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8 UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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12 RAKUTEN MEDICAL, INC., Case No. 20-CV-05430-LHK

13 Plaintiff,

ORDER DENYING DEFENDANT’S

MOTION TO DISMISS

14 v.

15 ILLUMINA, INC., 16 Defendant. 17 18 Plaintiff Rakuten Medical, Inc. (“Plaintiff”) sues Defendant Illumina, Inc. (“Defendant”) 19 for a declaration of non-infringement, right to register, and non-dilution. Before the Court is 20 Defendant’s motion to dismiss Plaintiff’s complaint. ECF No. 23 (“Mot.”).1 Having considered 21 the parties’ briefing, the relevant law, and the record in this case, the Court DENIES Defendant’s 22 motion to dismiss. 23 I. BACKGROUND 24 A. Factual Background 25

26 1 Defendant’s motion to dismiss contains a notice of motion paginated separately from the memorandum of points and authorities in support of the motion. ECF No. 23 at i. Civil Local 27 Rule 7-2(b) provides that the notice of motion and points and authorities must be contained in one document with the same pagination. 1 Plaintiff is a Delaware corporation with an office in San Mateo, California. Defendant is a 2 Delaware corporation with its principle place of business in San Diego, California. Complaint at ¶ 3 2–3, 7, ECF No. 1 (“Compl.”). 4 Plaintiff alleges that it is a “biotechnology company developing precision-targeted 5 therapies through its proprietary, anti-cancer treatment platform.” Id. at ¶ 11. In or around June 6 2019, Plaintiff adopted the trademark ILLUMINOX for its “proprietary, anti-cancer, 7 photoimmunotherapy technology platform,” which is “comprised of drug, medical device, and 8 other related technologies.” Id. at ¶ 15. Plaintiff continues to “develop, advertise, and promote its 9 ILLUMINOX-branded anti-cancer technology platform and drugs and devices developed on said 10 platform.” Id. at ¶ 20. 11 In 2018, a product developed on the ILLUMINOX-branded platform received a “Fast 12 Track” designation from the U.S. Food and Drug Administration and a similar designation from 13 the Japan Ministry of Health, Labor and Welfare. Id. at ¶¶ 20–21. Plaintiff has also reached an 14 agreement with the MD Anderson Center at the University of Texas to “collaborate to conduct 15 studies and devices developed on Rakuten Medical’s ILLUMINOX-branded platform.” Id. at ¶ 16 25. 17 On June 20, 2019, Plaintiff filed a U.S. trademark application for the mark ILLUMINOX, 18 which covers “pharmaceutical preparations for the treatment and prevention of cancer” and a 19 “medical device for treating and preventing cancer.” Id. at ¶ 27. 20 On July 3, 2019, Plaintiff filed a U.S. trademark application for the mark 21 ILLUMINOXHIKARI, which covers “pharmaceutical preparations for the treatment and 22 prevention of cancer” and a “medical device for treating and preventing cancer.” Id. at ¶ 28. 23 On July 8, 2019, Plaintiff filed a U.S. trademark application for the mark ILLUMINOX 24 translated into Katakana, which covers “pharmaceutical preparations for the treatment and 25 prevention of cancer” and a “medical device for treating and preventing cancer.” Id. at ¶ 29. 26 The Court will henceforth refer collectively to the ILLUMINOX mark, the 27 ILLUMINOXKARI mark, and the ILLUMINOX mark (translated into Katakana) as the “Rakuten 1 Medical marks.” 2 Defendant is the owner of the ILLUMINA U.S. trademark, which covers goods and 3 services in a number of trademark classes. The Court will refer to this collection of marks as the 4 “Illumina marks.” Id. at ¶¶ 36–39. Plaintiff alleges that although the Illumina marks cover 5 products and services related to genomic sequencing and other diagnostic instruments, “[n]one of 6 the registrations or application for the Illumina marks claim protection for pharmaceutical 7 preparations, medical devices, or cancer treatment platforms.” Id. at ¶¶ 42–45. 8 In August of 2019, Illumina filed letters of protest with the United States Patent and 9 Trademark Office that argued that the ILLUMINOX applications should be refused registration as 10 a result of Illumina’s prior trademark rights. ECF No. 23-2, at ¶ 2. According to Plaintiff, in 11 November of 2019, Defendant contacted Plaintiff and alleged that the use of ILLUMINOX creates 12 a likelihood of confusion with the Illumina marks. Plaintiff denied this allegation in its 13 correspondence with Defendant. Compl. at ¶ 57. The parties discussed settlement of the dispute 14 beginning in December of 2019 and scheduled a settlement discussion for March 9, 2020. Id. at ¶ 15 60. However, Plaintiff alleges that in early March, Defendant cancelled the March 9, 2020 16 settlement discussion. Id. at ¶ 60. 