Case Information
*4
BEA, Circuit Judge:
Aftеr a party obtains declaratory relief which decrees that it is not infringing a trademark, does it retain Article III standing to invalidate that mark? That is the central question presented in these appeals, and we answer it: No.
Defendant-appellant and cross-appellee Citizens Equity First Credit Union (CEFCU) began this dispute by petitioning the Trademark Trial and Appeal Board (TTAB) to cancel a trademark registration belonging to plaintiff- appellee and cross-appellant San Diego County Credit Union (SDCCU). CEFCU claimed that SDCCU’s registration covered a mark that is confusingly similar to both CEFCU’s registered mark and its alleged common-law mark. SDCCU procured a stay to the TTAB proceedings by filing the instant declaratory judgment action. SDCCU persuaded the district court that, during the course of the TTAB proceedings, it had become apprehensive that CEFCU would sue SDCCU for trademark infringement. SDCCU sought declaratory relief to establish it was not infringing either of CEFCU’s marks and to establish that those marks are invalid. The district court granted SDCCU’s motion for summary judgment on non-infringement. After a bench trial, the district court also held that CEFCU’s common-law mark is invalid and awarded SDCCU attorneys’ feеs.
We hold that SDCCU had no personal stake in seeking to invalidate CEFCU’s common-law mark because the district court had already granted summary judgment in favor of SDCCU, which established that SDCCU was not infringing that mark. Hence, there was no longer any *5 6 SDCCU V . CEFCU reasonable basis for SDCCU to apprehend a trademark infringement suit from CEFCU. After it granted summary judgment in favor of SDCCU, the district court was not resolving an actual “case” or “controversy” regarding the validity of CEFCU’s common-law mark; thus, it lacked Article III jurisdiction to proceed to trial on that issue. We therefore vacate its judgment and its award of attorneys’ fees. Of the remaining issues that are not obviated by our holding on Article III jurisdiction, we affirm. Thus, we affirm in part, vacate in part, and remand.
I.
This is a trademark dispute between two credit unions with largely geographically remote membership counties.
CEFCU’s principal place of business is in Peoria, Illinois. In 2008, it acquired Valley Credit Union located in the Bay Area of Northern California. Although CEFCU has members residing in all 50 states, it generally requires that its members have ties to Illinois or the following California counties: Alameda, Contra Costa, or Santa Clara. In 2011, CEFCU registered its trademark, “CEFCU. NOT A BANK. BETTER.,” with the United States Patent and Trademark Office. CEFCU also claims to own a common-law trademark that is nearly identical to its registered mark, but omits its house mark. Its claimed common-law mark is “NOT A BANK. BETTER.”
SDCCU’s principal place of business is in San Diego, California. Each of SDCCU’s locations are located in San Diego, Riverside, or Orange County. SDCCU focuses its marketing on these counties and over 95 percent of its members are resident Californians. In 2014, SDCCU obtained a registration for “IT’S NOT BIG BANK BANKING. IT’S BETTER.” CEFCU petitioned the TTAB to cancel SDCCU’s registration in 2017, alleging that CEFCU had used its registered mark in commerce prior to SDCCU’s registration. CEFCU alleged the parties provide “identical” services to “identical” types of customers and use their respective marks in “identical . . . online advertising media.” It claimed that SDCCU’s mark “so resembles” CEFCU’s registered mark “as to be likely, when used in connection with the services of [SDCCU], to cause confusion, or to cause mistake, or to *6 deceive within the meaning of [the] Trademark Act §2 (d), 15 U.S.C. § 1052(d).” Finally, CEFCU alleged it “believes it will be damaged by continued registration of [SDCCU’s mark] because such registration gives false color to [SDCCU]’s right to use [SDCCU’s mark] and encourages [SDCCU]’s misleading and deceptive use of [SDCCU’s mark] in derogation of [CEFCU]’s prior and superior rights in [CEFCU]’s registered mark.”
In the TTAB proceedings, SDCCU deposed Jennifer Flexer, CEFCU’s marketing director, and Susan Portscheller, a former vice president of CEFCU. Flexer testified that CEFCU petitioned to cancel SDCCU’s registration because she “became aware that SDCCU’s billboard was in the marketplace [in San Diego]. As a marketing professional [she] had concerns with the content of the advertisement” because it seemed “very similar” to CEFCU’s common-law mark. Portscheller testified as CEFCU’s corporate designee. See Fed. R. Civ. P. 30(b)(6) (allowing for depositions of corporate entities through a designee); 37 C.F.R § 2.116(a) (making the federal rules of civil procedure generally applicable in TTAB proceedings). Portscheller testified that CEFCU sought to build awareness of its brand in a five-mile radius of its Bay Area branches and seeks to “build awareness outside that radius in California.” She further testified that CEFCU has “members throughout California, and many of them are in Southern California.” Although she was not aware of any actual customer confusion, she beliеved it was “just a question of time” because CEFCU had only just begun marketing in California. She thought that SDCCU’s mark constituted “trademark infringement.”
