Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-06-04294/USCOURTS-ca10-06-04294-0/pdf.json

Parties Involved:
Sure Foot Corporation
Appellee
Surefoot LC
Appellant

Document Text:

FILED

United States Court of Appeals

Tenth Circuit

July 8, 2008

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SUREFOOT LC,

Plaintiff-Appellant,

v.

SURE FOOT CORPORATION,

Defendant-Appellee.

No. 06-4294

Appeal from the United States District Court

for the District of Utah

(D.C. No. 2:06-CV-554-TS)

Robert W. Adams of Nixon & Vanderhye P.C., Arlington, Virginia (Steven Call

and Carolynn Clark of Ray, Quinney & Nebeker P.C., Salt Lake City, Utah, and

Michael E. Crawford, Nixon & Vanderhye P.C., Arlington, Virginia, with him on

the briefs), for Plaintiff-Appellant.

Charles W. Jirauch of Quarles & Brady Streich Lang, LLP, Phoenix, Arizona (W.

LaNelle Owens of Quarles & Brady Streich Lang, LLP, Phoenix, Arizona; Marcy

G. Glenn of Holland & Hart LLP, Denver, Colorado; and Brett L. Foster, Cecilia

M. Romero, and Romaine C. Marshall of Holland & Hart LLP, Salt Lake City,

Utah, with him on the brief), for Defendant-Appellee.

Before MURPHY, HARTZ, and GORSUCH, Circuit Judges.

GORSUCH, Circuit Judge.

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 1 
- 2 -

In this case, two companies with similar names find themselves in the midst

of a trademark dispute. Over the course of several years, Sure Foot Corp. has

repeatedly accused Surefoot LC, of infringing on its trademark, occasionally

threatened litigation if Surefoot LC failed to change its name, and filed five

administrative petitions opposing Surefoot LC’s attempts to obtain trademark

registrations. Faced with uncertainty about its right to use the “Surefoot” mark,

Surefoot LC filed a declaratory judgment suit against Sure Foot Corp., asking the

district court to determine once and for all whether it was infringing on Sure Foot

Corp.’s rights. Applying our then-governing precedent, the district court

dismissed the suit for failing to present a justiciable case or controversy under

Article III because it found Surefoot LC had no reasonable apprehension of an

imminent lawsuit from Sure Foot Corp. After the district court issued its

judgment, however, the Supreme Court, in MedImmune, Inc. v. Genentech, Inc.,

127 S. Ct. 764 (2007), expressly rejected the “reasonable apprehension of

imminent suit” test on the ground that it imposed an additional hurdle inconsistent

with the Court’s Article III jurisprudence. This appeal calls upon us to assess and

apply MedImmune’s teachings for the first time. In doing so, we conclude that a

triable case or controversy within the meaning of Article III exists; accordingly,

we are obliged to reverse and remand this matter to the district court for further

proceedings.

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 2 
- 3 -

I

The parties are in the foot business. Sure Foot Corp. (“Sure Foot ND”),

based in North Dakota, manufactures and sells shoe traction products as well as

shoe laces and insoles; it has sold products under the “Sure Foot” brand since at

least 1985, when it registered a trademark for the use of “Sure Foot” in

connection with non-skid shoe pads. Meanwhile, Surefoot LC (“Surefoot UT”),

based in Utah, began business in 1994 and manufactures and sells custom-fit ski

boots and ski boot orthotics. 

By 1998, Sure Foot ND became aware of Surefoot UT’s use of the

“Surefoot” mark. Believing that this use infringed on its trademark rights, Sure

Foot ND sent to Surefoot UT a cease and desist letter asserting that Surefoot UT’s

use of the “Surefoot” mark “infringe[d] on Sure Foot’s rights in the SUREFOOT

trademark, and create[d] a likelihood of confusion” between the companies and

their products. App. at 76. It concluded by demanding that Surefoot UT cease

using the “Surefoot” mark. Id.

Over the next year, Sure Foot ND and Surefoot UT corresponded in an

attempt to settle their dispute. Surefoot UT insisted that its “Surefoot” brand of

ski boot products was sufficiently distinct from Sure Foot ND’s product line so

that there was no likelihood of consumer confusion. Accordingly, Surefoot UT

refused to change its name, though it did express some willingness to consider a

monetary settlement. For its part, Sure Foot ND continued to assert that

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 3 
- 4 -

confusion between the two marks was likely and was already occurring in the

market. It expressed a desire to resolve the matter outside of court, but on more

than one occasion threatened litigation if no settlement could be reached. See,

e.g., App. at 82-83 (July 20, 1999 letter) (“Sure Foot feels it has no option but to

seek legal redress. . . . Sure Foot continues to believe that litigation is in neither

party’s best interest. Nevertheless, it cannot accept your absolute refusal to

change your name. Absent your agreement to do so, Sure Foot will pursue other

more formal avenues of relief available to it.”). The parties failed to reach a

settlement, and, by the end of 1999, communications between the parties

essentially ceased. 

