An old standard’s taking a new turn, and it’s paving the way for declaratory judgments in trademark disputes. Applying MedImmune, Inc. v. Genentech, Inc., 2007 U.S. LEXIS 1003 (2007), the 10^th Circuit in Surefoot, a trademark declaratory judgment action, abandoned the "reasonable apprehension of imminent suit" test and a found a triable case or controversy within the meaning of Article III.

 

In Surefoot, Sure Foot ND sent to Surefoot UT a cease and desist letter asserting that Surefoot UT's use of the "Surefoot" mark infringed Sure Foot ND’s trademark. The companies attempted to settle their dispute but eventually found themselves before the USPTO's Trademark Trial and Appeal Board. 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. The district court dismissed the suit, holding 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.

 

On appeal, the 10^th Circuit followed the Supreme Court’s decision in MedImmune. In MedImmune, the Supreme Court found a case or controversy in a declaratory suit where no reasonable apprehension of litigation existed. In discussing the Supreme Court’s decision, the 10^th Circuit stated:

 

And to the extent that the Declaratory Judgment Act's "case of actual controversy" formulation was intended to reference Article III's case-or-controversy requirement, discarding the reasonable apprehension of suit test makes good sense: the existence of an Article III case or controversy has never been decided by a judicial wager on the chances the parties will (imminently or otherwise) sue one another; rather, it has always focused on the underlying facts, assessing whether they suggest an extant controversy between the parties or whether instead they merely call on us to supply an advisory opinion about a hypothetical dispute.

 

The 10^th Circuit went on to determine the proper jurisdictional test in a trademark declaratory judgment action:

 

[A] declaratory judgment suit must be "definite and concrete, touching the legal relations of parties having adverse legal interests," must be "'real and substantial' and 'admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.'" Put differently, "the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment."

 

. . . [T]his test . . . does "not draw the brightest of lines between those declaratory judgment actions that satisfy the case-or-controversy requirement and those that do not." Still, we can hardly claim unfamiliarity with Article III jurisdictional principles and their application, and reference to the facts and circumstances of the Supreme Court's decisions in the declaratory judgment field suggest that the case before us is a comparatively easy one. In particular, this case avoids the complication at the heart of MedImmune, where the existence of a live controversy between the parties seemingly (at least in the eyes of the lower courts) hinged on a future contingency that was entirely within the declaratory plaintiff's control . . . .

 

(citations omitted)

 

            The 10^th Circuit reversed the district court, finding jurisdiction to hear Sure Foot UT's action, which was based on historical facts and an already existing dispute over a federal right. Specifically, Sure Foot ND had made clear its belief that Surefoot UT's use of the "Surefoot" mark caused confusion in the market and therefore currently infringed on Sure Foot ND's trademark. Sure Foot ND had even threatened to sue for infringement if Surefoot UT did not agree to change its name. The 10^th Circuit stated:

 

Taking "all the circumstances" into account, as we must, we cannot help but conclude that the parties before us have a dispute that is definite and concrete that would "'admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.'" Because "[i]t is the nature of the controversy, not the method of its presentation or the particular party who presents it, that is determinative," we can confirm the point by asking, counterfactually, whether we would have Article III jurisdiction if faced with a straightforward infringement suit by Sure Foot ND against Surefoot UT, rather than a declaratory judgment action in which the parties are reversed. Given the evidence before us about the nature of the controversy between the parties in this dispute, we have no doubt the answer would be yes.

 

(citations omitted)

 

            In a footnote, the 10^th Circuit compared Surefoot to a hypothetical offered by Wright and Miller as a paradigmatic instance where declaratory judgment jurisdiction should be held to exist:

 

            If Jones Company does not sue [over its claim to a patent], but merely threatens Smith, Smith will have a lively interest in determining whether the patent is valid and whether his device is infringing. Prior to the Declaratory Judgment Act, Smith's action to resolve this question would not, absent diversity, have been within federal jurisdiction. Nevertheless, it now seems settled that Smith can sue for a declaratory judgment of invalidity or noninfringement. Again, the federal nature of the claim appears on the complaint for a declaratory judgment and the precise issue could have been litigated in federal court in a coercive action brought by Jones Company, although in the suit actually brought by Smith the parties are transposed and the matter may be determined at an earlier stage than if Smith had been required to await a coercive action by Jones Company.