The U.S. Court of Appeals for the Ninth Circuit affirmed the issuance of a preliminary injunction that halted the defendant’s sale of a dietary supplement bearing the plaintiff’s trademark, but vacated the district court order since it also ordered product recall and restitution. The Ninth Circuit found that the record did not establish that the infringing product caused a substantial risk of danger to the public. Marlyn Nutraceuticals, Inc. v. Mucos Pharma GMbH & Co., Case No. 08-15101 (9th Cir., July 2, 2009) (Thomas, J.).
Mucos Pharma GMbH & Co. (Mucos) developed and trademarked the dietary supplement Wobenzym. Marlyn Nutraceuticals, Inc. (Marlyn) exclusively distributed and sold the product in the United States. The parties entered into an agreement whereby Marlyn would have the right to exclusively manufacture and sell Wobenzym in the United States if Mucos ceased producing the product. In 2006, Marlyn believed Mucos had ceased producing Wobenzym because the product delivered in fulfillment of Marlyn’s purchase orders contained a different amount of active ingredients than as listed on the label. In 2007, Marlyn began to manufacture and sell Wobenzym in the United States under the same product label. Mucos filed an action for trademark infringement and requested a preliminary injunction to stop Marlyn from selling the product under the Wobenzym mark. Mucos argued that Marlyn’s formula differed from Mucos’s formula, causing consumer confusion and infringement. The district court granted Mucos’s request for a preliminary injunction and ordered Marlyn to halt its sales of the product, recall the product it had already sold and provide restitution to consumers who had purchased Marlyn’s Wobenzym. Marlyn appealed.
The Ninth Circuit affirmed the district court’s decision to issue a preliminary injunction against Marlyn, yet vacated the injunction because of its scope. Adopting Third Circuit precedent, the Court held that a party seeking product recall through a preliminary injunction must satisfy the traditional preliminary injunction test, as well as establishing three additional factors: that the defendant’s infringement was willful or intentional, that the risk of confusion to the public and injury to the trademark owner is greater than the defendant’s burden accompanying a product recall and that the defendant’s infringing activity caused substantial risk of danger to the public. While the district court did not analyze all three additional factors, it based its recall order in part on substantial risk of danger to the public, finding that Marlyn’s product created a public health hazard if it remained on the market. Finding no evidence in the record to support the existence of a public health risk, the Ninth Circuit vacated the district court’s recall and restitution order, remanding the issue for further consideration.
The Ninth Circuit rejected Marlyn’s defense that Mucos ceased production of Wobenzym, finding that the changes in the product formula were insignificant and that “trademark owners are permitted to make small changes to their products without abandoning their marks.”