In September 2000, Surefoot UT applied to the U.S. Patent and Trademark

Office (“USPTO”) to register the “Surefoot” mark in connection with certain of

its products. The USPTO issued a Notice of Publication for this trademark

application on June 19, 2001. No opposition was ever filed by Sure Foot ND or

any other party, and the USPTO ultimately issued a trademark registration to

Surefoot UT on June 25, 2002. Shortly thereafter, on August 1, 2002, Sure Foot

ND filed a petition with the USPTO’s Trademark Trial and Appeal Board

(“TTAB”), the administrative body charged with adjudicating trademark

registration disputes, seeking to cancel Surefoot UT’s trademark. At the same

time, Sure Foot ND filed an opposition to another trademark application by

Surefoot UT that was then pending. During a one-year period from mid-2005 to

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 4 
- 5 -

mid-2006, Surefoot UT applied for three more trademark registrations for other

products and services using the “Surefoot” mark, and Sure Foot ND filed

oppositions with the TTAB to each of these applications. The parties eventually

agreed to consolidate their various disputes in the TTAB into one proceeding,

which appears to be pending currently.

Believing that Sure Foot ND would not only continue to oppose future

trademark applications but would also eventually sue for trademark infringement,

Surefoot UT filed a declaratory judgment action in federal district court in July

2006. In its complaint, Surefoot UT sought a declaratory judgment that (1)

Surefoot UT’s use of the “Surefoot” mark does not infringe on any of Sure Foot

ND’s trademark rights; (2) the trademark rights asserted by Sure Foot ND against

Surefoot UT are invalid or limited in scope; and (3) any possible trademark

infringement, unfair competition, or dilution claims by Sure Foot ND are barred

by equitable doctrines. Sure Foot ND moved to dismiss the complaint, arguing,

among other things, that no jurisdiction existed under the Declaratory Judgment

Act. The district court agreed and dismissed the suit. Specifically, the district

court held that, to establish jurisdiction under the Declaratory Judgment Act,

Surefoot UT had to, but could not, show that it had a reasonable apprehension of

an imminent suit by Sure Foot ND. More specifically, the district court held that,

although Sure Foot ND made claims of infringement and threats of litigation

during the 1998-99 period that may well have given rise to a reasonable

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 5 
- 6 -

apprehension of litigation at the time, any such apprehension dissipated by 2006. 

Neither, the court held, did Sure Foot ND’s intervening administrative actions

before the TTAB give rise to any reasonable basis on Surefoot UT’s part to fear

imminent litigation. Surefoot UT now appeals the dismissal of its suit.

II

The parties’ disagreement in this case extends to the standard of review we

must apply. Surefoot UT contends that the district court’s dismissal of the case

for lack of jurisdiction under the Declaratory Judgment Act should be reviewed de

novo, while Sure Foot ND asserts our review may only be for abuse of discretion. 

To be fair, neither party is exactly incorrect.

The Declaratory Judgment Act states in pertinent part that, “[i]n 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(a). We have previously observed

that this text presents two separate hurdles for parties seeking a declaratory

judgment to overcome. See Kunkel v. Cont’l Cas. Co., 866 F.2d 1269, 1273 (10th

Cir. 1989). First, a declaratory judgment plaintiff must present the court with a

suit based on an “actual controversy,” a requirement the Supreme Court has

repeatedly equated to the Constitution’s case-or-controversy requirement. See,

e.g., Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40 (1937) (“The

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 6 
- 7 -

Declaratory Judgment Act of 1934, in its limitation to ‘cases of actual

controversy,’ manifestly has regard to the constitutional provision and is

operative only in respect to controversies which are such in the constitutional

sense.”); MedImmune, 127 S. Ct. at 771 (same); see also infra Part III (citing

additional authority); U.S. Const. Art. III § 2 (“The judicial Power shall extend to

all Cases . . . [and] Controversies . . . .”). Second, even where a constitutionally

cognizable controversy exists, the Act stipulates only that district courts “may” –

not “must” – make a declaration on the merits of that controversy; accordingly,

we have held that district courts are entitled to consider a number of case-specific

factors in deciding whether or not to exercise their statutory declaratory judgment

authority. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 982-83 (10th

Cir. 1994) (White, J.) (stating that “the district court is not obliged to entertain

every justiciable claim brought before it” and setting out the factors that a district

court should consider); Public Affairs Assoc., Inc. v. Rickover, 369 U.S. 111, 112

(1962) (“The Declaratory Judgment Act was an authorization, not a command. It

gave the federal courts competence to make a declaration of rights; it did not

impose a duty to do so.”); see also infra Part V.

To the extent that the first question implicates purely legal issues and goes

to the courts’ subject matter jurisdiction, we review any dismissal on this basis de

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 7 
1

 Of course, to the extent that a district court’s legal conclusion regarding

jurisdiction hinges on factual findings, we review those findings for clear error. 

