Decision of First Impression Grants Foreign Trademark Owner’s Petition to Cancel US Registration of Mark: TTAB | Practical Law

Decision of First Impression Grants Foreign Trademark Owner’s Petition to Cancel US Registration of Mark: TTAB | Practical Law

In Bayer Consumer Care AG v. Belmora LLC, the Trademark Trial and Appeal Board (TTAB) granted petitioner Bayer Consumer Care AG's petition to cancel respondent Belmora LLC's registration for the mark FLANAX, which Bayer had earlier registered and used in Mexico. The TTAB found that Bayer had standing to petition to cancel Belmora's registration even though Bayer had not registered, and did not use, the FLANAX mark in the US. The TTAB cancelled Belmora's registration based on its finding that Belmora used the FLANAX mark in the US to misrepresent that the source of its product was Bayer, the seller of FLANAX brand analgesics in Mexico. 

Decision of First Impression Grants Foreign Trademark Owner’s Petition to Cancel US Registration of Mark: TTAB

by Practical Law Intellectual Property & Technology
Published on 22 Apr 2014 • USA (National/Federal)
In Bayer Consumer Care AG v. Belmora LLC, the Trademark Trial and Appeal Board (TTAB) granted petitioner Bayer Consumer Care AG's petition to cancel respondent Belmora LLC's registration for the mark FLANAX, which Bayer had earlier registered and used in Mexico. The TTAB found that Bayer had standing to petition to cancel Belmora's registration even though Bayer had not registered, and did not use, the FLANAX mark in the US. The TTAB cancelled Belmora's registration based on its finding that Belmora used the FLANAX mark in the US to misrepresent that the source of its product was Bayer, the seller of FLANAX brand analgesics in Mexico.
On April 17, 2014, in Bayer Consumer Care AG v. Belmora LLC, the Trademark Trial and Appeal Board (TTAB) granted Bayer Consumer Care AG's petition to cancel Belmora LLC's US registration for the mark "FLANAX" for naproxen sodium analgesics (Cancellation No. 92047741 (TTAB Apr. 17, 2014)). The TTAB cancelled Belmora's registration under Section 14(3) of the Lanham Act, because Belmora misrepresented the source of its FLANAX analgesic in the US as Bayer's Mexican FLANAX analgesic (see 15 U.S.C. § 1064(3)).

Background

Bayer owns a Mexican trademark registration for the mark FLANAX covering pharmaceutical products, analgesics and anti-inflammatories. Bayer has sold its FLANAX-brand analgesic in Mexico since 1976. The product is Mexico's top-selling pain reliever. Bayer's FLANAX analgesic is not sold in the US. Bayer's affiliate, Bayer Healthcare LLC, does sell a naproxen sodium-based analgesic in the US under the brand name ALEVE.
Belmora was formed in 2002 by a single employee, Jamie Belcastro. Its original product, at issue in this case, is an analgesic tablet of naproxen sodium. In 2003 or 2004, Belmora began offering this product under the mark FLANAX in the US. Mr. Belcastro describes Belmora's business model as providing over-the-counter drug products to US residents of Hispanic background. In 2003, Belmora applied to register the FLANAX mark in the US. The registration issued in 2005.
Bayer petitioned to cancel Belmora's registration in 2007, asserting various grounds for relief, including likelihood of confusion, fraud and misrepresentation of source. Following Belmora's motion to dismiss Bayer's amended Petition for Cancellation, Bayer's only remaining claim was misrepresentation of source.

Outcome

In granting Bayer's cancellation petition, the TTAB applied the US Court of Appeals for the Federal Circuit's two-prong test, asking whether:
  • Bayer had standing to challenge Belmora's registration.
  • There are valid grounds for cancelling the registration.

Standing

Under the standing prong, the TTAB analyzed whether Bayer had a "real interest" in the cancellation proceeding. Belmora argued that Bayer lacked standing because Bayer:
  • Does not own a registration for the FLANAX mark in the US.
  • Has not used the FLANAX mark in the US.
  • Has no plans to use the FLANAX mark in the US.
The TTAB explained that Belmora's argument improperly focused solely on Bayer's lack of commercial activity in the US, instead of the fact that Belmora uses the FLANAX mark in the US and causes harm to Bayer in the US. The TTAB explained that:
  • Bayer owns a registration for the FLANAX mark in Mexico.
  • Bayer licenses its corporate affiliate to sell naproxen sodium analgesics under the FLANAX mark in Mexico.
  • The registration Bayer seeks to cancel is for the identical mark for identical goods.
The TTAB noted that because Belmora used the FLANAX mark in the US to misrepresent to US consumers the source of its products as Bayer's Mexican products, Bayer loses its ability to control its reputation and suffers damage. Therefore, the TTAB found standing because Bayer had a:
  • Direct and personal stake in the outcome of the proceeding.
  • Reasonable basis for its belief that it would be damaged by Belmora's US registration.

Misrepresentation of Source

After finding that Bayer had established standing, the TTAB went on to rule that cancellation of Belmora's registration was warranted because Belmora misrepresented the source of its products in violation of Section 14(3) of the Lanham Act. The TTAB found that Belmora took steps to deliberately pass off its goods as Bayer's goods. The TTAB examined evidence reflecting Belmora's "blatant misuse" of Bayer's Mexican FLANAX mark. Though noting that this is a case of first impression, the TTAB held that the evidence "readily establishes blatant misuse" in a manner calculated to trade in the US on Bayer's Mexican reputation and goodwill. The TTAB highlighted several factors supporting its finding including Belmora's:
  • Awareness that the FLANAX trademark was used in Mexico in association with naproxen sodium analgesics when Belmora adopted the FLANAX mark in the US.
  • Knowing selection of a mark identical to Bayer's mark.
  • Packaging, which initially copied Bayer's Mexican:
    • mark;
    • logo; and
    • packaging.
  • Owner's and agents' repeated invocation of Bayer's FLANAX-mark's reputation when marketing Belmora's FLANAX product in the US.
The TTAB rejected Belmora's argument that it could not have misrepresented the source of its products because it used its own name, Belmora, on its packaging, and did not use the name "Bayer." Instead, the TTAB held that Belmora affirmatively misrepresented the source of its FLANAX-brand products by copying Bayer's mark and logo and by repeatedly holding itself out as the US source of Bayer's successful Mexican product.

Practical Implications

This decision is noteworthy for establishing that a misrepresentation of source claim may be viable in a cancellation proceeding even where the petitioner has not used or registered its mark in the US, if the petitioner can show that the registrant is misusing the petitioner's foreign mark in the US in a manner calculated to trade in the US on the goodwill and reputation of the petitioner's foreign mark. A misrepresentation of source claim may therefore be available even though a likelihood of confusion claim would fail because of lack of prior US use.