Declaratory Relief: Court Stays Later Filed Trademark Infringement Action Pending Resolution Of First Filed Declaratory Relief Action

Federal Cartridge Company, et al. v. Remington Arms Company, Inc., et al
(D. Minn. Dec. 31, 2003), 2003 U.S. Dist. LEXIS 23482

Court Decision

The threat of a pre-emptive declaratory relief action in response to a cease and desist letter often creates a rush to the courthouse, and is one of the classic "thrusts and parries" of trademark infringement duels.

The court stayed this trademark infringement action pending resolution of the declaratory relief action Defendant previously filed in its home state of North Carolina after receiving Plaintiffs' cease and desist letter. The day before expiration of the reply period specified in Plaintiffs' letter, Defendant filed the declaratory relief action seeking a declaration of invalidity or noninfringement. Two days later, Plaintiffs filed and served the Complaint in the instant trademark infringement action. Several days later, Defendant perfected service of the complaint in its declaratory relief action. Both parties asserted that their respective suit was the "first filed" and thus had priority.

The court found that under the majority approach, the "first-filed" rule uses the filing date of the complaint, not the date that service is made, as the determinative date. The rule provides that the first court in which jurisdiction attaches has priority to consider the case. Thus, the North Carolina declaratory relief action was the first filed action here. Although the court noted that there were compelling reasons to depart from the first-filed rule and find that Minnesota is the proper forum, it declined to enjoin that proceding and ruled that the "compelling circumstances" determination is best left to the North Carolina court, as the first-filed tribunal. Accordingly, the court stayed this action pending resolution of that action.

Unfair Competition/False Advertising: Plaintiff Properly Pled Lanham Act Claims For Unfair Competition And False Advertising

In re: Connecticut Mobilcom, Inc., et al. – Connecticut Telephone and Communications Systems, Inc. v. Cellco Partnership d/b/a Verizon Wireless, et al.
(S.D.N.Y. Dec. 23, 2003), 2003 U.S. Dist. LEXIS 23063

Court Decision

The court denied a motion to dismiss Plaintiff's unfair competition and false advertising claims brought under the Lanham Act in this adversarial proceding in a bankruptcy, holding that Plaintiff properly pleaded those claims.

The unfair competition claim properly pled Plaintiff's ownership of the trade name CONNECTICUT TELEPHONE. Although the trade name is descriptive, plaintiffs are not required to do establish secondary meaning for pleading purposes, as the issue of whether a trade name has acquired secondary meaning is a question of fact and therefore not appropriately decided on a motion to dismiss.

The false advertising claim properly alleged that the misstatements were made in "commercial advertising and promotion," as required by 15 U.S.C. § 1125(a)(1)(B). Plaintiffs satisfied the "widespread dissemination" requirement by alleging that the false statements were repeated to "countless other Mobilecom customers and to the press" in addition to the specific instances also alleged. Widespread dissemination is a fact-specific question that varies from case to case and industry to industry.

 False Advertising: Second Circuit Affirms Preliminary Injunction Against Defendant's Heartburn Medication Slogan In Unpublished Decision

Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. The Procter & Gamble Company
(2d Cir. Dec. 16, 2003), 2003 U.S. App. LEXIS 25304

Court Decision

There was substantial support in the record that a single pill of Defendant's Prilosec OTC does not provide relief until four to five hours after ingestion, despite Defendant's slogan "One pill. 24 Hours. Zero Heartburn." The court also rejected Defendant's claim that, once effective, a single pill provides a full 24 hours of relief. The Second Circuit therefore affirmed, and vacated a stay pending appeal that had been entered:

 Based on these findings, the District Court found literally false the claims in P&G's advertising. Given the deference we afford to district court determinations of the meaning of an advertisement and the fact that an advertising claim can be made literally false not only by explicit statements but also by visual images and sounds ... we do not find the District Court's interpretation of the meaning of P&G's advertisement to be clearly erroneous.  [pp. 4-5]

The Cutting Edge Report previously reported the district court's order granting Plaintiff's motion for a preliminary injunction.

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