Source: http://sc.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20160323_0000936.C04.htm/qx
Timestamp: 2018-07-19 21:15:16
Document Index: 680394107

Matched Legal Cases: ['§ 43', '§ 1125', '§ 14', '§ 14', '§ 1064', '§ 44', '§ 14', '§ 14', '§ 43']

BELMORA LLC, Plaintiff - Appellee,
BAYER CONSUMER CARE AG, a Swiss corporation; BAYER HEALTHCARE LLC, a Delaware Limited Liability Company, Defendants - Consolidated Plaintiffs - Appellants,
BELMORA LLC, a Virginia Limited Liability Company; JAMIE BELCASTRO, an individual; DOES, 1-10, inclusive, Consolidated Defendants - Appellees, and MICHELLE K. LEE, Undersecretary for Intellectual Property and Director of the United States Patent and Trademark Office (Director), Intervenor. AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION, Amicus Curiae
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. (1:14-cv-00847-GBL-JFA). Gerald Bruce Lee, District Judge.
Bradley Louis Cohn, PATTISHALL, MCAULIFFE, NEWBURY, HILLIARD & GERALDSON LLP, Chicago, Illinois, for Appellants.
Martin Schwimmer, LEASON ELLIS LLP, White Plains, New York, for Appellee.
Lewis Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Intervenor.
Phillip Barengolts, Andrew R.W. Hughes, PATTISHALL, MCAULIFFE, NEWBURY, HILLIARD & GERALDSON LLP, Chicago, Illinois; Robert J. Shaughnessy, Eric C. Wiener, WILLIAMS & CONNOLLY LLP, Washington, D.C., for Appellants.
Craig C. Reilly, Alexandria, Virginia; John L. Welch, WOLF, GREENFIELD & SACKS, P.C., Boston, Massachusetts; Lauren B. Sabol, LEASON ELLIS LLP, White Plains, New York; Rebecca Tushnet, GEORGETOWN UNIVERSITY LAW CENTER, Washington, D.C., for Appellees.
Mark R. Freeman, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Dana J. Boente, United States Attorney, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, OFFICE OF THE UNITED STATES ATTORNEY, Washington, D.C.; Nathan K. Kelley, Solicitor, Christina J. Hieber, Associate Solicitor, Mary Beth Walker, Associate Solicitor, Benjamin T. Hickman, Associate Solicitor, UNITED STATES PATENT AND TRADEMARK OFFICE, Alexandria, Virginia, for Intervenor.
Sharon A. Israel, President, AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION, INC., Arlington, Virginia; Jennifer L. Kovalcik, STITES & HARBISON, PLLC, Nashville, Tennessee, for Amicus Curiae.
Before AGEE, FLOYD, and THACKER, Circuit Judges. Judge Agee wrote the opinion, in which Judge Floyd and Judge Thacker joined.
In this unfair competition case, we consider whether the Lanham Act permits the owner of a foreign trademark and its sister company to pursue false association, false advertising, and trademark cancellation claims against the owner of the same mark in the United States. Bayer Consumer Care AG (" BCC" ) owns the trademark " FLANAX" in Mexico and has sold naproxen sodium pain relievers under that mark in Mexico (and other parts of Latin America) since the 1970s. Belmora LLC owns the FLANAX trademark in the United States and has used it here since 2004 in the sale of its naproxen sodium pain relievers. BCC and its U.S. sister company Bayer HealthCare LLC (" BHC," and collectively with BCC, " Bayer" ) contend that Belmora used the FLANAX mark to deliberately deceive Mexican-American consumers into thinking they were purchasing BCC's product.
BCC successfully petitioned the U.S. Trademark Trial and Appeal Board (" TTAB" ) to cancel Belmora's registration for the FLANAX mark based on deceptive use. Belmora appealed the TTAB's decision to the district court. In the meantime, BCC filed a separate complaint for false association against Belmora under § 43 of the Lanham Act, 15 U.S.C. § 1125, and in conjunction with BHC, a claim for false advertising. After the two cases were consolidated, the district court reversed the TTAB's cancellation order and dismissed the false association and false advertising claims.
