Odyssey Medical, Inc. v. Augen Opticos, S.A. de C.V.

Filing 61

ORDER DENYING 24 Motion to Dismiss. Signed by Judge Samuel H. Mays, Jr., on 6/27/2011. (Mays, Samuel)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

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ODYSSEY MEDICAL, INC.
Plaintiff,
v.
AUGEN OPTICOS, S.A. de C.V.,
d/b/a AUGEN OPTICS and BLUE
COVE CORP. d/b/a AUGEN OPTICS,
Defendants.

No. 10-2797

ORDER DENYING DEFENDANT BLUE COVE CORP.’S MOTION TO DISMISS,
STAY OR TRANSFER

Before the Court is the January 31, 2011 Motion to Dismiss,
Stay or Transfer in Light of Previously Filed Case in California
Involving Blue Cove Corp. and Odyssey Medical, Inc. (“Motion”)
filed by Defendant Blue Cove Corp. (“Blue Cove”).
Cove

Corp.’s

Mot.

to

Dismiss,

Stay

or

Transfer

(Def. Blue
in

Light

of

Previously Filed Case in California Involving Blue Cove Corp.
and Odyssey Medical, Inc., ECF No. 24.)
Plaintiff

Odyssey

Medical,

Inc.

opposition on February 11, 2011.

(“Blue Cove’s Mot.”)

(“Odyssey”)

responded

in

(Pl.’s Resp. to Blue Cove

Corp. d/b/a Augen Optics’ Mot. to Dismiss, Stay, or Transfer,
ECF No. 25.)

(“Odyssey’s Resp.”)

Blue Cove’s Motion is DENIED.
I.

Background

For the following reasons,

On

November

6,

2010,

Odyssey

filed

a

complaint

against

Defendant Augen Opticos, S.A. de C.V. (“Augen Opticos”) in this
Court

(“Odyssey’s

First

Complaint”).

(Compl.

Relief and Money Damages, ECF No. 1.)
manufactures
commerce,

and

including

trademark PARASOL.

sells
its

ophthalmic
patented

products

punctual

(See id. ¶ 7.)

to

Odyssey,

Augen

Injunctive

Odyssey alleges that it
in

occluder

interstate
under

the

Odyssey owns the PARASOL

mark and registered it on December 15, 1998.
According

for

Opticos,

a

(See id. ¶ 10.)

competitor,

has

used

confusingly similar marks, including PARASOL and AUGEN PARASOL,
on

Augen

Opticos’

purchasers

who

ophthalmic

incorrectly

lenses,

believe

causing

that

confusion

Odyssey

and

in

Augen

Opticos are affiliated or that Odyssey has sponsored, endorsed,
or approved Augen Opticos’ products.
16.)

(See id. ¶¶ 2, 7, 12-13,

Odyssey asserts that Augen Opticos’ use of those marks

makes it liable for, among other things, trademark infringement,
false designation of origin, and dilution of Odyssey’s PARASOL
mark.

(See id. ¶¶ 25-41.)
On December 17, 2010, Blue Cove filed a complaint against

Odyssey in the United States District Court for the Southern
District

of

California.

(Compl.,

ECF

No.

24-2.)

In

that

complaint, Blue Cove alleges that it is the exclusive licensee
and distributor of Augen Opticos’ products in the United States
and that Odyssey’s First Complaint against Augen Opticos in this
2

Court has given rise to a reasonable apprehension that Odyssey
would sue Blue Cove for its continued use of the term AUGEN
PARASOL in marketing and selling the ophthalmic lenses Augen
Opticos produces.

(See id. ¶¶ 1, 19-20.)

Blue Cove requests a

declaratory judgment that its use of the term AUGEN PARASOL is
not likely to be confused with Odyssey’s use of the federallyregistered

trademark

trademark.

PARASOL

and

(See id. ¶¶ 2, 22.)

does

not

infringe

Odyssey’s

Blue Cove asserts that Augen

Opticos is “a separate and independent Mexican company doing
business

outside

the

territorial

jurisdiction

of

the

United

States,” but contends that Blue Cove has standing to challenge
Odyssey’s right to prevent Blue Cove from using the term AUGEN
PARASOL “[b]y virtue of its affiliation with AUGEN OPTICOS,” “a
related

but

independent

company

associated

with

BLUE

COVE.”

(Id. ¶¶ 1, 13-14, 19.)
On December 27, 2010, Odyssey filed an amended complaint in
this Court adding Blue Cove as a defendant and alleging that
Blue

Cove

does

business

within

the

United

States

as

Augen

Optics, the business name used by Augen Opticos in the United
States.

