## Facts

- Classic Liquor Importers, Ltd., a newer spirits business, developed a vodka product to be sold under the mark ROYAL ELITE and alleged it invested millions in the brand.
- On October 30, 2014, Classic filed a federal trademark application for ROYAL ELITE; the USPTO later approved it for publication subject to opposition.
- Spirits International B.V. (SPI) owned U.S. trademark rights in ELIT and ELIT BY STOLICHNAYA marks for vodka and related goods.
- On or about May 5, 2015, SPI sent a cease-and-desist letter asserting Classic’s planned use of ROYAL ELITE would infringe SPI’s ELIT-based marks and demanded withdrawal of the ROYAL ELITE application and limitation of a related application to exclude alcoholic beverages.
- On May 21, 2015, Classic denied infringement and asserted the marks could coexist.
- On July 10, 2015, SPI sought clarification about Classic’s intended ROYAL ELITE products; Classic did not respond.
- On August 18, 2015, Classic filed a federal declaratory-judgment action seeking a declaration of noninfringement as to its use and registration of ROYAL ELITE.
- After the suit began, SPI sent a letter stating it had no present intention to sue over ROYAL ELITE but reserved the right to sue in the future.

## Issues

1. Whether Classic plausibly alleged an “actual controversy” under Article III and the Declaratory Judgment Act sufficient to support subject-matter jurisdiction over a trademark noninfringement declaration.
2. Whether any requested declaratory relief extended beyond a concrete dispute and was therefore nonjusticiable as too speculative.

## Decision

- The court granted SPI’s Rule 12(b)(1) motion in part and denied it in part.
- The court held an actual controversy existed as to Classic’s use of ROYAL ELITE for vodka (and concretely related uses) in view of SPI’s infringement assertions and demands.
- The court dismissed aspects of the requested declaration that sought rulings on future, unspecified products or uses lacking sufficient immediacy and reality.
- The court held SPI’s post-filing “no present intention to sue” statement did not eliminate jurisdiction where SPI reserved the right to sue and the controversy is assessed as of the filing date.

## Legal Principles

- Declaratory-judgment jurisdiction exists when, under all the circumstances, there is a substantial controversy between parties with adverse legal interests of sufficient immediacy and reality.
- In trademark disputes, a cease-and-desist letter asserting infringement and demanding abandonment or limitation of rights can establish an actual controversy when the recipient is prepared to use the mark and has concrete business interests at stake.
- A defendant’s post-complaint assurance that it has “no present intention” to sue, while reserving the right to sue later, generally does not moot jurisdiction or negate an existing controversy.
- On a facial Rule 12(b)(1) challenge, the court accepts well-pleaded jurisdictional facts as true and draws reasonable inferences in the plaintiff’s favor.
- Declaratory relief must be tied to a concrete, immediate dispute; requests addressing hypothetical future expansions or unspecified uses may be dismissed as nonjusticiable.

## Conclusion

The court retained jurisdiction over Classic’s core request for a declaration that ROYAL ELITE vodka would not infringe SPI’s ELIT-based marks because SPI’s cease-and-desist demands created a real and immediate dispute, but it trimmed declaratory requests that extended to speculative future uses beyond the concrete controversy.


Classic Liquor Importers, Ltd. v. Spirits Int'l B.V., 151 F. Supp. 3d 451 (S.D.N.Y. 2015)