Court Opinion

ID: 3188187
Source: CourtListenerOpinion
Date Created: 2016-03-23 19:03:56.07478+00
Date Added: 2024-06-11T07:39:03.741924
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 15-1335

BELMORA LLC,

           Plaintiff - Appellee,

     v.

BAYER   CONSUMER  CARE   AG,  a   Swiss  corporation;   BAYER
HEALTHCARE LLC, a Delaware Limited Liability Company,

           Defendants - Consolidated Plaintiffs - Appellants,

     v.

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. Gerald Bruce Lee, District
Judge. (1:14-cv-00847-GBL-JFA)
Argued:   October 27, 2015                 Decided:   March 23, 2016

Before AGEE, FLOYD, and THACKER, Circuit Judges.

Vacated and remanded by published opinion. Judge Agee wrote the
opinion, in which Judge Floyd and Judge Thacker joined.

ARGUED: 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. ON BRIEF: 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.

                                  2
AGEE, Circuit Judge:

       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

                                      3
cancellation order and dismissed the false association and false

advertising claims.

     Bayer appeals those decisions.                   For the reasons outlined

below, we vacate the judgment of the district court and remand

this case for further proceedings consistent with this opinion.

                                 I. Background

     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

                               A. The FLANAX Mark

     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

     1 We have omitted internal quotation marks, alterations, and
citations here and throughout this opinion, unless otherwise
noted.

                                            4
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.

     Belmora LLC began selling naproxen sodium tablets in the

United States as FLANAX in 2004.                        The following year, Belmora

registered     the    FLANAX     mark    in       the    United   States.           Belmora’s

early   FLANAX       packaging     (below,         left)      closely       mimicked    BCC’s

Mexican    FLANAX     packaging       (right),          displaying      a    similar    color

scheme, font size, and typeface.

                                              5
J.A. 145.     Belmora later modified its packaging (below), but the

color scheme, font size, and typeface remain similar to that of

BCC’s FLANAX packaging.

Id.

      In    addition    to   using     similar    packaging,     Belmora   made

statements implying that its FLANAX brand was the same FLANAX

product sold by BCC in Mexico.              For example, Belmora circulated

a brochure to prospective distributors that stated,

      For generations, Flanax has been a brand that Latinos
      have turned to for various common ailments.   Now you
      too can profit from this highly recognized topselling
      brand among Latinos.   Flanax is now made in the U.S.
      and continues to show record sales growth everywhere
      it is sold. Flanax acts as a powerful attraction for
      Latinos by providing them with products they know,
      trust and prefer.

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

                                        6
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.

                                   B. Proceedings Below

                                             1.

       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

                                             7
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.

                                               2.

     Shortly after the TTAB’s ruling, Bayer filed suit in the

Southern    District       of    California,          alleging       that    1)    BCC   was

injured by Belmora’s false association with its FLANAX product

in violation of Lanham Act § 43(a)(1)(A), and 2) BCC and BHC

were both injured by Belmora’s false advertising of FLANAX under

§ 43(a)(1)(B).       The complaint also alleged three claims under

California state law.

                                               8
      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 California case was transferred to the Eastern District

of   Virginia        and    consolidated        with      Belmora’s      pending        action.

Belmora then moved the district court to dismiss Bayer’s § 43(a)

claims under Rule 12(b)(6) and for judgment on the pleadings

under Rule 12(c) on the § 14(3) claim.                            On February 6, 2015,

after     two    hearings,         the   district         court   issued      a   memorandum

opinion and order ruling in favor of Belmora across the board.

      The       district     court       acknowledged          that   “Belmora’s        FLANAX

. . .     has    a    similar       trade   dress         to   Bayer’s    FLANAX        and    is

      2A party to a cancellation proceeding who                          is dissatisfied
with the TTAB’s decision may either “appeal to”                           the U.S. Court
of Appeals for the Federal Circuit, 15 U.S.C.                             § 1071(a), or
elect to “have remedy by a civil action” in the                          district court,
id. § 1071(b). Belmora chose the latter option.

                                                9
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 States by another party and
     used in United States commerce?

J.A. 476.        The district court concluded that “[t]he answer is

no” based on its reading of the Supreme Court’s decision in

Lexmark International, Inc. v. Static Control Components, Inc.,

134 S. Ct. 1377 (2014).              J.A. 476.        Accordingly, the district

court dismissed Bayer’s false association and false advertising

claims for lack of standing.                At the same time, it reversed the

TTAB’s § 14(3) cancellation order.

     Bayer       filed    a    timely       notice   of   appeal,         and   we     have

jurisdiction      under       28   U.S.C.    §    1291.    The      U.S.    Patent      and

Trademark    Office       (“USPTO”)     intervened        to    defend      the      TTAB’s

decision to cancel Belmora’s registration and to argue that the

Lanham Act conforms to the United States’ commitments in Article

6bis of the Paris Convention. 3

     3 The district court had agreed with the TTAB that Article
6bis does not create an independent cause of action for the
cancellation of Belmora’s FLANAX registration.      Because Bayer
appears to have abandoned its treaty claims on appeal and their
resolution is not necessary to our decision, we do not address
any issue regarding the Paris Convention arguments.