CEFCU moved to amend its TTAB petition, alleging an additional reason that SDCCU’s registration should be cancelled—CEFCU’s prior use of its common-law mark.
While the motion to amend the TTAB petition was pending, SDCCU filed the instant suit in the United States District Court for the Southern District of California. Counts one through four of SDCCU’s complaint sought declaratory relief under the Declaratory Judgment Act stating that: (1) SDCCU is not infringing CEFCU’s registered mark; (2) SDCCU is not infringing CEFCU’s common-law mark; (3) CEFCU’s registered mark is invalid; and (4) CEFCU’s common-law mark is invalid. Count five alleged that CEFCU falsely or fraudulently registered its trademark. See 15 U.S.C. § 1120. At SDCCU’s request, the TTAB stayed *7 the cancellation proceedings pending resolution of this case.
Before answering the complaint, CEFCU filed two motions to dismiss. [2]
First, it moved to dismiss for lack of personal
jurisdiction. In support, CEFCU filed more than 200 pages
*8
10
SDCCU V . CEFCU
Chesebrough-Pond’s,
Inc.
v.
Faberge,
Inc.
(“Chesebrough”)
,
Its motions to dismiss for lack of personal and subject matter jurisdiction denied, CEFCU answered the complaint. It generally denied the allegations of SDCCU’s complaint, including that it had any intent to sue for infringement. CEFCU also asserted a counterclaim which mirrored the claim it originally asserted in the TTAB—cancellation of SDCCU’s registration.
New depositions were taken. This time, Flexer was CEFCU’s corporate designee. See Fed. R. Civ. P. 30(b)(6). The thrust of her testimony was that CEFCU did not intend to sue SDCCU for trademark infringement. She clarified that CEFCU did not take issue with SDCCU’s use of its mark “to date,” but that she would “not speculate with regard to the future.” If future harm resulted from SDCCU’s use of its mark, she “would seek counsel at that time.”
In view of the lack of evidence regarding infringement, SDCCU requested that CEFCU stipulate that SDCCU had not infringed CEFCU’s marks. But CEFCU declined.
The district court then granted CEFCU’s motion for
summary judgment on SDCCU’s fraudulent registration
claim (count five). At the same time, it granted SDCCU’s
unopposed motion for summary judgment on its non-
infringement claims. The district court understood that
*9
CEFCU did “not dispute that SDCCU’s use of its mark does
not infringe CEFCU’s [m]arks.”
San Diego Cnty. Credit
Union v. Citizens Equity First Credit Union
, No. 18CV967,
CEFCU did not raise its personal jurisdiction defense at the summary judgment phase. It did not seek an interlocutory appeal of the order which granted SDCCU summary judgment. Nor does it, in this appeal, challenge this order on the merits.
Having resolved counts one, two, and five, the district court sua sponte dismissed without prejudice CEFCU’s counterclaim seeking cancellation of SDCCU’s registration because the district court action no longer “involve[ed] a registered mark” under the meaning of 15 U.S.C. § 1119. The parties agreed to dismiss count three. The only issue that remained after the summary judgment phase was count four—SDCCU’s count seeking declaratory reliеf to invalidate CEFCU’s common-law mark.
CEFCU again moved to dismiss for lack of personal and subject matter jurisdiction, both of which motions the district court denied. After holding a bench trial, the district court determined that CEFCU’s common-law mark is invalid, entered a final judgment, and granted SDCCU’s motion for attorneys’ fees.
II.
The parties raise a bevy of issues on appeal. To assist in our explanation and analysis of those issues, it is helpful to establish some short-hand terminology.
We will refer to counts one and two of SDCCU’s complaint—which sought declaratory relief that SDCCU is *10 not infringing CEFCU’s registered mark or common-law mark—as SDCCU’s “non-infringement claims.” And we will refer to count four, which sought a declaration that CEFCU’s common-law mark is invalid, as SDCCU’s “invalidity claim.”
With that terminology in mind, we turn to the four issues that we decide in this appeal. First, we conclude that the district court lacked Article III jurisdiction to invalidate CEFCU’s common-law mark following its grant of summary judgment in favor of SDCCU on its non- infringement claims. Second, we vacate the district court’s award of attorneys’ fees because its decision to grant that award was based, in part, on the merits of the invalidity claim over which it lacked Article III jurisdiction. Third, we hold that the district court correctly exercised personal jurisdiction over CEFCU regarding SDCCU’s non- infringement claims. Fourth, we affirm the district court’s dismissal of CEFCU’s counterclaim.
A.
CEFCU disputes the existence of a case or controversy
sufficient to satisfy Article III at the pleading, summary
judgment, and trial phases of the proceedings below. The
existence of a case or controversy is a question of law we
review de novo.
Ridgeway v. Walmart Inc
,
The judicial power granted to us by the Constitution is
limited to resolving actual cases or controversies.
E.g.
,
Spokeo, Inc. v. Robins
, 578 U.S. 330, 337 (2016); U.S.
Const. Art. III, § 2. That limitation is “not relaxed in the
declaratory judgment context.”
