Retrobrands USA LLC v. General Mills Marketing, Inc.
Filing
25
ORDER granting 16 Motion to Dismiss or to Stay. (Written Opinion) Signed by Senior Judge David S. Doty on 10/11/2019. (DLO)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 19-1636 (DSD/DTS)
Retrobrands USA LLC,
Plaintiff,
v.
ORDER
General Mills Marketing, Inc.
Defendant.
Carl E. Christensen, Esq. and Christensen Law Office, PLLC,
800 Washington Ave. North, Suite 704, Minneapolis, MN 55401,
counsel for plaintiff.
Benjamin W. Hulse, Esq. and Blackwell Burke, PA, 431 South
7th Street, Suite 2500, Minneapolis, MN 55415, counsel for
defendant.
This matter is before the court upon the motion to dismiss or
stay by defendant General Mills Marketing, Inc.
Based on a review
of the file, record, and proceedings herein, and for the following
reasons, the motion to dismiss is denied and the motion to stay is
granted.
BACKGROUND
This declaratory judgment action arises from the parties’
stated interests in the DUNKAROOS trademark registered with the
United States Patent and Trademark Office (USPTO), registration
number 1755584 (Trademark).
Am. Compl. ¶ 11.
General Mills has
held the Trademark for use in cereal-based food and frosting since
1991.
Id.
In 2009, General Mills and Jeffrey Kaplan, principal of
plaintiff Retrobrands USA, LLC, executed a settlement agreement in
which Kaplan and, in effect, his businesses agreed to permanently
refrain from using any trademark owned by General Mills.
Decl. Ex. 1 ¶¶ 11, 13.
Hulse
On September 17, 2018, Retrobrands filed
an intent-to-use application with the USPTO for the Trademark with
respect
to
cereal-based
snack
foods.
Am.
Compl.
¶
22.
Retrobrands then filed an action with the Trademark Trial and
Appeal Board (TTAB) to cancel the Trademark.
Id. ¶ 23.
General
Mills, Inc. – the parent company of General Mills Marketing, Inc.
- responded by filing suit against Retrobrands and its principal
Jeffrey Kaplan in Hennepin County District Court alleging that the
settlement agreement bars Retrobrands from using the Trademark.
See Hulse Decl. Ex. 1; id. ¶¶ 11, 13, 16-20.
The TTAB suspended
the cancellation proceedings in light of the state court action,
as is routine.
Hulse Decl. Ex. 2.
Retrobrands and Kaplan then removed the case to federal court
on the basis of federal question jurisdiction.
Judge Nancy E.
Brasel remanded after concluding that the case turned not on an
interpretation of trademark law, but rather on whether Retrobrands
and Kaplan had breached the settlement agreement by pursuing the
Trademark.
Gen. Mills, Inc. v. Retrobrands USA, LLC, No. 19-258,
2
2019 WL 1578689, at *2-3 (D. Minn. Apr. 12, 2019).
The state
court action remains pending.
On June 21, 2019, Retrobrands filed this action against
General Mills, and later amended the complaint, seeking (1) a
declaration that General Mills has abandoned the Trademark for
cereal-based snack food and frosting, (2) a declaration that
Retrobrands has not infringed the Trademark or, alternatively,
that General Mills’ use of the mark since 2012 is insufficient to
give rise to exclusive use, and (3) an order directing the USTPO
to cancel registration number 1755584 for the Trademark.
Compl. at 6.
Am.
General Mills now moves to dismiss or, in the
alternative, to stay pending resolution of the Hennepin County
action and TTAB proceedings.
DISCUSSION
I.
Justiciability
General Mills first argues that the court lacks jurisdiction
over this matter because Retrobrands has not alleged a justiciable
controversy.
The court disagrees.
Article III of the United States Constitution limits the
jurisdiction
controversies.
of
federal
courts
to
justiciable
cases
and
U.S. Const. art. III, ' 2; Lujan v. Defenders of
Wildlife, 504 U.S. 555, 559-60 (1992).
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The Declaratory Judgment
Act, on which this case is premised, provides that, “[i]n a case
of actual controversy,” the court “may declare the rights and other
legal relations of any interested party seeking such declaration.”
28 U.S.C. ' 2201(a).
To be a justiciable controversy in this
context, there must be “a substantial controversy” between parties
with “adverse legal interests.”
Marine Equip. Mgmt. Co. v. United
States, 4 F.3d 643, 646 (8th Cir. 1993) (internal quotation marks
omitted).
Because
this
test
“is
imprecise,
the
decision
of
whether such controversy exists is made upon the facts on a case
by case basis.”
