46 F.3d 624

33 U.S.P.Q.2d 1617

TRIPPE MANUFACTURING COMPANY, Plaintiff-Appellant, v. AMERICAN POWER CONVERSION CORPORATION, Defendant-Appellee.

No. 94-2645.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 7, 1994.

Decided Jan. 25, 1995.

Irwin C. Alter (argued), Alter & Weiss, Chicago, IL, for plaintiff-appellant.

Richard G. Lione, Nicholas J. Valenziano, Jr., Willian, Brinks, Hofer, Gilson & Lione, Chicago, IL, Edward M. Prince (argued), Richard L. Kirkpatrick, and Kevin T. Kramer, Cushman, Darby & Cushman, Washington, DC, for defendant-appellee.

Before BAUER and KANNE, Circuit Judges, and SKINNER, District Judge. ^*

SKINNER, District Judge.

Trippe Manufacturing Company appeals the dismissal of both counts of its complaint against American Power Conversion Corporation.

Appellee American Power Conversion Corp. ("APC") is a Massachusetts corporation with its principal place of business in West Kingston, Rhode Island. It manufactures and markets uninterruptible power supply products under the registered trademarks BACK-UPS and SMART-UPS. Appellant Trippe Manufacturing Co. ("Trippe") is an Illinois corporation with its principal place of business in Chicago which also manufactures and markets uninterruptible power supply products.

On October 30, 1992, in response to a recent Trippe advertisement in a computer magazine, APC's Vice-President of Marketing, David Vieau, sent a letter to Trippe's Vice-President of Marketing, Keelin Wyman, accusing Trippe of infringing APC's BACK-UPS trademark. The letter requested that Trippe cease the alleged infringement. Wyman replied to APC that, "We feel there is no such danger of misunderstanding on the part of consumers, and no violation of a valid trademark, in our use of these phrases or words in the contexts where we have been using them." APC did not respond to Trippe's denial of infringement.

In April of 1993, Trippe filed a Petition for Cancellation of APC's BACK-UPS registered trademark, alleging in part the notice of infringement received from Vieau the previous October. APC's answer to Trippe's Petition for Cancellation admitted sending the notice of infringement but contained no further accusations of infringement against Trippe. APC's answers to Trippe's interrogatories in the cancellation proceedings likewise contained no renewed accusations of infringement. APC never filed a civil action for infringement of the BACK-UPS trademark against Trippe.

On December 15, 1993, Trippe filed its complaint against APC in the United States District Court for the Northern District of Illinois, seeking a declaratory judgment of non-infringement and the invalidity of APC's trademark BACK-UPS. Trippe also sought cancellation of the trademark.

On March 14, 1994, APC filed a complaint against Trippe in the United States District Court for the District of Rhode Island for infringement of APC's trademark SMART-UPS and moved for a preliminary injunction against Trippe using the SMART-UPS mark.

On March 25, Trippe filed its First Amended Complaint against APC in the Illinois District Court seeking a declaratory judgment for non-infringement and the invalidity of APC's trademarks, BACK-UPS (Count I) and SMART-UPS (Count II), and incidental damages.

On April 11, 1994 APC moved to dismiss Count I of the Amended Complaint, formally conceding that Trippe's use of the term BACK-UPS was "fair usage" and non-infringing, and to dismiss, transfer, or stay proceedings with respect to Count II. Four days later, Trippe filed a motion in the Rhode Island court to transfer APC's Rhode Island action to the Illinois District Court. On May 3, the Rhode Island court stayed the proceedings until such time as the Illinois court made a determination on APC's motion to dismiss.

On June 15, the Illinois court dismissed both counts of Trippe's Amended Complaint. The court dismissed Count I for lack of case or controversy, finding that "given APC's admissions in this lawsuit, none of the above referenced acts, either individually, or collectively, are sufficient to create a reasonable apprehension of an infringement suit." Count II was dismissed without prejudice in order to "discourage duplicative litigation." In the court's opinion the issue of venue should be litigated in Rhode Island. Trippe now appeals the Illinois District Court's dismissal. We affirm the judgment of the district court.