See Mo’s Express, LLC v. Sopkin, 441 F.3d 1229, 1233 (10th Cir. 2006).

- 8 -

novo;

1

 because the second question necessarily involves a discretionary

assessment of disparate, often incommensurate, and case-specific concerns, we

have indicated that we will review a district court’s decisions on that score only

for abuse of discretion. See Kunkel, 866 F.2d at 1273; Mhoon, 31 F.3d at 983. In

the case before us, Sure Foot UT challenges the district court’s determination that

this suit, on the basis of essentially undisputed facts, presented no constitutionally

cognizable controversy as a matter of law, and the district court never had

occasion to reach the second, discretionary jurisdictional question under the Act. 

Accordingly, our review proceeds de novo. 

III

The district court concluded that it lacked jurisdiction to hear Sure Foot

UT’s suit based on a determination that the company did not have a reasonable

apprehension that an imminent suit for trademark infringement was forthcoming

from Sure Foot ND. In doing so, the district court faithfully followed our

guidance in Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959

(10th Cir. 1996), where we held that, “[i]n an intellectual property case, an actual

controversy exists when,” among other things, “the declaratory defendant’s

conduct has created a reasonable apprehension” of imminent suit. Id. at 965. Our

holding in Cardtoons, in turn, relied on an extensive body of case law –

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 8 
- 9 -

developed primarily by the Federal Circuit – in which courts required a

reasonable apprehension of suit, or even a reasonable apprehension of imminent

suit, before deeming Article III’s case-or-controversy test satisfied in declaratory

judgment actions involving intellectual property claims. See, e.g., Spectronics

Corp. v. H.B. Fuller Co., 940 F.2d 631, 634 (Fed. Cir. 1991); Indium Corp. v.

Semi-Alloys, Inc., 781 F.2d 879, 883 (Fed. Cir.1985); see also Teva Pharm. USA,

Inc. v. Pfizer, Inc., 395 F.3d 1324, 1333 (Fed. Cir. 2005).

Since the district court issued its decision, however, the Supreme Court

entered the field and rejected the body of Federal Circuit case law on which we

relied in Cardtoons. In MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764

(2007), the declaratory plaintiff, MedImmune, was a drug manufacturer that had

entered into a patent license agreement with licensor, Genentech. When

Genentech asserted that one of MedImmune’s drugs was covered by one of

Genentech’s patents (the application for which was still pending at the time the

parties entered into the licensing agreement but which was nonetheless covered

by the agreement), MedImmune agreed to pay patent royalties under protest even

though it believed that its drug did not infringe on Genentech’s patent and that the

patent was invalid. While continuing to pay royalties, MedImmune filed a

declaratory judgment action against Genentech, seeking a declaration of noninfringement or patent invalidity. The district court and Federal Circuit, citing

the reasonable apprehension of imminent litigation test, dismissed the suit for

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 9 
2

 Indeed, one of the cases cited by the Court in this respect came from our

court. See Keener Oil & Gas Co. v. Consolidated Gas Utilities Corp., 190 F.2d

985, 989 (10th Cir. 1951) (“[A] party to a contract is not compelled to wait until

he has committed an act which the other party asserts will constitute a breach, but

may seek relief by declaratory judgment and have the controversy adjudicated in

order that he may avoid the risk of damages or other untoward consequence.”);

(continued...)

- 10 -

lack of jurisdiction, explaining that, so long as MedImmune chose to continue

paying royalties, it had no reasonable apprehension that it would be imminently

subjected to suit by Genentech. 

The Supreme Court reversed. In doing so, the Court rejected the notion

that MedImmune had to stop paying royalties – risking a breach of contract action

as well as treble damages and attorneys fees for doing so – before seeking relief

through the Declaratory Judgment Act. See id. at 775. More generally, the Court

stressed that the Act’s “case of actual controversy” language references Article

III’s case-or-controversy requirement, id. at 771; that a declaratory judgment

“controversy” therefore requires no greater showing than is required for Article

III; and that the existence of a case or controversy in the Supreme Court’s

precedents had never depended on one party taking law-breaking or contractbreaching steps before a declaratory suit could be filed. By way of example, the

Court cited numerous cases in which declaratory plaintiffs were not required to

“expose [themselves] to liability before bringing [declaratory actions],” either to

challenge the basis of laws the government enforced against them or to challenge

the legal basis of threatened action by private parties. See id. at 772-73.2

 Most

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 10 
2

(...continued)

see also Delaney v. Carter Oil. Co., 174 F.2d 314, 317 (10th Cir. 1949) (“One of

the highest offices of declaratory procedure is to remove uncertainty and

insecurity from legal relations, and thus clarify, quiet and stabilize them before

irretrievable acts have been undertaken.”).

