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K-Swiss Inc. v. Puma AG Rudolf Dassler Sport

July 9, 2009

K-SWISS INC.
v.
PUMA AG RUDOLF DASSLER SPORT



The opinion of the court was delivered by: The Honorable Gary Allen Feess

LINKS: 17, 18

CIVIL MINUTES - GENERAL

Renee Fisher None

Proceedings: (In Chambers)

ORDER RE: DISMISSAL

I. INTRODUCTION

This matter is before the Court on the respective Motions to Dismiss, Transfer, or Stay of Puma North America, Inc. ("PUMA NA") and Puma AG Rudolf Dassler Sport ("PUMA AG") (collectively, "Defendants"). Defendants have moved to dismiss, stay, or transfer this action for declaratory relief, which Plaintiff K-Swiss, Inc. filed on Thursday, April 30, 2009, to the District of Massachusetts. Pending in that district is an infringement suit, which was filed by Defendants on Monday, May 4, 2009. Both suits have identical parties and identical trademark issues.

The Court has considered the papers filed in support of and in opposition to these two motions, and deems this matter appropriate for resolution without oral argument. C.D. Cal. R. 7-15. Accordingly, the hearing scheduled for Monday, July 13, 2009 is hereby VACATED.

II. BACKGROUND

This case arises out of a dispute between Defendants and K-Swiss over the purported use of Defendants' trademarks on K-Swiss merchandise. The dispute commenced with a series of exchanges between the parties initiated by a March 2, 2009 cease and desist letter from PUMA AG to K-Swiss claiming that K-Swiss was violating PUMA AG's trademark rights and seeking to resolve the dispute without litigation.*fn1 (See Haight Decl., Exs. C-E.) PUMA AG gave K-Swiss until April 30, 2009, to cease infringement or PUMA AG would be "compelled to seek for [sic] a legal solution of this issue by enforcing our rights in our full discretion by all available legal measures." (Id., Ex. E.) On April 30, 2009, K-Swiss responded with a preemptive declaratory judgment action filed in this Court seeking a determination that its use of the "Eyelet Strip" is not infringing or otherwise violating any protectable trademark rights of Defendants.

Two business days after this complaint was filed, which was three days before PUMA AG was served (see Docket No. 5), PUMA AG and PUMA NA filed suit against K-Swiss in the District of Massachusetts alleging trademark infringement of the same marks and involving the same issues as are at issue in this case.*fn2 (See id., Ex. A.) The PUMA Defendants now seek to dismiss K-Swiss's action in this Court on the ground that they are the true plaintiffs since PUMA AG is the holder of the trademarks at issue and PUMA NA is the exclusive licensee in the United States.

The record before the Court strongly suggests that K-Swiss filed the action to ensure its choice of forum would prevail should litigation ensue. Because the Court concludes K-Swiss's action was initiated in anticipation of PUMA AG's litigation and was a clear attempt to deprive PUMA AG and PUMA NA of their choice of forum, the Court declines to exercise jurisdiction over this case under the Federal Declaratory Judgment Act. Defendants' motions are GRANTED. The case is DISMISSED.

III. DISCUSSION

LEGAL STANDARD GOVERNING MOTIONS ...


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