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Duke University v. Universal Products Inc.

United States District Court, M.D. North Carolina

May 6, 2014

DUKE UNIVERSITY, Plaintiff,
v.
UNIVERSAL PRODUCTS INC., Defendant.

MEMORANDUM OPINION AND ORDER

L. PATRICK AULD, Magistrate Judge.

This case comes before the undersigned United States Magistrate Judge on Defendant's Motion to Stay Proceedings (Docket Entry 9). (See Docket Entry dated Feb. 25, 2014.) For the reasons that follow, the Motion will be denied.[1]

I. Background

The Complaint identifies Plaintiff as "a private nonprofit research university that provides graduate, undergraduate and other educational programs in North Carolina and at other locations around the world and that, among many other endeavors, fields nationally prominent Division 1 athletic teams" (Docket Entry 1, ¶ 7) and Defendant as "a corporation of the State of Maryland" (id., ¶ 3) that manufactures, among other things, automobile cooling systems leak sealants (see id., ¶ 17). Plaintiff brings this suit for trademark infringement and related claims against Defendant for unauthorized use of Plaintiff's registered marks. (Id., ¶¶ 1, 27-64.)

According to the Complaint, Plaintiff "owns many marks consisting of the terms BLUE DEVIL and BLUE DEVILS and variants thereof, as well as marks consisting in whole or substantial part of the terms BLUE and DEVIL, and design marks including its famous BLUE DEVIL mascot." (Id., ¶ 8.) Plaintiff reports using said marks since approximately 1923 (id., ¶ 9) and possessing at least 13 United States Trademark Registrations for them (id., ¶ 11). Further, the Complaint states that Plaintiff sells and/or licenses a wide variety of products bearing its marks, including automotive accessories, both at retail premises and on the Internet, and provides "educational and entertainment services related to motor vehicle engineering and racing, including its Motorsports team, founded in 1996, which utilizes BLUE DEVIL Marks on its race cars and in other ways." (Id., ¶ 14.)

The Complaint alleges that, in 2009, Defendant "applied to register the unitary word "BLUEDEVIL" as a trademark for automobile cooling system leak sealants...." (Id., ¶ 17.) Plaintiff allegedly entered into discussions with Defendant and ultimately agreed to forego any opposition of Defendant's application in exchange for restrictions on the use of Defendant's mark. (Id., ¶ 19.) As a result, Defendant owns a United States Trademark Registration for that mark. (Id.)

According to the Complaint, "[i]n 2011, Defendant filed two new trademark applications for BLUEDEVIL PRODUCTS for wholesale and retail store services and on-line retail and wholesale store services featuring automotive accessories and automotive leak sealants, namely, air conditioning leak sealants, cooling system leak sealants, oil system leak sealants, power steering leak sealants, hydraulic leak sealants, head gasket leak sealant, windshield washer fluid, fuel additives for gas and diesel engines, radiator flush, and air conditioning coolant and coolant booster.'" (Id., ¶ 20 (citation omitted).) The Complaint alleges that these applications violate the agreement between Plaintiff and Defendant concerning Defendant's original mark and that Defendant's proposed marks infringe upon Plaintiff's registered marks. (Id., ¶¶ 24-26.)

In light of the foregoing facts, Plaintiff's Complaint asserts the following claims: breach of contract (id., ¶¶ 27-31); trademark infringement (id., ¶¶ 32-46); false designation of origin, false descriptions, false representation of association, dilution (id., ¶¶ 47-52); trademark infringement (common law) (id., ¶¶ 53-59); and unfair and deceptive trade practices (id., ¶¶ 60-64).

Prior to commencing this action, Plaintiff filed an Opposition to Defendant's 2011 trademark registration applications before the Trademark Trial and Appeal Board ("TTAB"). (See Docket Entry 13-1.) In its instant Motion (Docket Entry 9), Defendant "requests that this action be stayed pending the outcome of the Opposition action before the TTAB." (Docket Entry 10 at 1.)[2] Plaintiff responded (Docket Entry 13) and Defendant replied (Docket Entry 14).

II. Discussion

Defendant's instant Motion focuses on the doctrine of primary jurisdiction to support its request for a stay. (See Docket Entry 10 at 2-7.) "The doctrine of primary jurisdiction allows a court to stay or dismiss a case without prejudice to give the parties a reasonable opportunity to seek an administrative ruling on some issue within the special competence of an administrative agency.'" Sprint Commc'ns Co., L.P. v. NTELOS Tel. Inc., No. 5:11cv00082, 2012 WL 3255592, at *10 (W.D. Va. Aug. 7, 2012) (unpublished) (quoting Reiter v. Cooper , 507 U.S. 258, 268 (1993)). The doctrine, in part, "is intended to recognize that, with respect to certain matters, the expert and specialized knowledge of the agencies' should be ascertained before judicial consideration of the legal claim." Goya Foods, Inc. v. Tropicana Prods., Inc. , 846 F.2d 848, 851 (2d Cir. 1988) (quoting United States v. Western Pac. R.R. Co. , 352 U.S. 59, 64 (1956)).

The First, Second, and Ninth Circuits have addressed the applicability of primary jurisdiction to the realm of trademark law and determined that, for the most part, the doctrine does not justify a stay of federal court proceedings pending completion of a registration proceeding before the TTAB. See Rhoades v. Avon Prods., Inc. , 504 F.3d 1151, 1165 (9th Cir. 2007); PHC, Inc. v. Pioneer Healthcare, Inc. , 75 F.3d 75, 80-81 (1st Cir. 1996); Goya Foods , 846 F.2d at 852-54. The first of those cases involved a party seeking a declaration that it had not infringed on another's marks and requesting cancellation of the other party's registration. Goya Foods , 846 F.2d at 850. The Second Circuit, recognizing at the time that neither the United States Supreme Court nor any of the Courts of Appeal had addressed the impact of primary jurisdiction in trademark cases, began with a discussion of the process of trademark registration:

The Lanham Act provides for federal trademark registration and authorizes the PTO [Patent and Trademark Office] to refuse registrations of a mark that "so resembles a mark registered in the [PTO] or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when applied to the goods of the applicant, to cause confusion, or to cause mistake, or the deceive...." 15 U.S.C. § 1052(d). An opposition to a registration may be initiated by "[a]ny person who believes that he would be damaged by the registration of a mark, " 15 U.S.C. § 1063, and the TTAB is established "to determine and decide the respective rights of registration" in contested proceedings, 15 U.S.C. § 1067. An applicant for registration or party to an opposition or cancellation proceedings disappointed with the decision of the ...

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