17 On March 3, 2020, Defendant filed a “Notice of Opposition” against the Rakuten Medical 18 marks with the Trademark Trial and Appeal Board (“TTAB”). The Notice of Opposition 19 explained that “the Applications cover goods overlapping with, related to, and complementary to 20 Illumina’s Goods and Services and covered under Illumina’s Registrations and Prior Application, 21 and the respective goods and services are marketed, or will be marketed in the same channels of 22 trade and industries.” ECF No. 1-1, Ex. 4 at 11 (“Notice of Opposition”). The Notice of 23 Opposition went on to explain that the applications for the Rakuten Medical marks will so 24 resemble the Illumina marks “as to cause confusion, or to cause mistake or to deceive within the 25 meaning of Section 2(d) of the Trademark Act.” Id. at ¶ 62. 26 Prior to Plaintiff filing a complaint in the instant case, the parties held a required discovery 27 conference on May 13, 2020, in connection with the TTAB proceedings. Plaintiff alleges that 1 during the TTAB discovery conference, Defendant’s counsel stated that Defendant not only 2 objected to Plaintiff’s registration of the Rakuten Medical marks, but also to Plaintiff’s use of 3 ILLUMINOX because Defendant considered its use to infringe on Defendant’s trademark rights. 4 Id. at ¶ 64. 5 Plaintiff alleges that Defendant’s Notice of Opposition and Defendant’s statements at the 6 May 13, 2020 TTAB discovery conference make clear that Defendant not only opposes the 7 registration of the Rakuten Medical marks, but also the use of ILLUMINOX more generally by 8 Plaintiff. Id. at ¶¶ 65–66. 9 B. Procedural Background 10 On August 5, 2020, Plaintiff filed a complaint in the instant action. ECF No. 1 11 (“Compl.”). Plaintiff’s complaint alleges causes of actions for: (1) a declaratory judgment of 12 noninfringement of federal trademarks; (2) a declaratory judgment of noninfringement of 13 trademarks and unfair competition; (3) a declaratory judgment of a right to register; (4) a 14 declaratory judgment of no dilution. Id. at ¶¶ 74–90. 15 On October 9, 2020, Defendant filed a motion to dismiss, alleging that there is no actual 16 case or controversy between the parties. ECF No. 23 (“Mot.”). On October 23, 2020, Plaintiff 17 filed an opposition. ECF No. 26 (“Opp.”). On October 30, 2020, Defendant filed a reply. ECF 18 No. 30 (“Reply”). 19 II. LEGAL STANDARD 20 A. Motion to Dismiss Under 12(b)(1) 21 A defendant may move to dismiss for lack of subject matter jurisdiction pursuant to Rule 22 12(b)(1) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 12(b)(1). Although lack of 23 statutory standing requires dismissal for failure to state a claim under Rule 12(b)(6), lack of 24 Article III standing requires dismissal for want of subject matter jurisdiction under Rule 12(b)(1). 25 See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011) (explaining article III standing 26 requirement). 27 “A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. 1 Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack, the challenger asserts that the 2 allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.” 3 Id. The Court “resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): 4 Accepting the plaintiff’s allegations as true and drawing all reasonable inferences in the plaintiff’s 5 favor, the court determines whether the allegations are sufficient as a legal matter to invoke the 6 court’s jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (internal citations 7 and quotation marks removed). “[I]n a factual attack,” on the other hand, “the challenger disputes 8 the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe 9 Air for Everyone, 373 F.3d at 1039. “In resolving a factual attack on jurisdiction,” the Court “may 10 review evidence beyond the complaint without converting the motion to dismiss into a motion for 11 summary judgment.” Id. 12 Once a defendant has moved to dismiss for lack of subject matter jurisdiction under Rule 13 12(b)(1), the plaintiff bears the burden of establishing the Court’s jurisdiction. See Chandler v. 14 State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). 15 B. Leave to Amend 16 If the Court determines that a complaint should be dismissed, it must then decide whether 17 to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to 18 amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose 19 of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” 20 Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotations 21 marks omitted). When dismissing a complaint for failure to state a claim, “a district court should 22 grant leave to amend even if no request to amend the pleading was made, unless it determines that 23 the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 24 questions marks omitted). Accordingly, leave to amend generally shall be denied only if allowing 25 amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 26 moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 27 (9th Cir. 2008).

