October 27, 2015.
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.
Louis Cohn, PATTISHALL, MCAULIFFE, NEWBURY, HILLIARD &
GERALDSON LLP, Chicago, Illinois, for Appellants.
Schwimmer, LEASON ELLIS LLP, White Plains, New York, for
Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.,
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.
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.,
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
A. Israel, President, AMERICAN INTELLECTUAL PROPERTY LAW
ASSOCIATION, INC., Arlington, Virginia; Jennifer L. Kovalcik,
STITES & HARBISON, PLLC, Nashville, Tennessee, for Amicus
AGEE, FLOYD, and THACKER, Circuit Judges. Judge Agee wrote
the opinion, in which Judge Floyd and Judge Thacker joined.
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.
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.
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.
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).
The FLANAX Mark
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.
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.
145. Belmora later modified its packaging (below), but the
color scheme, font size, and typeface remain similar to that
of BCC's FLANAX packaging.
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 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
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.
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).
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.
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.
meanwhile appealed the TTAB's cancellation order and
elected to proceed with the appeal as a civil action in the
Eastern District of Virginia. 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.
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.
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
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 ...