Belmora LLC v. Bayer Consumer Care AG

Addressing the issue of standing in a cancellation action at the U.S. Patent and Trademark Office’s (USPTO) Trademark Trial and Appeal Board (TTAB), the U.S. District Court for the Eastern District of Virginia reversed a TTAB decision cancelling a federal trademark registration, finding that the petitioner did not have standing under the Lanham Act to file a cancellation action based on a trademark that was not used or registered in the U.S.  Belmora LLC v. Bayer Consumer Care AG, Case No. 1:14-cv-00847 (E.D. Va., Feb. 6, 2015). (Lee, J.).

Since the 1970s, Bayer, through its predecessors in interest, has sold an analgesic product in Mexico under the name FLANAX.  Bayer owns a Mexican trademark registration for the mark FLANAX.  However, neither Bayer nor its predecessors ever marketed or sold a product under the FLANAX mark in the United States and Bayer does not own a U.S. registration for the FLANAX mark.  Belmora began offering an analgesic tablet in the U.S. under the FLANAX mark.  Belmora secured a U.S. trademark registration for FLANAX in 2005.  Bayer later petitioned to cancel Belmora’s FLANAX registration before the TTAB, in part, alleging that Belmora was using the FLANAX mark to misrepresent the source of its goods in violation of the Lanham Act.  During the proceedings, Belmora challenged Bayer’s standing to bring claims under the Lanham Act, as Bayer’s FLANAX mark is not used or registered in the United States.  The TTAB, citing the Federal Circuit’s “liberal threshold” for determining standing, held that Bayer did have standing under the Lanham Act to challenge Belmora’s registration.  The TTAB reasoned that Bayer had a real interest in protecting its Mexican mark and that Bayer would be harmed if Belmora was using the FLANAX mark to misrepresent the source of its goods.  Concluding that the evidence of record supported Bayer’s allegation that Belmora misused the FLANAX mark in a manner that traded off the reputation and goodwill of Bayer’s mark, the TTAB granted Bayer’s petition to cancel Belmora’s federal registration.  Belmora appealed.

On appeal, the Eastern District of Virginia considered whether the Lanham Act allows the owner of a foreign mark not used or registered in the United States to assert priority rights over a mark that is registered in the U.S. and used in U.S. commerce.  The court looked to the Supreme Court’s two-prong test from Lexmark International v. Static Control Components, Inc. (IP Update, Vol. 17, No. 4) to determine whether Bayer had standing to bring a claim under the Lanham Act.  First, the Court considered whether Bayer’s interests fall within the zone of interests Congress intended to protect under the Lanham Act.  Because Bayer does not own a protectable interest in the FLANAX mark in the U.S., the court found that this prong was not satisfied.  Addressing the second prong of the Lexmark Internationaltest, the court reasoned that even if Bayer did own a protectable interest in its FLANAX mark in the U.S., Bayer failed to plead sufficient facts to show Belmora’s alleged violations of the Lanham Act were the proximate cause of any economic or reputational injury to Bayer.

Based on the foregoing, the court concluded that Bayer did not have standing to challenge Belmora’s registration under the Lanham Act, reversed the TTAB’s holding and ordered that Belmora’s U.S. federal registration be reinstated.