Court Opinion

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Date Created: 2015-10-13 22:39:03.997164+00
Date Added: 2024-06-11T07:28:09.114989
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Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

6-13-2007

Everett Lab Inc v. Vertical Pharm Inc
Precedential or Non-Precedential: Non-Precedential

Docket No. 06-1661

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                                                               NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                                __________

                                    No. 06-1661
                                    __________

                        EVERETT LABORATORIES, INC.,

                                                         Appellant

                                          v.

                     VERTICAL PHARMACEUTICALS, INC.

                                    __________

                  On Appeal from the United States District Court
                            for the District of New Jersey
                            (D.C. Civil No.05-cv-05926)
                 District Judge: Honorable Dickinson R. Debevoise
                                     __________

                              Argued on May 10, 2007

          Before: RENDELL, JORDAN, and ALDISERT,* Circuit Judges.

                               (Filed: June 13, 2007 )

__________________

   * Honorable Ruggero J. Aldisert, Senior Judge of the United States Court of Appeals
     for the Third Circuit, participated via audioconference.
Kevin W. Goering [ARGUED]
Sheppard, Mullin, Richter & Hampton
30 Rockefeller Center, 24th Floor
New York, NY 10112

Don J. Pelto
Julie A. Hopkins
Sheppard, Mullin, Richter & Hampton
1300 “I” Street, NW, 11th Floor
Washington, DC 20005
Counsel for Appellant
Everett Laboratories, Inc.

Charles P. Kennedy [ARGUED]
Roy H. Wepner
Samantha M. Kameros
Lerner, David, Littenberg,
  Krumholz & Mentlik
600 South Avenue West, 3rd Floor
Westfield, NJ 07090-1497
Counsel for Appellee
Vertical Pharmaceuticals, Inc..

                                       __________

                               OPINION OF THE COURT
                                     __________

RENDELL, Circuit Judge.

       Everett Laboratories (“Everett”) appeals from the January 13, 2006 order of the

United States District Court for the District of New Jersey denying Everett an injunction

                                            2
against Appellee Vertical Pharmaceuticals (“Vertical”) for using the mark “CORVITE”

as a name for Vertical’s prescription vitamin product. Everett argued that Vertical’s use

of that name infringed on Everett’s “STROVITE” mark, which Everett also applies to a

prescription vitamin product, in violation of §§ 32 and 43(a) of the Lanham Act. The

District Court determined that Everett was unlikely to succeed on the merits after finding

that relevant consumers were not likely to be confused by the two names. We will affirm

the order of the District Court.

       I.     Factual and Procedural Background

       The facts of this case are not in significant dispute.1

       Since 1985, Everett has manufactured, marketed and sold prescription vitamin

supplements. Although most vitamins are sold over the counter, Everett competes in

what it characterizes as the “narrow market segment of prescription vitamin

supplements.” Appellant’s Brief at 6. Since its inception, Everett has sold the

prescription vitamin STROVITE and, over the years, has added “STROVITE PLUS,”

“STROVITE FORTE,” and “STROVITE ADVANCE” to its line of products. Everett

claims to have spent over $2 million marketing and advertising these products. On

May 1, 2001, the United States Patent & Trademark Office (“USPTO”) granted Everett a

  1
   Because discovery had not yet taken place, the District Court resolved this case solely
on the basis of the affidavits and declarations submitted by the parties. Our recitation of
the facts is necessarily derived from these untested submissions, though we emphasize
again that the parties largely do not disagree on the essential facts.

                                               3
trademark registration for the mark “STROVITE.” Everett apparently has not sought

separate registration for the full names of its other STROVITE products.

       In 2003, three Everett employees left the company to found Vertical.2 Over the

spring and summer of 2003, Vertical developed and began to market and sell its own

prescription vitamin supplement – CORVITE. In deciding upon the name “CORVITE,”

Vertical claims that it combined the words “core” – as in “core nutrients,” signifying the

medical necessity of the ingredients – with “vite” – a suffix Vertical claims represents the

word “vitamin.” Vertical has not yet registered “CORVITE” with the USPTO, though it

has taken some steps to do so.

       Both STROVITE and CORVITE are sold in the same fashion and to the same

people: sales representatives personally visit doctors’ offices and leave literature or

sample boxes behind to encourage doctors to prescribe the product in the future.

Wholesalers will purchase the vitamins and distribute them to pharmacies in anticipation

of future prescriptions.

       Everett became aware of CORVITE on August 8, 2005 and, shortly thereafter,

notified Vertical of its belief that CORVITE’s name infringed on Everett’s “STROVITE”

mark. On August 25, 2005, Everett claims that it began receiving reports of confusion

amongst doctors and pharmacists as to the existence of a relationship between CORVITE

  2
   This was not an amicable parting, as evidenced both by this suit and a separate one
currently pending between Everett and Vertical in New Jersey state court. Both parties
agree that the issues in the state court case do not bear on those presented here.