                                             10
                               II. Discussion

      We review de novo the district court’s decision to dismiss

a proceeding under Rules 12(b)(6) and 12(c), accepting as true

all well-pleaded allegations in the plaintiff’s complaint and

drawing    all    reasonable   factual        inferences   in    the   plaintiff’s

favor.     Priority Auto Grp., Inc. v. Ford Motor Co., 757 F.3d

137, 139 (4th Cir. 2014); see also Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555–56 (2007).             In ruling on a motion to dismiss,

“a court evaluates the complaint in its entirety, as well as

documents attached or incorporated into the complaint.”                    E.I. du

Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448

(4th Cir. 2011).

 A. False Association and False Advertising Under Section 43(a)

      The district court dismissed Bayer’s false association 4 and

false advertising claims because, in its view, the claims failed

to   satisfy     the   standards   set    forth    by   the     Supreme   Court   in

Lexmark.    At the core of the district court’s decision was its

conclusion that 1) Bayer’s claims fell outside the Lanham Act’s

“zone of interests” –- and are not cognizable -- “because Bayer

      4As the district court pointed out, we have sometimes
denominated   Lanham  Act   §  43(a)(1)(A)   claims   as  “false
designation” claims.    We think it preferable to follow the
Supreme Court’s terminology in Lexmark and instead refer to such
claims as those of “false association,” although the terms can
often be used interchangeably.

                                         11
does not possess a protectable interest in the FLANAX mark in

the United States,” J.A. 485, and 2) that a “cognizable economic

loss under the Lanham Act” cannot exist as to a “mark that was

not used in United States commerce.”         J.A. 488-89.

       On appeal, Bayer contends these conclusions are erroneous

as a matter of law because they conflict with the plain language

of § 43(a) and misread Lexmark.

                                     1.

       “While much of the Lanham Act addresses the registration,

use, and infringement of trademarks and related marks, § 43(a)

. . .   goes    beyond   trademark   protection.”        Dastar    Corp.   v.

Twentieth Century Fox Film Corp., 539 U.S. 23, 28-29 (2003).

Written in terms of the putative defendant’s conduct, § 43(a)

sets    forth   unfair   competition      causes   of   action    for   false

association and false advertising:

       Any person who, on or in connection with any goods or
       services, or any container for goods, uses in commerce
       any word, term, name, symbol, or device, or any
       combination thereof, or any false designation of
       origin, false or misleading description of fact, or
       false or misleading representation of fact, which --

           (A) [False Association:] is likely to cause
           confusion, or to cause mistake, or to deceive as
           to the affiliation, connection, or association of
           such person with another person, or as to the
           origin, sponsorship, or approval of his or her
           goods, services, or commercial activities by
           another person, or

                                     12
            (B)    [False    Advertising:]    in    commercial
            advertising   or   promotion,  misrepresents   the
            nature, characteristics, qualities, or geographic
            origin of his or her or another person’s goods,
            services, or commercial activities,

     shall be liable in a civil action by any person who
     believes that he or she is or is likely to be damaged
     by such act.

Lanham Act § 43(a)(1), 15 U.S.C. § 1125(a)(1).                            Subsection A,

which    creates    liability      for     statements       as       to   “affiliation,

connection, or association” of goods, describes the cause of

action    known    as    “false    association.”            Subsection          B,     which

creates     liability        for      “misrepresent[ing]                  the        nature,

characteristics,        qualities,    or       geographic    origin”            of    goods,

defines the cause of action for “false advertising.”

     Significantly,       the     plain    language     of       §    43(a)      does    not

require that a plaintiff possess or have used a trademark in

U.S. commerce as an element of the cause of action.                                  Section

43(a) stands in sharp contrast to Lanham Act § 32, which is

titled as and expressly addresses “infringement.”                               15 U.S.C.

§ 1114 (requiring for liability the “use in commerce” of “any

reproduction,      counterfeit,      copy,      or   colorable        imitation         of   a

registered mark” (emphasis added)).                  Under § 43(a), it is the

defendant’s use in commerce -- whether of an offending “word,

term, name, symbol, or device” or of a “false or misleading

description [or representation] of fact” -- that creates the

injury under the terms of the statute.                   And here the alleged

                                          13
offending “word, term, name, symbol, or device” is Belmora’s

FLANAX mark.

     What § 43(a) does require is that Bayer was “likely to be

damaged” by Belmora’s “use[] in commerce” of its FLANAX mark and

related advertisements.    The    Supreme      Court    recently   considered

the breadth of this “likely to be damaged” language in Lexmark,

a false advertising case arising from a dispute in the used-

printer-cartridge market.     134 S. Ct. at 1383, 1388.             The lower

courts in Lexmark had analyzed the case in terms of “prudential

standing” -– that is, on grounds that are “prudential” rather

than constitutional.   Id. at 1386.           The Supreme Court, however,

observed that the real question in Lexmark was “whether Static

Control has a cause of action under the statute.”                Id. at 1387.