Gator.com Corp. v. L.L.
Bean, Inc.
,
In reversing, the Supreme Court explained that “[t]he
plaintiff’s own action (or inaction) in failing to violate the
law eliminates the imminent threat of prosecution, but
nonetheless does not eliminate Article III jurisdiction.”
Id.
at
128–30. “The dilemma posed by that coercion—putting the
challenger to the choice between abandoning his rights or
risking prosecution—is a dilemma that . . . was the very
purpose of the Declaratory Judgment Act to ameliorate.”
Id.
(internal quotation marks omitted). Notably, the Supreme
Court rejected the Federal Circuit’s articulation of the
reasonable apprehension test.
Id.
at 132 n.11. Instead, it
applied language from
Maryland Casualty Co. v. Pacific
Coal & Oil Co.
,
Indeed,
MedImmune
simply reaffirms two principles we
had already articulated. First, it confirms that “concrete
threats” of a trademark infringement suit “are not required”
to create a live controversy for purposes of providing
standing in a declaratory relief action.
Rhoades
, 504 F.3d at
1158. Second,
MedImmune
underscores the importance of
our examination of “the likely impact on competition”
created by a defendant’s actions, along with “the risks
imposed upon the plaintiff.”
Chesebrough
,
suit” is beside the point. The point is that Societe , Chesebrough , and Rhoades are consistent with MedImmune .
We also conclude that our precedent survived
Clapper
.
CEFCU argues otherwise. It contends that our precedent is
outdated because
it uses
the “pre-
Clapper
phrase,
‘reasonable apprehension.’” “Post-
Clapper
,” CEFCU
argues, “future
legal
liability must be
‘certainly
impending.’” To begin with, CEFCU should have raised this
argument in its opening brief, not in a
footnote
to its
reply
brief.
See Christian Legal Soc. Chapter of Univ. of
California v. Wu
,
Regardless,
Clapper
does not require plaintiffs, for
purposes of establishing standing, “to demonstrate that it is
literally certain that the harms they identify will come
about.”
1.
CEFCU argues that SDCCU did not reasonably apprehend an infringement suit at the pleading stage because of the parties’ geographic separation. CEFCU characterizes its TTAB petition as challenging only SDCCU’s claim of right to use its mark “nationwide.” SDCCU responds that the TTAB “petition alone was sufficient for SDCCU to infer a threat of an infringement action” because it alleged a likelihood of confusion. SDCCU also argues that CEFCU’s conduct during the cancellation proceedings reaffirmed the reasonableness of its apprehension.
We conclude that a justiciable controversy existed at the pleading stage, but not solely because of the allegations in CEFCU’s TTAB petition. SDCCU makes much ado about the fact that CEFCU alleged a likelihood of confusion resulting from SDCCU’s “ use ” of its mark. In urging us to focus on CEFCU’s use of the word “use” in its TTAB petition, SDCCU reads far too broadly our decision in Chesebrough .
In that case, plaintiff Chesebrough applied for registration of its “Match” mark. Chesebrough , 666 F.2d at 394–95. While Chesebrough’s application was pending, Faberge—which owned a registration for its “Macho” mark in the same industry—sent Chesebrough a letter “stating that it believed the two marks to be ‘confusingly similar’ and that unless Chesebrough withdrew its application, Faberge would file opposition thereto.” Id. at 395. Chesebrough refused to withdraw and Faberge filed opposition. Id. Three years later, Chesebrough sought declaratory relief of non- infringement in federal court. Id. The district court found a live controversy and granted summary judgment in favor of Chesebrough, holding that there was no likelihood of confusion between the parties’ marks. Id.
We affirmed. In assessing the reasonableness of plaintiff’s apprehension, we explained that the court in *16 20 SDCCU V . CEFCU Societe “focused upon the position and perceptions of the plaintiff, declining to identify specific acts or intentions of the defendant that would automatically constitute a threat of litigation” in determining the circumstances in which a “trademark or patent dispute ripened into an actual controversy.” Id. We explained, “[t]he acts of the defendant [are] instead to be examined in view of their likely impact on competition and the risks imposed upon the plaintiff.” Id. Despite our admonition that “simple opposition proceeding[s]” generally do not create a reasonable apprehension of suit, and despite our recognitiоn that likelihood of confusion is “relevant to both registration and infringement proceedings,” we held in Chesebrough that Faberge’s letter created a reasonable apprehension of suit because it alleged a likelihood of confusion and thereby “stat[ed] a prima facie case for trademark infringement.” Id. at 396–97. We identified two additional facts that “bolster[ed]” the reasonableness of Chesebrough’s apprehension. Id. at 397. First, after Chesebrough filed its complaint, Faberge asserted an infringement counterclaim. Id. Second, Chesebrough’s use of its mark had been “chill[ed]” by the opposition proceedings. Id. [6]
In arguing that CEFCU’s TTAB petition created a live controversy, SDCCU interprets Chesebrough as holding that the mere allegation of a likelihood of confusion—regardless of context—can create a justiciable controversy. 666 F.2d at *17 [hereinafter McCarthy ].