III. DISCUSSION

1 The Declaratory Judgment Act permits a federal court to “declare the rights and other legal 2 relations” of parties to “a case of actual controversy.” 28 U.S.C. § 2201. Courts use “a two-part 3 test . . . to determine whether a declaratory judgment is appropriate. First, the court must 4 determine if there exists an actual case or controversy within the court’s jurisdiction. Second, if 5 so, the court must decide whether to exercise its jurisdiction.” Neilmed Prod., Inc. v. Med.- 6 Systems, Inc., 472 F. Supp. 2d 1178, 1179-80 (N.D. Cal. 2007); Principle Life Ins. Co. v. 7 Robinson, 394 F.3d 665, 669 (9th Cir. 2004) (same). 8 Defendant argues that this case satisfies neither prong of the two-part test. First, 9 Defendant argues that there is no actual case or controversy between Plaintiff and Defendant. 10 Second, Defendant argues that the Court should decide not to exercise the Court’s jurisdiction 11 over this action. The Court finds that neither argument is persuasive. 12 A. The Action is Ripe Under the Declaratory Judgment Act 13 Under the Declaratory Judgment Act (“DJA”), the Court must first determine whether 14 there is “a real case of actual controversy.” 28 U.S.C. § 2201; Robinson, 394 F.3d at 669. The 15 “actual controversy” requirement of the DJA is the same as the “case or controversy” requirement 16 of Article III of the United States Constitution. Robinson, 394 F.3d at 669. 17 A plaintiff must allege facts that “under all the circumstances, show that there is a 18 substantial controversy, between parties having adverse legal interests, of sufficient immediacy 19 and reality to warrant the issuance of a declaratory judgment.” MedImmune, Inc. v. Genentech, 20 Inc., 549 U.S. 118, 127 (2007). The Ninth Circuit has explained that “trademark disputes have 21 sufficiently ripened into an actual controversy under the [DJA] when ‘the plaintiff has a real and 22 reasonable apprehension that he will be subject [to suit].’” Neilmed, 472 F. Supp. 2d at 1180 23 (quoting Chesebrough-Pond’s v. Faberge, 666 F.2d 393, 396 (9th Cir. 1982)). 24 “In determining ‘if the threat perceived by the plaintiff is real and reasonable,’ the court 25 focuses ‘upon the position and perceptions of the plaintiff’ and ‘[t]he acts of the defendant [are] . . 26 . examined in view of their likely impact on competition and the risks imposed upon the 27 1 plaintiff.’” Id. (quoting Chesebrough-Pond’s, 666 F.2d at 396) (alterations in original). The 2 showing of apprehension “need not be substantial” when an allegedly infringing mark is in use. 3 Societe de Conditionnement en Aluminium v. Hunter Engineering Co., 655 F.2d 938, 944 (9th Cir. 4 1981). 5 Defendant does not dispute that it has objected to Plaintiff’s use of ILLUMINOX as the 6 brand name of a drug or device. However, Defendant argues that Plaintiff cannot establish an 7 actual controversy regarding Plaintiff’s use of the ILLUMINOX mark because Plaintiff has taken 8 no significant, concrete steps to use ILLUMINOX on a drug or device. Mot. at 6. Moreover, 9 Defendant points out that Plaintiff concedes in the opposition brief that Plaintiff does not currently 10 use ILLUMINOX on a drug or device. See Opp. at 11 (“Rakuten Medical does not use 11 ILLUMINOX directly on a drug or medical device.”). Defendant therefore argues that because it 12 has only objected to Plaintiff’s use of ILLUMINOX on a drug or device, Plaintiff “cannot 13 establish a real and reasonable apprehension that it would be subject to liability for the use of 14 ILLUMINOX on drugs or devices.” Reply at 1. 15 Plaintiff argues that Defendant’s objection extends beyond an opposition to Plaintiff’s use 16 of ILLUMINOX on drugs or devices, and that Defendant has made clear that it opposes Plaintiff’s 17 use of ILLUMINOX on Plaintiff’s ILLUMINOX platform and for other goods and services. Opp. 18 at 1. Plaintiff further argues that because Plaintiff has already begun to use ILLUMINOX in 19 relation to its platform and other collaborations, there is an actual case or controversy between the 20 parties. Opp. at 3. 21 In support of Plaintiff’s contention that Defendant’s objection to Plaintiff’s use of the 22 ILLUMINOX mark extends beyond drugs and devices, Plaintiff cites three pieces of evidence. 