In an opinion this week, Judge Gardephe granted the plaintiffs’ motion to dismiss their own federal trademark claims, but found that the defendants’ declaratory judgment counterclaims were enough to preserve federal jurisdiction. Defendant Chobani had alleged that the dismissal of the federal law claims was simply a tactic for the plaintiffs to attempt to defeat federal subject matter jurisdiction and effectively move the case to state court.
First, Judge Gardephe noted that, under Rules 15 and 41, a plaintiff can voluntarily dismiss some (but not all) of its claims, so long as there is no prejudice to the defendant. Next, Judge Gardephe found that Chobani would not be prejudiced by the dismissal as there would still be a federal case or controversy under federal law arising from Chobani’s counterclaims seeking declaratory judgment that its “HOW MATTERS” trademark did not infringe on the Plaintiffs’ trademark:
[T]he [U.S.] Supreme Court [has] held that – for purposes of satisfying the “case or controversy” requirement – a patent licensee is not required to terminate or be in breach of its licensing agreement before seeking a declaratory judgment that the underlying patent is invalid, unenforceable, or not infringed . . . . Indeed, courts routinely find an actual “case or controversy” on much less substantial grounds, such as cease and desist letters . . . .
[G]iven Plaintiffs’ intention to proceed on its state law claims, it is obvious that Plaintiffs have not abandoned their view that Defendants’ use of the marks in question constitute infringement. Accordingly, it is not “absolutely clear” that Plaintiffs will not make any claims or demands against Defendants in the future regarding the “How Matters” mark, and therefore Defendants’ counterclaims present an actual “case or controversy” that provides an independent basis for the exercise of federal jurisdiction.