If, as SDCCU contends, the most common ground for a cancellation petition creates a justiciable controversy, then little weight can be given to Chesebrough ’s only limiting principle. Diminishing that limiting principle would impair the “[t]he traditional rule,” which “is that if the only basis for a Declaratory Judgment is the threat or actual filing of an opposition or cancellation proceeding against plaintiff's trademark registration in the Patent and Trademark Office, then this is not, by itself, sufficient to create an ‘actual controversy’ over trademark infringement.” 6 McCarthy § 32:52. Accepting SDCCU’s position would allow litigants to “file suit in federal court solely for cancellation of a registration,” a result that “undercut[s] and short-circuit[s] the power of the Trademark Board to consider such cases.” 6 McCarthy § 32:54.
Chesebrough
itself rejects such a result. We emphasized
that jurisdiction does not depend on whether a party used
magic words in a TTAB petition—we “declin[ed] to identify
specific acts or intentions of the defendant that would
automatically constitute a threat of litigation.”
Chesebrough
,
CEFCU argues that the relevant context here includes the
“geographic separation” between the areas in which the
parties use their marks. This geographic separation is
significant—SDCCU’s northernmost credit union branch is
in Orange County, while CEFCU’s southernmost
membership county is Santa Clara. That leaves Los Angeles,
Ventura, Santa Barbara, San Luis Obispo, and Monterey
counties to separate the parties’ territories. That geographic
separation would have colored SDCCU’s understanding of
CEFCU’s likelihood-of-confusion allegation at that time.
SDCCU should have understood CEFCU’s likelihood-of-
confusion allegation merely as a necessary basis to support
CEFCU’s cancellation petition—statutory standing. 15
U.S.C. § 1064;
see also infra
note 7. A reasonable person in
SDCCU’s position would have known that an infringement
suit was unlikely.
Compare Giant Food, Inc. v. Nation’s
Foodservice, Inc.
,
This testimony is relevant because a senior registrant can
enjoin a junior user of an infringing mark if it is likely that
the senior registrant will expand into the junior user’s
market.
Dawn Donut Co. v. Hart’s Food Stores, Inc.
, 267
F.2d 358, 364 (2d Cir. 1959);
see also Lodestar Anstalt v.
Bacardi & Co. Ltd.
,
2.
CEFCU next argues that the district court erred in concluding that it possessed ongoing Article III jurisdiction at the summary judgment phase. CEFCU contends that SDCCU was required to re-prove the existence of a live controversy at the summary judgment phase. We disagree.
CEFCU made the strategic decision to assert a factual
jurisdictional attack in its motion to dismiss. “Rule 12(b)(1)
jurisdictional attacks can be either facial or factual.”
White
v. Lee
,
Where the jurisdictional issue is separable from the merits of the case, the judge may consider the evidence presented with respect to the jurisdictional issue and rule on that issue, resolving factual disputes if necessary. . . . The standards applicable to a Rule 12(b)(1) speaking motion differ greatly from the standards for ruling on a motion for summary judgment. Faced with a factuаl attack on subject matter jurisdiction, the trial court may proceed as it never could under Rule 12(b)(6) or Fed. R. Civ. P. 56. No presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.
Id.
(cleaned up). If the factual basis for jurisdiction is
disputed, “[t]he plaintiff bears the burden of proving by a
preponderance of the evidence that each of the requirements
for subject-matter jurisdiction has been met.”
Leite v. Crane
Co.
,
The district court understood CEFCU was “mounting a
factual attack on subject matter jurisdiction” in its motion to
dismiss.
San Diego Cnty. Credit Union
, 344 F. Supp. 3d at
1153. The district court did not expressly hold that SDCCU
proved subject matter jurisdiction by a preponderance of the
evidence; however, it examined hundreds of pages of
documents outside the complaint, including the cancellation
petition, CEFCU’s proposed amendment to its cancellation
petition, discovery disclosures, deposition transcripts, as
well as attornеy and witness affidavits laying foundation for
those documents. This evidence was sufficient to meet
SDCCU’s burden under the preponderance of the evidence
standard because, as we have explained, it was “more likely
than not” that SDCCU reasonably apprehended an
infringement suit from CEFCU.
Guglielmino v. McKee
Foods Corp
., 506 F.3d 696, 699 (9th Cir. 2007). Because
*21
SDCCU established a justiciable controversy by a
preponderance of the evidence at the pleading stage, the
district court did not need to consider additional evidence at
the summary judgment stage—the district court had already
“resolv[ed] factual disputes” in a manner that “it never could
under Rule 12(b)(6) or Fed. R. Civ. P. 56.”
Thornhill Pub.
Co.
,
The district court appeared to recognize these principles
by relying upon
Already, LLC v. Nike, Inc.
, 568 U.S. 85
(2013), to apply a mootness analysis at the summary
judgment phase.
See Cardinal Chem. Co. v. Morton Int’l,
Inc.
