Belmora LLC v. Bayer Consumer Care AG (Belmora I), a significant and long-running trademark and unfair competition case that questioned whether the Lanham Act applies to foreign brands, will not be heard by the U.S. Supreme Court this fall. Given that certiorari was denied on February 27, 2017, foreign trademark owners have standing to sue for unfair competition under the act for the unauthorized use of their foreign brand in the Fourth Circuit Court of Appeals.
In 2004, Bayer, the German pharmaceutical company, applied to register “FLANAX” in the United States, but the U.S. Patent and Trademark Office denied the application based on preexisting efforts by Belmora, a U.S. drug company, to register the mark. Bayer has used the trademark “FLANAX” for naproxen sodium pain relievers in Mexico since the 1970s, and marketed the same product as “ALEVE” in the United States; it owns a trademark for “FLANAX” in Mexico, but not in the United States. Belmora started using the mark “FLANAX” in the United States in 2004 for “orally ingestible tablets of naproxen sodium;” it successfully registered “FLANAX” in the United States in 2005.
In 2007, Bayer petitioned the Trademark Trial and Appeal Board to cancel Belmora’s “FLANAX” mark on grounds that it was confusingly similar to Bayer’s brand of naproxen sodium pain relief products. In 2014, the TTAB cancelled Belmora’s “FLANAX” registration pursuant to Section 14(3) of the Lanham Act, which allows for cancellation of a mark that is being used to misrepresent the source of the goods.
Belmora appealed the TTAB’s decision to U.S. District Court for the Eastern District of Virginia in Belmora LLC v. Bayer Consumer Care AG (Belmora II), which dismissed Bayer’s claims and reversed the TTAB. The district court based its ruling on its interpretation of the Supreme Court’s Lexmark International, Inc. v. Static Control Components, Inc.decision, which lays out a two-part test for determining whether a plaintiff has standing to bring a statutory cause of action. Under the Lexmark test, the plaintiff must fall under the statute’s “zone of interest” and must demonstrate economic injury. With respect to the first part of the test, the district court held that Bayer failed to show that its foreign trademark, not used in the United States, represented a “protectable interest.” As to the proximate cause part of the test, the court held that Bayer could not have economic loss for a mark it did not use in U.S. commerce.
Bayer appealed the Virginia decision to the United States Court of Appeals for the Fourth Circuit, which held that the district court misapplied Lexmark. See Belmora LLC v. Bayer Consumer Care AG (Belmora III). The circuit court ruled that there is no requirement in the language of Section 43(a), which allows for civil liability against someone who uses a mark that is likely to deceive others, or Section 43(a), that a plaintiff must have used its mark in commerce in order to prevail. The Fourth Circuit vacated the district court’s decision and found that preventing unfair U.S. competition by the “deceptive and misleading use” of foreign marks is within the “zone of interest” protected by the Lanham Act. It also found that Bayer pled sufficient injuries to show proximate cause.
Although the Supreme Court’s denial of certiorari means that foreign trademark owners can now bring deceptive and unfair competition claims against U.S trademark owners in certain U.S. jurisdictions, it remains to be seen whether and how other U.S. circuit courts will rule on this issue.