In a fairly straightforward case, the Northern District of Illinois granted Declaratory Judgment under 28 USC 2201(a) to plaintiff Amerimax Real Estate Partners in a trademark dispute with Re/Max International, Inc. Plaintiff is a real estate broker and has two Illinois state trademark registrations for the marks "Amerimax Real Estate Partners" and "Amerimax." Re/Max is in the business of franchising real estate brokerage offices, and is the owner of U.S. trademark registrations for the marks "Re/Max" and "ReMax," as well as various designs containing these marks. Re/Max authorizes thousands of franchisees and independent contractors to use its marks in connection with real estate brokerage services throughout the United States and other countries.
Plaintiff alleges that Re/Max contacted it in 2005 to claim exclusive rights in the word "Max," and to assert that plaintiff's use of its own marks infringed on Re/Max's rights. Plaintiff, thus, filed an action for Declaratory Judgment seeking a declaration that (1) the word "Max" is generic or descriptive, (2) Re/Max has no exclusive rights to that word, and (3) plaintiff is not infringing. Plaintiff also sought an injunction prohibiting Re/Max from attempting to preclude its use of "Max" through litigation or other means. In response, Re/Max filed a counterclaim alleging trademark infringement and unfair competition.
The Declaratory Judgment Act allows a U.S. district court to "declare the rights and other legal relations of any interested party" in a case of actual controversy. In other words, as the Court puts it, the Act allows "a party who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to await the commencement of legal action by the other side." It is therefore necessary to determine whether an actual case or controversy exists. As applied to trademark suits within the Seventh Circuit, the courts use a two-pronged test: (1) whether the defendant's conduct has created a real or reasonable apprehension of liability on the part of the plaintiff (the party seeking declaratory relief), and (2) whether the plaintiff has engaged in a course of conduct bringing it into an adversarial conflict with the defendant.
The Court determined without much trouble that an actual case or controversy existed in this matter as Re/Max had contacted plaintiff in order to assert its exclusive rights in its marks and had subsequently filed a trademark infringement counterclaim against plaintiff. The Court then considered the threshold issue of whether the word "Max," as used in the parties' trademarks, is by itself a protectable trademark. The Court concluded that it was not protectable for the following reasons. First, many companies use "Max" as a prefix or suffix with their names, trademarks, products, or services. The Court included a laundry list of such marks (e.g. Office Max, Car Max, Max Real Estate Network, etc.). Next, the Court stated that "Max" is commonly used as an abbreviation for the word "maximum," and, as such, "is therefore ubiquitous in both commerce and ordinary language." Finally, the Court referred to Re/Max's own admission that in 1996 it had filed two U.S. trademark applications for the term "/Max," and that both of these applications were refused registration and were subsequently abandoned (NOTE: While the Court does not specify the reason for the refusals to register and the USPTO's TDR system does not contain any documents pertaining to the prosecution history of these two applications, I presume that the refusals were based on descriptiveness). The Court therefore held that (1) "Max" is a generic or common descriptive word, (2) Re/Max does not have any exclusive rights to that word, and (3) plaintiff does not infringe on Re/Max's mark. However, the Court refused to grant injunctive relief to plaintiff as it determined that little danger existed that Re/Max's challenged conduct would continue due to the issuance of the Declaratory Judgment.
Amerimax Real Estate Partners, Inc. v. Re/Max Intnl., Inc., (Slip Op.) 2006 WL 2794934 (N.D. Ill., Sept. 26, 2006).