(See First Am. Compl. for Injunctive Relief and Money

Damages ¶¶ 2-3, ECF No. 13.)

Odyssey also alleges that the

address of Blue Cove’s principal place of business is the same
as Augen Opticos’ address.

(See id.)

Odyssey seeks relief

against Augen Opticos and Blue Cove for, among other things,
3

trademark

infringement,

false

designation

dilution of Odyssey’s PARASOL mark.

of

original,

and

(See id. ¶¶ 4, 33-49.)

On January 31, 2011, Blue Cove moved to dismiss Odyssey’s
action against it in this Court.

(Blue Cove’s Mot. 1.)

Blue

Cove argues that, because it was the first party to file suit in
the

controversy

between

it

and

Odyssey,

this

Court

should

dismiss it from Odyssey’s action in this Court under the first(See id. at 1-3; Def. Blue Cove Corp.’s Mem. in

to-file rule.
Supp.

of

Mot.

to

Dismiss,

Stay

or

Transfer

in

Light

of

Previously Filed Case in California Involving Blue Cove Corp.
and

Odyssey

Mem.”).)

Medical,

Inc.

1-4,

ECF

No.

24-1

(“Blue

Cove’s

In the alternative, Blue Cove asks the Court to stay

Odyssey’s action against it pending the outcome of a motion to
dismiss

Odyssey

California,

or

has

filed

transfer

in

the

Odyssey’s

Southern District of California.

Southern

action

against

District
it

to

of
the

(See Blue Cove’s Mot. 3; Blue

Cove’s Mem. 4.)
In response to Blue Cove’s Motion, Odyssey argues that its
action against Blue Cove was filed first under the first-to-file
rule and that, as the action of the natural plaintiff, Odyssey’s
action against Blue Cove in this Court should take precedence
over Blue Cove’s action against Odyssey in the Southern District
of California.

(See Odyssey’s Resp. 1-3, 5-9.)

4

On March 31, 2011, Odyssey filed notice with this Court of
a March 28, 2011 order by the United States District Court for
the

Southern

District

of

California

finding

that

Odyssey’s

action against Blue Cove in this Court was the first action
filed.
Cove

(See Notice of Subsequent Ruling Bearing on Def. Blue

Corp.’s

d/b/a

Augen

Optics

Mot.

to

Dismiss,

Stay

or

Transfer, ECF No. 32; Order, ECF No. 32-1 (“California Order”).)
The United States District Court for the Southern District of
California
decision

stayed

on

Blue

Cove’s

jurisdictional

and

action
venue

pending
issues

this

raised

Court’s
by

Augen

Opticos and Blue Cove in other motions before this Court.

(See

California Order 5.)
II.
“The

Analysis
first-to-file

rule

.

.

.

is

a

‘well-established

doctrine that encourages comity among federal courts of equal
rank.’”

Certified Restoration Dry Cleaning Network, L.L.C. v.

Tenke Corp., 511 F.3d 535, 551 (6th Cir. 2007) (quoting AmSouth
Bank v. Dale, 386 F.3d 763, 791 n.8 (6th Cir. 2004)).

“The rule

provides that when actions involving nearly identical parties
and issues have been filed in two different district courts,
‘the court in which the first suit was filed should generally
proceed to judgment.’”

Id. (quoting Zide Sport Shop of Ohio,

Inc. v. Tobergte Assocs., Inc., 16 F. App’x 433, 437 (6th Cir.
2001)).
5

“Courts

have

identified

three

factors

to

consider

in

determining whether to invoke the first-to-file rule: ‘(1) the
chronology of the actions; (2) the similarity of the parties
involved;

and

(3)

the

similarity

of

the

issues

at

stake.’”

Clear!Blue, LLC v. Clear Blue, Inc., 521 F. Supp. 2d 612, 614-15
(E.D. Mich. 2007) (quoting Plating Res., Inc. v. UTI Corp., 47
F. Supp. 2d 899, 903-04 (N.D. Ohio 1999)); accord Siegfried v.
Takeda

Pharm.

N.

Am.,

Inc.,

No.

1:10-CV-02713-JG,

2011

WL

1430333, at *5 (N.D. Ohio Apr. 14, 2011); Fuller v. Abercrombie
& Fitch Stores, Inc., 370 F. Supp. 2d 686, 688 (E.D. Tenn.
2005).

“However, ‘the first-filed rule is not a strict rule and

much more often than not gives way in the context of a coercive
action filed subsequent to a declaratory judgment.’”
Restoration

Dry

Cleaning

Network,

AmSouth Bank, 386 F.3d at 791 n.8).