Id. (citing Golden v. Zwickler, 394 U.S. 103, 108
(1969)).
General Mills argues that there is no actual controversy
because it has not sued or threatened to sue Retrobrands for
trademark
infringement.
Although
it
is
true
that
an
actual
controversy exists when a party has brought a legal claim of
infringement, a plaintiff need not wait for the threat of an actual
lawsuit to request declaratory relief.
As explained by the Eighth
Circuit Court of Appeals in the analogous patent context,
a charge [of infringement] need not be express and
can be found in any conduct or course of action on
the part of the patentee which would lead a
reasonable man to fear that he or his customers face
an infringement suit or the threat of one if he
continues or commences the activity in question.
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Sherwood Med. Indus., Inc. v. Deknatel, Inc., 512 F.2d 724, 727–
28 (8th Cir. 1975).
In assessing the possible threat of an
infringement action, the court must make “pragmatic judgments” and
must be “aware of the business realities that are involved.”
Electro Med. Sys., Inc. v. Med. Plastics, Inc., 393 F. Supp. 617,
619 (D. Minn. 1975 (quoting Sherwood, 512 F.2d at 728).
Here, although Retrobrands has not yet used, 1 and General
Mills has not formally claimed that Retrobrands has infringed, the
Trademark,
the
practical
aspects
of
existence of an actual controversy.
the
case
establish
the
Retrobrands has filed an
intent-to-use application demonstrating its present interest in
using the Trademark based on General Mills’ alleged abandonment.
Retrobrands also filed a TTAB action to cancel General Mills’
interest the Trademark.
General Mills has opposed those efforts
by filing the state court breach-of-contract action. 2
General
Mills has also stated that it will challenge the TTAB action if it
1
The amended complaint seems to allege that Retrobrands has
been using the Trademark.
See Am. Compl. ¶ 23 (alleging a
likelihood of confusion between “the marks”); id. ¶ 27 (alleging
that “use of the DUNKAROOS mark” exposes it to liability). At the
hearing, however, Retrobrands clarified that it has not yet used
the mark.
2
Despite Retrobrands’ argument to the contrary, the state
court action is not in substance an infringement action and
therefore does not serve as a basis for finding that a justiciable
controversy exists.
The state court lawsuit involves the
contractual relationship between the parties, not whether
Retrobrands is infringing the Trademark.
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does not prevail in the state action.
Thus, the conflict between
the parties over the Trademark is concrete and ongoing; the fact
that it has not yet been framed in terms of trademark infringement
by General Mills is immaterial. As discussed below, however, the
court is persuaded that a stay of this case is appropriate given
the other ongoing proceedings.
II.
Request for Stay
General Mills argues that a stay in favor of the state court
and TTAB actions is appropriate should the court deny the motion
to dismiss.
As noted, the court agrees.
“[T]he power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the causes
on its docket with economy of time and effort for itself, for
counsel, and for litigants.”
Emerson Elec. Co. v. Black & Decker
Mfg. Co., 606 F.2d 234, 237 n.6 (8th Cir. 1979) (citation and
internal quotation marks omitted).
Retrobrands argues that a stay is inappropriate because the
threshold question in the parties’ overall dispute is whether
General Mills has abandoned its ownership of the Trademark, which
is squarely at issue in this case.
In other words, Retrobrands
seems to argue that General Mills must have a current ownership
interest in the Trademark for the settlement agreement, which is
before the state court, to apply.
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The court is unpersuaded.
As the court understands it, the state court action involves
the issue of whether Retrobrands is generally precluded from
challenging General Mills’ trademarks, whether active or inactive.
See Hulse Decl. Ex. 1.
If General Mills prevails, Retrobrands
arguably would have no viable right to pursue the Trademark, which
would likely resolve the parties’ dispute.
And, if Retrobrands
prevails, it can proceed with its TTAB action to cancel General
Mills’ interest in the Trademark based on non-use.
Therefore, the
actual threshold issue in the parties’ dispute is before, and must
be determined by, the state court.
Although it is difficult to see how this case will remain
viable under either outcome in the state action, the court will
exercise its discretion and stay this matter pending resolution of
the other matters to preserve the parties’ rights. 3
3
Given the nature of its ruling, the court declines to
consider
at
this
time
whether
Retrobrands’
request
for
cancellation of the Trademark is legally viable.
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CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.
The motion to dismiss or to stay [ECF No. 16] is granted
as set forth above; and
2.
The case is stayed pending resolution of the Hennepin
County District Court action and the TTAB proceedings.
Dated: October 11, 2019
s/David S. Doty
David S. Doty, Judge
United States District Court
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