This query, in turn, hinged on “a straightforward question of

statutory   interpretation”      to   which     it     applied   “traditional

principles” of interpretation.             Id. at 1388.      As a threshold

matter, the Supreme Court noted that courts must be careful not

to import requirements into this analysis that Congress has not

included in the statute:

     We do not ask whether in our judgment Congress should
     have authorized Static Control’s suit, but whether
     Congress in fact did so. Just as a court cannot apply
     its independent policy judgment to recognize a cause
     of action that Congress has denied, it cannot limit a
     cause of action that Congress has created merely
     because ‘prudence’ dictates.

                                      14
Id.   The Court concluded that § 43(a)’s broad authorization --

permitting suit by “any person who believes that he or she is or

is likely to be damaged” -- should not be taken “literally” to

reach the limits of Article III standing, but is framed by two

“background principles,” which may overlap.       Id.

      First, a plaintiff’s claim must fall within the “zone of

interests” protected by the statute.     Id.     The scope of the zone

of interests is not “especially demanding,” and the plaintiff

receives the “benefit of any doubt.”         Id. at 1389.   Because the

Lanham Act contains an “unusual, and extraordinarily helpful”

purpose statement in § 45, identifying the statute’s zone of

interests “requires no guesswork.”     Id.    Section 45 provides:

      The intent of this chapter is to regulate commerce
      within the control of Congress by making actionable
      the deceptive and misleading use of marks in such
      commerce; to protect registered marks used in such
      commerce from interference by State, or territorial
      legislation; to protect persons engaged in such
      commerce against unfair competition; to prevent fraud
      and deception in such commerce by the use of
      reproductions,   copies,  counterfeits,  or   colorable
      imitations of registered marks; and to provide rights
      and remedies stipulated by treaties and conventions
      respecting   trademarks,   trade  names,   and   unfair
      competition entered into between the United States and
      foreign nations.

Lanham Act § 45, 15 U.S.C. § 1127. 5

      5In the same section, the Lanham Act defines “commerce” as
“all commerce which may lawfully be regulated by Congress.”
Lanham Act § 45, 15 U.S.C. § 1227. We have previously construed
this phrase to mean that the term is “coterminous with that
(Continued)
                                15
       The Supreme Court observed that “[m]ost of the enumerated

purposes are relevant to a false-association case,” while “a

typical      false-advertising        case    will      implicate     only      the   Act’s

goal   of     ‘protecting     persons        engaged     in    commerce      within      the

control of Congress against unfair competition.’”                          Lexmark, 134

S. Ct. at 1389.         The Court concluded “that to come within the

zone    of    interests      in   a    suit       for   false       advertising       under

[§ 43(a)], a plaintiff must allege an injury to a commercial

interest in reputation or sales.”                 Id. at 1390.

       The    second    Lexmark       background         principle         is     that    “a

statutory      cause    of    action     is       limited      to   plaintiffs        whose

injuries are proximately caused by violations of the statute.”

Id.    The injury must have a “sufficiently close connection to

the    conduct    the   statute       prohibits.”             Id.     In    the    § 43(a)

context, this means “show[ing] economic or reputational injury

flowing directly from the deception wrought by the defendant’s

advertising; and that that occurs when deception of consumers

causes them to withhold trade from the plaintiff.”                         Id. at 1391.

commerce that Congress may regulate under the Commerce Clause of
the United States Constitution.” Int’l Bancorp, LLC v. Societe
des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d
359, 363-64 (4th Cir. 2003).    “Commerce” in Lanham Act context
is therefore an expansive concept that “necessarily includes all
the explicitly identified variants of interstate commerce,
foreign trade, and Indian commerce.”     Id. at 364 (citing U.S.
Const. art. I, § 8, cl.3); see also infra n.6).

                                             16
      The    primary       lesson       from    Lexmark is        clear:        courts     must

interpret the Lanham Act according to what the statute says.                                  To

determine        whether   a   plaintiff,           “falls       within      the   class       of

plaintiffs       whom    Congress       has     authorized        to    sue,”      we    “apply

traditional       principles       of    statutory     interpretation.”                 Id.    at

1387.      The outcome will rise and fall on the “meaning of the

congressionally enacted provision creating a cause of action.”

Id. at 1388.

      We now turn to apply these principles to the case before

us.

                                               2.

                                               a.

      We    first    address       the    position,        pressed        by    Belmora       and

adopted     by    the    district       court,      that     a    plaintiff        must   have

initially used its own mark in commerce within the United States

as a condition precedent to a § 43(a) claim.                                   In dismissing

BCC’s § 43(a) claims, the district court found dispositive that

“Bayer failed to plead facts showing that it used the FLANAX

mark in commerce in [the] United States.”                         J.A. 487.        Upon that

ground, the district court held “that Bayer does not possess a

protectable interest in the [FLANAX] mark.”                       Id.

      As    noted       earlier,    such       a    requirement         is      absent    from

§ 43(a)’s plain language and its application in Lexmark.                                  Under

                                               17
the statute, the defendant must have “use[d] in commerce” the

offending “word, term, name, [or] symbol,” but the plaintiff

need   only      “believe[]    that     he    or    she   is   or     is    likely    to    be

damaged by such act.”          Lanham Act § 43(a), 15 U.S.C. § 1125(a).

