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ELI'S CHICAGO FINEST, INC. v. CHEESECAKE FACTORY

October 21, 1998

Eli's Chicago Finest, Inc., Plaintiff,
v.
The Cheesecake Factory, Incorporated, Defendant.



The opinion of the court was delivered by: LINDBERG

MEMORANDUM OPINION AND ORDER

 Plaintiff Eli's Finest, Inc. ("Eli's") filed this action for a declaratory judgment asserting that its use of certain descriptive dessert designations did not interfere with Defendant's trademark rights. Defendant, The Cheesecake Factory, Incorporated, ("Cheesecake Factory") filed a motion to dismiss the complaint, and for the reasons stated below that motion will be granted.

 I. FACTUAL AND PROCEDURAL BACKGROUND

 The parties are competitors engaged in the sale of cheesecakes. Plaintiff is an Illinois corporation and Defendant is a California corporation. Both parties produce, market and sell cheesecakes with particular descriptive designations throughout the United States.

 Defendant owns as registered trademarks the following cheesecake designations: "Chocolate Raspberry Truffle," "White Chocolate Lemon Truffle," "White Chocolate Raspberry Truffle," and "Triple Chocolate Brownie Truffle."

 On June 26, 1998, counsel for Defendant sent a cease and desist letter to Eli's protesting Eli's alleged use of the dessert designations: "White Chocolate Raspberry Truffle Cheesecake," and "Triple Chocolate Truffle." *fn1" The letter requested that: (1) Plaintiff cease using the designations, and (2) Plaintiff notify Defendant of Plaintiff's intent to comply within ten days. The letter further indicated that should Plaintiff fail to communicate an intent to comply within ten days, Defendant was prepared to take legal action.

 On July 2, 1998, six days after receiving Defendant's letter, and without first responding to Defendant, Plaintiff filed suit under the Lanham Act 15 U.S.C. §§ 1121-1125(a). Plaintiff asked this Court for a declaratory judgment finding that Plaintiff's use of the contested designation did not interfere with Defendant's trademark rights. Next, prior to officially serving Defendant, Plaintiff sent defendant a letter enclosing a copy of the complaint and expressing an interest in "opening a dialogue" with Defendant. Defendant was then properly served with notice of this action.

 On July 7, 1998, Defendant filed a trademark infringement suit against Plaintiff in the United States District Court for the Central District of California. It is undisputed that the California suit concerns the same facts and issues as those presented here, and is essentially a "mirror image" of the action pending before this Court. On July 14, 1998, Defendant moved to dismiss Plaintiff's declaratory judgment action. The parties have stipulated and the United States District Court for the Central District of California has granted a stay of those proceedings pending a ruling on the motion to dismiss currently before this Court.

 II. DISCUSSION

 The issue at hand is whether this Court, in its discretion, should decline to exercise its jurisdiction over Plaintiff's claim for declaratory relief. It is settled that federal courts have the discretion to decline to hear a claim for declaratory relief in appropriate circumstances. Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 86 L. Ed. 1620, 62 S. Ct. 1173 (1942), Tempco Electric Heater Corp. v. Omega Engineering, 819 F.2d 746 (7th Cir. 1987). To resolve this issue the Court must determine whether exercising jurisdiction is consistent with the purposes of the Declaratory Judgement Act ("Act"). 28 U.S.C.A. § 2201. Sears, Roebuck and Co., v. American Mutual Liability Insurance Co., 372 F.2d 435 (7th Cir. 1967)(finding that a court should exercise discretion in a declaratory judgment action for a reason related to the purposes of the Declaratory Judgment Act). The Court finds that the purposes of the Act would be disserved by exercising jurisdiction over the case at bar.

 A. DECLARATORY JUDGMENTS

 Declaratory judgments are intended to, "terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding." Tempco, 819 F.2d at 749, quoting Borchard, DECLARATORY JUDGMENTS 299 (2d ed. 1941). As the Tempco Court articulated:

 
Essentially, two related but distinct fact situations are contemplated: (1) The controversy has ripened to a point where one of the parties could invoke a coercive remedy (i.e. a suit for damages or an injunction) but has not done so; and (2) Although the controversy is real and immediate, it has not ripened to such a point, and it would be unfair or inefficient to require the parties to wait for a decision. Tempco, 819 F.2d at 749.

 This suit falls within the first category. At the time that Plaintiff filed this action, Defendant was in a position to commence an infringement suit and had not yet done so. In this circumstance, a declaratory judgment prevents, "one party from continually accusing the other, to his detriment, without allowing the other to ...


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