,
The Supreme Court affirmed. It explained that a case becomes moot “when the issues presented are no longer ‘live[,]’ the parties lack a legally cognizable interest in the outcome,” or “the dispute is no longer embedded in any actual controversy about the plaintiffs’ particular legal rights.” Id. at 91 (citations and internal quotation marks omitted). Because the case in Already was alleged to have become moot due to the Nike’s voluntary cessation of wrongdoing, the Supreme Court placed the burden on Nike “to show that it could not reasonably be expected to resume its enforcement efforts against Already.” Id. at 92 (citation and internal quotation marks omitted). Nike met that burden because it had made and delivered an “unconditional and irrevocable” covenant not to sue. Id. at 93.
Based on the principles articulated in Already , we agree with the district court that CEFCU bore the burden of proving that the case was moot at the summary judgment phase. Nike put Alrеady in fear of infringement liability by suing for infringement; Nike therefore bore the burden of dispelling that fear. And CEFCU’s conduct in the TTAB proceedings similarly sparked SDCCU’s fear of *22 infringement liability. Already therefore places the burden on CEFCU to dispel SDCCU’s fear. But Already does not hold that the only method by which CEFCU can do so is through a binding promise not to sue. To be sure, if a defendant provided similar evidence that eliminated, as a matter of law, a declaratory-judgment plaintiff’s reasonable apprehension of an infringement action, such evidence would be sufficient to moot the case. We need not decide what that evidence might be; we merely conclude that CEFCU’s evidence in this case was insufficient to moot the case because it did not remove SDCCU’s reasonable apprehension of suit as a matter of law.
Not only did CEFCU fail to provide a binding promise that it would not sue for infringement (as Nike did in Already ), but CEFCU affirmatively refused SDCCU’s stipulation that SDCCU was not infringing CEFCU’s marks. CEFCU now claims it was merely unwilling to waive its jurisdictional defenses, but that limited characterization of its objection is not apparent from the record. And although CEFCU submitted Flexer’s deposition testimony suggesting that CEFCU did not plan to sue SDCCU for trademark infringement, it provided no assurances to that effect. Moreover, Flexer’s testimony was conspicuously couched in present-tense language. She did not dispute SDCCU’s use of its mark “to date,” and pointedly would “not speculate with regard to the future.” Given Portscheller’s previous testimony suggesting CEFCU was growing in California and that it was only a matter of time before actual confusion occurred, Flexer’s restrained testimony served to reaffirm SDCCU’s reasonable apprehension about whether it could be subject to legal action for the current use of its mark in Southern California. The district court therefore possessed Article III jurisdiction at the summary judgment phase, and we affirm its entry of judgment in favor of SDCCU on SDCCU’s non-infringement claims.
3.
Finally, we come to the question presented at the
beginning of this opinion: whether the district court
possessed Article III jurisdiction to proceed to trial on
SDCCU’s invalidity claim. We conclude it did not.
*23
SDCCU V . CEFCU
29
In the patent context, it is “usually” an error to reach the
issue of validity “in the face of a finding of non-
infringement.”
Lockwood v. Langendorf United Bakeries,
Inc.
,
The facts in
Altvater
mirrored those in
MedImmune
.
See
At oral argument, counsel for SDCCU argued that SDCCU retained standing to pursue its invalidity claim even after it obtained summary judgment on its non-infringement *25 claims because the still-pending cancellation proceedings might be affected by a finding regarding the validity of CEFCU’s common-law mark. But counsel did not explain why a potential impact on the cancellation proceedings could satisfy the requirements of Article III standing. To the contrary, we have held that a “simple opposition proceeding in the Patent and Trademark Office generally will not raise a real and reasonable apprehension of suit,” and so is insufficient to show injury-in-fact. See Chesebrough , 666 F.2d at 396. Accepting SDCCU’s argument would mean that any time a party seeks to cancel a registration due to prior use of a common-law mark, a controversy is created such that the registrant may circumvent the TTAB’s jurisdiction. We reject that premise.
Moreover, we note that a future conflict over CEFCU’s
common-law trademark rights is extremely unlikely as a
matter of law. Unlike the ability of a senior
registrant
to
enjoin a junior user of an infringing mark when it is likely
that the
registrant
will move into the junior user’s territory,
see Dawn Donut
,
In sum, once SDCCU obtainеd an adjudication stating
that the use of its mark does not infringe CEFCU’s common-
law mark, SDCCU lost any personal stake it once had in
invalidating CEFCU’s common-law mark. We recognize the
significant resources that the parties and the district court
have already invested in holding a bench trial on this issue.
But “sunk costs to the judiciary does not license courts to
retain jurisdiction over cases in which one or both of the
parties plainly lacks a continuing interest.”
Gator.com
Corp.
,
B.