                                              4
and Everett. In response, and in anticipation of this litigation, Everett gathered affidavits

from those who either claimed to have witnessed confusion (five Everett sales reps) or

experienced such confusion personally (five New Jersey pharmacists).

       On December 23, 2005, Everett filed suit against Vertical in the United States

District Court for the District of New Jersey alleging trademark infringement under § 32

of the Lanham Act, 15 U.S.C. § 1114; unfair competition under § 43(a) of the Lanham

Act, 15 U.S.C. § 1125(a); trade dress infringement under § 43(a) of the Lanham Act,

15 U.S.C. § 1125(a); trademark infringement under the common law of New Jersey;

tortious interference with existing contractual relationships under the common law of

New Jersey; tortious interference with prospective contractual relationships under the

common law of New Jersey; and unfair competition under N.J.S.A. § 56:4-1. Shortly

thereafter, Everett sought and obtained from the District Court an order to show cause as

to why a preliminary injunction – preventing Vertical from “selling, manufacturing,

marketing, advertising or distributing any vitamin, mineral or nutritional supplement

product bearing the CORVITE mark or any mark or brand name confusingly similar to

Everett’s STROVITE mark” – should not be issued.3

  3
    Everett’s suit not only alleged that CORVITE infringed on its “STROVITE” mark but
also that Vertical’s use of the mark “OB COMPLETE” for its prenatal vitamin product
infringed on the trademark for Everett’s own prenatal vitamin, “VITAFOL OB.”
However, Everett did not seek a preliminary injunction as to Vertical’s use of OB
COMPLETE. Additionally, Everett’s motion for a preliminary injunction was not
premised on any arguments pertaining to its § 43(a) trade dress or state law claims.
Therefore, the District Court’s ruling was only as to Everett’s likelihood of succeeding on

                                              5
       On January 13, 2006, the District Court heard argument on the motion and, the

same day, denied it via an oral opinion. In doing so, the District Court did not proceed

past the first prong of the familiar four-prong test for a preliminary injunction: likelihood

of success on the merits. The Court recognized that, to prevail on its Lanham Act claims,

Everett had to “demonstrate that (1) it had a valid and legally protectable mark; (2) [that]

it owns that mark; and (3) [that Vertical’s] use of the mark to identify goods or services

causes a likelihood of confusion.” A & H Sportswear, Inc. v. Victoria’s Secret Stores,

Inc. (A & H V), 237 F.3d 198, 210 (3d Cir. 2000) (brackets added). Because there was no

dispute as to the first two of these elements, the District Court confined its analysis to the

question of whether consumers were likely to be confused by the marks “STROVITE”

and “CORVITE,” determining that the issue was governed by what is now known as the

ten “Lapp Factors,” in reference to our decision in Interpace Corp. v. Lapp, Inc., 721 F.2d

460 (3d Cir. 1983). After examining these factors, which are set forth below, the Court

concluded that there was no likelihood of confusing “STROVITE” with “CORVITE”

and, therefore, that Everett was unlikely to succeed on the merits.

       Everett now appeals, arguing that the District Court made numerous errors of law

in applying the Lapp Factors and that, therefore, it abused its discretion in denying

Everett’s motion for a preliminary injunction. Everett asks that we either vacate the

its § 32 and § 43(a) trademark and unfair competition claims as to the use of
“STROVITE” and “CORVITE.”

                                              6
District Court’s order and remand with instructions consistent with Everett’s view of the

law or, better yet, that we enter a preliminary injunction ourselves. We choose neither

option because we conclude that the District Court did not abuse its discretion in denying

Everett’s motion.

       II.    Jurisdiction and Standard of Review

       We have jurisdiction to review this interlocutory appeal under 28 U.S.C.

§ 1292(a)(1). “We review the District Court’s factual determinations for clear error, but

we give plenary review to its legal conclusions.” A & H V, 237 F.3d at 210. “We review

the denial of a preliminary injunction for an ‘abuse of discretion, an error of law, or a

clear mistake in the consideration of proof.’” Kos Pharms., Inc. v. Andrx Corp., 369 F.3d

700, 708 (3d Cir. 2004) (quoting Am. Tel. & Tel. Co. v. Winback & Converse Program,

Inc., 42 F.3d 1421, 1427 (3d Cir. 1994)). As mentioned above, the crucial question

before the District Court was whether Everett has shown a likelihood that consumers

would confuse the two marks. In reviewing the District Court’s analysis, we are mindful

that “[l]ikelihood of confusion is a factual question . . . but legal principles govern what

evidence may, or must, be considered by the District Court in reaching that conclusion,

and also what standards apply to its determination.” A & H V, 237 F.3d at 210.

