from the ruling-by-reputation dept
If you were to simply input the word “magenta” into the search bar at the top of Techdirt, you will note that two company names seem to keep coming up in the articles: T-Mobile and its parent company Deutsche Telekom. This is because those two companies have been incredibly annoying at with their nonstop bullying of other companies, often in entirely unrelated industries, for daring to use the color magenta in their branding. While some will want to argue that very specific colors can definitely be trademarked, this misunderstands how T-Mobile and DT operate, which is to threaten plenty of companies that use a similar purple color and those that use magenta but in different marketplaces. Notably for the purposes of this post, much of this trademark bullying has occurred in Europe, though not all of it. The point is that DT is a trademark bully when it comes to the color magenta and everyone knows it.
Which is what makes it disappointing to see a company like Splunk lose its ability to sue DT in America to have its use of magenta declared non-infringing solely because it has thus far only been bullied in Germany.
Tech company Splunk Inc can’t sustain its lawsuit against Deutsche Telekom over its trademark rights in a “color gradient” that includes DT’s signature color magenta, a San Francisco federal court ruled Monday.
U.S. District Judge James Donato said Splunk didn’t have a “reasonable apprehension” of litigation in the U.S. based on a cease-and-desist letter it received from DT about its conduct in Europe and DT’s trademark action against it in Germany.
On the one hand, this is a jurisdictional technicality and comes after Deutsche Telekom representatives insisted to the court that there were “no plans” to sue Splunk for trademark infringement in the United States. From the court’s perspective, this led it to the conclusion that there was no actual conflict within its jurisdiction.
But on the other hand, DT does have a reputation to consider and it appears that there is enough interpretation being done in this ruling that it certainly could have taken that reputation into better account. From the ruling:
“[T]rademark disputes are justiciable under the Declaratory Judgment Act when ‘the plaintiff has a real and reasonable apprehension that he will be subject to liability.’” FN Cellars, LLC v. Union Wine Co., No. 15-cv-02301-JD, 2015 WL 5138173, at *2 (N.D. Cal. Sept. 1, 2015) (quoting Chesebrough-Pond’s, Inc. v. Faberge, Inc., 666 F.2d 393, 396 (9th Cir. 1982)). For this inquiry, the Court focuses “upon the position and perceptions of the plaintiff” and the “acts of the defendant,” which are “examined in view of their likely impact on competition and the risks imposed upon the plaintiff.” Chesebrough-Pond’s, 666 F.2d at 396 (cleaned up). The showing of apprehension “need not be substantial” when an allegedly infringing mark is in use. Societe de Conditionnement en Aluminium v. Hunter Eng’g Co., 655 F.2d 938, 944 (9th Cir. 1981).
There is no bright-line application of these factors to decide justiciability. “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.”
Here the court acknowledges that there is no bright line and that the “apprehension need not be substantial.” Splunk has a reasonable apprehension that it will be the target of a trademark action by DT, given that it is a target of one in Germany for the exact circumstances it’s seeking relief. Despite DT’s reputation as a trademark bully and the action initiated overseas, however, the court takes a very narrow view of that action, as well as taking DT’s word that it doesn’t plan to sue Splunk.
On the record before the Court, Splunk has not demonstrated a reasonable apprehension of being sued in the United States by DT. The salient facts, which are not in dispute, are that DT: (1) sent a demand letter to Splunk under German and EU law for Splunk’s conduct in Europe; (2) filed a trademark action against Splunk in Germany over the EU conduct; (3) reserved its trademark rights under U.S. law; and (4) has not sued Splunk in the United States, and did not oppose Splunk’s trademark proceedings before the TTAB. These facts are a country mile from the circumstances typically deemed sufficient to establish DJA jurisdiction.
Again, it’s not that the court is wrong. Still, it seems like there is a reasonable chance DT will prove the court wrong with a lawsuit sometime in the future, given its past and present actions. If that were to occur, it would render this court’s decision somewhat silly.
As silly, frankly, as the fact that these kinds of disputes over the color magenta need occur in any jurisdiction.