No Subject Matter Jurisdiction Without Registered Trademark: D.N.J. | Practical Law

No Subject Matter Jurisdiction Without Registered Trademark: D.N.J. | Practical Law

In Zany Toys, LLC v. Pearl Enterprises, LLC, the US District Court for the District of New Jersey granted Pearl's motion to dismiss Zany Toys' trademark and copyright infringement action, holding that the court did not have subject matter jurisdiction over Zany Toys' trademark claim in part because the claim was not ripe for consideration.

No Subject Matter Jurisdiction Without Registered Trademark: D.N.J.

Practical Law Legal Update 0-598-8385 (Approx. 3 pages)

No Subject Matter Jurisdiction Without Registered Trademark: D.N.J.

by Practical Law Intellectual Property & Technology
Law stated as of 03 Feb 2015 • USA (National/Federal)
In Zany Toys, LLC v. Pearl Enterprises, LLC, the US District Court for the District of New Jersey granted Pearl's motion to dismiss Zany Toys' trademark and copyright infringement action, holding that the court did not have subject matter jurisdiction over Zany Toys' trademark claim in part because the claim was not ripe for consideration.
On January 28, 2015, in Zany Toys, LLC v. Pearl Enterprises, LLC, the US District Court for the District of New Jersey granted Pearl's motion to dismiss Zany Toys' cause of action seeking to block the registration of Pearl's trademarks for fraud on the US Patent and Trademark Office (USPTO) based on the court's holding that it lacked subject matter jurisdiction over Zany Toys' trademark claim in part because the claim was not ripe for consideration (No. 13–5262, (D.N.J. Jan. 28, 2015)).
The case involved Pearl's intent-to-use applications for the USPTO's registration of the mark, THE NO! BUTTON for a talking electronic toy. Zany Toys brought the action alleging that:
  • Zany Toys had superior rights to the THE NO! BUTTON trademark based on its prior use of the unregistered THE NO! BUTTON and NO! marks.
  • Pearl infringed Zany Toys' rights in these trademarks.
  • Pearl committed fraud on the USPTO by submitting a declaration in support of its application for registration of THE NO! BUTTON declaring to the USPTO that it had no knowledge of Zany Toys' use of a substantially identical mark.
In response, Pearl moved to dismiss on the grounds that the court lacked subject matter jurisdiction over Zany Toys' trademark claim, or alternatively, for failure to state a claim. The court granted Pearl's motion to dismiss the trademark claim, ruling that:
  • The court did not have subject matter jurisdiction over Zany Toys' trademark claim because:
    • the publication of Pearl's trademark application was not a decision of the Director of the USPTO or the TTAB within the meaning of 15 U.S.C. § 1071(b)(1); and
    • the claim did not yet arise under the Lanham Act and was not ripe for the court to consider because there was no registered mark, only a pending application (15 U.S.C. §§ 1119, 1120).
  • The trademark claim's lack of ripeness was underscored by the facts that:
    • Zany Toys should have first exhausted administrative remedies before resorting to courts; and
    • neither party had registrations for the marks at issue and Zany Toys' claims did not, therefore, fall within the exception allowing courts to determine the registrability of an unregistered mark where there is a sufficient nexus between a USPTO application proceeding and a dispute involving a registered mark.
  • Zany Toys' argument that the court had subject matter jurisdiction over its trademark claim on grounds of judicial estoppel was both:
    • unsupported by any evidence of inconsistent positions taken by Pearl; and
    • mooted by the court's lack of subject matter jurisdiction.