Airs Aromatics, LLC v. Opinion Victoria's Secret Stores Brand Management, Inc.
744 F.3d 595
| 9th Cir. | 2014Background
- Airs International used the mark ANGEL DREAMS beginning in 1991 and entered a 1999 consent-to-use agreement with Victoria’s Secret allowing Victoria’s Secret to use DREAM ANGELS; Victoria’s Secret paid $25,000/year and could renew annually.
- In 2000 Marcus (Airs principal) assigned the Airs family of marks to Mine Hakim; later litigation among parties over ownership resulted in a district-court injunction and cancellation order that this Court affirmed, recognizing Airs International’s senior claim.
- Victoria’s Secret deposited payments into escrow during the ownership dispute, stopped payments in 2008, and obtained federal registrations for multiple DREAM ANGELS marks in 2007.
- Marcus later revived Airs International and formed Airs Aromatics, LLC in 2011 and alleged it owned common-law rights; Airs Aromatics sued Victoria’s Secret for breach of the consent-to-use agreement and sought cancellation of Victoria’s Secret’s registrations for likelihood of confusion.
- The district court dismissed the complaint with prejudice: (1) breach claims because alleged conduct did not violate the agreement; (2) cancellation claim for lack of standing because Airs Aromatics failed to plead continuous (non‑abandoned) use of ANGEL DREAMS. Airs Aromatics appealed only the dismissal of the cancellation claim.
Issues
| Issue | Airs Aromatics' Argument | Victoria’s Secret's Argument | Held |
|---|---|---|---|
| Whether 15 U.S.C. § 1119 (cancellation) provides an independent basis for federal jurisdiction | § 1119 allows cancellation in federal court independent of other federal claims | § 1119 is remedial and requires an existing federal action involving a registered mark; it does not create independent jurisdiction | § 1119 does not provide independent federal jurisdiction; cancellation requires an action that otherwise invokes federal jurisdiction |
| Whether Airs Aromatics adequately pleaded ownership / continuous use of ANGEL DREAMS (standing to seek cancellation/infringement) | Litigation and past use suffice to show continuous, protectible common-law use | Airs Aromatics failed to allege public, continuous commercial use; litigation activity alone does not preserve trademark rights | Dismissed: pleadings did not allege continuous public commercial use sufficient to establish protectible common-law rights |
| Whether the cancellation claim should be treated as a poorly pleaded infringement claim | Even if recharacterized, the complaint still must plead facts showing ownership and likelihood of confusion | Complaint lacks the required factual allegations for infringement (continuous use, distinctiveness, confusion) | Recharacterization would not save the claim; plaintiff failed to plead necessary infringement elements |
| Whether the district court abused its discretion by denying leave to amend | Plaintiff sought leave to plead continuous use facts | Defendant opposed amendment as futile given plaintiff’s admissions that marks were not actively used 2004–2011 | Leave denied as futile: plaintiff had previously admitted non-use; litigation activity cannot be repleaded to show commercial continuous use |
Key Cases Cited
- Bancroft & Masters, Inc. v. Augusta National Inc., 223 F.3d 1082 (9th Cir. 2000) (discussing cancellation claim coexistence with declaratory claims)
- Nike, Inc. v. Already, LLC, 663 F.3d 89 (2d Cir. 2011) (interpreting § 1119 as remedial, not jurisdictional)
- Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery Ass’n, 465 F.3d 1102 (9th Cir. 2006) (permitting subsidiary registration disputes to be resolved when joined to infringement claims)
- Ditri v. Coldwell Banker Residential Affiliates, Inc., 954 F.2d 869 (3d Cir. 1992) (rejecting § 1119 as independent jurisdictional grant)
- Windsurfing Int’l Inc. v. AMF Inc., 828 F.2d 755 (Fed. Cir. 1987) (treating § 1119 as remedy tied to infringement actions)
- Watec Co., Ltd. v. Liu, 403 F.3d 645 (9th Cir. 2005) (continuous use requirement for common-law trademark ownership)
- Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999) (public, identifying use required to establish common-law trademark rights)