The U.S. Court of Appeals for the Fifth Circuit affirmed a district court dismissal of a case for lack of subject matter jurisdiction when the declaratory judgment plaintiff did not have a substantially fixed and definite product design when it filed the action. Vantage Trailers v. Beall Corp.,Case No. 08-20139, (5th Cir., May 8, 2009) (Jones, C. J.).
Defendant Beall marks and sells an aluminum bottom dump trailer, the “Beall Bullet,” which is protected by a trademark registration. After Vantage began design of its own trailer, Beall sent a letter to Vantage stating that if Vantage were to place any trailers into service that violate any of the Beall trademarks it would pursue legal action.
Vantage thereupon filed suit seeking a declaratory judgment that Beall’s trademark is invalid and that “the design, manufacture, sale and use of [Vantage’s] aluminum bottom dump trailer does not infringe any valid intellectual property right” of Beall’s.
Following discovery, Beall filed a successful motion to dismiss the trademark declaratory judgment claim for lack of subject matter jurisdiction. Vantage appealed.
On appeal, Vantage argued that a variety of its activities, all centered around its design and attempted sale of an aluminum bottom dump trailer, demonstrate the immediacy and reality of the controversy between itself and Beall. Vantage worked with an engineer on product development, began construction of a new manufacturing facility, purchased specialized equipment, built a sub-frame and offered to sell its new model trailers. The question, in the mind of the court, was whether the product design was sufficiently fixed at the time of filing to allow evaluation of trademark infringement.
Turning to a Federal Circuit decision in a patent case, Sierra Applied Sciences, for guidance, the court found, that like the Sierra Applied Sciences, although the declaratory plaintiff had begun development of a potentially infringing device at the time of suit there was no immediate and real controversy “[b]ecause the design was fluid on the date the complaint was filed, it was impossible to determine-on that date-whether any eventual design … would infringe [the] patents.”
The Fifth Circuit concluded that even though the present dispute involved a trademark, not a patent, the “distinction between patents and trademarks weakens, rather than strengthens, Vantage’s argument for justiciability. Typically, the functional elements of design will long precede the cosmetic. The compromises and alterations necessary to accomplish a product’s purpose often dictate its appearance.”