Belmora LLC v. Bayer Consumer Care Ag,

819 F.3d 697 (4th Cir. 2016)

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Nature of the Case

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Facts

P 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. Sales totaled hundreds of millions of dollars, with a portion of the sales occurring in Mexican cities near the United States border. P never marketed or sold its FLANAX in the United States. P's sister company, BHC, sells naproxen sodium pain relievers under the brand ALEVE in the United States market. D began selling naproxen sodium tablets in the United States as FLANAX in 2004. D registered the FLANAX mark and made its packaging mimic P's Mexican FLANAX packaging. D made statements implying that its FLANAX brand was the same FLANAX product sold by P in Mexico. D's sales script stated that D 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.' P petitioned the TTAB to cancel D's registration in that D violated Article 6bis of the Paris Convention 'as made applicable by Sections 44(b) and (h) of the Lanham Act.' P also sought cancellation under § 14(3) of the Lanham Act because D had used the FLANAX mark 'to misrepresent the source of the goods [on] which the mark is used.' The TTAB dismissed the Article 6bis claim because it was not self-executing. The TTAB ordered cancellation under 14(3). P filed suit alleging that 1) it was injured by D's false association with its FLANAX product in violation of Lanham Act § 43(a)(1)(A), and 2) P and BHC were both injured by D's false advertising of FLANAX under § 43(a)(1)(B). The complaint also alleged three claims under California state law. D appealed the TTAB's cancellation order. The California case was transferred to the Eastern District of Virginia and consolidated with D's pending action. The district court issued a memorandum opinion and order ruling in favor of D across the board. It held that the Lanham Act does not allow the owner of a foreign mark that is not registered in the United States and who 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. P appealed. At the core of the district court's decision was its conclusion that 1) P's claims fell outside the Lanham Act's 'zone of interests' - and are not cognizable -- 'because P does not possess a protectable interest in the FLANAX mark in the United States,' 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.'