NSI Corp. v. Showco, Inc.

843 F. Supp. 642, 30 U.S.P.Q. 2d (BNA) 1546, 1994 WL 25371, 1994 U.S. Dist. LEXIS 883
CourtDistrict Court, D. Oregon
DecidedJanuary 21, 1994
DocketCiv. No. 93-1153-FR
StatusPublished
Cited by8 cases

This text of 843 F. Supp. 642 (NSI Corp. v. Showco, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NSI Corp. v. Showco, Inc., 843 F. Supp. 642, 30 U.S.P.Q. 2d (BNA) 1546, 1994 WL 25371, 1994 U.S. Dist. LEXIS 883 (D. Or. 1994).

Opinion

AMENDED OPINION

FRYE, District Judge:

The matters before the court are 1) the motion of the defendant, Showeo, Inc., to dismiss (#4-1) or alternatively to transfer (#4-2); and 2) the motion of the plaintiff, NSI Corporation, to enjoin a subsequently filed suit (# 9).

FACTS

Showeo, Inc. (Showeo) is engaged in the development, manufacture and leasing of sound systems and speakers that are used at live performances and the provision of related services. NSI Corporation (NSI) designs, manufactures and sells microprocessor based lighting controllers and dimmers for lighting systems that are used at live performances.

In 1986, Showeo began using the mark PRISM in connection with a new high quality sound system. In 1987, Showeo registered the mark PRISM (Reg. No. 1,457,279) with the United States Patent and Trademark Office for “sound equipment namely speakers.” The registration is now ineontestible under section 15 of the United States Trademark Act (15 U.S.C. § 1065). Showco’s PRISM sound system has been used in live performances throughout the United States and elsewhere by musicians. Showco’s PRISM sound system is its most important product.

In early 1993, NSI filed an application with the United States Patent and Trademark Office to register the mark PRISM after having determined that no other companies in the lighting industry were using it as a trademark.

Showeo first became aware that NSI was using the mark PRISM as a result of the publication of NSI’s application to register the mark PRISM (Serial No. 74/333, 821) in the May 11, 1993 issue of the Trademark Official Gazette. In its application to register the mark PRISM,' NSI states that it uses the mark in connection with “portable programmable memory lighting controllers and software and user manuals therefor sold as a unit for use in live performances, entertainment tours and events.” Exhibit 1 to Supplemental Declaration of Joseph A. Calvaruso.

Showeo became concerned that because it was using the mark PRISM for sound systems at the same type of events that NSI proposed to use the mark PRISM for lighting equipment, there was a likelihood of consumer confusion. As a result, on June 9, 1993, Showeo filed a request for an extension of time to oppose the application of NSI for the mark PRISM.

On July 30,1993, Joseph A. Calvaruso, one of Showco’s attorneys, wrote a letter to Alexander C. Johnson, Jr., trademark attorney for NSI, informing NSI of Showco’s use of the mark PRISM and demanding that NSI “immediately cease and desist from all use of the PRISM mark” and “withdraw its pending application to register said mark.” Exhibit 2 to Declaration of Joseph A. Calvaruso, p. 2. In the letter of July 30, 1993, Calvaruso [644]*644advised NSI that while Showco was prepared to oppose registration of the mark in the Patent and Trademark Office or to use additional other legal remedies, it would prefer to resolve the conflict amicably.

On August 5,1993, trademark attorney for NSI contacted Showco’s attorney to acknowledge receipt of the letter of July 30, 1993. Showco was informed that NSI was investigating the matter. In early September, counsel for Showco called counsel for NSI to inquire about the status of the matter. At that time, NSI informed Showco that it would be forwarding a settlement proposal.

On September 16, 1993, counsel for NSI sent Showco a settlement proposal pursuant to which NSI’s use of the mark PRISM would be limited. In a declaration submitted to this court, the president of NSI, Larry Lynn, stated:

Recognizing that Showco might still demand that NSI stop using PRISM as demanded in their attorney’s July 30 letter, however, we decided we would have to fight rather than switch, and needed to be prepared. I was particularly concerned about suit being filed anywhere that might disrupt our marketing or attending an important tradeshow. Therefore, I authorized the preparation and filing of a complaint, but directed that it not be filed unless and until it looked like Showco would not settle short of NSI ceasing to use PRISM.

Declaration of Larry Lynn, p. 6. Despite the declaration of Lynn on behalf of Showco that he had directed that suit not be filed until it looked like a settlement would not be possible, NSI filed this declaratory judgment action on September 17, 1993, one day after it mailed the settlement offer to Showco.

NSI served the complaint on Showco on October 15, 1993. On the same day, counsel for NSI sent Showco’s attorney a copy of NSI’s complaint and a renewed offer of settlement. In the letter of October 15, 1993, counsel for NSI stated:

Although it has been three weeks since NSI’s settlement proposal, Showco has yet to respond to NSI in any fashion. Thus, it is the lack of communication with Showco and the resulting uncertainty that prompted NSI to file suit. NSI sincerely desires to resolve this matter amicably and forego the expense and disruption of litigation.

Exhibit 4 to Declaration of Joseph A. Calvaruso.

NSI acknowledges that the letter of October 15, 1993 contains several misstatements. The most significant misstatement contained in the letter of October 15,1993 is the representation of Gerald D. Haynes that the delay of Showco had caused NSI to “file suit” when, in fact, the delay of Showco had prompted NSI only to make service of the suit which had been filed on September 17, 1993. See Declaration of Gerald D. Haynes, p. 4.

On October 19, 1993, Showco formally rejected NSI’s offer of settlement. On November 2, 1993, Showco sued NSI in the United States District Court for the Northern District of Texas, Showco, Inc. v. NSI Corp., No. CV 2203-R. In that complaint, Showco alleges that the use of the mark PRISM by NSI constitutes trademark infringement, false designation of origin, and unfair competition under federal, state and common law and dilution under the laws of the State of Texas.

STANDARD OF REVIEW

The Declaratory Judgment Act provides, in relevant part:

In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a). “The Declaratory Judgment Act does not grant litigants an absolute right to a legal determination. The decision to grant declaratory relief is a matter of discretion, even when the court is presented with a justiciable controversy.” United States v. Washington, 759 F.2d 1353, 1356 (9th Cir.1985) (citations omitted).

[645]*645The doctrine of federal comity is a discretionary doctrine which permits one federal district court to decline to exercise jurisdiction over a matter if a complaint has been filed in another federal district court. Church of Scientology v. United States Dep’t of Army, 611 F.2d 738, 749 (9th Cir.1979).

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Bluebook (online)
843 F. Supp. 642, 30 U.S.P.Q. 2d (BNA) 1546, 1994 WL 25371, 1994 U.S. Dist. LEXIS 883, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nsi-corp-v-showco-inc-ord-1994.