23 First, Plaintiff alleges that Defendant’s Notice of Objection to the TTAB evinces an objection to 24 Plaintiff’s use of the ILLUMINOX mark beyond drugs and devices. Second, Plaintiff argues that 25 discussions between the parties confirm Defendant’s objection. Finally, Plaintiff argues that 26 Defendant’s refusal to enter into a settlement agreement demonstrates that Defendant objects to 27 Plaintiff’s use of ILLUMINOX more broadly. The Court considers these arguments in turn. 1 First, Plaintiff points to Defendant’s Notice of Opposition, which states in relevant part 2 that “the Applications cover goods overlapping with, related to, and complementary to Illumina’s 3 Goods and Services and covered under Illumina’s Registrations and Prior Application, and the 4 respective goods and services are marketed, or will be marketed in the same channels of trade and 5 industries.” ECF No. 1-1, Ex. 4 at 11. Plaintiff suggests that this language is expansive and 6 implies that Defendant objects to the use of the ILLUMINOX mark on goods and services beyond 7 drugs and medical devices. Opp. at 7–8. 8 Second, Plaintiff argues that Defendant’s statements to Plaintiff’s counsel confirm that 9 Defendant objects more broadly to the use of the ILLUMINOX mark. Specifically, Plaintiff 10 explains that during the parties’ TTAB Rule 26(f) conference in May 2020, prior to Plaintiff filing 11 a complaint in the instant case, “Illumina’s counsel confirmed that Illumina took issue with 12 Rakuten Medical’s use of the ILLUMINOX mark, not merely the goods identified in the 13 applications for registration.” Opp. at 8–9. Furthermore, when the parties met in July 2020, again 14 prior to the date Plaintiff filed a complaint in the instant case, Plaintiff reports that “Rakuten 15 Medical’s counsel pointedly asked whether the dispute relatedly [sic] solely to registrability or 16 whether it extended to use of the mark, and Illumina’s counsel continued to maintain its objection 17 to the use of Rakuten Medical’s ILLUMINOX mark on goods or services other than drugs and 18 devices.” Id. at 9. Defendant disputes this characterization of its counsel’s comment during the 19 July 2020 meeting, and Defendant instead argues that it continued to only object to the use of the 20 ILLUMINOX mark on drugs or devices. Reply at 2. 21 Finally, Plaintiff points to Defendant’s refusal to enter into a settlement agreement as 22 evidence that there is an actual controversy between the parties. Op. at 16 Specifically, “Rakuten 23 offered to withdraw its pending ILLUMINOX applications and to refrain from using 24 ILLUMINOX on drugs, devices, or any other goods in the same classes of goods (International 25 Classes 5 and 10),” in exchange for “Illumina’s agreement not to oppose any trademark 26 application Rakuten might file in the future for ILLUMINOX for services.” Mot. at 4–5. 27 Defendant argues that it refused the agreement because it does not understand the “types of goods 1 or services on which Rakuten might use ILLUMINOX.” Id. at 8. Plaintiff, by contrast, argues 2 that “Illumina feigns ignorance as to Rakuten Medical’s activities,” and that Defendant’s rejection 3 of a settlement offer demonstrates that Defendant objects to not only Plaintiff’s use of the 4 ILLUMINOX mark on drugs or medical devices, but the use of ILLUMINOX more broadly. 5 Opp. at 16, 18. 6 Considering this evidence in total, the Court finds that it is a close question as to whether 7 “‘plaintiff has a real and reasonable apprehension that [it] will be subject [to suit].’” Neilmed, 472 8 F. Supp. 2d at 1180 (quoting Chesebrough-Pond’s, 666 F.2d 393 at 396 (9th Cir. 1982)). The 9 Court notes that “[i]n determining ‘if the threat perceived by the plaintiff is real and reasonable,’ 10 the court focuses ‘upon the position and perceptions of the plaintiff’ and ‘[t]he acts of the 11 defendant [are] . . . examined in view of their likely impact on competition and the risks imposed 12 upon the plaintiff.’” Id. at 1180 (quoting Chesebrough-Pond’s, 666 F.2d at 396) (alterations in 13 original). 14 The Court agrees with Defendant that, standing alone, each piece of Plaintiff’s evidence is 15 likely insufficient to demonstrate “that there is a substantial controversy, between parties having 16 adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory 17 judgment.” MedImmune, 549 U.S. at 127. 18 However, taken together, Plaintiff’s allegations are sufficient to establish that Plaintiff “has 19 a real and reasonable apprehension that [it] will be subject [to suit].’” Neilmed, 472 F. Supp. 2d at 20 1180. Plaintiff’s allegations regarding Defendant’s Notice of Opposition are insufficient on their 21 own because, as Defendant correctly argues, the Notice of Opposition objects to Plaintiff’s 22 registration of the Rakuten Medical marks for drugs and medical devices. However, Plaintiff’s 23 allegations regarding Defendant’s Notice of Opposition are not considered in isolation. Coheso, 24 Inc. v. Can’t Live With It, LLC, 2017 WL 10434396, at *6 (N.D. Cal. Dec. 18, 2017) (explaining 25 that “even if the Letter in isolation is