- 11 -

notably, the Court cited Altvater v. Freeman, 319 U.S. 359 (1943), in which the

Court held a live controversy existed where a patent licensee sought a declaratory

judgment of patent invalidity, even though the licensee continued to pay patent

royalties (pursuant to an injunction obtained by the patent licensor in an earlier

case). Applying the principles of those cases to the suit before it, the Supreme

Court held that the district court erred in dismissing MedImmune’s case for lack

of jurisdiction because, despite the absence of a reasonable apprehension that the

declaratory defendant would sue, the case presented a dispute sufficiently definite

and live regarding the validity of Genentech’s patent to satisfy Article III and

invoke subject matter jurisdiction. See id. at 777.

Not only did the MedImmune Court find a case or controversy in a

declaratory suit where no reasonable apprehension of litigation existed, the Court

spoke directly to the continuing viability of the reasonable apprehension of suit

doctrine developed by the Federal Circuit. In a footnote, the Court stated that the

doctrine conflicted with several of the Court’s decisions, including Maryland

Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941), where the

Court held that declaratory judgment “jurisdiction obtained even though the

collision-victim defendant could not have sued the declaratory-judgment plaintiffAppellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 11 
3

 We note that, in addition to the reasonable apprehension of suit test,

Cardtoons also required declaratory plaintiffs to show that they had “produced or

[were] prepared to produce the product in question” in order to establish the

existence of a case or controversy. See Cardtoons, 95 F.3d at 965. Because that

requirement was linked to and closely intertwined with the reasonable

apprehension of suit test, we hold that both aspects of the two-part test in

Cardtoons have now been retired from their status as the touchstones of

declaratory judgment jurisdiction in intellectual property cases, though we

acknowledge that in some cases they may still prove relevant to determining

whether an Article III case or controversy exists under the analysis set out by the

(continued...)

- 12 -

insurer without first obtaining a judgment against the insured,” as well as Aetna,

where the Court held that “jurisdiction obtained even though the very reason the

insurer sought declaratory relief was that the insured had given no indication that

he would file suit.” MedImmune, 127 S. Ct. at 774 n.11. And to the extent that

the Declaratory Judgment Act’s “case of actual controversy” formulation was

intended to reference Article III’s case-or-controversy requirement, discarding the

reasonable apprehension of suit test makes good sense: the existence of an

Article III case or controversy has never been decided by a judicial wager on the

chances the parties will (imminently or otherwise) sue one another; rather, it has

always focused on the underlying facts, assessing whether they suggest an extant

controversy between the parties or whether instead they merely call on us to

supply an advisory opinion about a hypothetical dispute. 

In light of MedImmune’s direction, it seems to us clear that the test for

declaratory judgment jurisdiction we set forth in Cardtoons is no longer good

law.3

 To be sure, Sure Foot ND tries valiantly, and in three different ways, to

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 12 
3

(...continued)

Supreme Court in MedImmune.

- 13 -

convince us otherwise. First, Sure Foot ND contends that MedImmune’s

discussion of the reasonable apprehension of imminent suit test is dicta, confined

to a footnote and inessential to the Court’s disposition in the case. We cannot

agree. Although the Court held in the body of its opinion that it was bound by the

holding of its decision in Altvater, in footnote 11 the MedImmune Court explained

further that, even if Altvater could be distinguished on its facts, the point

remained that the reasonable apprehension of imminent suit test applied by the

Federal Circuit does not comport with Maryland Casualty and Aetna. Alternative

rationales such as this, providing as they do further grounds for the Court’s

disposition, ordinarily cannot be written off as dicta. See United States v. Rohde,

159 F.3d 1298, 1302 & n.5 (10th Cir. 1998) (“[The] alternate holding [was] not

dicta. . . . Were this panel inclined to engage in the business of labeling as dicta

one of the two alternative grounds . . . , it would then confront defendant’s failure

to demonstrate why that label ought not adhere to the alternative which is

innocuous to her theory, rather than to the alternative which undermines it.”). 

Moreover, even if the Court’s rejection of the reasonable apprehension test could

be plausibly characterized as dicta, our job as a federal appellate court is to

follow the Supreme Court’s directions, not pick and choose among them as if

ordering from a menu. See Gaylor v. United States, 74 F.3d 214, 217 (10th Cir.

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 13 
4

 Along similar lines, we note that the two district court cases cited by

Sure Foot ND as narrowly construing MedImmune’s holding in the way Sure Foot

ND proposes did so only because those courts were considering patent cases

presumably under the appellate jurisdiction of the Federal Circuit and that Circuit

had not yet published a decision overturning its prior decisions in light of

MedImmune. See Appellee’s Br. at 39-40 (citing Prasco, LLC v. Medicis Pharm.

Corp., 2007 WL 928669 (S.D. Ohio 2007); WS Packaging Group, Inc. v. Global

Commerce Group, LLC, 2007 WL 205559 (E.D. Wis. 2007)). The Federal

Circuit, of course, has now expressly overruled its prior decisions applying the

reasonable apprehension of suit test. See, e.g., Teva Pharm. USA, Inc. v. Novartis

Pharm. Corp., 482 F.3d 1330, 1336-39 (Fed. Cir. 2007).

