A Fourth Circuit appellate panel has unanimously agreed to send a case brought by Bayer Consumer Care AG (Bayer) against Belmora LLC back to the Eastern District of Virginia for it to consider whether Bayer’s unfair competition claim in violation of § 43(a) of the Lanham Act is barred, not by a borrowed state statute of limitations, but by the equitable doctrine of laches. The court’s Feb. 2 published opinion comes after nearly twenty years of trademark litigation before agency tribunals and several federal trial and appellate courts. In the instant decision, the United States weighed in as amicus curiae in support of Bayer.
The case revolved around Flanax, a trademarked, best-selling, over-the-counter pain reliever sold for decades by Bayer’s affiliate in Mexico. In 2004, Belmora, a rival pharmaceutical company, saw an opportunity to sell the naproxen sodium pain relievers under the Flanax name to American consumers given many consumers’ familiarity therewith. In October 2003, Belmora sought to trademark the name Flanax, and the following year began to market and sell it to Hispanic American consumers.
Bayer filed an opposition to Belmora’s trademark application, but ultimately lost out after the U.S. Patent and Trademark Office (PTO) issued the trademark to Belmora in 2005. Bayer then petitioned the U.S. Trademark Trial and Appeal Board (TTAB) to review the decision. Its petition “sought cancellation under § 14(3) of the Lanham Act, alleging that Belmora misrepresented the source of its goods bearing the FLANAX mark.”
After nearly seven years of litigation before the TTAB, the case was resolved in Bayer’s favor. The TTAB held that evidence readily established the blatant misuse of the Flanax mark by Belmora as a result of its piggybacking off the reputation and goodwill Bayer’s mark had created in Mexico.
The litigation continued, in relevant part with Bayer filing the instant Lanham Act case against Belmora seeking damages for its misuse of the Flanax mark in the United States. The primary issue raised on appeal was whether a statute of limitations or some other timeliness rule applied to Bayer’s § 43(a) claims. The panel explained that the provision does not have its own statute of limitations, thus the judges contemplated which rule would serve as a worthy stand in.
The appellate panel disagreed with the district court’s decision to borrow an analogous state law’s statute of limitations. After reviewing the text of § 43(a), the court concluded that the provision is “…one such federal law for which a state statute of limitations would be an unsatisfactory vehicle for enforcement. Rather, the affirmative defense of laches, which applies to claims that are equitable in nature… ‘provides a closer analogy than available state statutes.’”
The court also held that the district court failed to consider whether Bayer’s related state-law claims were subject to tolling. In addition, it affirmed the dismissal of Belmora’s seven tort and antitrust counterclaims after finding that they were unsupported by evidence. Finally, the panel affirmed summary judgment as to Bayer’s request that the TTAB decision remain undisturbed, after finding that the trial court’s decision was supported by the facts presented.
Bayer is represented by Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP and Williams & Connolly LLP. Belmora is represented by Mandelbaum Salsburg, PC, Dhillon Law Group, and Law Offices of Craig C. Reilly.
