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Combe Inc. v. Dr. August Wolff Gmbh & Co. KG Arzneimittel

United States District Court, E.D. Virginia, Alexandria Division

March 28, 2018

COMBE INC., Plaintiff,
v.
DR. AUGUST WOLFF GMBH & CO. KG ARZNEIMITTEL, Defendant.

          MEMORANDUM OPINION

          T.S. Ellis, III United States District Judge.

         Defendant, a German manufacturer of medicinal, cosmetic and dermatological products, filed an application with the United States Patent & Trademark Office (“PTO”) Trademark Trial and Appeal Board (“TTAB”) to register the mark VAGISAN for use on pharmaceutical and sanitary preparations in the United States. Plaintiff, a domestic manufacturer of competing products sold under the registered mark VAGISIL, filed an opposition to defendant's application. The TTAB ultimately ruled in favor of defendant, finding there was no likelihood of confusion between plaintiff's VAGISIL mark and defendant's proposed VAGISAN mark. Plaintiff now appeals this TTAB decision pursuant to 15 U.S.C. § 1071(b)(1) and, as that statute permits, asserts additional federal and state claims against defendant for trademark infringement, trademark dilution, and unfair competition.

         Defendant now seeks dismissal of these additional claims, arguing that the complaint has not alleged facts to establish the statutorily-required “use in commerce” of the allegedly infringing mark. At issue, therefore, on defendant's threshold dismissal motion pursuant to Rule 12(b)(6), Fed. R. Civ. P., is whether plaintiff can sue defendant for trademark infringement, dilution, or unfair competition where, as here, a defendant has not sold or transported a good with the allegedly infringing mark in Virginia, or anywhere in the United States.

         I.[1]

         Plaintiff, Combe Incorporated, is a Delaware corporation and a leading maker of personal-care products for men and women. In particular, since approximately 1973, plaintiff has offered and sold a wide variety of women's personal care products, including medicated creams, moisturizers, deodorant powders, wipes, gels, washes and other products, under the trademark VAGISIL. Defendant, Dr. August Wolff GmbH & Co. KG Arzneimmitel, is a German limited liability partnership that manufactures medicinal, cosmetic and dermatological products, including feminine products under the label VAGISAN. Defendant maintains its headquarters in Bielefeld, Germany and has no offices or employees in the United States. Defendant's products are authorized for sale primarily in Belgium, Bulgaria, Estonia, Finland, Germany, Iraq, Iran, Jordan, Croatia, Lithuania, Latvia, Austria, Poland, Portugal, Switzerland, Serbia/Montenegro, Slovenia, Czech Republic, Turkey, Hungary, and the United Kingdom. At this time, defendant has not yet sold any products in the United States but has taken the following steps toward entering the United States market:[2]

• since October 25, 2011, defendant has maintained a website at “www.vagisan.com” with links to third party pharmacies where consumers can purchase products bearing the VAGISAN mark. Defendant's products are also available for purchase via third party pharmacies on Amazon.com.
• on January 24, 2012, defendant filed United States Trademark Application Serial No. 79/111, 922 (“the '922 Application”) with the PTO to register the mark VAGISAN for “pharmaceutical preparations, namely, vaginal moisturizers, vaginal anti-fungal preparations, vaginal washes; sanitary preparations for medical use; diet pills, diet capsules, diet liquid medications” and “soaps, perfumery, essential oils, cosmetics, hair lotions.” Compl. ¶ 26.
• on March 14, 2012, representatives from defendant met in Germany with representatives from a United States based drugstore, Lil Drugstore, about potential distribution of VAGISAN products.
• on January 2, 2013, defendant provided a United States based consultant with three Powerpoint slides with regulatory information on VAGISAN Moisturizing Cream and Moisturizing Cream Combi for a presentation at a J.P. Morgan Investors Conference scheduled to take place in the United States
• in June 2014, defendant filed an application with the United States Food & Drug Administration (“FDA”) for approval of the VAGISAN Vaginal Moisturizing Cream and Wash products within the United States.

         Shortly after defendant filed the '922 Application with the TTAB in 2012, plaintiff filed an opposition to the application, arguing that defendant's use of a VAGISAN mark in the United States would create a likelihood of confusion with plaintiffs existing registered VAGSIL mark. During the course of these TTAB proceedings, defendant testified under oath that it has not, and will not, sell products bearing the VAGISAN mark in the United States unless and until the trademark application dispute with plaintiff is resolved. See Thevessen TTAB Dep. 34:11-21. Following consideration of evidence submitted by the parties, the TTAB issued a final decision on June 19, 2017, dismissing plaintiffs opposition on the ground that the VAGISAN mark did not so resemble the VAGISIL mark as to be likely to cause “confusion, ” “mistake, ” or “deception” pursuant to 15 U.S.C. § 1052. See Combe Inc. v. Dr. August Wolff GmbH & Co. KG Arzneimittel, Opposition No. 91209708 (TTAB June 19, 2017).

         Thereafter, plaintiff filed this action on August 21, 2017 pursuant to 15 U.S.C. § 1071(b)(4), which allows a party otherwise entitled to appeal a TTAB decision to institute a suit against the party in interest in the Eastern District of Virginia.[3] In addition to its appeal of the final TTAB decision on registration of the VAGISAN mark, plaintiff brings the following federal and state claims against defendant:

(i) a claim for trademark infringement under the Lanham Act (Count II);
(ii) a claim for trademark infringement, false designation of origin, passing off, and unfair competition under the Lanham Act (Count III);
(iii) a claim for trademark dilution under the Lanham Act (Count IV);
(iv) a claim for trademark infringement under the Virginia Trademark and Service Mark Act (“VTSMA”) (Count V); and
(v) a claim for trademark infringement and unfair competition under Virginia common law (Count VI).

         On November 6, 2017, defendant filed a motion to dismiss each of these claims for lack of personal jurisdiction pursuant to Rule 12(b)(2), Fed. R. Civ. P.[4] An Order issued denying the Motion to Dismiss and holding that personal jurisdiction exists with respect to all plaintiff's claims. See Combe Inc. v. Dr. August Wolffe GMBH, No. 1:17-cv-935 (Dec. 1, 2017) (Order). Specifically, because personal jurisdiction plainly exists with respect to plaintiff's TTAB appeal and because the TTAB appeal and plaintiff's trademark infringement, dilution and unfair competition claims arise out of a common nucleus of operative fact, the doctrine of pendent personal jurisdiction operates to provide personal jurisdiction with respect to these claims as well. Id. at 4-8 (citing ESAB Grp. V. Centricut Inc., 126 F.3d 617, 628 (4th Cir. 1997) (recognizing that under the doctrine of pendent personal jurisdiction, courts have authority over defendants to decide both federal and state claims where the claims arise from a common nucleus of operative fact)).

         On January 2, 2018, defendant filed the Motion to Dismiss at issue here pursuant to Rule 12(b)(6), Fed. R. Civ. P., contending that plaintiff has failed to allege facts showing that defendant used the VAGISAN mark in United States commerce, and as such, plaintiff cannot state a claim for trademark infringement, dilution, or unfair competition under either the Lanham Act or Virginia law. Plaintiff opposes the motion, contending that the steps defendant has taken to enter the United States market, including seeking FDA registration, meeting with United States consultants, and developing a plan to enter the market, are ...


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