The second issue for review is whether the district court erred in awarding attorneys’ fees to SDCCU under 15 U.S.C. § 1117(a). Under that statute, a “prevailing party” may be awarded attorneys’ fees “in exceptional cases.” 15 U.S.C. § 1117(a). CEFCU challenges this award on numerous grounds. [9]
Our conclusion that the district court lacked jurisdiction
to proceed to trial on SDCCU’s invalidity claim does not, by
itself, preclude jurisdiction to award attorneys’ fees.
See,
e.g.
,
K.C. ex rel. Erica C. v. Torlakson
,
Here, the district court’s decision to award attorneys’ fees under § 1117(a) was partly based on the merits of the invalidity claim over which it lacked jurisdiction. We therefore vacate that award.
The district court concluded that SDCCU was the prevailing party because of the non-infringement relief it obtained on summary judgment and because of its victory in invalidating CEFCU’s common-law mark at trial. Although the question whether SDCCU remains a prevailing party even absent its trial victory is a legal question subject to de novo review, [10] we leave that question for the district court to *28 Although we conclude that the district court lacked subject matter jurisdiction to proceed to trial on SDCCU’s invalidity claim, our conclusion “does not automatically wipe out all proceedings had in the district court at a time when the district cоurt operated under the misapprehension that it had 603 n.4 (2001) (“We have interpreted these fee-shifting provisions consistently and so approach the nearly identical provisions at issue here.” (internal citation omitted)).
Notably, the Eighth Circuit held that
Highmark
did not displace de
novo review for prevailing party determinations.
E. Iowa Plastics, Inc.
v. PI, Inc.
, 832 F.3d 899, 906 n.5 (8th Cir. 2016). In two separate
opinions disposing of the same case, the Second Circuit applied de novo
review to a prevailing party determination in one opinion,
Manhattan
Rev. LLC v. Yun
,
jurisdiction.”
Willy
,
C.
The third issue is whether CEFCU is subject to personal
jurisdiction in California. We review the existence of
personal jurisdiction de novo.
Ayla, LLC v. Alya Skin Pty.
Ltd.
,
*29
A defendant is subject to specific personal jurisdiction in
the forum state if: (1) the defendant performed an act or
consummated a transaction by which it purposely directed
its activity toward the forum state; (2) the claims arose out
of defendant’s forum-related activities; and (3) the exercise
[11]
The parties dispute the correct evidentiary standard to apply to
CEFCU’s personal jurisdiction defense. The two evidentiary standards
that could apply are the prima facie and preponderance of the evidence
standards.
See, e.g.
, 4 Wright, Miller, & Steinman,
Federal Practice and
Procedure
§ 1067.6 at 581–645 (4th ed. 2015). CEFCU urges us to
reverse the judgment because SDCCU made out only a prima facie
showing of personal jurisdiction,
see Data Disc, Inc. v. Sys. Tech.
Assocs., Inc.
,
of personal jurisdiction is reasonable. Id. at 979. Analysis of the first prong—“purposeful availment or direction”—turns on the nature of the underlying claims. Id. “Trademark infringement is treated as tort-like for personal jurisdiction purposes, and so we focus on purposeful direction.” Id. SDCCU bears the burden of proving the first two prongs. Id. Once those are established, the burden shifts to CEFCU to prove that the exercise of personal jurisdiction is unreasonable. Id.
Analysis of this three-prong test leads to the conclusion that CEFCU is subject to personal jurisdiction in California regarding SDCCU’s non-infringement claims. [12]
First, CEFCU purposefully directed its activity toward California by using its trademarks there and by operating several branches in the Bay Area. [13] CEFCU further directed *30 38 SDCCU V . CEFCU its activity toward California when it filed its cancellation pеtition with the TTAB and alleged that the registration for SDCCU’s trademark (used solely in California) must be cancelled because of CEFCU’s prior use of its marks (used in Illinois and California ). Thus, the first prong is met.
Second, SDCCU’s non-infringement claims arose out of
CEFCU’s use of its trademarks in California because those
are the very same trademarks that CEFCU used to attack
SDCCU’s trademark registration in the TTAB proceedings.
Moreover, CEFCU’s conduct in those proceedings put
SDCCU in a reasonable apprehension that it would be sued
for use of its marks in California.
Cf. Bancroft & Masters,
Inc. v. Augusta Nat. Inc.
,
Regarding the third prong, CEFCU does not explain why the exercise of personal jurisdiction in California is unreasonable. Nor could it. CEFCU operates, uses its trademarks, and serves its credit union members in California. Under these circumstances, there is nothing unreasonable about litigating a trademark infringement case in California. Thus, we conclude that SDCCU established by a preponderance of the evidence that CEFCU is subject to personal jurisdiction in California regarding SDCCU’s non- infringement claims.
D.
The fourth issue is whether the district court erred in dismissing without prejudice CEFCU’s counterclaim for lack of statutory subject matter jurisdiction. CEFCU’s counterclaim mirrored the relief it had originally sought before the TTAB; that is, it sought to cancel SDCCU’s trademark registration. SDCCU argues that the district court misinterpreted 15 U.S.C. § 1119 to conclude that it lacked statutory subject matter jurisdiction over CEFCU’s counterclaim. CEFCU responds that SDCCU lacks standing to appeal this dismissal because it is favorable to SDCCU.
