Court Denies Motion to Dismiss Declaratory Judgment Action in Trademark Dispute Involving Alticor
In Alticor, Inc. v. Nutrisystem, Inc., Case No. 1:12-cv-256, Alticor (the parent company of Amway) filed a declaratory judgment action seeking a declaration that its use of the NUTRILITE mark does not infringe Defendants' alleged rights in the NUTRISYSTEM mark. Defendants moved to dismiss the suit for lack of subject matter jurisdiction, arguing that Alticor merely sought an "advisory opinion as to a hypothetical situation," such that there was no actual case or controversy. Judge Robert Holmes Bell disagreed.
To maintain a declaratory judgment action, the Court noted that there must be a "definite and concrete" dispute between parties having adverse legal interests. Whether a plaintiff has a "reasonable apprehension of suit" is a valid consideration for determining if there is an actual controversy.
Prompting Alticor's declaratory judgment suit was a letter it received from Defendants' attorney alleging that Alticor's use and registration of the NUTRILITE mark infringed Defendants' rights in the NUTRISYSTEM mark and demanding that Alticor refrain from using the mark. The Court found that Alticor could reasonably interpret this letter as a threat to bring a trademark infringement action. An "accusation of trademark infringement," the Court observed, is "the hallmark of an actual controversy." As such, the Court denied Defendants' motion to dismiss.
We will continue to monitor this case, including any decision relating to the underlying trademark infringement dispute.