       It   is    important     to    emphasize        that     this       is   an    unfair

competition case, not a trademark infringement case.                                 Belmora

and the district court conflated the Lanham Act’s infringement

provision        in   § 32     (which        authorizes        suit    only      “by       the

registrant,” and thereby requires the plaintiff to have used its

own mark in commerce) with unfair competition claims pled in

this case under § 43(a).              Section 32 makes clear that Congress

knew how to write a precondition of trademark possession and use

into a Lanham Act cause of action when it chose to do so.                                   It

has not done so in § 43(a).              See Russello v. United States, 464

U.S.    16,      23   (1983)    (“[W]here          Congress     includes        particular

language in one section of a statute but omits it in another

section of the same Act, it is generally presumed that Congress

acts intentionally and purposely in the disparate inclusion or

exclusion.”).

       Given     that    Lexmark      advises        courts     to     adhere        to    the

statutory        language,     “apply[ing]           traditional           principles       of

statutory interpretation,” Lexmark, 134 S. Ct. at 1388, we lack

authority to introduce a requirement into § 43(a) that Congress

plainly omitted.        Nothing in Lexmark can be read to suggest that

                                             18
§ 43(a) claims have an unstated requirement that the plaintiff

have       first   used    its    own     mark    (word,     term,      name,   symbol,     or

device)       in   U.S.    commerce       before      a   cause    of    action     will   lie

against a defendant who is breaching the statute.

       The district court thus erred in requiring Bayer, as the

plaintiff, to have pled its prior use of its own mark in U.S.

commerce         when     it   is    the     defendant’s          use    of     a   mark    or

misrepresentation that underlies the § 43(a) unfair competition

cause       of   action.         Having    made       this   foundational       error,     the

district court’s resolution of the issues requires reversal. 6

       Admittedly, some of our prior cases appear to have treated

a plaintiff’s use of a mark in United States commerce as a

       6
       Even though the district court’s error in transposing
§ 43(a)’s requirements for a defendant’s actions upon the
plaintiff skews the entire analysis, the district court also
confused the issues by ill-defining the economic location of the
requisite unfair competition acts. As noted earlier, supra n.5,
a defendant’s false association or false advertising conduct
under § 43(a) must occur in “commerce within the control of
Congress.” Such commerce is not limited to purchases and sales
within the territorial limits of the United States as the
district court seems to imply at times with regard to § 43(a)
and § 14(3) claims.   See J.A. 483, 506 (as to § 14(3), stating
that “Bayer did not use the FLANAX mark in the United States”);
J.A. 487 (as to § 43(a), stating that “Bayer failed to plead
facts showing that it used the FLANAX mark in commerce in [the]
United States”).    Instead, as we explained in International
Bancorp, Lanham Act “commerce” includes, among other things,
“foreign trade” and is not limited to transactions solely within
the borders of the United States.     Int’l Bancorp, 329 F.3d at
364.   Of course, any such “foreign trade” must satisfy the
Lexmark “zone of interests” and “proximate cause” requirements
to be cognizable for Lanham Act purposes.

                                                 19
prerequisite for a false association claim.                      See Lamparello v.

Falwell, 420 F.3d 309, 313 (4th Cir. 2005) (“Both infringement

[under § 32] and false designation of origin [under § 43(a)]

have    [the     same]    five        elements.”);      People   for    the    Ethical

Treatment of Animals v. Doughney, 263 F.3d 359, 364 (4th Cir.

2001) (same); Int’l Bancorp, 329 F.3d 361 n.2 (“[T]he tests for

trademark        infringement         and     unfair     competition     . . .     are

identical.”); Lone Star Steakhouse & Saloon v. Alpha of Va.,

Inc., 43 F.3d 922, 930 (4th Cir. 1995) (“[T]o prevail under

§§ 32(1) and 43(a) of the Lanham Act for trademark infringement

and     unfair     competition,            respectively,     a   complainant      must

demonstrate       that   it     has    a    valid,   protectible   trademark[.]”).

However, none of these cases made that consideration the ratio

decidendi of its holding or analyzed whether the statute in fact

contains such a requirement.                  See, e.g., 5 J. Thomas McCarthy,

Trademarks       and     Unfair       Competition       § 29:4   (4th    ed.     2002)

(observing that International Bancorp merely “assumed that to

trigger Lanham Act § 43(a), the plaintiff’s mark must be ‘used

in commerce’”).          Moreover, all of these cases predate Lexmark,

which     provides        the     applicable           Supreme   Court        precedent

interpreting § 43(a).             See U.S. Dep’t of Health & Human Servs.

v. Fed. Labor Relations Auth., 983 F.2d 578, 581 (4th Cir. 1992)

(“A decision by a panel of this court, or by the court sitting

                                              20
en banc, does not bind subsequent panels if the decision rests

on authority that subsequently proves untenable.”).

     Although the plaintiffs’ use of a mark in U.S. commerce was

a fact in common in the foregoing cases, substantial precedent

reflects that § 43(a) unfair competition claims come within the

statute’s     protectable          zone        of   interests          without     the

preconditions     adopted     by   the    district      court    and    advanced    by

Belmora.     As the Supreme Court has pointed out, § 43(a) “goes

beyond trademark protection.”              Dastar Corp., 539 U.S. at 29.

