In the recent US appeal decision of Belmora LLC v Bayer Consumer Care AG and Bayer Healthcare LLC, a case concerning the use of trade marks in the US, Belmora LLC showed that well known marks do not create an exception to the territoriality principle in US.
In the US a plaintiff must use a trade mark in US in order to enforce rights against an infringer. In the past marks which are well known outside of the US have been registered in the US allowing the registrant to trade off the goodwill of the original mark.
Bayer had been selling pain relief under the mark FLANAX in Mexico since 1976. FLANAX was a top selling pain reliever. Bayer had a trade mark registration for the mark in Mexico. However, in the US Bayer used a different mark to market the same goods.
In 2003 Belmora filed a US trade mark application for the mark FLANAX covering identical goods and in 2004 they started to use the mark FLANAX in the US using the same colours, font and packaging as Bayer had used on their goods in Mexico. Bayer filed an application for the mark FLANAX in 2004 which was rejected due to Belmora's earlier application. Bayer's application was abandoned.
In 2007 Bayer filed an application to cancel Belmora's registration. The grounds for cancellation were likelihood of confusion and prior use of the mark in US commerce, false advertising, Article 6bis which provides protection for well-known marks and Section 14(3) which allows the cancellation of a mark where the registered mark was used to misrepresent a source.
Article 6bis of the Paris Convention is the famous marks doctrine and provides that a foreign mark is protectable even if it is not registered or used, where the mark is so well know or famous as to give rise to a risk of consumer confusion.
Trade Mark Trial Appeal Board Decision
Although the cancellation was rejected on the grounds of prior use, false advertising and Article 6bis, The Trade Mark Trial Appeal Board (TTAB) agreed that the mark should be cancelled due to Section 14(3) – misrepresentation of source. The TTAB found that Belmora had passed off their goods as those of another and this was misuse of the mark to allow them to trade on the goodwill of another party. Belmora had adopted the mark FLANAX in the US knowing of Bayer's prior use of the mark in Mexico on an identical product. Belmora had also copied Bayer's Mexican packaging including the font and colour.
Belmora appealed the decision and the Court reversed the TTAB's decision. Bayer argued that their mark was famous in the US and that they owned protectable goodwill due to the significant number of Mexican Americans who were familiar with the brand. The Court held that Section 14(3) requires use of the mark in US commerce in order to find misrepresentation. Belmora argued that under the territoriality principle Bayer did not own protectable trade mark rights in US and Article 6bis did not provide an acceptation to this principle. The decision stated that the Lanham Act does not allow the owner of a foreign mark which has not been used in US to claim priority over a mark which is registered and used in US commerce by another party.in: Case Law, News, Trade Marks