Declaratory judgment actions involving intellectual property rights are most often brought by potential infringers seeking a declaration of non-infringement. In a twist on the standard practice, however, the U.S. District Court for the Southern district of New York was recently faced with a trademark owner’s request for a declaration of infringement. In AARP v. 200 Kelsey Associates, LLC, et al., plaintiff AARP sought to have the court declare that defendants’ activities in preparation for their launch of a magazine using an infringing name were sufficient to justify a declaratory award. Despite defendants’ motion to dismiss for lack of jurisdiction and for failure to state a claim – because there had been no actual product launch or sale of product under the accused name and therefore no actual controversy and no basis for a finding of trademark infringement – the court held that plaintiff’s declaratory judgment (“DJ”) action was appropriate and denied defendants’ motion to dismiss.

Plaintiff AARP, a non-profit organization dedicated to addressing the needs and promoting the interests of individuals over 50, sued Defendants 200 Kelsey Associates and Michael Reich for trademark infringement over defendants’ impending launch of a magazine called “Modern Maturity”, a magazine targeting a senior readership. AARP sought a declaration that its own MODERN MATURITY mark (originally the name of its flagship magazine, and now used on its website), had been infringed by defendants. Defendants countered with a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim, arguing that because they had not actually published or begun to sell their “Modern Maturity” magazine (i) there existed no case or controversy sufficient to confer jurisdiction; and (ii) even if there were a case or controversy, there was no use in commerce of the “Modern Maturity” name so as to give rise to a justiciable claim for trademark infringement. Opposing the motion, plaintiff AARP argued that there was no need to wait until defendants’ magazine was published and distributed; rather defendants’ pre-publication activities were sufficient to show that the infringing mark was “used in commerce” for purposes of alleging trademark infringement.

The Declaratory Judgment Act provides that in a case of actual controversy, a federal court may declare the rights and other legal relations of any interested party seeking such a declaration. See 28 U.S.C. § 2201 (a). The first step in the analysis in a situation where a motion to dismiss is filed, however, is to decide whether the court has jurisdiction, i.e., whether there is an actual case or controversy as set forth in Article III of the United States Constitution. Here, in analyzing this question in light of the defendants’ anticipated launch of its magazine, the court first acknowledged that these types of actions are typically brought by potential infringers – not by trademark owners. However, relying on the Federal Circuit’s decision in Lang v. Pacific Marine & Supply Co. Ltd, 895 F.2d 761, 764 (Fed. Cir. 1990), and on the Second Circuit’s subsequent decision in Starter Corp. v. Converse, Inc., 84 F.3d 592, 595 (2nd Cir. 1996), the court held that such actions are in fact permitted when a trademark owner seeks a declaration with respect to an impending infringement.

The test for determining whether the requisite “controversy” exists in an action brought by a plaintiff trademark owner requires the plaintiff to show that the defendant is “engaged in a course of conduct evidencing a ‘definite intent and apparent ability to commence use’ of the allegedly infringing mark on a product” (citation omitted). Thus, there must be more than a vague or general desire to use the infringing mark; rather the defendant must be making meaningful preparation for the infringing activity.

Although the “definite intent and apparent ability” test was derived from the now rejected “reasonable apprehension of suit” test -- a test rejected by the Supreme Court in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) -- the court in AARP found that the “definite intent and apparent ability” aspect was still applicable. The court’s rationale was that this aspect stemmed from that portion of the “reasonable apprehension” test dealing with the “adversity requirement” between the parties. In the court’s view, this requirement remained unchanged by MedImmune. Thus, after determining the appropriateness of applying the “definite intent and apparent ability” test, the court concluded that there existed “a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment”. As such, plaintiff AARP had a reasonable basis for bringing a DJ action, and thus the court had jurisdiction under the Declaratory Judgment Act.

Turning to defendants’ second claimed ground for dismissal, i.e., that there had not yet been any true “use in commerce” and thus that there could be no claim of trademark infringement, the court rejected the defendants' argument that “use in commerce” of the allegedly infringing mark meant that defendants had to have actually published, distributed and sold their magazine. The court concluded that trademark infringement, as codified in the Lanham Act, is not contingent on the actual sale of an allegedly infringing product. Here, because defendants had actively searched for licensees and had conducted “extensive analysis of the publishing industry in preparation for the launch of their magazine, it was reasonable to infer that, in doing so, defendants have not only used the [accused mark], but ha[d] done so through channels of commerce.” As a result, the court concluded that AARP had “alleged facts giving rise to a reasonable inference that defendants ha[d] used the ‘Modern Maturity’ mark in commerce.

In sum, in this offensive declaratory judgment action, where the defendant had not actually sold or distributed the infringing product, an “actual controversy” existed where defendants' pre-launch activities, including seeking licensees, demonstrated a “definite intent and apparent ability” to commence use of the infringing mark. Additionally, these pre-launch activities were enough to establish use in commerce for purposes of supporting a trademark infringement claim.