United States District Court, E.D. Virginia, Alexandria Division
M. HILTON UNITED STATES DISTRICT JUDGE.
MATTER comes before the Court on Plaintiff-Consolidated
Defendant Belmora's Motion for Summary Judgment and
Defendant-Consolidated Plaintiff Bayer's Motion for
case arises from Bayer's claims that Belmora's FLANAX
trademark should be cancelled because Belmora deceived
customers into thinking that its FLANAX brand of pain relief
medicine is the same FLANAX brand under which Bayer has sold
pain relief medicine in Mexico for decades. The Trademark
Trial and Appeal Board ("TTAB") cancelled
Belmora's trademark. Judge Gerald Lee of the Eastern
District of Virginia reversed the TTAB's decision, which
the Fourth Circuit reviewed, vacated, and remanded. The case
is now remanded to this Court. The parties seek review of the
TTAB decision and bring additional causes of action.
is a limited liability company formed in 2002. It is owned
and operated by Jamie Belcastro. Belmora operates in the
United States and sells over-the-counter pain relief products
under the FLANAX brand name. Belmora began selling an
analgesic naproxen sodium tablet in the United States as
FLANAX in 2004. On October 6, 2003, Belmora filed an
application with the United States Patent and Trademark
Office ("PTO") to register the FLANAX mark for the
analgesic tablets. The application was published for
opposition on August 3, 2004, and the PTO issued the
registration for the FLANAX mark on February 1, 2005.
Consumer Care AG, a Swiss Corporation, Bayer Healthcare LLC,
a Delaware limited liability company, and predecessors have
sold analgesics, pharmaceutical products, and
anti-inflammatories in Mexico under the Mexican-registered
trademark FLANAX since the 1970s. Bayer does not possess a
trademark for FLANAX in the United States.
attempted to register FLANAX in the United States in 2004 but
the PTO rejected the application based on Belmora's
preexisting efforts to register the mark. Bayer has sold
hundreds of millions of dollars of FLANAX products in Mexico.
Bayer promotes FLANAX in Mexico, including in major cities
near the United States-Mexico border. The 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 was never marketed or sold in the United
States. Bayer has never received approval from the FDA to
market or sell FLANAX in the United States.
early packaging closely mimicked Bayer's Mexican FLANAX
packaging, including a similar color scheme, font size, and
typeface. Belmora has since changed its packaging,
but this modified scheme remains similar to that of
Bayer's FLANAX. In addition to similar packaging, Belmora
made statements implying that its FLANAX brand was the same
FLANAX product sold by Bayer in Mexico. Belmora's
marketing messages often suggested a historical connection
between its FLANAX and Latino customers.
the mid-2000s, no manufacturer had obtained FDA approval to
produce naproxen sodium in liquidgel form. As a result,
naproxen sodium liquidgels were not available to U.S.
customers. In 20 07, Banner Pharmacaps ("Banner")
received approval from the FDA to produce naproxen sodium
liquidgels and entered into a supply agreement with Bayer.
Bayer has since marketed Banner-manufactured naproxen sodium
liquidgels to consumers under the ALEVE brand. In 2 015,
Banner sold its rights to the naproxen sodium liquidgels to
Bionpharma. Bionpharma, as Banner's successor, was the
only FDA approved source for naproxen sodium liquidgels.
Bionpharma entered into a supply agreement with Bayer in
January 2017. In addition to Bayer, Bionpharma supplies
naproxen sodium liquidgels to national chains for private
alleges that a third party, PL Developments, agreed to
package naproxen sodium liquidgels that Belmora would sell to
consumers as a FLANAX branded product. As the only source of
naproxen sodium liquidgels, PL Developments needed to obtain
the liquidgels from Bionpharma. Belmora claims that when PL
Developments approached Bionpharma and informed it that
Belmora was the intended re-seller of the product, Bionpharma
refused to supply the product.
also alleges that Bayer is involved in grey market product
sales. Bayer de Mexico, which is not a party to this lawsuit,
lawfully sells FLANAX-branded naproxen sodium products in
Mexico. It licenses use of the FLANAX trademark from Bayer
Consumer Care AG. As the basis for its trademark
infringement, unfair competition, and Tariff Act
counterclaims, Belmora alleges that Bayer is involved in the
importation and sale of Mexican FLANAX in the United States.
29, 2007, Bayer petitioned the TTAB to cancel Belmora's
registration for the FLANAX mark. Bayer argued 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, in
addition to violating § 14(3) of the Lanham Act. Under
§ 14(3) of the Lanham Act, Bayer argued that Belmora
used the FLANAX mark to misrepresent the source of the goods
on which the mark was used.
TTAB dismissed Bayer's Article 6bis claim but allowed the
§ 14(3) claim to proceed. In 2014, after discovery and a
hearing, the TTAB issued a ruling canceling Belmora's
FLANAX registration pursuant to Section 14(3) of the Lanham
Act, 15 U.S.C. § 1064(3}. Bayer Consumer Care AG v.
Belmora LLC, 2014 WL 167914 6 (T.T.A.B. 2 014). The TTAB
concluded that Belmora had misrepresented the source of the
FLANAX goods and that the facts "d[id] not present a
close case." Id. at 32. The TTAB went on to say
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. Id. at
the TTAB's ruling, Bayer filed suit in the Southern
District of California alleging violations of the Lanham Act
as well as three claims under California state law. See
Bayer Consumer Care AG v. Belmora, LLC, No.
3:14-cv-01395 (S.D. Cal.). Shortly after, Bayer filed a
notice of voluntary dismissal because the "case was
filed in the wrong district." (Dkt. 37 at 3 n.2). On
June 9, 2014, Bayer refiled its complaint in the Central
District of California.
appealed the TTAB's cancellation order and elected to
proceed with the appeal as a civil action in the Eastern
District of Virginia. Belmora 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. Belmora also sought a
declaration that its actions had not violated the false
association and false advertising provisions of Lanham Act
§ 43(a) as alleged in Bayer's California lawsuit.
Bayer filed a counterclaim challenging the TTAB's
dismissal of its Paris Convention treaty claims.
Central District of California case was transferred and
consolidated with Belmora's pending action in the Eastern
District of Virginia. Belmora then moved to dismiss
Bayer's § 43(a) and § 14(3) claims. On February
6, 2015, the district court issued an opinion granting
Belmora's motion. The district court distilled the case
into a single question of:
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?
Belmora LLC v. Bayer Consumer Care AG, 84 F.Supp.3d
490, 495 (E.D. Va., 2015) .
district court concluded that "[t]he answer is no"
based on its reading of the Supreme Court's decision in
Lexmark Int'l, Inc. v. Static Control Components,
Inc., 134 S.Ct. 1377 (2014). The Court dismissed
Bayer's false association and false advertising claims
for lack of standing and reversed the TTAB's § 14(3)
the district court's ruling, Bayer filed a timely notice
of appeal to the Fourth Circuit. The USPTO intervened to
defend the TTAB's decision to cancel Belmora's
registration. The Fourth Circuit vacated and remanded Judge
Lee's decision, and found that in applying the
Lexmark framework, Bayer has standing to bring its
unfair competition claims under the Lanham Act § 43(a)
and its cancellation claim under § 14(3}. The Court
ruled that "the Lanham Act authorizes [Bayer] to bring
its § 14(3) action against Belmora" . . . and that
"[Bayer's] cancellation claim falls within the
Lanham Act's zone of interests because it confronts the
'deceptive and misleading use of marks'."
Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697,
715 (4th Cir. 2016). The Court went on to say that
"Bayer has also adequately pled a proximately ...