511

F.3d

at

551

Certified
(quoting

The Sixth Circuit Court of

Appeals has explained:
District courts have the discretion to dispense with
the first-to-file rule where equity so demands.
A
plaintiff, even one who files first, does not have a
right to bring a declaratory judgment action in the
forum of his choosing.
Factors that weigh against
enforcement
of
the
first-to-file
rule
include
extraordinary circumstances, inequitable conduct, bad
faith, anticipatory suits, and forum shopping.
Id. at 551-52 (quoting Zide Sport Shop, 16 F. App’x at 437).
“Cases

construing

the

interplay

between

declaratory

judgment

actions and suits based on the merits of underlying substantive

6

claims create, in practical effect, a presumption that a first
filed declaratory judgment action should be dismissed or stayed
Id. at 552 (quoting AmSouth

in favor of the substantive suit.”
Bank, 386 F.3d at 791 n.8).
Here,

the

first-to-file

rule

against Blue Cove in this Court.

favors

Odyssey’s

action

In analyzing the first factor,

“the date that an original complaint is filed controls,” Zide
Sport Shop, 16 F. App’x at 437 (citing Plating Res., 47 F. Supp.
2d at 904), not the date of an amended complaint even if a party
was

only

added

in

an

amended

complaint

after

filing

suit

elsewhere, see Intersearch Worldwide, Ltd. v. Intersearch Grp.,
Inc., 544 F. Supp. 2d 949, 958 (N.D. Cal. 2008); Shire U.S.,
Inc. v. Johnson Matthey, Inc., 543 F. Supp. 2d 404, 409-10 (E.D.
Pa. 2008).
Court

on

Odyssey filed suit against Augen Opticos in this
November

infringement
products.

of

6,

2010,

Odyssey’s

based

on

PARASOL

Augen

mark

Opticos’

alleged

Augen

Opticos’

on

(See Compl. for Injunctive Relief and Money Damages.)

Blue Cove filed suit against Odyssey in the Southern District of
California on December 17, 2010, seeking a declaratory judgment
that using the term AUGEN PARASOL in marketing and selling Augen
Opticos’

products

does

not

infringe

Compl. ¶¶ 1, 22, ECF No. 24-2.)

Odyssey’s

rights.

(See

Odyssey’s action in this Court

was filed first although Blue Cove was subsequently added as a
party on December 27, 2010.

The first factor favors Odyssey’s
7

See Zide Sport Shop, 16 F.

action proceeding in this Court.

App’x at 437; Intersearch Worldwide, 544 F. Supp. 2d at 958;
Shire

U.S.,

543

F.

Supp.

2d

at

409-10.

The

United

States

District Court for the Southern District of California reached
the same conclusion.

(See California Order 3.)

The second factor also favors Odyssey’s action against Blue
Cove

in

District

this
Court

Court.
for

As
the

demonstrated
Southern

by

the

District

United

of

States

California’s

analysis, Blue Cove is not a separate and distinct entity under
the

first-to-file

rule

because

it

has

held

itself

out

interchangeably with Augen Opticos in dealings with the Southern
District of California and with the U.S. Patent and Trademark
Office and shares a physical office with Augen Opticos in San
Diego, California.
websites

have

(See id.)

identical

IP

Augen Opticos’ and Blue Cove’s

addresses,

the

content

of

their

websites is identical, and nowhere on either website is there a
reference to Blue Cove.

(See id. at 4.)

Blue Cove admitted in

its California action that Augen Opticos is a related company,
associated with it.

(See Compl. ¶ 19, ECF No. 24-2.)

amended its complaint to add Blue Cove as a party.1

Odyssey

(See First

Am. Compl. for Injunctive Relief and Money Damages ¶ 3.)

Under

these circumstances, the similarity of the parties in the two

1

That is not to suggest that Blue Cove is properly a party in Odyssey’s
action in this Court.
Several motions relating to jurisdiction and venue
remain pending.

8

actions favors Odyssey’s action, the first to be filed.

See

Certified Restoration Dry Cleaning Network, 511 F.3d at 551;
Clear!Blue, 521 F. Supp. 2d at 614-15.
The third factor also favors Odyssey’s action against Blue
Cove in this Court.