- 14 -

1996) (we are “bound by Supreme Court dicta almost as firmly as by the Court’s

outright holdings, particularly when the dicta is recent and not enfeebled by later

statements”) .

Second, Sure Foot ND argues that MedImmune at most invalidated only the

reasonable apprehension of suit test in patent cases, while Cardtoons, like this

case, involved a trademark issue. But Sure Foot ND offers no persuasive reason

why the interpretation of the Declaratory Judgment Act’s terms depends on the

nature of the intellectual property right at issue, and nothing in MedImmune’s

analysis suggests one. Indeed, two of the cases the MedImmune Court cited in the

process of rejecting the reasonable apprehension of suit test were insurance cases

– themselves well outside the intellectual property, much less patent, context. See

MedImmune, 127 S. Ct. at 774 n.11 (citing Maryland Cas., 312 U.S. at 273

(insurance case), and Aetna, 300 U.S. at 239 (same)).4

Third, Sure Foot ND argues that MedImmune only invalidated the

reasonable apprehension of suit test for situations involving parties in a privity

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 14 
- 15 -

relationship, such as through a patent licensing agreement or some other contract. 

See Appellee’s Br. at 45-48. But, again, we discern no such limiting principle in

the Court’s reasoning. The Court rejected the reasonable apprehension of suit test

on the basis that Article III is the touchstone of declaratory judgment

jurisdictional analysis and that, for a case or controversy to exist under Article

III, a party need not “bet the farm” by taking actions that could subject them to

substantial liability before obtaining a declaration of their rights. MedImmune,

127 S. Ct. at 775. That principle applies equally to privity and non-privity

settings. Indeed, the Court cited and relied on numerous cases in which plaintiffs

were allowed to pursue declaratory judgments against the government even

though the plaintiffs had not taken whatever steps that would have subjected them

to criminal or civil prosecution by the government, see id. at 772-73, and in none

of those cases did a privity relationship exist between the individual and the

government. 

IV

Having concluded that MedImmune displaced the jurisdictional test we

announced in Cardtoons, the question remains what test replaces it, in light of

MedImmune, and whether Surefoot UT can meet that test in this case. Our

starting point naturally lies in MedImmune’s language. There, the Court reminded

us of the formulations it offered in Aetna and Maryland Casualty and suggested

they remain key to our jurisdictional inquiry in declaratory judgment actions. 

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 15 
- 16 -

Pursuant to those decisions, a declaratory judgment suit must be “definite and

concrete, touching the legal relations of parties having adverse legal interests,”

must be “‘real and substantial’ and ‘admit of specific relief through a decree of a

conclusive character, as distinguished from an opinion advising what the law

would be upon a hypothetical state of facts.’” MedImmune, 127 S. Ct. at 771

(quoting Aetna, 300 U.S. at 240-41). Put differently, “the question in each case is

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. (quoting Maryland Cas., 312 U.S. at 273).

As the Court itself admitted, this test, stated in somewhat circular terms in

Maryland Casualty, does “not draw the brightest of lines between those

declaratory judgment actions that satisfy the case-or-controversy requirement and

those that do not.” Id. Still, we can hardly claim unfamiliarity with Article III

jurisdictional principles and their application, and reference to the facts and

circumstances of the Supreme Court’s decisions in the declaratory judgment field

suggest that the case before us is a comparatively easy one. In particular, this

case avoids the complication at the heart of MedImmune, where the existence of a

live controversy between the parties seemingly (at least in the eyes of the lower

courts) hinged on a future contingency that was entirely within the declaratory

plaintiff’s control – namely, whether to continue paying royalties. The

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 16 
- 17 -

MedImmune Court solved that complication by explaining that it was Genentech’s

repeated threat to enforce its claims should MedImmune stop paying royalties that

made the continuation of those payments effectively “involuntary [and]

coerc[ed],” and thus sufficed to negate the yet-unaccomplished future contingency

upon which a live controversy seemed to depend. 127 S. Ct. at 773.

By contrast, and happily, no such unfulfilled future contingency exists in

the suit before us. Surefoot UT asks the federal courts only to adjudicate the

rights of the parties based on historical facts and an already existing dispute over

a federal right. Sure Foot ND and Surefoot UT have employed the same (or at

least a very similar) mark in connection with their products. Sure Foot ND has,

through various communications with Surefoot UT, made clear its belief that

Surefoot UT’s use of the “Surefoot” mark already causes confusion in the market

and therefore currently infringes on Sure Foot ND’s trademark rights. See App.

at 76 (Sept. 2, 1998 letter) (stating that the “use of SURE-FOOT infringes on Sure

Foot’s rights . . . and creates a likelihood of confusion” and that “there were

several instances of actual confusion” at a recent trade show); App. at 78

(May 19, 1999 letter) (alleging “actual confusion in the marketplace”); App. at 83

(July 20, 1999 letter) (same). Sure Foot ND has even threatened to sue for

federal trademark infringement if Surefoot UT does not agree to change its name. 

