I Am, I Said: Cease and Desist Letters, Declaratory Judgments, and Legal Black Eyes

by John Seay, Atlanta Entertainment Lawyer: The Seay Firm LLC (@TheSeayFirmLLC)

Note: although I only refer to trademarks in this blog post, declaratory judgment actions are also a potential response to alleged copyright violations. If you need a refresher course on cease and desist letters, then feel free to consult my posts on what to do if you receive a cease and desist letter or feel like you need to send one yourself.

In December of 2012, will.i.am of the The Black Eyed Peas sent a cease and desist letter to singer-songwriter Pharrell Williams, demanding that Pharrell stop using the phrase “I AM OTHER” on his clothing line. According to will.i.am, Pharrell’s mark is confusingly similar to will.i.am’s registered trademarks of “I AM” and “WILL.I.AM,” which will.i.am places on his own clothing line. Pharrell must have disagreed, because in April of 2013, will.i.am escalated the conflict by filing oppositions against Pharrell’s eight pending federal trademark applications for “I AM OTHER.” In an escalating move of his own, Pharrell responded by filing a preemptive declaratory judgment action in the Southern District of New York, asking the judge to declare that “I AM OTHER” does not infringement the “I AM” and “WILL.I.AM” marks. The gauntlet has been thrown…but, what does it mean?

What Is a Declaratory Judgment?

A declaratory judgment is a legally binding ruling from a court that establishes the rights and other legal relations of the parties without providing for or ordering enforcement. In other words, if the first party accuses the second party of infringing on some right of the first party, then in certain situations, the second party can ask a court to make an initial determination as to whether that accusation is true. If the court rules that the conduct is not infringing, then the second party has successfully forestalled the first party’s opportunity to file a lawsuit on that claim. However, a declaratory judgment is only proper if “actual controversy” exists. If you file a declaratory judgment action and the court determines that there is no “actual controversy,” then the case will be dismissed.

What Is Actual Controversy?

So what constitutes “actual controversy”? Unfortunately, there is no concrete answer to that question. Courts decide the issue on a case-by-case, fact-specific basis, taking into account whether the party who filed the declaratory judgment action has a real and reasonable apprehension of litigation, and has engaged in a course of conduct that brought the issue into actual conflict. To make matters worse, jurisdictions sometimes contradict each other. Even within the same jurisdiction, it can be hard to say with certainty in which cases “actual controversy” exists. But generally, if a cease and desist letter includes a draft lawsuit; threatens litigation; uses aggressive language; or is part of a string of cease and desist letters, then it is more likely to create “actual controversy.” Conversely, a cease and desist letter that mentions amicable resolution, or uses other “soft” language, may—but is not guaranteed to—reduce the likelihood of a finding of “actual controversy.”[1]

Should I Seek A Declaratory Judgment?

Before doing anything, you should make an assessment as to whether your conduct is infringing. If it is, then seeking a declaratory judgment will do you no good. If you believe that your conduct is not infringing, and for whatever reason negotiations between the parties have broken down and you are considering seeking a declaratory judgment ruling, then you should make another assessment as to whether the cease and desist letter has created “actual controversy.” Finally, seek a declaratory judgment only if you have the resources and dedication necessary to see the action through to its conclusion.

If you meet those criteria, then a declaratory judgment action can be a wonderful way of flipping the script on the other party. The major benefit of filing a declaratory judgment action is that it enables you to bring the fight to the jurisdiction of your choice. For example, if a California media conglomerate sends a cease and desist letter to your place of business in Kansas, then you can—assuming the above criteria are met—file a declaratory judgment action in Kansas, and make the California media conglomerate associate with local counsel to defend the action in Kansas. A declaratory judgment action also swiftly determines the rights of the parties, so that everyone can get back to, or not get back to, their business. Finally, a declaratory judgment action can test the mettle of the sender of the cease and desist letter: how serious are they about defending their accusations?

How Can I Avoid a Declaratory Judgment?

In addition to employing some of the cease and desist letter drafting techniques I discussed above, you can avoid a declaratory judgment by “pocket filing” a lawsuit before, or contemporaneously with, the sending of the cease and desist letter. To “pocket file,” you draft and actually file a lawsuit against the party to whom you’re sending the cease and desist letter, but don’t actually have the lawsuit “served.”[2] Then, send your cease and desist letter, potentially even attaching a copy of the “draft” complaint, saying, if we can’t work this out, then I’ll serve this complaint. Even if you don’t alert the other party to the fact that you’ve filed, you’ve still effectively “reserved” jurisdiction in the case, and if the other party seeks a declaratory judgment in another jurisdiction, then the case will be dismissed. Of course, “pocket filing” does not help you to avoid litigation—after all, it is litigation—but it does allow you to reserve jurisdiction.

What About will.i.am and Pharrell?

In the case of Pharrell’s declaratory judgment action, an “actual controversy” almost certainly exists. After all, will.i.am not only sent a cease and desist letter, but also opposed Pharrell’s trademark applications. The real question remaining is whether Pharrell’s proposed marks are confusingly similar to will.i.am’s marks.[3] Used properly, declaratory judgment actions are good for the system, but there is a long list of factors to consider for any party wondering how to proceed in a potential infringement matter, one of which is how litigious is the other party. In the case of Pharrell, the answer, apparently, is fairly. As always, feel free to contact us if you have any questions about any of these issues.