                                              7
       III.   Applicable Law

       To obtain a preliminary injunction, Everett had the burden of showing “(1) a

likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction

is denied; (3) that granting preliminary relief will not result in even greater harm to the

non-moving party; and (4) that the public interest favors such relief.” Kos, 369 F.3d at

708 (citations and quotations omitted).

       With respect to the first element, neither party disputes the law governing the

merits of this case: Everett had the burden before the District Court of showing that

“STROVITE” is a “valid and legally protectable mark,” that Everett owns the mark and

that Vertical’s use of the mark causes a “likelihood of confusion” in the marketplace.

Both parties continue to agree that Everett has satisfied the first two of these elements.

The question, therefore, is whether the District Court erred in finding that Everett had

failed to show a likelihood of confusion between the two marks.

       A “likelihood of confusion” exists when “‘consumers viewing the mark would

probably assume that the product or service it represents is associated with the source of a

different product or service identified by a similar mark.’” A & H V, 237 F.3d at 211

(quoting Dranoff-Perlstein Assocs. v. Sklar, 967 F.2d 852, 862 (3d Cir. 1992)). The

question is not whether a court could imagine that any consumer might possibly be

confused by the defendant’s mark but, rather, whether “an appreciable number of

ordinarily prudent consumers of the type of product in question are likely to be confused

                                              8
as to the source of the goods.” 4 Versa Prod. Co., Inc. v. Bifold Co. (Mfg.) Ltd., 50 F.3d

189, 200 (3d Cir. 1995) (emphasis added).

       In Lapp, we identified ten factors to which a court may look to resolve such

questions. Although these factors were initially designed for cases involving non-

competing goods, in A & H V we adapted them for use in competing-goods cases, such as

this one. See A & H V, 237 F.3d at 212-213. These factors are:

       (1) the degree of similarity between the owner’s mark and the alleged
       infringing mark;
       (2) the strength of the owner’s mark;
       (3) the price of the goods and other factors indicative of the care and
       attention expected of consumers when making a purchase (i.e., “consumer
       sophistication”);
       (4) the length of time the defendant has used the mark without evidence of
       actual confusion arising;
       (5) the intent of the defendant in adopting the mark;
       (6) the evidence of actual confusion;
       (7) whether the goods, competing or not competing, are marketed through
       the same channels of trade and advertised through the same media;
       (8) the extent to which the targets of the parties’ sales efforts are the same;

  4
    In Kos, the Court questioned whether the appropriate standard for cases involving
drugs, such as Kos itself, was “possibility of confusion” rather than “likelihood of
confusion.” Kos, 369 F.3d at 716 n.13. Although Kos never resolved the question, both
of the parties in that case agreed that “likelihood of confusion” was the proper standard.
Id. However, in an earlier iteration of A & H, the Court identified the lack of clarity over
the standard and held, definitively, that “the appropriate standard for determining
trademark infringement under the Lanham Act is likelihood of confusion.” A & H
Sportswear, Inc. v. Victoria’s Secret Stores, Inc. (A & H IV), 166 F.3d 197, 205 (3d Cir.
1999). Although A & H IV did not involve drugs, there is no question that the Court’s
intent was to put to rest a long-running, and much criticized, ambiguity in our prior law.
See 3 J. McCarthy, Trademarks and Unfair Competition, § 23:3. Regardless, neither
Everett nor Vertical suggest now that the standard is anything other than “likelihood of
confusion.”

                                              9
       (9) the relationship of the goods in the minds of consumers, whether
       because of the near-identity of the products, the similarity of function, or
       other factors; and
       (10) other facts suggesting that the consuming public might expect the prior
       owner to manufacture both products, or expect the prior owner to
       manufacture a product in the defendant’s market, or expect the prior owner
       is likely to expand into the defendant’s market.

See Kos, 369 F.3d at 709 (citing A & H V, 237 F.3d at 215).

       Although we have encouraged the use of these factors, a district court need not

engage in a precise accounting of each and every one. “None of these factors is

determinative in the likelihood of confusion analysis and each factor must be weighed

and balanced one against the other.” Checkpoint Sys., Inc. v. Check Point Software

Techs., Inc., 269 F.3d 270, 280 (3d Cir. 2001). Although, this “‘is not to say that all

factors must be given equal weight.’” Kos, 369 F.3d at 709 (quoting Fisons Horticulture,

Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 476 n.11 (3d Cir. 1994)). Instead, “‘different

factors may properly be accorded different weights depending on the particular factual

setting. A district court should utilize the factors that seem appropriate to a given

situation.’” Kos, 369 F.3d at 709 (quoting A & H V, 237 F.3d at 215). Importantly,

however, “a district court may, if it so chooses, examine only mark similarity for directly

competing goods.” A & H V, 237 F.3d at 214. Indeed, the “single most important factor

in determining likelihood of confusion is mark similarity.” Id. at 216.

