A federal judge has granted the Nicklaus Golf Equipment Co.’s motion to dismiss a declaratory judgment complaint filed by Wilson Sporting Goods Co., after finding Nicklaus Golf “promptly” filed its trademark infraction claim after the Wilson filing.
The ruling means the trademark infraction case will be litigated in the Southern District of Ohio, not the Northern District of Illinois where Wilson is headquartered and had sought a declaratory judgment. The decision was also significant because the judge found that Nicklaus Golf’s complaint was considered to be “promptly” filed even though it was filed 45 days after Wilson sought a declaratory judgment.
The impetus for the case was Wilson’s use of the term “JACK” in relation to a golf ball as well as the phrase “You don’t know Jack” in its marketing campaign. The issue was raised initially in October of 2002 by Nicklaus Golf’s CEO Robert P. Kelly, who sent a letter to Jim Baugh, the president of Wilson. Kelly claimed that his company had previously used the mark “JACK” in relation to golf clubs. He also expressed his hope that the matter could be “amicably resolved.”
Two months later, Wilson’s general counsel, Raymond M. Berens, sent Kelly a letter, writing that he was “surprised” that Nicklaus Golf was claiming “exclusive rights” to use the ‘You don’t know Jack’ colloquialism.” He also wrote that he wanted to resolve the dispute “short of litigation.”
The dialogue between the two companies became more intense in February 2003 when Nicklaus Golf’s outside counsel, Scott A. McCollister, sent a letter that explored potential litigation between the two companies and what the ramification could be for Wilson. He asked for a response by the end of the month.
Wilson responded with a letter, dated February 26, 2003, from its outside counsel, Jeffery A. Key, stating that Wilson would like “to resolve this matter without resort to litigation. To that end, perhaps we can discuss a means for mediating or arbitrating the trademark issues you have raised.”
Wilson waited two days before filing a complaint, seeking “a declaratory judgment that Wilson has not infringed defendants’ trademarks or violated other laws and that any trademark for the term “JACK” on golf balls is invalid.” On April 14, 2003, Nicklaus Golf filed its trademark infringement action.
Shortly thereafter, Nicklaus Golf filed Rule 12(b)(1) and 12(b)(2) motions to dismiss the the declaratory judgment action.
In analyzing the arguments, the court determined that it did, in fact, have subject matter jurisdiction. Nest, it considered the defendant’s argument that it should not “exercise our jurisdiction under the Declaratory Judgment Act because the action was filed in anticipation of an infringement action.”
The pivotal case law in deciding the argument was Tempco Electric Heater Corp. v. Omega Engineering, Inc., 819 F.2d 746, 747 (7th Cir. 1987), where the the 7th Circuit held that “it is well settled that the federal courts have discretion to decline to hear a declaratory judgment action, even though it is within their jurisdiction” if the declaratory judgment action “was filed in anticipation of a trademark infringement action.” While instances where Tempco has been applied involved instances where the gap between a declaratory judgment action and the filing of the infringement action was between 2 and 12 days, the court concluded that no particular time limit has been established to determine when an action has been “promptly” filed. In this instance, held the court, the complaint could be deemed to be “promptly” filed. Wilson Sporting Goods Co. v. Nicklaus Golf Equipment Co. et al., No. 03 C 1520
Attorneys of Record: (for plaintiff) Michael R. Levinson, Louis S. Chronowski, Jr., Seyfarth Shaw, Chicago, IL. (for defendants) Mark Warren Hetzler, Edward Emmett Clair, Fitch, Even, Tabin & Flannery, Chicago, IL.