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From Intellectual Property Law Daily, February 27, 2019

Galderma Labs deemed to be owner of skin care delivery system ‘Restoraderm’ mark

By Robert B. Barnett Jr., J.D.

The Third Circuit ruled that Galderma Laboratories owned the trademark to "Restoraderm" pursuant to a 2002 contract between Galderma’s predecessor in interest and the individual inventor of "Restoraderm," reversing a lower court ruling that the inventor owned the trademark because a subsequent 2004 contract superseded the 2002 agreement.

A federal district court’s ruling that an individual inventor owned the trademark to "Restoraderm," a skin care delivery system, has been reversed by the U.S. Court of Appeals in Philadelphia, which instead found that a 2002 agreement between the inventor and CollaGenex, his corporate partner, clearly transferred all trademark rights to CollaGenex. A 2004 agreement, which the lower court ruled had superseded the 2002 agreement, changed nothing because it did not address trademarks. As a result, all claims against Galderma Laboratories, CollaGenex’s successor in interest, were dismissed because they depended upon a finding that the inventor owned the trademark (Skold v. Galderma Laboratories L.P., February 26, 2019, Jordan, K.).

Thomas Skold invented a proprietary drug-delivery formulation for use in skin-care products that he called "Restoraderm." In 2002, he partnered with CollaGenex to bring "Restoraderm" to market. The contract they signed vested all trademarks, including Restoraderm, exclusively in CollaGenex (Skold had not at this point sought to trademark Restoraderm). The agreement also contained a provision stating that all vested rights would outlive the term of the contract. CollaGenex, with Skold’s cooperation, then registered the Restoraderm mark. In 2004, the two parties signed a new contract, in which Skold agreed to transfer Restoraderm intellectual property and related goodwill to CollaGenex. In the agreement, intellectual property was defined as patent rights and associated know-how.

Galderma bought CollaGenex in 2008, acquiring the rights to Restoraderm. After deciding to use Restoraderm on products other than the ones using Skold’s technology, Galderma terminated the 2004 agreement. Skold found other partners for his skin-care technology but he did not use the Restoraderm mark.

In 2014, Skold sued Galderma in Pennsylvania federal court, asserting claims for trademark infringement, unfair competition, and false advertising under the Lanham Act, as well as state law claims for breach of contract, unfair competition, and unjust enrichment. The trial court denied Galderma’s motion for summary judgment on ownership of the Restoraderm mark, finding that the 2004 agreement apparently voided Galderma’s ownership rights in the mark. More specifically, the trial court said that a contract provision in the 2004 agreement ("Skold shall sell, transfer, and deliver to CollaGenex...all goodwill, if any, relating to the [Restoraderm intellectual property]") created a factual issue as to ownership.

At trial, the jury found that Skold owned the mark, and then, in an odd combination of verdicts, found (1) against Skold on the infringement and unfair competition claims because no likelihood of confusions was shown (even though the identical word mark was being used), (2) against Skold on the false advertising claim because there was no capacity to deceive, (3) for Skold on unjust enrichment, and (4) against Skold on all other claims. No damages were awarded. Skold appealed and Galderma cross-appealed.

Trademark ownership. Everything on appeal depended upon who was the proper owner of the Restoraderm mark. The Third Circuit concluded that the 2002 agreement unambiguously transferred the mark to Galderma’s predecessor in interest. Upon registration of the mark, ownership was vested in that predecessor. Even if the 2004 agreement completely superseded the 2002 agreement, the court said, the mark was still vested in the predecessor. As a result, the lower court should never have allowed the ownership issue to go to the jury.

The 2002 agreement contained a provision stating that termination of the 2002 agreement "shall not affect in any manner vested rights of either party." As a result, the mark was permanently transferred to the predecessor, once application to register the mark was made. The court further noted that the 2004 agreement did nothing to change that fact. Even Skold admitted that the 2004 agreement did not cover trademarks. Rather than voiding mark ownership, the 2004 agreement confirmed it. Based on the unambiguous language in the 2002 agreement, Galderma became the rightful owner of the Restoraderm mark when it purchased CollaGenex, and it remained so after the 2002 agreement was terminated, which the 2004 agreement did not alter. As a result, the court reversed the unjust enrichment verdict, and it confirmed the lower court’s judgment in all other respects.

This case is Nos. 17-3148 and 17-3231.

Attorneys: Bruce W. Clark (Clark Michie LLP) for Thomas Skold. Jeffrey M. Becker (Haynes and Boone, LLP) and Frederick A. Tecce (Ice Miller LLP) for Galderma Laboratories LP, Galderma Laboratories Inc., Galderma SA, and Nestle Skin Health SA.

Companies: Galderma Laboratories LP; Galderma Laboratories Inc.; Galderma SA; Nestle Skin Health SA

MainStory: TopStory Trademark DelawareNews NewJerseyNews PennsylvaniaNews

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