The central issue in this action and in

Blue Cove’s action against Odyssey in California is the same:
whether

the

marks

on

products

infringe Odyssey’s trademark.

manufactured

by

Augen

Opticos

(Compare Compl. ¶ 22, ECF No. 24-

2 (alleging that Blue Cove’s use of the AUGEN PARASOL mark is a
fair use and does not infringe Odyssey’s trademark), with Compl.
for Injunctive Relief and Money Damages ¶¶ 7, 10, 12-13, 16, 2530 (alleging that the marks on Augen Opticos’ products infringe
Odyssey’s trademark), and First Am. Compl. for Injunctive Relief
and Money Damages ¶¶ 33-38 (alleging that Augen Opticos and Blue
Cove have used infringing marks).)

The similarity of these

issues favors Odyssey’s action, the first to be filed.

See

Certified Restoration Dry Cleaning Network, 511 F.3d at 551;
Clear!Blue, 521 F. Supp. 2d at 614-15.
Because
District

of

the

actions

California

in

this

involve

Court

nearly

and

in

identical

the

Southern

parties

and

issues, the first-to-file rule favors Odyssey’s action in this
Court.
at

551.

See Certified Restoration Dry Cleaning Network, 511 F.3d
All

three

factors

support

Clear!Blue, 521 F. Supp. 2d at 614-15.
9

this

conclusion.

See

Therefore, Blue Cove’s

argument

that

the

first-to-file

rule

supports

dismissing,

staying, or transferring Odyssey’s action against Blue Cove is
not well-taken.
Even if first-to-file rule favored dismissing, staying, or
transferring Odyssey’s action, this Court would decline to do so
because of the nature of Blue Cove’s suit in California.

As the

Sixth Circuit has explained, “the first-filed rule is not a
strict

rule

and

much

more

often

than

not

gives

way

in

the

context of a coercive action filed subsequent to a declaratory
Certified Restoration Dry Cleaning Network, 511 F.3d

judgment.”

at 551 (quoting AmSouth Bank, 386 F.3d at 791 n.8).
Cove’s

declaratory

judgment

Odyssey’s

action

against

trademark

infringement

action

Blue

would

Cove
be

subsequent to Blue Cove’s action.
in

California

anticipatory
action.

See

that

declaratory
giving

551-52.

and

Augen

coercive

filed

first,

Opticos
action

for
filed

That Blue Cove has admitted

its

at

been

a

supports

suit
id.

had

If Blue

judgment

way

That

to

Blue

action

was

an

a

later

coercive

Cove

has

seemingly

engaged in forum shopping by filing suit in California further
supports giving way.

See id.

The Sixth Circuit has said that:

Courts take a dim view of declaratory plaintiffs who
file their suits mere days or weeks before the
coercive suits filed by a “natural plaintiff” and who
seem to have done so for the purpose of acquiring a
favorable forum.
Allowing declaratory actions in
these situations can deter settlement negotiations and
encourage races to the courthouse, as potential
10

plaintiffs must file before approaching defendants for
settlement negotiations, under pain of a declaratory
suit.
This also dovetails with the previous factor:
where a putative defendant files a declaratory action
whose only purpose is to defeat liability in a
subsequent coercive suit, no real value is served by
the declaratory judgment except to guarantee to the
declaratory plaintiff her choice of forum—a guarantee
that cannot be given consonant with the policy
underlying the Declaratory Judgment Act.
AmSouth Bank, 386 F.3d at 788 (citations omitted).
This Court would not dismiss, stay, or transfer Odyssey’s
action

against

Blue

supported doing so.

Cove

even

if

the

first-to-file

rule

See id.; see also Foreword Magazine, Inc.

v. OverDrive, Inc., No. 1:10-cv-1144, 2011 WL 31044, at *2 (W.D.
Mich. Jan. 5, 2011) (“As the Sixth Circuit has noted, the firstto-file rule is discretionary and will generally yield to the
stronger

policy

that

prefers

the

coercive

action

over

declaratory judgment actions.” (citing Certified Restoration Dry
Cleaning Network, 511 F.3d at 552)); Long v. CVS Caremark Corp.,
No. 5:09CV1392, 2010 WL 547143, at *4 (N.D. Ohio Feb. 11, 2010)
(“The declaratory judgment exception is a tool used by courts to
combat procedural fencing where courts refuse to give deference
to

declaratory

judgment

substantive lawsuit.

actions

filed

in

anticipation

of

a

Courts refuse to apply the first-to-file

rule under these circumstances because doing so would unfairly
deprive a plaintiff of his choice of forum.” (citing Certified
Restoration Dry Cleaning Network, 511 F.3d at 552)).

11

III. Conclusion
For the foregoing reasons, Blue Cove’s Motion is DENIED.
So ordered this 27th day of June, 2011.

s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

12