Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-00173/USCOURTS-casd-3_09-cv-00173-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MALAVA, LLC, a California limited

liability company,

Plaintiff,

CASE NO. 09cv173 WQH (WVG)

ORDER

vs.

INNOVATIVE BEVERAGE GROUP

HOLDINGS, INC., a Nevada corporation,

INNOVATIVE BEVERAGE GROUP,

INC., a Nevada corporation,

Defendants __________________________________

INNOVATIVE BEVERAGE GROUP

HOLDINGS, INC., a Nevada corporation,

INNOVATIVE BEVERAGE GROUP,

INC., a Nevada corporation,

 Counter-claimants,

 vs.

MALAVA, LLC, a California limited

liability company,

 Counter-defendant.

HAYES, Judge:

The matter before the court is Plaintiff Malava LLC’s Motion to Voluntarily Dismiss

Case. (ECF No. 57). 

Case 3:09-cv-00173-WQH-WVG Document 70 Filed 11/22/10 Page 1 of 5
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BACKGROUND

On January 29, 2009, Plaintiff initiated this action by filing the Complaint. (ECF No.

1). On October 20, 2009, Plaintiff filed a First Amended Complaint (“FAC”). (ECF No. 34).

 The FAC alleges that Plaintiff is the owner of the common law trademark and registered

United States Trademark “The Anti-Energy Drink.” Id. at 3 ¶ 9. The Complaint alleges that

Defendant misappropriated its mark by using the following slogans, “‘anti energy’, ‘the anti

energy drink’, and ‘the world’s first anti energy drink.’” Id. at 4 ¶ 15. The Complaint alleges

the following claims for relief: (1) federal trademark infringement; (2) federal unfair

competition, false designation of origin, passing off, and false advertising; (3) false advertising

in violation of section 17500, et seq., of the California Business and Professions Code; and (4)

unfair business practices in violation of section 17200, et seq., of the California Business and

Professions Code. 

On March 5, 2009, Defendant filed an Answer and Counterclaim. (ECF No. 8). On

October 21, 2009, Defendant filed an Amended Answer and Counterclaim. (ECF No. 37).

The Counterclaim seeks declaratory judgment of non-infringement and invalidity of Plaintiff’s

mark. Id. at 10. 

On October 4, 2010, Plaintiff Malava LLC filed a Motion to Voluntarily Dismiss the

Case. (ECF No. 57). On October 18, 2010, Defendant Innovative Beverage Group Holdings

and Innovative Beverage Group’s Opposition to Plaintiff’s Motion to Voluntarily Dismiss was

filed. (ECF No. 61). On October 23, 2010, Plaintiff filed a Reply. (ECF No. 62). 

 Plaintiff seeks voluntarily dismiss of its affirmative claims and requests the Court

dismiss the case in its entirety. Plaintiff contends that if the Complaint is dismissed,

Defendants will not suffer prejudice by the counterclaims being dismissed because the

counterclaims would be unnecessary. 

Defendants do not oppose dismissal of Plaintiff’s Complaint provided that dismissal is

with prejudice and Defendant’s counterclaims are not dismissed. Defendants contend that

there is a case pending before the Trademark Office’s Trial and Appeal Board which has been

stayed in favor of resolution of this case, and even if that case was decided, Plaintiff could

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return to federal court and relitigate these issues by appealing the decision. Defendants

contend that Plaintiff is merely forum shopping to gain a tactical advantage. Defendants also

contend that the Court has jurisdiction to determine the counterclaims.

DISCUSSION

I. Plain Legal Prejudice

Under Rule 41(a)(2) of the Federal Rules of Civil Procedure, “an action may be

dismissed at the plaintiff’s request only by court order, on terms that the court considers

proper.” Fed. R. Civ. P. 41(a)(2). Dismissal pursuant to Rule 41(a)(2) is without prejudice

unless the order dismissing the case states otherwise. Id. “Rule 41 vests the district court with

discretion to dismiss an action at the plaintiff's instance upon such terms and conditions as the

court deems proper.” Hargis v. Foster, 312 F.3d 404, 412 (9th Cir. 2002). “A district court

should grant a motion for voluntary dismissal under Rule 41(a)(2) unless a defendant can show

that it will suffer some plain legal prejudice as a result.” Smith v. Lenches, 263 F.3d 972, 975

(9th Cir. 2001). 

