International Brand Owner’s Standing to Sue In U.S.
Bayer vs. Belmora: 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)
In this unfair competition case, the court considered 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.
Bayer appeals those decisions. In its decision, the district court focused on a key question related to Bayer’s Lanham Act § 43(a), 15 U.S.C. § 1125(a), claim: “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?” The district court held that the answer was no, based on the district court’s interpretation of the Supreme Court’s analysis in Lexmark International, Inc. v. Static Control Components, Inc.
The 4th Circuit held the answer was yes. The court found that the plain language of the Lanham Act § 43(a) does not require the plaintiff to possess or have used the trademark in U.S. commerce. The court found that it is not the plaintiff’s use, but rather the defendant’s use in commerce—of an offending “word, term, name, symbol, or device,” or of a “false or misleading description of fact”—that creates injury under the terms of the statute. The court thus held that it was Belmora’s use of FLANAX in commerce that grounded the injury.