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From Intellectual Property Law Daily, September 12, 2018

Bayer’s infringement claims against Belmora over FLANAX mark dismissed as untimely

By Robert Margolis, J.D.

Bayer Consumer Care, AG knew or should have known that Belmora LLC had used the FLANAX trademark for pain relief products more than four years before filing suit, a federal district court in Alexandria, Virginia has held, in granting summary judgment dismissing as untimely Bayer’s Lanham Act and state law claims against Belmora. The court also held that Belmora’s Lanham Act and state law claims failed for lack of evidence that Bayer was involved in the sale of its Mexican FLANAX-brand products in the United States. The court dismissed all claims by both parties, and also upheld a Trademark Trial and Appeal Board decision canceling Belmora’s FLANAX registration (Belmora, LLC v. Bayer Consumer Care AG, September 6, 2018, Hilton, C.).

Belmora operates in the United States selling over-the-counter pain relief products using the FLANAX brand name. Belmora applied to register the FLANAX mark for analgesic tablets in October 2003, and the USPTO issued a registration for the mark in February 2005. Bayer has sold analgesics and other pharmaceutical products under the Mexican-registered FLANAX trademark since the 1970s. Though it has sold hundreds of millions of dollars of products in Mexico, including near the border with the United States, it has never been approved by the FDA to market or sell FLANAX in the United States. Belmora contends that some of Bayer’s FLANAX products are sold in the grey market in the United States.

In 2004, Bayer sought to register its FLANAX mark in the United States, but the USPTO rejected the application based on Belmora’s first-filed application. Belmora’s early FLANAX packaging was similar in appearance to Bayer’s Mexican FLANAX packaging, and though since modified, remains similar.

In 2007, Bayer petitioned the Trademark Trial and Appeal Board (TTAB) to cancel Belmora’s FLANAX registration. In 2014, the TTAB granted the petition and ordered cancellation, based on misrepresentation of source under Section 14(3). Following the TTAB’s ruling, Bayer sued Belmora in federal district court in California, alleging five claims under the Lanham Act and state law. Belmora elected to pursue its appeal of the TTAB cancellation order in federal district court in Virginia. The two cases were consolidated in Virginia. Belmora asserted counterclaims, including Lanham Act and state law claims based on allegations that Bayer was responsible for the sale of its FLANAX products in the United States.

In February 2015, the district court reversed the TTAB’s cancellation order and also dismissed false advertising and false association claims Bayer had brought against Belmora. The district court held that Bayer lacked standing because Bayer did not possess a protectable interest in the FLANAX mark in the United States. The Fourth Circuit reversed the district court, holding that Bayer did not need to use the mark in commerce within the United States as a condition precedent to filing a Lanham Act claim for unfair competition. The Supreme Court then denied certiorari. Back in the district court, each side moved for summary judgment dismissing the other side’s claims.

Bayer’s claims untimely. The court granted Belmora’s summary judgment motion and dismissed each of Bayer’s five claims, finding them barred by the applicable limitations periods. For the Lanham Act claims, the court noted that because the Act does not have its own statute of limitations and Bayer originally sued in California, it would apply the most analogous state limitations period from California. Though the court acknowledged a split in the Ninth Circuit over which "comparable" California statute to apply to a trademark infringement claim—a three-year statute based on the analogy to fraud claims, or a four-year period for state unfair competition and trademark infringement claims—it found that it did not need to choose since the claims failed even under the longer four-year statute. The court applied California’s three-year limitations period for fraud to Bayer’s Lanham Act false advertising claim, and applied three- or four-year limitations periods to Bayer’s various state law claims.

All of Bayer’s claims, including under the Lanham Act, accrued when it knew or should have known about Belmora’s use of the FLANAX mark in the United States, and the court found at least six different dates that establish Bayer knew or should have known of its rights more than four years before it filed suit. These dates range between 2004, when Bayer’s predecessor-in-interest received a letter from the USPTO as part of its failed registration attempt that cited Belmora’s earlier application, and 2009 when the USPTO registered Belmora’s trademark. Even if the latest date were chosen, Bayer did not file its lawsuit until 2014. As a result, each of the claims were untimely under the applicable three- and four-year limitations periods.

Belmora’s claims. The court also granted Bayer’s summary judgment motion and dismissed all seven of Belmora’s counterclaims against Bayer. Five of those counterclaims—for trademark infringement, unfair competition, and Tariff Act violations—failed because Belmora provided no evidence that Bayer facilitated or was responsible for the sale of its Mexican FLANAX products in the United States. Belmora’s claim for contributory liability under the Lanham Act required evidence that Bayer intentionally induced others to sell its Mexican FLANAX in the United States or knowingly supplied the products to persons selling it here. All Belmora provided was speculation that Bayer somehow facilitated the sale, which the court held was not enough to sustain its claim.

Belmora’s remaining claims for monopolization under the Sherman Act and tortious interference similarly failed for lack of evidence on key elements, the court held.

TTAB’s cancellation. Finally, the court upheld the TTAB’s decision canceling Belmora’s FLANAX registration, based on Belmora’s misrepresentation of source. The TTAB had found that Belmora knew of the use of FLANAX as a trademark in Mexico, copied Bayer’s Mexican FLANAX packaging, and invoked the reputation of Bayer’s FLANAX mark in its United States marketing campaigns. According to the court, Belmora adduced no evidence that would require it to revisit those TTAB findings.

This case is No. 1:14-cv-00847.

Attorneys: Craig Crandall Reilly (Law Office of Craig C. Reilly) for Belmora LLC. Robert J. Shaughnessy (Williams & Connolly LLP) and James Norman Bierman, Jr. (Sheppard Mullin Richter & Hampton LLP) for Bayer Consumer Care AG and Bayer HealthCare LLC.

Companies: Belmora LLC; Bayer Consumer Care AG; Bayer HealthCare LLC

MainStory: TopStory Trademark VirginiaNews

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