Artful Color, Inc. v. Hale

928 F. Supp. 2d 859, 2013 WL 791138, 2013 U.S. Dist. LEXIS 30611
CourtDistrict Court, E.D. North Carolina
DecidedMarch 4, 2013
DocketNo. 5:12-CV-576-BO
StatusPublished
Cited by1 cases

This text of 928 F. Supp. 2d 859 (Artful Color, Inc. v. Hale) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Artful Color, Inc. v. Hale, 928 F. Supp. 2d 859, 2013 WL 791138, 2013 U.S. Dist. LEXIS 30611 (E.D.N.C. 2013).

Opinion

ORDER

TERRENCE WILLIAM BOYLE, District Judge.

This cause comes before the Court on defendant’s motion to dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Plaintiff has responded, defendant has replied, and the matter is ripe for ruling. For the reasons discussed below, the Court declines to exercise jurisdiction and this matter is dismissed.

BACKGROUND

Plaintiff filed this action seeking a declaratory judgment seeking an order declaring that plaintiff has not infringed on defendant’s common law trademark rights and declaring that defendant is infringing on plaintiffs common law trademark rights. Plaintiff also seeks compensation for defendant’s trademark infringement, tortious interference with contract, libel per se, and unfair and deceptive trade practices under North Carolina law.

This action involves the printing of digital photographs on other mediums such as canvas and the trademarks related to such process. In 2001, defendant filed for and ultimately received in 2003 trademark registration for his Pix2Canvas mark. Defendant’s trademark was cancelled in 2010, however, due to an allegedly inadvertent failure to file a declaration of use. Defendant maintains that he has never stopped using the mark and that he has applied for and is awaiting re-registration of the mark. In 2005, plaintiff, engaged in a similar business, purchased the domain name www.mypix2canvas.com and since 2010 has used and continues to use the trademark MyPix2Canvas in connection with goods [861]*861and services it provides on its website. Plaintiff also established a Facebook page using the MyPix2Canvas name.

In June 2012, plaintiff received an email from defendant alleging that plaintiffs use of the MyPix2Canvas name infringed on defendant’s Pix2Canvas mark. Plaintiff attempted to negotiate a license agreement with defendant, which apparently was unsuccessful. Defendant then contacted Integral Solutions Group, the service provider for plaintiffs website, alerting them to the alleged infringement. Plaintiff terminated its relationship with Integral Solutions and began using another service provider. Defendant thereafter contacted Facebook and Microsoft alleging that plaintiff was infringing on his intellectual property rights. As referenced in plaintiffs complaint, plaintiff is a corporation organized and existing under North Carolina law with a principal place of business in Apex, North Carolina, and defendant is an individual resident of California. Plaintiff effected service on defendant at his address in California.

DISCUSSION

A district court may upon the filing of an appropriate pleading “declare the rights and other legal relations of any interested party seeking of any interested party seeking such declarations whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). However, a district court may in its discretion decline to exercise jurisdiction over a declaratory judgment action as no mandatory obligation to declare the litigant’s rights is imposed by the Declaratory Judgment Act. Aetna Cas. & Sur. Co. v. Ind-Corn Elec. Co., 139 F.3d 419, 421 (4th Cir.1998). The absence of a parallel state proceeding does not remove the district court’s discretion to dismiss a declaratory judgment action. Id. at 424. When determining whether to exercise jurisdiction over a declaratory judgment action in the absence of a parallel state proceeding, a court should consider whether the judgment would serve a useful purpose in clarifying the legal relations at issue and whether a judgment will afford relief from uncertainty, insecurity, and controversy. United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Cir.1998). A court’s discretion in declining to exercise jurisdiction over a declaratory judgment action is not unfettered, and it may only do so for good reason. Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th Cir.1937).

The Court first concludes that it does in fact have diversity jurisdiction over this action. Volvo Const. Equip. N. America, Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir.2004) (in declaratory judgment action court must determine whether it has jurisdiction over the action and whether an actual controversy has been presented). The Court must next determine whether plaintiff has presented an actual controversy within the meaning of the Declaratory Judgment Act. See Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 272, 61 S.Ct. 510, 85 L.Ed. 826 (1941). Such a question is one of degree, and a court must determine whether “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 273, 61 S.Ct. 510. In other words, the Declaratory Judgment Act may not be invoked to ask a district court to issue advisory opinions, and the dispute between the parties must be a case or controversy within the confines of Article III of the Constitution. White v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 913 F.2d 165, 167 (4th Cir.1990); see also MedImmune Inc. v. Genentech, Inc., 549 U.S. 118, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007).

Considering the second prong first, it is apparent that through its use of a [862]*862mark similar to defendant’s plaintiff has engaged in allegedly infringing actions. Considering next whether plaintiff had an objectively reasonable apprehension of litigation, the Court notes that a cease and desist letter alone may not amount to an actual controversy. See e.g. Dunn Computer Corp. v. Loudcloud, Inc., 138 F.Supp.2d 823, 827-28 (E.D.Va.2001). Indeed, defendant’s cease and desist letter mailed to plaintiff specifically states that he does not desire litigation, that he is not litigious in nature, and that the matter could be resolved through negotiation. [DE 12-2]. Defendant, however, also took additional steps to prevent plaintiffs allegedly infringing behavior, including contacting plaintiffs service providers and Facebook, and thus the Court finds that an actual controversy exists. See e.g. Jeffrey Banks, Ltd. v. Jos. A. Bank Clothiers, Inc., 619 F.Supp. 998, 1002 (D.Md.1985) (actual controversy over trademark exists where defendant sent a cease and desist letter, defendant had filed an opposition to plaintiffs published mark, and the parties were unable to settle the matter).

Having determined that it has jurisdiction over this matter, the Court must still consider whether in its discretion it will exercise such jurisdiction.

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Bluebook (online)
928 F. Supp. 2d 859, 2013 WL 791138, 2013 U.S. Dist. LEXIS 30611, Counsel Stack Legal Research, https://law.counselstack.com/opinion/artful-color-inc-v-hale-nced-2013.