See supra Part I (citing letter dated July 20, 1999). And Sure Foot ND has sought

to impede Surefoot UT in its use of the “Surefoot” mark by commencing

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 17 
- 18 -

trademark cancellation and opposition proceedings in the TTAB. On the other

side of the suit, Surefoot UT denies that it is infringing on Sure Foot ND’s

trademark rights and alternatively alleges that Sure Foot ND’s trademarks are

invalid. Taking “all the circumstances” into account, as we must, see Maryland

Cas., 312 U.S. at 273, we cannot help but conclude that the parties before us have

a dispute that is definite and concrete that would “‘admit of specific relief

through a decree of a conclusive character, as distinguished from an opinion

advising what the law would be upon a hypothetical state of facts.’” MedImmune,

127 S. Ct. at 771 (quoting Aetna, 300 U.S. at 240-41). Because “[i]t is the nature

of the controversy, not the method of its presentation or the particular party who

presents it, that is determinative,” Aetna, 300 U.S. at 244, we can confirm the

point by asking, counterfactually, whether we would have Article III jurisdiction

if faced with a straightforward infringement suit by Sure Foot ND against

Surefoot UT, rather than a declaratory judgment action in which the parties are

reversed. Given the evidence before us about the nature of the controversy

between the parties in this dispute, we have no doubt the answer would be yes. 

In this respect, our case finds a home in the heartland of declaratory

judgment cases, closely resembling Aetna. In that case, an insured repeatedly

claimed coverage under certain insurance policies for a present disability, but

never brought suit against the insurer; meanwhile, the insurer, though believing

the insured was not entitled to any payment under the policies, felt compelled to

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 18 
5

 The case before us also parallels a hypothetical offered by Wright and

Miller as a paradigmatic instance where declaratory judgment jurisdiction should

be held to exist:

If Jones Company does not sue [over its claim to a patent], but merely

threatens Smith, Smith will have a lively interest in determining whether

the patent is valid and whether his device is infringing. Prior to the

Declaratory Judgment Act, Smith’s action to resolve this question would

not, absent diversity, have been within federal jurisdiction.

Nevertheless, it now seems settled that Smith can sue for a declaratory

(continued...)

- 19 -

maintain a sum of money in reserve to guard against the contingent liability posed

by the insured’s claims. See id. at 237-39. Seeking to dispel the cloud that the

insured’s claims placed over the insurer’s business affairs, and unwilling to wait

until the insured finally (if ever) filed suit, the insurer sought a declaration of the

insured’s rights in federal court. See id. The case presented no complicating

issues of future contingencies and the Supreme Court readily held that jurisdiction

existed, stressing that the “parties had taken adverse positions with respect to

their existing obligations,” and the dispute concerned “a present right” based

upon historical or “established facts.” See id. at 242. The very same may be said

of the case before us. Indeed, the only perceivable difference between Aetna and

our case, on the one hand, and conventional litigation, on the other, is the bare

formality that the parties are transposed. See id. at 244; Maryland Cas., 312 U.S.

at 273 (“It is immaterial that . . . , in the declaratory judgment suit, the positions

of the parties in the conventional suit are reversed; the inquiry is the same in

either case”).5

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 19 
5

(...continued)

judgment of invalidity or noninfringement. Again, the federal nature of

the claim appears on the complaint for a declaratory judgment and the

precise issue could have been litigated in federal court in a coercive

action brought by Jones Company, although in the suit actually brought

by Smith the parties are transposed and the matter may be determined at

an earlier stage than if Smith had been required to await a coercive

action by Jones Company. 

10B Fed. Prac. & Proc. § 2767, at 650-51 (footnotes omitted).

6

 We do note, however, that the Federal Circuit, which appears to have

addressed this issue more than any other court, has concluded that the mere

passage of time does not eviscerate the existence of an actual controversy unless a

declaratory defendant has, for example, made a covenant not to sue the

declaratory plaintiff, or where the circumstances of the parties have significantly

changed, perhaps such as by the withdrawal of one side’s product from the

marketplace – neither of which have occurred in this case. See, e.g., Fina

Research, S.A. v. Baroid Ltd., 141 F.3d 1479, 1484 (Fed. Cir. 1998).

- 20 -

Sure Foot ND objects to the conclusion we reach about the nature of the

parties’ controversy, arguing that it has not made any claims of infringement or

threats of suit since the 1998-99 period, and that the six years separating that

period from the filing of this suit dissipated whatever controversy may have

existed in the earlier period. But, despite the passage of time, Sure Foot ND has

never withdrawn its allegations of ongoing infringement (or its threats to sue). 

