For better or worse, trademark infringement claims enjoy relaxed standing requirements which enable plaintiffs to move quickly to quash would-be infringers. These requirements are at their lowest ebb when parties seek declaratory judgments. This results in some creative uses of the declaratory judgment claim.
A declaratory judgment plaintiff does not need to allege actual infringement. It is sufficient, for standing purposes, to show that a party “has engaged in a course of conduct evidencing a definite intent and apparent ability to commence use of the mark[.]” See Starter Corp. v. Converse, Inc., 84 F.3d 592, 595–96 (2d Cir. 1996), abrogated on other grounds by MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007).
This is a fact-sensitive inquiry. The would-be infringer must have crossed “the point of no return,” meaning it “must be engaged in ‘meaningful preparation,’ such that it is ‘actively preparing to produce the article in question’.” See, e.g., AARP v. 200 Kelsey Associates, LLC, 06 CIV. 81 (SCR), 2009 WL 47499, at *5 (S.D.N.Y. Jan. 8, 2009). A “vague or general desire” to use a particular mark is not sufficient.
But the most interesting aspect of declaratory judgment suits is their potential as a defensive measure by a party seeking a declaration that their new mark does not infringe an existing mark. In Menashe v. V Secret Catalogue, Inc., 409 F. Supp. 2d 412, 420 (S.D.N.Y. 2006), plaintiffs, a former model and a publicist, filed a Section 1(b) “intent-to-use” trademark application for the mark “SEXY LITTLE THINGS.” They intended to use the mark for a new line of ladies’ undergarments. Upon learning of the application, Victoria’s Secret issued a cease-and-desist letter, insisting that Victoria’s Secret was already marketing a line of undergarments under the mark “SEXY LITTLE THINGS.” The letter demanded that plaintiffs cease and desist all plans to use “…SEXY LITTLE THINGS,” abandon their [trademark] application, and transfer the domain name www.sexylittlethings.com to Victoria’s Secret” within four days. Id.
The plaintiffs responded by filing a declaratory judgment action in the Southern District of New York seeking a declaration of non-infringement. Predictably, Victoria’s Secret argued that the plaintiffs lacked standing since they had not yet sold any product, and therefore presented no “actual case or controversy.” See Menashe v. V Secret Catalogue, Inc., 05 CIV. 239(HB), 2005 WL 1580799, at *4 (S.D.N.Y. July 7, 2005). The court disagreed. It cited precedent holding that an “indirect threat of suit can be sufficient to satisfy the justiciable controversy requirement,” and found that the cease-and-desist letter sent by Victoria’s Secret’s counsel was easily sufficient to create a “reasonable apprehension of liability on the part of the plaintiff,” and thereby create a justiciable controversy for the court to decide. Id. at *5.
The court ultimately found that plaintiff’s intended use of the “SEXY LITTLE THINGS” mark would infringe upon Victoria Secret’s trademark. But that is not the important lesson from this case. The Southern District’s opinion in Menashe v. Victoria Secret shows that trademark owners and their lawyers must be wary of the relaxed standing requirements applied to trademark cases. Even a standard cease-and-desist letter can alter the rights and burdens of the parties involved.