For most of our readers, it has probably been a long time since they heard the terms “Hula Hoop” or “Frisbee.” We mention them here not out of nostalgia – I, for one, could never keep the damned hoop from falling down – but because they are the focus of an interesting (to IP people and insomniacs) case relating to declaratory judgment actions. Wham-O, Inc. v. Manley Toys Ltd. et al.
Both terms are registered trademarks of Wham-O (hence the above capitalization). Manley and its co-defendant, AW Computer Holdings LLC, competitors of Wham-O, have initiated proceedings in the Trademark Office to cancel the registrations, alleging that the marks have become generic¹. Wham-O admits that neither Manley nor AW has infringed either mark. Nevertheless, Wham-O was apparently not content to await the decision of the Trademark Office as to the continued validity of its marks. It brought a declaratory judgment action seeking a judgment that the marks are not generic and remain valid.
The Court dismissed the action, on the grounds that “the courts do not have ‘jurisdiction under the Declaratory Judgment Act to determine the validity of [a] trademark where there is no issue of infringement.’” The Court also concluded that “[b]ased on these facts, there is no threatened action on the part of the Defendants sufficient to establish an independent basis for jurisdiction in this case.”
The Court’s conclusion may come as a surprise, or even shock, to those (two or three) readers who have read the Med Immune and SanDisk decisions, but there it is.
THE LESSON TO BE LEARNED: (1) Patents and trademarks are subject to different laws; and (2) courts have great freedom to draw their own “conclusions.”
¹ Has anyone ever heard the damn ring toy called anything other than a “hula hoop”?
Whatever one's opinion of the case's outcome, it looks like Manley & AW played their cards right. This decision could open the door to more instances of aggressive attempts to cancel trademark registrations. Hopefully the court's conclusion won't start to tilt patent law in this same direction.