And whether or not the passage of time could effectively eviscerate declaratory

judgment jurisdiction where it once existed or how much time is necessary to do

so, we need not decide.6

 Even if the parties’ controversy dissipated for a period,

it was surely rekindled when Sure Foot ND engaged in a new burst of activity

beginning in 2002, when it initiated what ultimately became five separate

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 20 
7

 Certain other cases on which Sure Foot ND relies hold that a TTAB

opposition does not give rise to jurisdiction because it fails to create a reasonable

apprehension of suit. See, e.g., Kosmeo Cosmetics Inc. v. Lancome Parfums et

Beaute & Cie., 44 U.S.P.Q.2d 1472, 1474 (E.D. Tex. 1996) (“An opposition

proceeding cannot serve as the basis for reasonable apprehension of suit.”). After

MedImmune, however, we now know that this asks the wrong question.

- 21 -

cancellation and opposition proceedings in the TTAB against Surefoot UT’s

trademark applications, signaling its belief that Surefoot UT continues to infringe

its trademark.

To this, Sure Foot ND replies that TTAB opposition proceedings should be

entirely irrelevant when assessing whether an actual controversy exists, and cites

to us cases that purportedly support such a conclusion. As it happens, however,

most of the cases Sure Foot ND cites stand only for the very modest proposition

that, because a party may oppose a trademark registration for reasons having

nothing to do with any infringement dispute between the trademark applicant and

opponent, courts should not take a TTAB opposition filing, automatically and by

itself, to be conclusive evidence of the existence of a live infringement dispute. 

See, e.g., Merrick v. Sharp & Dohme, 185 F.2d 713, 716-17 (7th Cir. 1950).7

 

Neither can Sure Foot ND reasonably dispute the fact that TTAB proceedings

sometimes do involve express assertions of infringement, and other times are at

least a symptom indicative of, or even a proxy fight for, an underlying

infringement dispute. Most importantly of all, were we to hold TTAB opposition

filings as a class irrelevant to Article III analysis, we would disregard the

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 21 
- 22 -

Supreme Court’s direction that, in assessing whether a live controversy exists

between the parties, we must both take into account “all the circumstances”

before us, MedImmune, 127 S. Ct. at 771 (quoting Maryland Cas., 312 U.S. at

273), and be sensitive to the fact that whether jurisdiction exists is often a

question of “degree,” Maryland Cas. 312 U.S. at 273; see also 10B Fed. Prac. &

Proc. § 2757, at 469 (“Although the massive generalities” of earlier cases are

often quoted, “[l]ater cases have recognized, as Justice Murphy did [in Maryland

Casualty], that whether the controversy is of sufficient immediacy and reality to

permit a declaratory judgment is a question of degree.”).

Of course, to say TTAB proceedings are not categorically irrelevant does

not answer the question what weight they deserve. One might worry, for

example, whether the filing of a single TTAB opposition without a hint of an

infringement claim should hold much sway in a jurisdictional analysis. One

might also be concerned about what assuming jurisdiction in cases where ongoing

TTAB proceedings exist might mean as a practical matter; at least one

commentator has suggested that the “real policy” undergirding the case law cited

by Sure Foot ND for disregarding the existence of TTAB proceedings has nothing

to do with Article III but with a more practical concern “not to short-circuit the

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 22 
8

 Along related lines, other commentators have expressed the concern that

one of MedImmune’s effects might be that a single cease-and-desist letter, if not

carefully drafted to avoid making threats of litigation, may more frequently give

rise to declaratory judgment jurisdiction. See, e.g., Michael Weinstein, The Fate

of the Federal Circuit’s “Reasonable Apprehension” Standard in Patent Suits for

Declaratory Judgment Following MedImmune, Inc. v. Genentech, Inc., 76 U. Cin.

L. Rev. 681, 704-06 (2008); cf. D. Peter Harvey & Seth I. Appel, The Declaratory

Judgment Response to a Cease and Desist Letter: “First-to-File” or “Procedural

Fencing”, 96 Trademark Rep. 639 (2006).

- 23 -

administrative tribunal that has already achieved jurisdiction over the issues”

separating the parties. 6 McCarthy on Trademarks 32:52.8

 

In response to these concerns, we underscore that we have no need today to

pass on what MedImmune means to a case where the only indicia of a live

infringement controversy is the existence of a single TTAB opposition

proceeding, or perhaps a single cease-and-desist letter, see supra note 8. In this

case, we have five separate TTAB oppositions combined with an extensive history

of interactions between the parties in which the declaratory defendant expressly

and repeatedly suggested historical and existing infringing activity by the

declaratory plaintiff. It is only this combination that we pass upon today and

which we hold suffices to demonstrate the existence of Article III jurisdiction. 

