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CIBER, INC. v. CIBER CONSULTING

July 6, 2004.

CIBER, INC., a Delaware corporation, Plaintiff,
v.
CIBER CONSULTING, INC., a dissolved Illinois corporation; BRUCE F. EVANS, an individual; CYNTHIA B. EVANS, an individual; JOHN DOES 1-10, individuals, Defendants.



The opinion of the court was delivered by: ROBERT GETTLEMAN, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff CIBER, Inc. initiated the instant trademark infringement action against defendants CIBER Consulting, Inc., Bruce Evans, Cynthia Evans, and John Does 1-10, alleging that defendants' use of the trade name "Ciber Consulting, Inc." infringed plaintiff's "CIBER" mark. Specifically, plaintiff's second amended complaint asserts five claims: trademark infringement under the Lanham Act, 15 U.S.C. § 1051 et seq. (Count I); federal unfair competition and false advertising under the Lanham Act (Count II); common law unfair competition and unfair business practices (Count III); deceptive trade practices under the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count IV); and unfair competition and deceptive trade practices in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (Count V). Defendants have asserted a counterclaim under 15 U.S.C. § 1119, entitled "Request for Cancellation of the Mark `CIBER,'" which, among other things, alleges that plaintiff's registrations are "generic and not entitled to registration as trademarks." On May 7, 2004, plaintiff filed a motion to voluntarily dismiss its claims with prejudice and dismiss defendants' counterclaim as moot, which has been opposed by defendants. For the reasons stated herein, the court grants plaintiff's motion to dismiss its claims with prejudice, and dismisses defendants' counterclaim without prejudice.

FACTS

  Plaintiff owns several trademark registrations for the CIBER mark, including U.S. Trademark Registration Nos. 1,185,100 and 1,479,942. According to the instant motion, plaintiff provides a number of business and computer consulting services under that mark. Defendant CIBER Consulting, Inc. provides information management consulting services in the nuclear energy field. The instant suit for trademark infringement arose from defendants' use of the trade name CIBER Consulting, Inc.

  Through discovery, plaintiff learned that: (1) CIBER Consulting, Inc.'s customer base does not exceed five customers; (2) Bruce Evans is CIBER Consulting, Inc.'s only employee; and (3) CIBER Consulting, Inc. has not done any broadcast advertising and does not have an internet presence. Moreover, in the instant motion plaintiff contends that "it is highly unlikely that defendants ever will expand either their business or their advertising," and notes that defendants no longer hold the right to use the trade name Ciber Consulting, Inc. in their home state of Illinois. According to plaintiff, it secured registration of the Ciber Consulting, Inc. trade name after defendant was administratively dissolved for failure to renew its trade name registration. Based on this information, plaintiff concluded that the use of the CIBER Consulting, Inc. trade name is de minimis, does not present a likelihood of confusion, and does not justify further litigation. Hence the instant motion to dismiss. In its motion to dismiss, plaintiff requests "dismissal with prejudice of all claims covering Defendants' past and present use of its trade name, which effectively insulates Defendants from suit based on current or past use of the mark." According to plaintiff, dismissal with prejudice of its claims compels the dismissal of defendants' counterclaim for cancellation, as well, because once plaintiff's claims are dismissed, there will no longer be a case or controversy that would provide the court with jurisdiction under Article III of the Constitution to hear defendants' counterclaim. Defendants disagree, challenging plaintiff's characterization of their future business prospects (or lack thereof) and arguing, inter alia, that Fed.R.Civ.P. 41(a)(2) prevents dismissal of the instant action over defendants' objection. For the reasons stated below, the court reject's defendants' position and grants the instant motion to dismiss.

  DISCUSSION

  Article III of the United States Constitution limits the exercise of judicial power to "cases" and "controversies." Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227 (1937). In Aetna, the Supreme Court distinguished a "justiciable controversy" from a "difference or dispute of a hypothetical or abstract character." Id. at 241. According to the Aetna Court, a "justiciable controversy" must be "a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." Id. The question central to the instant motion, then, is whether defendants' counterclaim could be properly characterized as a "justiciable controversy" after the dismissal of plaintiff's claims with prejudice.