For example, a plaintiff whose mark has become generic –- and

therefore not protectable –- may plead an unfair competition

claim   against   a   competitor      that      uses    that    generic    name    and

“fail[s]    adequately   to    identify        itself    as    distinct    from    the

first organization” such that the name causes “confusion or a

likelihood of confusion.”          Blinded Veterans Ass’n v. Blinded Am.

Veterans Found., 872 F.2d 1035, 1043 (D.C. Cir. 1989); see also

Kellogg Co. v. Nat’l Biscuit Co., 305 U.S. 111, 118-19 (1938)

(requiring the defendant to “use reasonable care to inform the

public of the source of its product” even though the plaintiff’s

“shredded wheat” mark was generic and therefore unprotectable);

Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 203-04 (1896)

(same, for “Singer” sewing machines).

                                          21
       Likewise, in a “reverse passing off” case, the plaintiff

need not have used a mark in commerce to bring a § 43(a) action. 7

A reverse-passing-off plaintiff must prove four elements: “(1)

that the work at issue originated with the plaintiff; (2) that

origin of the work was falsely designated by the defendant; (3)

that       the   false   designation   of   origin   was   likely   to   cause

consumer confusion; and (4) that the plaintiff was harmed by the

defendant’s false designation of origin.”              Universal Furniture

Int’l, Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 438

(4th Cir. 2010).          Thus, the plaintiff in a reverse passing off

case must plead and prove only that the work “originated with”

him -- not that he used the work (which may or may not be

associated with a mark) in U.S. commerce.            Id.

       The generic mark and reverse passing off cases illustrate

that § 43(a) actions do not require, implicitly or otherwise,

that a plaintiff have first used its own mark in United States

commerce.        If such a use were a condition precedent to bringing

a § 43(a) action, the generic mark and reverse passing off cases

could not exist.

       7
       Reverse passing off occurs when a “producer misrepresents
someone else’s goods or services as his own,” in other words,
when the defendant is selling the plaintiff’s goods and passing
them off as originating with the defendant. Universal Furniture
Int’l, Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 438
(4th Cir. 2010) (quoting Dastar Corp., 539 U.S. at 28 n.1).

                                       22
     In     sum,   the    Lanham   Act’s   plain   language     contains   no

unstated requirement that a § 43(a) plaintiff have used a U.S.

trademark     in   U.S.   commerce   to    bring   a   Lanham    Act   unfair

competition claim.        The Supreme Court’s guidance in Lexmark does

not allude to one, and our prior cases either only assumed or

articulated as dicta that such a requirement existed.              Thus, the

district court erred in imposing such a condition precedent upon

Bayer’s claims. 8

     As Bayer is not barred from making a § 43(a) claim, the

proper Lexmark inquiry is twofold.             Did the alleged acts of

unfair competition fall within the Lanham Act’s protected zone

of interests?      And if so, did Bayer plead proximate causation of

     8 A plaintiff who relies only on foreign commercial activity
may face difficulty proving a cognizable false association
injury under § 43(a).    A few isolated consumers who confuse a
mark with one seen abroad, based only on the presence of the
mark on a product in this country and not other misleading
conduct by the mark holder, would rarely seem to have a viable §
43(a) claim.
     The story is different when a defendant, as alleged here,
has -- as a cornerstone of its business -- intentionally passed
off its goods in the United States as the same product
commercially available in foreign markets in order to influence
purchases by American consumers.     See M. Kramer Mfg. Co. v.
Andrews, 783 F.2d 421, 448 (4th Cir. 1986) (“[E]vidence of
intentional, direct copying establishes a prima facie case of
secondary meaning sufficient to shift the burden of persuasion
to the defendant on that issue.”).          Such an intentional
deception can go a long way toward establishing likelihood of
confusion.   See Blinded Veterans, 872 F.2d at 1045 (“Intent to
deceive . . . retains potency; when present, it is probative
evidence of a likelihood of confusion.”).

                                      23
a cognizable injury?           We examine the false association and false

advertising claims in turn.

                                           b.

                                           i.

       As to the zone of interests, Lexmark advises that “[m]ost

of the [Lanham Act’s] enumerated purposes are relevant to false-

association cases.”          134 S. Ct. at 1389.               One such enumerated

purpose is “making actionable the deceptive and misleading use

of marks” in “commerce within the control of Congress.”                         Lanham

Act § 45, 15 U.S.C. § 1127; see also Two Pesos, Inc. v. Taco

Cabana,      Inc.,    505   U.S.    763,   784    n.19    (1992)       (Stevens,    J.,

concurring)      (“Trademark        law    protects      the    public     by   making

consumers confident that they can identify brands they prefer

and    can    purchase      those    brands      without       being     confused    or

misled.”).      As pled, BCC’s false association claim advances that

purpose.

       The complaint alleges Belmora’s misleading association with

BCC’s FLANAX has caused BCC customers to buy the Belmora FLANAX

in    the    United   States    instead     of   purchasing       BCC’s    FLANAX    in

Mexico.       For example, the complaint alleges that BCC invested

heavily in promoting its FLANAX to Mexican citizens or Mexican-

                                           24
Americans      in     border    areas. 9     Those     consumers     cross     into   the

United       States    and     may   purchase       Belmora      FLANAX    here   before

returning       to     Mexico.         And        Mexican-Americans        may    forego

purchasing the FLANAX they know when they cross the border to

visit Mexico because Belmora’s alleged deception led them to

purchase the Belmora product in the United States.