I. FINALITY

APC argues that the district court's June 16, 1994 Amended Minute Order dismissing the entire case was not a final order for purposes of 28 U.S.C. Sec. 1291. APC suggests that because Count II of the Amended Complaint was dismissed "without prejudice" and because Trippe's Motion to Transfer is currently pending in the Rhode Island District Court, a possibility exists that Trippe's claim may yet be heard in the Illinois District Court. APC relies on Willhelm v. Eastern Airlines, Inc., 927 F.2d 971 (7th Cir.1991) in arguing that the possibility of a plaintiff resurrecting its claims destroys the finality required for appellate jurisdiction. In Willhelm, the district court dismissed the plaintiff's claims against Eastern Airlines without prejudice because the airline had filed for bankruptcy. This court found that "the district court expressly noted that [the plaintiff] may reopen his case against Eastern if the bankruptcy court lifts the automatic stay," 927 F.2d at 972, and that the plaintiff could resurrect his lawsuit because the district court did not dismiss the entire action, just the complaint.

"We have jurisdiction over this appeal only if the district court has terminated the litigation in its entirety; mere dismissal of the complaint is insufficient." Willhelm, 927 F.2d at 972 (citations omitted). The relevant distinction is between an order dismissing a complaint and an order dismissing the entire action. The inquiry is not, as APC suggests, whether a dismissal is with prejudice or not. "[T]he simple dismissal of a complaint does not terminate the litigation. In contrast, a dismissal of the entire action ends the litigation." Benjamin v. United States, 833 F.2d 669, 671 (7th Cir.1987).

In Benjamin, this court held that the language of the district court's order was controlling. There, the district court had expressly ruled: "Complaint is DISMISSED." Id. Since the language that the district court used in its judgment specified exactly what was dismissed, the complaint and only the complaint, the judgment was not appealable. In contrast, here the district court entered a Minute Order of June 16, 1994 amending the judgment to include: "[T]he action is dismissed in its entirety nunc pro tunc June 15, 1994." (Emphasis added.) In contrast to Benjamin, in this case the district court concluded that "the action could not be saved by an amendment of the complaint which the plaintiff could reasonably be expected to make." 833 F.2d at 672 (quoting Marshall v. Sawyer, 301 F.2d 639, 643 (9th Cir.1962)). Furthermore, if this dispute returns to the Illinois court, it will be in the form of the Rhode Island action, not this one, which, if we affirm on the merits, will be dead as a doornail. We accordingly have jurisdiction to hear this appeal.

II. CASE OR CONTROVERSY

The Illinois District Court dismissed Count I of Trippe's amended complaint for lack of case or controversy, finding that given APC's concession of fair use, none of the facts alleged by Trippe, either individually or collectively, were sufficient to create a reasonable apprehension of an infringement suit. "In reviewing the dismissal, we must determine whether the district court abused its discretion in its viewing of the evidence and consequent determination that no controversy existed." Crown Drug Co., Inc. v. Revlon, Inc., 703 F.2d 240, 243 (7th Cir.1983) (citing International Harvester Co. v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir.1980)). "Furthermore, the district court's findings of fact will not be set aside unless they are 'clearly erroneous' as provided by Fed.R.Civ.P. 52(a)." Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018 (7th Cir.), cert. denied, 447 U.S. 924, 100 S.Ct. 3016, 65 L.Ed.2d 1116 (1980) (citing Fleetwood Co. v. Hazel Bishop, Inc., 352 F.2d 841 (7th Cir.1965)).

"The Declaratory Judgment Act, 28 U.S.C. Sec. 2201, allows federal courts, in their discretion, to render declaratory judgments only where there exists an 'actual controversy': the latter requirement is a 'jurisdictional prerequisite of constitutional dimensions.' " Crown Drug, 703 F.2d at 242-43 (quoting Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir.1979)). In determining whether or not an actual controversy exists, "the question in each case is whether the facts alleged, under all circumstances, show that there is a controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant issuance of a declaratory judgment." Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941) (recently cited in Oneida Tribe of Indians of Wisconsin v. State of Wisconsin, 951 F.2d 757, 760 (7th Cir.1991)). "The defendant must have engaged in conduct giving rise to a reasonable apprehension on plaintiff's part that it will face ... suit or the threat of one if it commences or continues the activity in question." International Harvester, 623 F.2d at 1210. The focus of the inquiry must rest on the defendant's statements and conduct since an "apprehension alone, if not inspired by defendant's actions, does not give rise to an actual controversy." Id. at 1211. The determination should be applied to the facts existing at the time the complaint is filed. See Arrowhead Industrial Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed.Cir.1988). And even where a case presents an actual controversy, a court may properly refuse to grant declaratory relief for prudential reasons. International Harvester, 623 F.2d at 1217.

In determining whether...