Retrobrands USA LLC v. General Mills Marketing, Inc.

Background

Retrobrands brought a declaratory-judgment action seeking declarations that General Mills had abandoned the DUNKAROOS trademark for cereal-based snack food and frosting, that Retrobrands had not infringed the trademark, or alternatively that General Mills’ use since 2012 was insufficient to create exclusive rights. Retrobrands also sought an order directing the United States Patent and Trademark Office to cancel the trademark registration.

General Mills had held the trademark for cereal-based food and frosting since 1991. In 2009, General Mills and Jeffrey Kaplan, Retrobrands’ principal, entered a settlement agreement under which Kaplan and, in effect, his businesses agreed to permanently refrain from using General Mills’ trademarks. In 2018, Retrobrands filed an intent-to-use application for the DUNKAROOS trademark for cereal-based snack foods and filed a proceeding with the Trademark Trial and Appeal Board (TTAB) seeking cancellation of the trademark.

General Mills, Inc., the parent company of General Mills Marketing, Inc., then sued Retrobrands and Kaplan in Hennepin County District Court. That lawsuit alleges that the settlement agreement bars Retrobrands from using the trademark. The TTAB suspended its cancellation proceeding because of the state-court action. The state-court case remained pending when General Mills Marketing moved to dismiss or, alternatively, stay this federal case.

Justiciability

The court denied the argument that no justiciable controversy existed. A justiciable controversy is a real dispute between parties with opposing legal interests. Although General Mills had not formally accused Retrobrands of trademark infringement, the court concluded that the circumstances showed a concrete and ongoing conflict.

Retrobrands had filed an intent-to-use application showing a present interest in using the trademark based on its claimed abandonment. It had also filed the TTAB cancellation proceeding. General Mills opposed those efforts through the state-court breach-of-contract lawsuit and stated that it would challenge the TTAB proceeding if it did not prevail in state court. The court emphasized that a formal infringement lawsuit or express infringement accusation was not required in these circumstances.

The court also clarified that the state-court lawsuit was not itself an infringement action. It concerned the contractual relationship between the parties and whether the settlement agreement prevented Retrobrands from challenging General Mills’ trademarks.

Stay

The court granted a stay pending resolution of the Hennepin County District Court action and the TTAB proceedings. A stay pauses a case while related proceedings take place elsewhere.

Retrobrands argued that trademark abandonment was the threshold issue and that the federal case should therefore proceed first. The court disagreed. It understood the state-court action to concern whether Retrobrands was generally barred from challenging General Mills’ trademarks, whether active or inactive. If General Mills prevailed, Retrobrands might have no viable right to pursue the DUNKAROOS trademark. If Retrobrands prevailed, it could proceed with its TTAB cancellation proceeding based on non-use.

The court therefore concluded that the state court would determine the actual threshold issue in the parties’ dispute. It stated that it was difficult to see how the federal case would remain viable under either result, but stayed the matter to preserve the parties’ rights. Because of the stay, the court declined to decide whether Retrobrands’ request to cancel the trademark was legally viable.

Disposition

The court denied the motion to dismiss and granted the motion to stay. The order’s conclusion states that the motion to dismiss or stay was granted as set forth in the order, and specifically ordered that the case be stayed pending resolution of the Hennepin County District Court action and the TTAB proceedings. Judge David S. Doty signed the order.