  Relying on Windsurfing Int'l Inc. v. AMF Inc., 828 F.2d 755 (Fed. Cir. 1987), and its progeny, plaintiff maintains that the dismissal of its claims with prejudice divests this court of jurisdiction over defendants' § 1119 counterclaim. In Windsurfing Int'l, after filing a suit for patent infringement, the plaintiff sent letters to the defendant demanding that it cease using "Windsurfer" to refer to one of its products and threatening "more formal proceedings" if the defendant did not comply with its request. Id. at 756. Defendant complied, but subsequently filed a counterclaim to cancel the plaintiff's "windsurfer" trademark, arguing that the "windsurfer" mark was generic and thus did not function as a trademark. The plaintiff moved to dismiss the defendant's trademark counterclaim for lack of subject matter jurisdiction, arguing that the defendant "had alleged insufficient facts to create a case or controversy under Article III of the Constitution." Id. The trial court denied the plaintiff's motion to dismiss and found in favor of the defendant on the merits of its counterclaim. The Federal Circuit vacated the judgment.

  Noting that "[a] justiciable controversy is one that touches the legal relations of parties having adverse legal interests," id. at 758 (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-241 (1937)), the court explained:
[T]he defendant's "desire" to use "windsurfer" and "windsurfing" descriptively may render its commercial interests adverse to those of [the plaintiff], but absent a combination of [the defendant's] use of the mark and threats or suits by [the plaintiff], the legal interests of [the plaintiff and defendant] are not adverse.
Id. at 758 (emphasis added).
  The Windsurfing Int'l court continued:
Under the Lanham Act, district courts have the power to cancel registrations, but only in an "action involving a registered mark." 15 U.S.C. § 1119. "Involving" cannot mean the mere presence of a registered trademark, but must be read as involving the right to use the mark and thus the right to maintain the registration. There must, therefore, be something beyond the mere competitor status of the parties to confer jurisdiction. Such a basis may, for example, be a suit for trademark infringement, or a "case of actual controversy" referred to in the Declaratory Judgment Act, 28 U.S.C. § 2201.
Id. at 758-59 (internal citations omitted).

  Relying on the Second Circuit's definition of "case or controversy," id. at 757, the court concluded that the defendant's status as a competitor of the plaintiff did not "create such an `actual controversy' effective to create jurisdiction in the district court." Id. at 759.

  The facts in the instant case compel a similar result. Plaintiff has sought dismissal of its claims with prejudice, which would bar any suit based on defendants' current or past use of the "CIBER" mark. In the absence of such an infringement suit, or the threat of such a suit, there is no justiciable case or controversy.

  Defendants' assertion that "plaintiff will most assuredly reassert a claim for trademark infringement if and when defendants' business expands or changes in any way," does not dictate a contrary outcome. Defendants state that they "have every intention of expanding their business to serve additional clients and, if the opportunity presents itself, expanding the business into areas outside of the field of nuclear records management." Defendants' stated "intentions" with respect to their use of "CIBER," without more, however, are insufficient to create a justiciable controversy. As the court stated in Aetna, a "difference or dispute of a hypothetical or abstract character" does not qualify as a justiciable controversy under Article III. Compare G. Heileman Brewing Co., Inc. v. Anheuser-Busch, Inc., 873 F.2d 985, 991 (7th Cir. 1989) (finding "actual controversy" requisite to maintaining declaratory judgment action to invalidate trademark because "[b]y making active preparations [plaintiff] has shown that he has more than a mere speculative interest in the validity and applicability of the [defendant's trademark]. His interest is direct, real, and immediate, not a mere academic one.") (quoting 6A J. Moore, Moore's Federal Practice ¶ 57.20, at 57-217).

  A similar factual scenario was contemplated by the Federal Circuit in Super Sack Manufacturing Corp. v. Chase Packaging Corp., 57 F.3d 1054 (Fed. Cir. 1995). The plaintiff in Super Sack brought a patent infringement action against the defendant, who in turn filed a counterclaim for declaratory judgments of both noninfringement and invalidity. Before trial, the plaintiff filed a motion to dismiss, in which it "unconditionally agree[d] not to sue [defendant] for infringement as to any claim of the patents-in-suit based upon the products currently manufactured and sold by [defendant]." Id. at ...


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