12
Aug/02

Inverizon v. Verizon and Federal Questions


Inverizon is a Missouri company providing agricultural services.  When Bell Atlantic announced that it was adopting VERIZON as a housemark, Inverizon got in line and sent Verizon a demand letter.  After Verizon responded, Inverizon left Verizon on indefinite hold.  The Declaratory Judgment Act is intended to end such limbos so Verizon filed a DJ action in Missouri, seeking a declaration of non-infringment under hte LAnham Act. Six weeks later, Inverizon brought a suit in Missouri state court, leaving out any federal claims. The district court stayed.

The Eighth Circuit has now reversed (click on ‘full text search’ and use Inverizon as a search term).  It ruled that the lower court had erred in finding that Inverizon was deprived of its forum (it clearly wasn’t rushing up the court house steps when Verizon filed its action) and, importantly, the lower court had not considered whether a federal court should be deciding Verizon’s federal claim, when it stayed the federal action.

What is of interest is the concurrence by Justice Bye, placed in the context of the federalization of trademark law.  He strongly believes that federal courts should try federal questions, however, under prevailing law, had the lower court considered that factor and still stayed the federal action, that in and of itself what not have constituted the abuse of discretion necessary to overturn the stay.  It is because the lower court did not even evaluate the federal question factor that the decision represented an abuse of discretion, and therefore the decision can be overturned.  And, while we’re at it, the Justice throws in a shot at state trademark law, namely that no one cares about it anymore (I’m paraphrasing), and that in the future, it should be the practice that federal questions, at least federal trademark questions, should only be decided by federal courts.

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