       In    either     circumstance,      BCC     loses    sales    revenue      because

Belmora’s      deceptive       and   misleading       use   of    FLANAX    conveys    to

consumers a false association with BCC’s product.                          Further, by

also       deceiving    distributors       and      vendors,     Belmora     makes    its

       9   Bayer alleges in its complaint that:

       11. [BCC] has sold hundreds of millions of dollars of
       its FLANAX medicines in Mexico.         This includes
       substantial sales in major cities near the U.S.-Mexico
       border.

       12. [BCC] has spent millions of dollars promoting and
       advertising the FLANAX brand in Mexico, including in
       major cities near the U.S.-Mexico border.

       13. As a result of [BCC’s] extensive sales and
       marketing, the FLANAX brand is extremely well known in
       Mexico and to Mexican-American consumers in the United
       States.

               . . . .

       30. Defendants have marketed Belmora’s FLANAX products
       by targeting Hispanic consumers likely to be familiar
       with   [BCC’s]   FLANAX   products   and   deliberately
       attempting to deceive those consumers into believing
       that Belmora’s FLANAX products are the same thing as
       the FLANAX medicines they know and trust from Mexico.

J.A. 156, 159 (Compl. ¶¶ 11-13, 30).

                                             25
FLANAX more available to consumers, which would exacerbate BCC’s

losses.     See J.A. 196 (stating in a brochure for distributors

that “Flanax is now made in the U.S.” and “acts as a powerful

attraction       for   Latinos”);        J.A.    410   (noting   a   distributor’s

concern that the product “is legal to sell in the US”).                     In each

scenario, the economic activity would be “within the control of

Congress” to regulate.        Lanham Act § 45, 15 U.S.C. § 1127.

       We thus conclude that BCC has adequately pled a § 43(a)

false association claim for purposes of the zone of interests

prong.      Its allegations reflect the claim furthers the § 45

purpose    of    preventing       “the    deceptive     and   misleading    use    of

marks” in “commerce within the control of Congress.”

                                           ii.

       Turning to Lexmark’s second prong, proximate cause, BCC has

also     alleged       injuries     that        “are   proximately       caused    by

[Belmora’s] violations of the [false association] statute.”                       134

S. Ct. at 1390.           The complaint can fairly be read to allege

“economic       or   reputational        injury    flowing    directly    from    the

deception wrought by the defendant’s” conduct.                   Id. at 1391.      As

previously noted, BCC alleges “substantial sales in major cities

near the U.S.-Mexico border” and “millions of dollars promoting

and advertising” its FLANAX brand in that region.                          J.A. 156

(Compl. ¶¶ 11-12).        Thus, BCC may plausibly have been damaged by

                                           26
Belmora’s alleged deceptive use of the FLANAX mark in at least

two ways.      As reflected in the zone of interests discussion, BCC

FLANAX customers in Mexico near the border may be deceived into

foregoing a FLANAX purchase in Mexico as they cross the border

to   shop    and    buy    the    Belmora     product        in    the    United       States.

Second, Belmora is alleged to have targeted Mexican-Americans in

the United States who were already familiar with the FLANAX mark

from their purchases from BCC in Mexico.                             We can reasonably

infer that some subset of those customers would buy BCC’s FLANAX

upon   their    return      travels    to    Mexico      if       not    for    the    alleged

deception      by   Belmora.         Consequently,           BCC    meets       the    Lexmark

pleading requirement as to proximate cause.

       BCC    may    ultimately      be     unable      to     prove      that       Belmora’s

deception      “cause[d]     [these       consumers]      to       withhold         trade   from

[BCC]” in either circumstance, Lexmark, 134 S. Ct. at 1391, but

at   the     initial      pleading    stage      we    must       draw    all       reasonable

factual inferences in BCC’s favor.                    Priority Auto Grp., 757 F.3d

at 139.      Having done so, we hold BCC has sufficiently pled a §

43(a) false association claim to survive Belmora’s Rule 12(b)(6)

motion.      The district court erred in holding otherwise.

                                            c.

       BCC   and    BHC    both   assert      § 43(a)(1)(B)             false    advertising

claims     against     Belmora.       BHC’s      claim       represents         a    “typical”

                                            27
false    advertising         case:    it    falls     within     the    Act’s    zone     of

interests by “protecting persons engaged in commerce within the

control of Congress against unfair competition.”                          Lexmark, 134

S.    Ct.    at   1389    (quoting      15      U.S.C.     § 1127).       As    a     direct

competitor to Belmora in the United States, BHC sufficiently

alleges that Belmora engaged in Lanham Act unfair competition by

using       deceptive     advertisements            that    capitalized         on     BCC’s

goodwill.         See J.A. 163 (Compl. ¶ 54) (asserting that Belmora

was   deceptive       with    “claims      in     their    marketing     materials       and

communications           with        distributors”);          Appellees’         Br.      77

(acknowledging that “BHC is a competitor of Belmora’s in the

United States naproxen sodium market” and “can in theory bring a

false advertising action against a competitor”).                            If not for

Belmora’s statements that its FLANAX was the same one known and

trusted in Mexico, some of its consumers could very well have

instead      purchased       BHC’s    ALEVE       brand.      These     lost    customers

likewise      satisfy     Lexmark’s        second    prong:      they   demonstrate       an

injury to sales or reputation proximately caused by Belmora’s

alleged conduct.