not enough to give Plaintiff a real and reasonable 26 apprehension of suit, it rises to that level when seen in light of the surrounding events.”). Rather, 27 the Court must consider those allegations together with Plaintiff’s additional allegations that (1) 1 during discussions between the parties Defendant repeatedly objected to Plaintiff’s use of 2 ILLUMINOX on goods and services beyond drugs and medical devices, and (2) Defendant 3 rejected a settlement agreement that would have allowed Plaintiff to register the ILLUMINOX 4 mark on services in exchange for Plaintiff’s agreement not to use the ILLUMINOX mark on 5 drugs, devices, or other goods of that kind. 6 In cases involving the Declaratory Judgment Act, courts examine “’[t]he acts of the 7 defendant . . . in view of their likely impact on competition and the risks imposed upon the 8 plaintiff.’” Neilmed, 472 F. Supp. 2d at 1180 (quoting Chesebrough-Pond’s, 666 F.2d at 396) 9 (alterations in original). Here, taken together, Plaintiff’s allegations are sufficient to establish a 10 real and reasonable apprehension of suit and therefore impact Plaintiff’s ability to continue to 11 develop its ILLUMINOX platform and other related goods and services using the ILLUMINOX 12 brand. Defendant’s actions demonstrate that it is likely to object to Plaintiff’s use of 13 ILLUMINOX, and Plaintiff’s continued use ILLUMINOX creates “a real and reasonable 14 apprehension that [Plaintiff] will be subject [to suit].’” Neilmed, 472 F. Supp. 2d at 1180. The 15 Court therefore finds that an actual case or controversy exists between the parties. 16 The Court now turns to the second step in the Declaratory Judgment Act inquiry, whether 17 the Court should exercise its jurisdiction. 18 B. The Court Will Exercise Jurisdiction over the Action 19 In Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942), the United States Supreme 20 Court identified several factors for courts to consider when determining whether to exercise 21 jurisdiction over a declaratory judgment action. The Ninth Circuit has confirmed that “the 22 Brillhart factors remain the philosophical touchstone for the district court.” Government 23 Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998). “The district court should avoid 24 needless determination of State law issues; it should discourage litigants from filing declaratory 25 actions as a means of forum shopping; and it should avoid duplicative litigation.” Id. (internal 26 citations omitted). 27 The Ninth Circuit “has suggested other considerations that may weigh in favor of a district 1 court's decision to dismiss or stay an action for declaratory relief: whether the declaratory action 2 will settle all aspects of the controversy; whether the declaratory action will serve a useful purpose 3 in clarifying the legal relations at issue; whether the declaratory action is being sought merely for 4 the purposes of procedural fencing or to obtain a res judicata advantage; whether the use of a 5 declaratory action will result in entanglement between the federal and state court systems; the 6 convenience of the parties; and the availability of and relative convenience of other remedies.” 7 First Mercury Ins. Co. v. Great Divide Ins. Co., 203 F. Supp. 3d 1043, 1050 (N.D. Cal. 2016). 8 Defendant argues that the Court should not exercise jurisdiction over the declaratory 9 judgment action because there is too much uncertainty surrounding Plaintiff’s use of 10 ILLUMINOX and the only ripe dispute between the parties is Plaintiff’s right to register the 11 ILLUMINOX marks for drugs and devices, which is currently pending before the TTAB. Mot. at 12 10–11. 13 However, the Court finds that neither the Brillhart factors nor the Ninth Circuit’s 14 additional considerations support dismissing this action. In the instant case, there are no state law 15 issues, only federal trademark issues. Moreover, there is no evidence of duplicative litigation, 16 only this declaratory action and the pending opposition proceeding before the TTAB. This 17 declaratory judgment action would “settle all aspects of the controversy” and “serve a useful 18 purpose in clarifying the legal relations at issue.” First Mercury Ins. Co., 203 F. Supp. 3d at 1050. 19 Accordingly, the Court will exercise its discretion to take jurisdiction over this declaratory 20 judgment action in order to resolve the trademark infringement, right to register, and dilution 21 claims in this case. 22 IV. CONCLUSION 23 For the foregoing reasons, the Court DENIES Defendant’s motion to dismiss. 24 IT IS SO ORDERED. 25 Dated: April 19, 2021 26 ______________________________________

LUCY H. KOH

27 United States District Judge