From Non-Infringement to No Jurisdiction: Does a Finding of Non-Infringement Moot a Request for Declaratory Judgment of Invalidity in Trademark Cases?
The trademark dispute that has been steadily escalating between Illinois-based Citizens Equity First Credit Union (“Citizens”) and California-based San Diego County Credit Union (“SDCCU”) could be headed to the Supreme Court. SDCC filed a Petition for Writ of Certiorari asking the Supreme Court to clarify when courts have jurisdiction to hear invalidity claims in trademark disputes.
Citizens, a credit union based in Peoria, Illinois, obtained a federal trademark registration in May 2011 2011 for the mark CEFCU. NOT A BANK. BETTER. In January 2011, SDCCU filed a trademark application for the tagline IT’S NOT BIG BANKING, IT’S BETTER and obtained a federal registration for the mark in April 2014. Citizens petitioned the Trademark Trial and Appeal Board (“TTAB”) to cancel the SDCCU registration as confusingly similar to its CEFCU. NOT A BANK BETTER. registration and purported common law rights to the standalone tagline NOT A BANK. BETTER.
During the TTAB proceedings, SDCCU began to suspect that Citizens would sue SDCCU for trademark infringement and responded by filing an action for declaratory judgment. SDCCU sought to establish that: (i) SDCCU’s IT’S NOT BIG BANKING, IT’S BETTER mark did not infringe Citizens’ registered and common law trademarks; and (ii) any common law rights that Citizens may have acquired in the tagline (sans house mark) NOT A BANK. BETTER. were invalid. The district court granted summary judgment in favor of SDCCU with a finding of non-infringement regarding the federally registered marks and proceeded with a bench trial on the validity of Citizens’ common law rights to NOT A BANK. BETTER. The district court held that Citizens’ rights to the tagline NOT A BANK. BETTER. were invalid because the tagline was rarely used without the Citizens house mark and it was not used frequently or consistently enough to have acquired distinctiveness.
On appeal, the Ninth Circuit ruled that the district court erred in invalidating Citizens’ common law rights to NOT A BANK. BETTER., holding that the court should not have proceeded with the bench trial at all in light of its grant of summary judgment and finding of non-infringement. The Ninth Circuit pointed to the lack of an existing case or controversy under Article III of the Constitution to reverse the district court’s decision.
Most recently, SDCCU filed a Petition for Writ of Certiorari (“Petition”) with the U.S. Supreme Court. The question that SDCCU is urging the Court to address is two-fold. The first is whether a finding of non-infringement renders moot a party’s request that a trademark be declared invalid. The second is whether a district court’s decision resolving a trademark dispute (e.g., a finding of non-infringement) should function to divest the court of any jurisdiction to decide a cancellation claim under 15 U.S.C. §1119. In its Petition, SDCCU argues that district courts routinely consider infringement and cancellation claims together and the Ninth Circuit’s decision “effectively holds that the order in which the district court decides those claims determines whether the court maintains jurisdiction.” SDCCU further argues that the Ninth Circuit holding is “contrary to the statute’s language and common sense, [and] will impose unnecessary costs on parties who litigate infringement and cancellation claims for years only to have the district court deprive itself of jurisdiction by deciding infringement first.” The Court’s decision to hear the case may hinge on an analogous theory in the context of patent law, specifically that “[a] finding of non-infringement . . . does not by itself moot a request for declaratory judgment of invalidity.” Synchronoss Techs, Inc. v. Dropbox, Inc., 987 F.3d 1358, 1365 (Fed. Cir. 2021). Citizens’ response to the Petition is due August 23, 2023.