        BCC’s false advertising claim is perhaps not “typical” as

BCC is a foreign entity without direct sales in the territorial

United      States.      Nonetheless,         BCC’s      claim   advances       the    Act’s

purpose of “making actionable the deceptive and misleading use

of marks.”         Lanham Act § 45, 15 U.S.C. § 1127.                      As alleged,

                                             28
Belmora’s       advertising       misrepresents      the    nature    of    its    FLANAX

product in that Belmora implies that product is the same as

consumers purchased in Mexico from BCC and can now buy here.

        To be sure, BCC’s false advertising claim overlaps to some

degree    with    its     false    association     claim,     but    the    two    claims

address distinct conduct within the two subsections of § 43(a).

Belmora’s       alleged    false    statements       go    beyond    mere   claims      of

false association; they parlay the passed-off FLANAX mark into

misleading         statements         about        the       product’s        “nature,

characteristics, qualities, or geographic origin,” all hallmarks

of a false advertising claim.               Lanham Act 43(a)(1)(B), 15 U.S.C.

1125(a)(1)(B). 10

     Belmora’s alleged false statements intertwine closely with

its use of the FLANAX mark.                 The FLANAX mark denotes history:

Belmora claims its product has been “used [for] many, many years

in Mexico” and “Latinos have turned to” it “[f]or generations.”

J.A. 196.        FLANAX also reflects popularity: Belmora says the

product    is    “highly    recognized       [and]    top-selling.”          Id.       And

FLANAX signifies a history of quality: Belmora maintains that

Latinos “know, trust and prefer” the product.                         Id.         Each of

these     statements       by     Belmora   thus     directly       relates       to   the

     10 Because each of these claims is anchored as a factual
matter to the FLANAX mark’s history “in the Latino American
market,” we disagree with Belmora’s argument that the statements
amount to mere puffery. See J.A. 160.

                                            29
“nature,    characteristics,       qualities,           or    geographic    origin”     of

its FLANAX as being one and the same as that of BCC.                          Lanham Act

§   43(a)(1)(B),       15     U.S.C.    § 1125(a)(1)(B).                Because    these

statements are linked to Belmora’s alleged deceptive use of the

FLANAX    mark,   we    are    satisfied         that    BCC’s      false   advertising

claim, like its false association claim, comes within the Act’s

zone of interests.          As we can comfortably infer that the alleged

advertisements contributed to the lost border sales pled by BCC,

the claim also satisfies Lexmark’s proximate cause prong (for

the same reasons discussed above regarding the false association

claim).

                                            d.

     We    thus   conclude      that    the      Lanham       Act   permits    Bayer    to

proceed with its claims under § 43(a) –- BCC with its false

association claim and both BCC and BHC with false advertising

claims.      It   is   worth     noting,         as   the     Supreme   Court     did   in

Lexmark, that “[a]lthough we conclude that [Bayer] has alleged

an adequate basis to proceed under [§ 43(a)], it cannot obtain

relief     without     evidence        of    injury          proximately      caused    by

[Belmora’s alleged misconduct].                  We hold only that [Bayer] is

entitled to a chance to prove its case.”                     134 S. Ct. at 1395.

     In granting Bayer that chance, we are not concluding that

BCC has any specific trademark rights to the FLANAX mark in the

                                            30
United States.             Belmora owns that mark.             But trademark rights do

not include using the mark to deceive customers as a form of

unfair competition, as is alleged here.                            Should Bayer prevail

and    prove    its        §    43(a)    claims,       an   appropriate       remedy    might

include directing Belmora to use the mark in a way that does not

sow confusion.                 See Lanham Act § 34(a), 15 U.S.C. § 1116(a)

(authorizing injunctions based on “principles of equity”).                                  Of

course, the precise remedy would be a determination to be made

by     the   district           court    in   the      first    instance      upon     proper

evidence. 11          We       leave    any   potential      remedy      to   the    district

court’s discretion should this case reach that point.                                We only

note    that     any       remedy       should    take      into    account    traditional

trademark      principles          relating       to    Belmora’s       ownership      of   the

mark.

                       B. Cancellation Under Section 14(3)

       The     TTAB    ordered          the   cancellation         of   Belmora’s      FLANAX

trademark under § 14(3), finding that the preponderance of the

       11
       For example, a remedy might include altering the font and
color of the packaging or the “ready remedy” of attaching the
manufacturer’s name to the brand name.    Blinded Veterans, 872
F.2d at 1047.    Another option could be for the packaging to
display a disclaimer -- to correct for any deliberately created
actual confusion. See id. (“The district court could, however,
require [Blinded American Veterans Foundation] to attach a
prominent disclaimer to its name alerting the public that it is
not the same organization as, and is not associated with, the
Blinded Veterans Association.”).