This appeal comes to us following the district court's grant of Belmora's Federal Rule of Civil Procedure 12(b)(6) motion to dismiss Bayer's complaint and Belmora's Rule 12(c) motion for judgment on the pleadings on the trademark cancellation claim. In both circumstances, we " assume all well-pled facts to be true and draw all reasonable inferences in favor of" Bayer as the plaintiff. Cooksey v. Futrell, 721 F.3d 226, 234 (4th Cir. 2013).[1]
BCC registered the trademark FLANAX in Mexico for pharmaceutical products, analgesics, and anti-inflammatories. It has sold naproxen sodium tablets under the FLANAX brand in Mexico since 1976. FLANAX sales by BCC have totaled hundreds of millions of dollars, with a portion of the sales occurring in Mexican cities near the United States border. BCC's FLANAX brand is well-known in Mexico and other Latin American countries, as well as to Mexican-Americans and other Hispanics in the United States, but BCC has never marketed or sold its FLANAX in the United States. Instead, BCC's sister company, BHC, sells naproxen sodium pain relievers under the brand ALEVE in the United States market.
J.A. 196. Belmora also employed telemarketers and provided them with a script containing similar statements. This sales script stated that Belmora was " the direct producers of FLANAX in the US" and that " FLANAX is a very well known medical product in the Latino American market, for FLANAX is sold successfully in Mexico." Id. Belmora's " sell sheet," used to solicit orders from retailers, likewise claimed that " Flanax products have been used [for] many, many years in Mexico" and are " now being produced in the United States by Belmora LLC." Id.
Bayer points to evidence that these and similar materials resulted in Belmora's distributors, vendors, and marketers believing that its FLANAX was the same as or affiliated with BCC's FLANAX. For instance, Belmora received questions regarding whether it was legal for FLANAX to have been imported from Mexico. And an investigation of stores selling Belmora's FLANAX " identified at least 30 [purchasers] who believed that the Flanax products . . . were the same as, or affiliated with, the Flanax products they knew from Mexico." J.A. 416.
In 2007, BCC petitioned the TTAB to cancel Belmora's registration for the FLANAX mark, arguing that Belmora's use and registration of the FLANAX mark violated Article 6bis of the Paris Convention " as made applicable by Sections 44(b) and (h) of the Lanham Act." J.A. 89. BCC also sought cancellation of Belmora's registration under § 14(3) of the Lanham Act because Belmora had used the FLANAX mark " to misrepresent the source of the goods . . . [on] which the mark is used." Id.; see also Lanham Act § 14(3), 15 U.S.C. § 1064(3).
The TTAB dismissed BCC's Article 6bis claim, concluding that Article 6bis " is not self-executing" and that § 44 of the Lanham Act did not provide " an independent basis for cancellation." J.A. 95. However, the TTAB allowed Bayer's § 14(3) claim to proceed. In 2014, after discovery and a hearing, the TTAB ordered cancellation of Belmora's FLANAX registration, concluding that Belmora had misrepresented the source of the FLANAX goods and that the facts " d[id] not present a close case." J.A. 142. The TTAB noted that Belmora 1) knew the favorable reputation of Bayer's FLANAX product, 2) " copied" Bayer's packaging, and 3) " repeatedly invoked" that reputation when marketing its product in the United States. J.A. 143-45.
Belmora meanwhile appealed the TTAB's cancellation order and elected to proceed with the appeal as a civil action in the Eastern District of Virginia.[2] It argued that the TTAB erred in concluding that Bayer " had standing and/or a cause of action" under § 14(3) and in finding that Belmora had misrepresented the source of its goods. J.A. 218. Belmora also sought a declaration that its actions had not violated the false association and false advertising provisions of Lanham Act § 43(a), as Bayer had alleged in the California district court proceeding. Bayer filed a counterclaim challenging the TTAB's dismissal of its Paris Convention treaty claims.
The district court acknowledged that " Belmora's FLANAX . . . has a similar trade dress to Bayer's FLANAX and is marketed in such a way that capitalizes on the goodwill of Bayer's FLANAX." J.A. 475. It nonetheless " distilled" the case " into one single question" :
Does the Lanham Act allow the owner of a foreign mark that is not registered in the United States and further has never used the mark in United States commerce to assert priority rights over a mark that is registered in the United ...