Neither are we alone in reaching such a conclusion; many other courts before us

have considered TTAB oppositions in combination with threats of litigation

sufficient under certain circumstances to suggest a live infringement controversy

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 23 
9

 See, e.g., Chesebrough-Pond’s, Inc. v. Faberge, Inc., 666 F.2d 393, 396-

97 (9th Cir. 1982) (finding an actual controversy where notice of opposition was

filed in conjunction with a letter threatening an opposition filing and claiming a

“likelihood of confusion”); HSI IP v. Champion Window Mfg. & Supply Co., 510

F. Supp. 2d 948, 956 (M.D. Fla. 2007) (“While [Defendant] is correct that the

filing of a TTAB action is not, on its own, sufficient to create an actual

controversy, such is not the issue in this case where it is undisputed that in

addition to filing an opposition in the TTAB proceedings, [Defendant] sent

correspondence to [Plaintiff] suggesting it would sue if its [infringement]

concerns ‘could not be settled on an amicable basis.’”); Jeffrey Banks, LTD v. Jos.

A Bank Clothiers, Inc., 619 F. Supp. 998, 1002 (D. Md. 1985) (finding an actual

controversy where prior claims of infringement and threats of litigation had cast a

“threatening shadow” that was “made more ominous by the notice of

opposition.”).

- 24 -

and thus establish Article III jurisdiction.9 To the extent one might worry that

allowing declaratory litigation might supersede or even supplant already-ongoing

administrative TTAB proceedings, or that it might impede efforts by parties to

secure an informal resolution through correspondence and personal negotiation,

we note that there exists a more appropriate venue for addressing such concerns: 

Before assuming declaratory judgment jurisdiction, a district court must not only

consider its Article III authority to hear the case, it is also free to consider a range

of other discretionary factors in assessing whether or not to exercise jurisdiction

under the Act. See supra Part II; infra Part V. At the end of the day, however,

such discretionary considerations should not be confused with, or included in, the

very different and non-discretionary assessment whether the Article III case-orcontroversy requirement has been satisfied.

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 24 
- 25 -

V

Though we hold that the district court has jurisdiction to entertain this case,

the question remains whether, as a discretionary matter, it should do so. As we

noted above, see supra Part II, the Declaratory Judgment Act does not demand

that a district court decide every declaratory suit brought to it even where the

court has the power to do so. Instead, once the court is satisfied that Article III’s

jurisdictional requirements are met, it must then consider a number of factors,

including those previously set out by this court in Mhoon, to determine whether

the suit warrants the district court’s attention. These factors include: 

[1] whether a declaratory action would settle the controversy; [2]

whether it would serve a useful purpose in clarifying the legal relations

at issue; [3] whether the declaratory remedy is being used merely for

the purpose of “procedural fencing” or “to provide an arena for a race

to res judicata ”; [4] whether use of a declaratory action would increase

friction between our federal and state courts and improperly encroach

upon state jurisdiction; and [5] whether there is an alternative remedy

which is better or more effective.

Mhoon, 31 F.3d at 983. 

In this case, the district court never reached the issue whether it should, as

a matter of statutory discretion, consider Surefoot UT’s request for declaratory

relief because it held that, by failing to present a case or controversy, the suit

could not be entertained at all. Now, of course, the discretionary question must

be faced and answered. Rather than tackling it ourselves, we believe the

appropriate course is to afford the district court the opportunity to evaluate it in

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 25 
- 26 -

the first instance. In this vein, we are guided again by MedImmune where, after

holding that Article III jurisdiction existed, the Court explained that “it would be

imprudent for us to decide whether the District Court should, or must, decline to

issue the requested declaratory relief,” and so held that “[w]e leave the equitable,

prudential, and policy arguments in favor of such a discretionary dismissal for the

lower courts’ consideration on remand.” 127 S. Ct. at 776-77. In doing so, the

Court echoed its own previous direction in Wilton v. Seven Falls Co., 515 U.S.

277, 289 (1995), where it said that “[w]e believe it more consistent with the

statute to vest district courts with discretion in the first instance.” So we say

here, and further stress that we express no views on what the proper outcome of

the district court’s analysis should be.

* * *

While the district court faithfully applied our precedent, since the time it

issued its decision the Supreme Court has undone that precedent. Applying the

Court’s new direction in MedImmune, we conclude that Article III jurisdiction

exists over this controversy and so must reverse the district court’s contrary

judgment. At the same time, acknowledging that discretionary considerations

associated with Surefoot UT’s invocation of the Declaratory Judgment Act remain

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 26 
10 We deem moot Sure Foot ND’s motion to strike certain portions of

Surefoot UT’s Reply Brief that cited post-appeal communications between the

parties as evidence of the likelihood of suit. The contested portion of Surefoot

UT’s filings played no role in our disposition of this matter.

- 27 -

to be addressed, we remand this matter for further proceedings not inconsistent

with this opinion.10

Reversed and remanded.

Appellate Case: 06-4294 Document: 01012193462 Date Filed: 07/08/2008 Page: 27