Intellectual Property Law

Western District Holds Cancellation is Not a Valid Independent Claim

By Michael Atkins

In Basel Action Network v. International Association of Electronics Recyclers, both parties are non-profit organizations that certify businesses that recycle electronics products.

In June 2010, Basel sued IAER for a declaratory judgment that its use of the terms “certified electronics recycler” and “electronics recycler” does not infringe IAER’s CERTIFIED ELECTRONICS RECYCLER certification mark. Basel also sought to cancel the CERTIFIED ELECTRONICS RECYCLER registration on the ground that it is generic, among other grounds. (STL post on the complaint here.)

IAER moved to dismiss Basel’s claims.

On Dec. 13, Western District Judge Richard Jones found that Basel had not presented a justiciable controversy sufficient to sustain its declaratory judgment action. 

The court then considered what appears to be a novel question in the Ninth Circuit: Can a plaintiff sustain an independent cause of action to cancel a defendant’s registration under Section 37 of the Lanham Act?  

The court answered the question in the negative.

“The court holds that a party seeking cancellation of a registered mark must not only state an Article III controversy that cancellation can remedy, it must also state a valid independent cause of action that encompasses the controversy,” the court held. “The court reaches this conclusion for several reasons. First, Section 37 does not speak of a ‘controversy involving a registered mark,’ but rather an ‘action involving a registered mark.’ Second, if Congress had intended Section 37 to support a cause of action by itself, the court would expect the statute to explicitly provide for a cause of action. Third, no court has ever held that an Article III controversy that cannot stand as an independent claim can support a cancellation request.”

The court went on to find: “Every court to consider the issue has required a valid independent cause of action as a precondition for invoking Section 37’s cancellation remedy. The court in Universal Sewing Mach. Co. v. Std. Sewing Equip. Corp., 185 F. Supp. 257 (S.D.N.Y. 1960), reached the same conclusion as this court. The plaintiff there raised claims involving the registered mark, but none of them were cognizable in federal court. The court held that ‘absent some other basis of jurisdiction, a suit for cancellation by one in plaintiff’s position may not be independently maintained in this court.’ In Thomas & Betts Corp. v. Panduit Corp., 48 F. Supp. 2d 1088, 1093 (N.D. Ill. 1999), the court held that Section 37 does not by itself support a cause of action. It explained that the viability of the plaintiff’s cancellation claim depended on the viability of its separate Lanham Act unfair competition claim. If this court were to find a party could invoke Section 37 merely by articulating an Article III controversy, it would apparently be the first court to do so.”

The case cite is Basel Action Network v. International Association of Electronics Recyclers, No. 10-931 (W.D. Wash. Dec. 13, 2010) (Jones, J.).

Full post as published by Seattle Trademark Lawyer on December 15, 2010 (boomark / email).