                                                 31
evidence    “readily     establishe[d]          blatant       misuse     of    the     FLANAX

mark in a manner calculated to trade in the United States on the

reputation and goodwill of petitioner’s mark created by its use

in Mexico.”    J.A. 142.        In reversing that decision and granting

Belmora’s motion for judgment on the pleadings, the district

court found    that      BCC,   as   the    §    14(3)        complainant,          “lack[ed]

standing to sue pursuant to Lexmark” under both the zone of

interests    and   the    proximate    cause           prongs.      J.A.       505.      The

district court also reversed the TTAB’s holding that Belmora was

using FLANAX to misrepresent the source of its goods “because

Section 14(3) requires use of the mark in United States commerce

and Bayer did not use the FLANAX mark in the United States.”

J.A. 505-06.

     On appeal, Bayer argues that the district court erred in

overturning the TTAB’s § 14(3) decision because it “read a use

requirement    into      the    section         that     is     simply        not    there.”

Appellants’ Br. 49.         For reasons that largely overlap with the

preceding § 43(a) analysis, we agree with Bayer.

                                           1.

     Section 14(3) of the Lanham Act creates a procedure for

petitioning to cancel the federal registration of a mark that

the owner has used to misrepresent the source of goods:

     A petition to cancel a registration of a mark, stating
     the grounds relied upon, may . . . be filed as follows

                                           32
       by any person who believes that he is or will                      be
       damaged . . . by the registration of a mark . . .

             . . . .

             (3) At any time . . . if the registered mark is
             being used by, or with the permission of, the
             registrant so as to misrepresent the source of
             the goods or services on or in connection with
             which the mark is used.

Lanham Act § 14(3), 15 U.S.C. § 1064(3).                   The petitioner must

establish that the “registrant deliberately sought to pass off

its goods as those of petitioner.”             See 3 McCarthy, § 20:30 (4th

ed. 2002).

       If successful, the result of a § 14(3) petition “is the

cancellation     of    a   registration,      not    the   cancellation    of    a

trademark.”      Id. § 20:40.       Cancellation of registration strips

an owner of “important legal rights and benefits” that accompany

federal   registration,      but   it   “does    not    invalidate   underlying

common law rights in the trademark.”                Id. § 20:68; see also B &

B Hardware Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1300

(2015).

       To determine what parties § 14(3) authorizes to petition

for cancellation, we again apply the Lexmark framework.                         The

relevant language in § 14(3) closely tracks similar language

from   § 43(a)   that      the   Supreme     Court    considered   in   Lexmark:

“[A]ny person who believes that he is or will be damaged” by the

mark’s registration may petition for cancellation under § 14(3),

                                        33
just as “any person who believes that he or she is or is likely

to    be    damaged”   may   bring     an   unfair    competition      action    under

§ 43(a).       The same two-prong inquiry from Lexmark provides the

mode of analysis.

       To determine if a petitioner falls within the protected

zone of interests, we note that § 14(3) pertains to the same

conduct targeted by § 43(a) false association actions -- using

marks so as to misrepresent the source of goods.                         Therefore,

“[m]ost of the [Lanham Act’s] enumerated purposes are relevant”

to § 14(3) claims as well.             See Lexmark, 134 S. Ct. at 1389.            As

for    proximate       cause,     we   once      again     consider    whether    the

plaintiff has “show[n] economic or reputational injury flowing

directly       from    the      deception        wrought    by   the    defendant’s

[conduct].” 12     Id. at 1391.        As with § 43(a), neither § 14(3) nor

Lexmark mandate that the plaintiff have used the challenged mark

in United States commerce as a condition precedent to its claim.

See Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270,

1278 (Fed. Cir. 2014) (“In the proceedings before the Board,

       12
        The USPTO suggests that § 14(3) might require a lesser
showing of causation because it sets forth an administrative
remedy, whereas the Supreme Court based its Lexmark analysis on
common law requirements for judicial remedies.      See Empresa
Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 1275 (Fed.
Cir. 2014) (“A petitioner is authorized by statute to seek
cancellation of a mark where it has both a real interest in the
proceedings as well as a reasonable basis for its belief of
damage.”).   We need not resolve this issue for purposes of the
current decision.

                                            34
however,     Cubatabaco     need     not    own        the     mark       to     cancel       the

Registrations under [Section 14(3)].”).

                                           2.

       Applying the framework from Lexmark, we conclude that the

Lanham Act authorizes BCC to bring its § 14(3) action against

Belmora.      BCC’s cancellation claim falls within the Lanham Act’s

zone    of   interests     because    it        confronts          the    “deceptive          and

misleading use of marks.”            Lanham Act § 45, 15 U.S.C. § 1127.

And BCC has also adequately pled a proximately caused injury to

survive      Belmora’s    Rule     12(c)    motion           for    the        same       reasons

previously      discussed    for     the        false    association                and    false

advertising claims.         The district court thus erred in reversing

the    TTAB’s   decision    cancelling          the    registration            of     Belmora’s

FLANAX mark.

                                       III.

       For   the   foregoing     reasons,         we    conclude          that        Bayer    is

entitled to bring its unfair competition claims under Lanham Act

§ 43(a) and its cancellation claim under § 14(3).                              The district

court’s judgment is vacated and the case remanded for further

proceedings consistent with this opinion.

                                                                   VACATED AND REMANDED

                                           35