                                             10
       IV.     Discussion

       Everett argues that the District Court erred in its analysis by, inter alia, failing to

consider and appropriately weigh all ten Lapp factors. Overall, we think that the District

Court, while it may have focused on certain aspects more than others,5 did not abuse its

discretion in finding a lack of confusion. We so conclude based not only on the District

Court’s reasoning and result, but also because we think the District Court overstated the

similarity of the marks – the “single most important factor.”

       In analyzing the first Lapp factor, the District Court said:

              They each have obvious similarity of a ‘vite’ at the end of the [sic].
       Name, combined with the vite, which the parties seem to agree relates to
       vitamins, is the arbitrary one syllable prefix C-O-R in one case, and
       S-T-R-O in the other. The combination creates an arbitrary arc and name,
       even though the defendant attributes the word core, C-O-R-E, as the source
       of the C-O-R in Corvite. Thus, there are similarities. The use of the vite,
       and an arbitrary one syllable prefix which has some element of similarity,
       C-O-R/S-T-R-O, bearing some superficial relationship, as evidenced by my
       previous mispronunciation of Corvite as Crovite.

Appx. at 18.

       However, when determining mark similarity, “the general rule that marks should

be viewed in their entirety does not undermine the common-sense precept that the more

forceful and distinctive aspects of a mark should be given more weight, and the other

  5
   The District Court may have overemphasized misdispensing as compared to source
confusion and concentrated too much on consumer sophistication. See, e.g., Kos, 369
F.3d at 718 (“There is no reason to believe that medical expertise as to products will
obviate confusion as to source or affiliation or other factors affecting good will.”).

                                              11
aspects less weight.” A & H V, 237 F.3d at 216. See also Country Floors, Inc. v. P’ship

Composed of Gepner and Ford, 930 F.2d 1056, 1065 (3d Cir. 1991) (quoting Giant Food,

Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565, 1570 (Fed. Cir. 1983) (“When

comparing two marks each must be viewed in its entirety, although ‘one feature of a mark

may be more significant than other features, and it is proper to give greater force and

effect to that dominant feature.’”); 3 J. McCarthy, Trademarks and Unfair Competition,

§ 23:48 (the “inclusion of a [common, descriptive] suffix may alone be an insufficient

basis to find a likelihood of confusion where the initial portions of the mark are

sufficiently indistinguishable”).

       Here, the “VITE” portion of both marks is a commonly understood descriptive

term – calling to mind “vitamin” – of little independent force or distinctiveness that

should have been given lesser weight than the marks’ more distinctive aspects – the

“COR” and “STRO” prefixes. Therefore, the District Court should have focused to a

greater extent on “COR” and “STRO” when determining the marks’ similarity. In our

view, a comparison of these prefixes does not give rise to the conclusion that the marks

are similar or likely to confuse. See Tektronix, Inc. v. Daktronics, Inc., 187 U.S.P.Q. 588

(T.T.A.B. 1975), aff’d, 534 F.2d 915, 189 U.S.P.Q. (C.C.P.A. 1976) (finding no

likelihood of confusion between “TEKTRONIX” and “DAKTRONICS” in part because

the suffix “TRONIX”/“TRONICS” merely indicates that the goods are electronic in

nature); Am. Cyanamid Corp. v. Connaught Labs., Inc., 800 F.2d 306 (2d Cir. 1986)

                                             12
(finding no likelihood of confusion between “HibVAX” and “HibIMMUNE” in part

because the term “Hib” signified that the respective vaccines at issue were designed to

treat haemophilus influenza type b); Cutter Labs., Inc. v. Air Prods. & Chems., Inc., 189

U.S.P.Q. 108 (T.T.A.B. 1975) (finding no likelihood of confusion between

“STERIFLEX” and “RESIFLEX” in part because the suffix “FLEX” is a descriptive term

indicating the flexible nature of the product); Polaroid Corp. v. Oculens, Ltd., 196

U.S.P.Q. 836 (T.T.A.B. 1977) (finding no likelihood of confusion between

“POLAROID” and “FILTEROID” in part because the term “OID” is a common one

indicating “resemblance” or “likeness”).6 See also 3 J. McCarthy, Trademarks and

Unfair Competition, § 23:48 (setting forth numerous other similar cases).

       Therefore, the District Court did not err in concluding that Everett was unlikely to

succeed on the merits and did not abuse its discretion in denying Everett’s motion for a

preliminary injunction.

       V.     Conclusion

       For these reasons, we will AFFIRM the ruling of the District Court.

________________

  6
   Although Tektronix, Cutter Labs., and Polaroid involved Lanham Act § 2(d) claims,
“the standard applied is the same ‘likelihood of confusion’ rule applicable to the test of
trademark infringement.” 3 J. McCarthy, Trademarks and Unfair Competition, § 23:78.

                                            13