Wednesday, February 20, 2019

E.D. Va. Dismisses Bayer's Section 43(a) Claims but Affirms TTAB's Cancellation of Belmora's FLANAX Registration

When we last visited (here) the long-running Bayer versus Belmora battle over the mark FLANAX, the U.S. Court of Appeals for the Fourth Circuit had reversed and remanded the case to the U.S. District Court for the Eastern District of Virginia. The lower court had ruled that Bayer lacked standing to bring its Section 43(a) claims of unfair competition and its Section 14(3) claim for cancellation of Belmora's FLANAX registration, because Bayer was not using the FLANAX mark in the United States. The Fourth Circuit, however, found that under a proper reading of Lexmark, Bayer has standing for all its claims. On remand, the district court has now dismissed, on summary judgment, Bayer's Section 43(a) claims, affirmed the TTAB's Section 14(3) decision, and dismissed various counterclaims brought by Belmora. Belmora LLC v. Bayer Consumer Care AG, 338 F. Supp. 3d 477 (E.D. Va. 2018).

Belmora's FLANAX

Bayer's Section 43(a) claims: The district court found that Bayer's Section 43 claims for unfair competition and false advertising, and its similar claims under California law, were barred by the applicable statute of limitations. The court concluded that, whether it applied a three-year or four-year statute of limitations in accordance with California law (there was some split in the Ninth Circuit courts), "Bayer's filing of this action [in 2014] misses the statute of limitations by almost a decade. There are at least six different dates [in 2004, 2005, 2006, and 2009] that establish that Bayer either knew or should have known of its Lanham Act rights."

Bayer's Section 14(3) cancellation claim: With regard to the TTAB's ruling under Section 14(3), the court observed that Belmora did not produce any new credible new evidence that Belmora's principal was not aware of Bayer's Mexican FLANAX product when he chose that mark, or that Belmora's packaging and advertising was not as the Board found, and that "the Board's decision was not arbitrary, capricious, or otherwise not in conformance with the law." And so it affirmed the Board's decision.

Belmora's Counterclaims: The  court dismissed Belmora's seven counterclaims. As to the first three, for trademark infringement and unfair competition, the court found no evidence that Bayer sold its Mexican FLANAX product in the United States, and so no likelihood of confusion. As to the fourth and fifth cpunterclaims, for importation of unauthorized or infringing goods under 19 USC Section 1526 and 15 U.S.C. Section 1124, the court again pointed to the lack of evidence that Bayer imported Mexican FLANAX into the United States. The sixth counterclaim, for monopolization under Section 2 of the Sherman Act, failed due to lack of expert testimony establishing the relevant market. And the seventh counterclaim, for tortious interference with a contract or prospective economic advantage, also failed for lack of evidence that Bayer had interfered with any orders that Belmora had received.

Both parties have appealed from the district court's ruling.

Read comments and post your comment here.

TTABlog comment: This brouhaha began in 2007 at the TTAB. Belmora remains the owner of the FLANAX mark in the United States. Its ownership of the mark is not in dispute.

Text Copyright John L. Welch 2019.


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