True, the general rule is that litigants have no standing to
appeal favorable decisions.
E.g.
,
United States v. Good
Samaritan Church
,
The district court sua sponte dismissed the counterclaim for lack of statutory subject matter jurisdiction after granting summary judgment on the first, second, and fifth counts. As a result of those counts being resolved, it concluded that this case no longer “involve[ed] a registered mark” under 15 U.S.C. § 1119. That statute reads:
In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.
15 U.S.C. § 1119.
SDCCU argues that “action” refers to the entire case and that this “action” still “involv[es] a registered mark” because the parties’ claims originally involved their registered marks. Thus, SDCCU contends, the district court possessed ongoing statutory subject matter jurisdiction over CEFCU’s counterclaim. We disagree.
In
Airs Aromatics, LLC v. Opinion Victoria’s Secret
Stores Brand Management, Inc.
, the plaintiff sought: (1) a
declaration that defendant breached a consent-to-use
agreement; and (2) cancellation of defendant’s trademark
registrations based on a likelihood of confusion with
plaintiff’s marks. 744 F.3d 595, 598 (9th Cir. 2014). The
district court dismissed both claims, but the plaintiff
appealed only the dismissal of his cancellation claim.
Id.
We
held that § 1119 would not “provide an independent basis for
subject-matter jurisdiction on remand standing alone.”
Id.
We held that § 1119 provides cancellation only as relief to a
party who has proved infringement because § 1119 is
“remedial, not jurisdictional.”
Id.
at 598 (quoting
Nike, Inc.
v. Already, LLC
,
That same syllogism dictates the outcome here. CEFCU’s cancellation counterclaim under § 1119 must have an independent jurisdictional basis. And SDCCU has understandably not appealed from the district court’s judgment on the only claims that could arguably provide *33 such a basis—i.e., SDCCU’s non-infringement claims. Like the plaintiff in Airs Aromatics, SDCCU does not ask us to reinstitute those non-infringement claims such that CEFCU could potentially prove infringement and obtain cancellation on remand. We therefore affirm the district court’s dismissal of CEFCU’s counterclaim.
III.
We vacate the district court’s judgment and remand with instructions for further proceedings not inconsistent with this opinion. On remand, the district court is instructed to dismiss count four of SDCCU’s complaint for lack of Article III jurisdiction, reassess its exceptional-case and prevailing- party determinations and, if necessary, revisit the amount of its fee award.
Pursuant to Federal Rule of Appellate Procedure 39(a) and Ninth Circuit General Order 4.5(e), each party shall bear its own costs on appeal.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
Notes
[1] See 28 U.S.C. § 2201.
[2] CEFCU filed a third pre-answer motion, and it filed many other
motions throughout the proceedings below. We discuss only those
relevant to our analysis.
of exhibits, including the cancellation petition pleadings,
documents produced during discovery, deposition
transcripts, a consumer survey, and CEFCU’s motion to
amend its cancellation petition. SDCCU submitted 15
exhibits in opposition. In its order, the district court
acknowledged that it was resolving the motion “on written
materials rather
than an evidentiary hearing” and,
consequently, required SDCCU to make only “a prima facie
showing of jurisdictional facts to withstand the motion to
dismiss.”
San Diego Cnty. Credit Union v. Citizens Equity
First Credit Union
,
[3] CEFCU raises numerous issues regarding the trial. Our holding on
Article III jurisdiction obviates review those issues.
“personal stake,”
Gator.com Corp.
,
[4] Namely, MedImmune reiterated: “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there We conclude that our precedent is consistent with MedImmune . Although MedImmune may have abrogated the Federal Circuit ’s version of the reasonable apprehension test, see SanDisk Corp. v. STMicroelectronics, Inc. , 480 F.3d
[5] The Federal Circuit explained that MedImmune “did not completely do away with the relevance of a reasonable apprehension of suit.” Prasco, LLC v. Medicis Pharm. Corp. , 537 F.3d 1329, 1336 (Fed. Cir. 2008). According to Prasco , “proving a reasonable apprehension of suit is one of multiple ways that a declaratory judgment plaintiff can satisfy the more general all-the-circumstances test to establish that an action presents a justiciable Article III controversy.” Id. We agree in substance. We agree that a reasonable apprehension of infringement liability remains the primary focus of the inquiry after MedImmune . But in our view, a plaintiff who thinks himself forced to engage in or refrain from engaging in certain conduct to avoid being sued simply evinces a reasonable apprehension of suit in a manner different from what the Federal Circuit had previously recognized. Take the plaintiff in MedImmune , for example. By paying the royalties under protest, the plaintiff voluntarily refrained from fulfilling a condition precedent to the defendant’s purported ability to file an infringement lawsuit. The plaintiff’s fear of infringement liability remained the basis for jurisdiction even in that example. harm will occur,” id. , and subsequent Supreme Court cases have followed suit. See Susan B. Anthony List v. Driehaus , 573 U.S. 149, 158 (2014) (“An allegation of future injury may suffice if the threatened injury is certainly impending, or there is a substantial risk that the harm will occur.” (emphasis added) (cleaned up)). We have also used similar language and long held that a threatened injury may constitute an injury in fact where there is “a credible threat of harm” in the future. See Krottner v. Starbucks Corp. , 628 F.3d 1139, 1143 (9th Cir. 2010). This language is perfectly consistent with our “reasonable apprehension” standard. Moreover, Clapper emphasized the separation-of- powers considerations inherent in a national security case. 568 U.S. at 407–08. It applied an “especially rigorous” analysis to avoid judicial usurpation of the powers of the political branches. Id. at 408. We reject CEFCU’s unexplained insistence that we transform the “certainly impending” language in Clapper into a “precise test” by which we must analyze the existence of Article III jurisdiction in any and all cases, regardless of their contexts. See Babbitt v. United Farm Workers Nat. Union , 442 U.S. 289, 297 (1979). In the context of declaratory judgment actions regarding trademark infringement, we will continue to apply the principles articulated in Societe , Chesebrough , and Rhoades . Having clarified the applicable standard, we now turn to the question whether subject matter jurisdiction existed at the pleading, summary-judgment, and trial stages of the proceedings below.