Plain legal prejudice is defined in the Ninth Circuit as “prejudice to some legal interest,

some legal claim, some legal argument.” Westlands Water Dist. v. United States, 100 F.3d 94,

97 (9th Cir. 1996). “Plain legal prejudice, however, does not result simply when defendant

faces the prospect of a second lawsuit or when plaintiff merely gains some tactical advantage.”

Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982)(citation omitted);

see also Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th Cir. 1996) (“[T]he threat

of future litigation which causes uncertainty is insufficient to establish plain legal prejudice.)

Although Defendants contend that they may face the prospect of a future litigation and

that Plaintiff may gain some tactical advantage, Defendants have failed to show that they will

suffer plain legal prejudice as a result of the granting of Plaintiff’s Motion to Voluntarily

Dismiss the Case. Hamilton, 679 F.2d at 145. Plaintiff’s Complaint is dismissed. 

II. Case or Controversy

Defendants contend that the Court continues to have jurisdiction over the counterclaims.

Article III of the United States Constitution restricts federal judicial power to the

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adjudication of “Cases” or “Controversies.” U.S. Const. art. III, § 2. The Declaratory

Judgment Act provides: “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.” 28 U.S.C. § 2201. “The Declaratory Judgment Act’s requirement of

‘a case of actual controversy’ simply affirms this [Article III] Constitutional requirement,

having long been interpreted as referring to any case and controversy that is justiciable under

Article III.” Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1335 (Fed. Cir. 2008)

(citations omitted). 

In deciding if the case or controversy requirement is satisfied, 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.” MedImmune, Inc. v. Genentech, Inc., 549

U.S. 118, 127 (2007) (quotation omitted). “[A] case or controversy must be based on a real

and immediate injury or threat of future injury that is caused by the defendants—an objective

standard that cannot be met by a purely subjective or speculative fear of future harm.” Prasco,

537 F.3d at 1339 (emphasis in original). “[T]he alleged injury at the root of most justiciable

declaratory judgment controversies in the patent [or trademark] context is a restraint on the free

exploitation of non-infringing goods, or an imminent threat of such restraint.” Id. (quotation

omitted). Under Rhoades v. Avon Products, Inc., 504 F.3d 1151 (9th Cir. 2007), “[A]n action

for a declaratory judgment that a patent [or trademark] is invalid, or that the plaintiff is not

infringing, [presents] a case or controversy if the plaintiff has a real and reasonable

apprehension that he will be subject to liability if he continues to manufacture his product.”

Id. at 1157 (citing Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542,

1555-56 (9th Cir. 1990)). 

The sole basis for declaratory judgment and Article III jurisdiction alleged in the

Counterclaim is the following: “By accusing Defendants of federal and state trademark

infringement and filing the complaint herein, Malava has created a present and actual

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controversy between the parties.” (ECF No. 37 at 10 ¶ 13). The Counterclaim also alleges that

Defendants “previously used the words ‘anti-energy’ in certain of its marketing, product

packaging or advertisements of the ‘drank’ beverage product. [Defendants have] ceased using

‘anti-energy’ on such items.” Id. at 9 ¶ 3. Peter Bianchi, President and Chief Executive

Officer of Defendant Innovative Beverage Group Holdings, Inc., states in his declaration:

“From approximately October 2007 to June 2008, [Defendants] used the term ‘anti-energy’ on

the ‘drank’ product packaging. [Defendants] ceased using the term on its packaging in June

2008 . . . .” (ECF No. 61-3 at 46). 

Based on the record, Defendants’ Counterclaims do not present a case or controversy

“of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

MedImmune, 549 U.S. at 127. 

CONCLUSION

Plaintiff Malava LLC’s Motion to Voluntarily Dismiss Case (ECF No. 57) is

GRANTED. Plaintiff’s Complaint and Defendants’ Counterclaims are dismissed without

prejudice. The Clerk shall close the case. 

DATED: November 19, 2010

WILLIAM Q. HAYES

United States District Judge

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