[6] The opinion does not explain how, exactly, Chesebrough proved to the
district court that Faberge’s actions had caused Chesebrough to “chill[]”
the use of its mark out of a fear of infringement liability. But because the
district court analyzed jurisdiction at the summary judgment phase,
Chesebrough
,
[7] SDCCU misquotes documents from the TTAB proceedings to argue that CEFCU attempted to prove “ damages to CEFCU by reason of” SDCCU’s use of its mark. (emphasis added). The portion of the record quoted by SDCCU consists of an attorney declaration explaining CEFCU’s submission of “[d]ocuments evidencing the potentiаl for damage to CEFCU by reason of” SDCCU’s use of the SDCCU mark. (emphasis added). The distinction between “damages” and “damage” is important. See Antonin Scalia & Bryan A. Garner, R EADING L AW : T HE I NTERPRETATION OF L EGAL T EXTS 44 (2012) (“The word damage (harm to property) is quite distinct in meaning from damages (money awarded to a victorious litigant).”). Allegations of “damages” certainly could lead a party to apprehend monetary damages resulting from infringement, much like the damages sought by the defendant in Rhoades , 504 F.3d at 1158. But any such apprehension was unreasonable in the context of the then-ongoing cancellation proceedings. CEFCU was required to plead and prove—as a matter of statutory standing—that it was “likely to be damaged” by SDCCU’s registration. 3 McCarthy at § 20.41 (“To successfully prosecute a petition for cancellation, petitioner must plead and prove . . . that it has standing to petition to cancel in that it is likely to be damaged by the registration.” (emphasis added)); 15 U.S.C. § 1064 (“A petition to cancel a registration of a mark . . . may . . . be filed . . . by any person who believes that he is or will be damaged . . . by the registration of a mark.” (emphasis added)). It would make no sense that CEFCU was trying to prove monetary damages in the TTAB proceedings—the TTAB cannot award such damages. Rhoades , 504 F.3d at 1158; id. at 1158 n.6 (“The powers of the TTAB are limited to determining and deciding the respective rights of trademark registration.” (cleaned up)). CEFCU’s attempt to prove “potential for damage” in the TTAB action should not have put SDCCU in reasonable apprehension of an infringement suit.
[8] We regularly borrow on principles from patent cases to guide our
analyses in trademark cases.
See, e.g.
,
SunEarth, Inc. v. Sun Earth Solar
Power Co.
,
[9] We reject CEFCU’s near-frivolous argument that a party must prove
“infringement” to be entitled to attorneys’ fees under § 1117(a). The
first sentence of § 1117(a) discusses the measure of damages to be
awarded upon proof of trademark infringement. Six sentences later, the
statute states: “The court in exceptional cases may award reasonable
attorney fees to the prevailing party.” Obviously, a defendant in an
infringement case—or, as in this case, a plaintiff in a declaratory
judgment action seeking a declaration of non-infringement—can be the
“prevailing party” and can therefore be entitled to reasonаble attorneys’
fees, without proof that infringement occurred.
See, e.g.
,
Gracie v.
Gracie
,
[10] SDCCU urges us to adopt the district court’s prevailing-party
determination under an abuse of discretion standard. SDCCU recognizes
that we have previously reviewed prevailing party determination under
§ 1117(a) de novo,
Asociacion de Trabajadores de Lake Forest v. City
of Lake Forest
,
[12] Where—as here—“a plaintiff relies on specific jurisdiction, he must
establish that jurisdiction is proper for ‘each claim asserted against a
defendant.’”
Picot v. Weston
, 780 F.3d 1206, 1211 (9th Cir. 2015)
(citation omitted);
see also
,
Ayla
,
[13]
See, e.g.
,
Panavision Int’l, L.P. v. Toeppen
,