Combe Inc. v. Dr. Aug. Wolff GmbH & Co. KG Arzneimittel
Combe Inc. v. Dr. Aug. Wolff GmbH & Co. KG Arzneimittel
Opinion of the Court
Defendant, a German manufacturer of medicinal, cosmetic and dermatological products, filed an application with the United States Patent & Trademark Office ("PTO") Trademark Trial and Appeal Board ("TTAB") to register the mark VAGISAN for use on pharmaceutical and sanitary preparations in the United States. Plaintiff, a domestic manufacturer of competing products sold under the registered mark VAGISIL, filed an opposition to defendant's application. The TTAB ultimately ruled in favor of defendant, finding there was no likelihood of confusion between plaintiff's VAGISIL mark and defendant's proposed VAGISAN mark. Plaintiff now appeals this TTAB decision pursuant to
Defendant now seeks dismissal of these additional claims, arguing that the complaint has not alleged facts to establish the statutorily-required "use in commerce" of the allegedly infringing mark. At issue, therefore, on defendant's threshold dismissal motion pursuant to Rule 12(b)(6), Fed. R. Civ. P., is whether plaintiff can sue defendant for trademark infringement, dilution, or unfair competition where, as here, a defendant has not sold or transported a good with the allegedly infringing mark in Virginia, or anywhere in the United States.
I.
Plaintiff, Combe Incorporated, is a Delaware corporation and a leading maker of personal-care products for men and women. In particular, since approximately 1973, plaintiff has offered and sold a wide variety of women's personal care products, including medicated creams, moisturizers, deodorant powders, wipes, gels, washes *417and other products, under the trademark VAGISIL. Defendant, Dr. August Wolff GmbH & Co. KG Arzneimmitel, is a German limited liability partnership that manufactures medicinal, cosmetic and dermatological products, including feminine products under the label VAGISAN. Defendant maintains its headquarters in Bielefeld, Germany and has no offices or employees in the United States. Defendant's products are authorized for sale primarily in Belgium, Bulgaria, Estonia, Finland, Germany, Iraq, Iran, Jordan, Croatia, Lithuania, Latvia, Austria, Poland, Portugal, Switzerland, Serbia/Montenegro, Slovenia, Czech Republic, Turkey, Hungary, and the United Kingdom. At this time, defendant has not yet sold any products in the United States but has taken the following steps toward entering the United States market:
• since October 25, 2011, defendant has maintained a website at "www.vagisan.com" with links to third party pharmacies where consumers can purchase products bearing the VAGISAN mark. Defendant's products are also available for purchase via third party pharmacies on Amazon.com.
• on January 24, 2012, defendant filed United States Trademark Application Serial No. 79/111,922 ("the '922 Application") with the PTO to register the mark VAGISAN for "pharmaceutical preparations, namely, vaginal moisturizers, vaginal anti-fungal preparations, vaginal washes; sanitary preparations for medical use; diet pills, diet capsules, diet liquid medications" and "soaps, perfumery, essential oils, cosmetics, hair lotions." Compl. ¶ 26.
• on March 14, 2012, representatives from defendant met in Germany with representatives from a United States based drugstore, Lil Drugstore, about potential distribution of VAGISAN products.
• on January 2, 2013, defendant provided a United States based consultant with three Powerpoint slides with regulatory information on VAGISAN Moisturizing Cream and Moisturizing Cream Combi for a presentation at a J.P. Morgan Investors Conference scheduled to take place in the United States
• in June 2014, defendant filed an application with the United States Food & Drug Administration ("FDA") for approval of the VAGISAN Vaginal Moisturizing Cream and Wash products within the United States.
Shortly after defendant filed the '922 Application with the TTAB in 2012, plaintiff filed an opposition to the application, arguing that defendant's use of a VAGISAN mark in the United States would create a likelihood of confusion with plaintiff's existing registered VAGSIL mark. During the course of these TTAB proceedings, defendant testified under oath that it has not, and will not, sell products bearing the VAGISAN mark in the United States unless and until the trademark application dispute with plaintiff is resolved. See Thevessen TTAB Dep. 34:11-21. Following consideration of evidence submitted by the parties, the TTAB issued a final decision on June 19, 2017, dismissing plaintiff's opposition on the ground that the VAGISAN
*418mark did not so resemble the VAGISIL mark as to be likely to cause "confusion," "mistake," or "deception" pursuant to
Thereafter, plaintiff filed this action on August 21, 2017 pursuant to
(i) a claim for trademark infringement under the Lanham Act (Count II);
(ii) a claim for trademark infringement, false designation of origin, passing off, and unfair competition under the Lanham Act (Count III);
(iii) a claim for trademark dilution under the Lanham Act (Count IV);
(iv) a claim for trademark infringement under the Virginia Trademark and Service Mark Act ("VTSMA") (Count V); and
(v) a claim for trademark infringement and unfair competition under Virginia common law (Count VI).
On November 6, 2017, defendant filed a motion to dismiss each of these claims for lack of personal jurisdiction pursuant to Rule 12(b)(2), Fed. R. Civ. P.
On January 2, 2018, defendant filed the Motion to Dismiss at issue here pursuant to Rule 12(b)(6), Fed. R. Civ. P., contending that plaintiff has failed to allege facts showing that defendant used the VAGISAN mark in United States commerce, and as such, plaintiff cannot state a claim for trademark infringement, dilution, or unfair competition under either the Lanham Act or Virginia law. Plaintiff opposes the motion, contending that the steps defendant has taken to enter the United States market, including seeking FDA registration, meeting with United States consultants, and developing a plan to enter the market, are sufficient to state claims for trademark infringement, dilution, and unfair competition. These issues have been fully briefed and argued and are now ripe for disposition.
II.
The standard on a motion to dismiss pursuant to *419Rule 12(b)(6), Fed. R. Civ. P., is too well-settled to dispute or to require extensive discussion. Put simply, a court may dismiss a claim if, after accepting all well-pleaded allegations in the complaint as true and drawing all reasonable factual inferences in the plaintiff's favor, the complaint does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly ,
III.
Defendant argues that plaintiff's federal and state trademark infringement, dilution, and unfair competition claims fail because the complaint does not allege, nor does the record disclose, facts to establish the requisite use in commerce of the allegedly infringing mark. This argument succeeds, but requires some elaboration.
The Lanham Act
A threshold question is the meaning of "use in commerce" under the Lanham Act for the purposes of plaintiff's trademark infringement, dilution, and unfair competition *420claims. Analysis of this question properly begins with the text of the Lanham Act. Notably, the Lanham Act defines "use in commerce" as
the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce-
(1) on goods when-
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce ....
To avoid this conclusion, plaintiff argues that this statutory definition does not apply in the infringement, unfair competition, and dilution contexts, and instead simply sets the standards and circumstances under which the owner of a mark can qualify to register the mark. In this respect, plaintiff correctly notes that the statute provides that its definitions are not applicable where "the contrary is plainly apparent from the context."
Plaintiff's argument, although superficially plausible, ultimately fails; the argument goes off the tracks because it incorrectly assumes that if the first sentence of the definition does not apply in this context, the entire definition is inapplicable. But this conclusion is unpersuasive; it does not follow that if the first sentence of the provision does not apply in this context, then the entire definition is inapplicable. And indeed, courts adjudicating trademark infringement actions have persuasively reached this conclusion, namely that the second sentence of the "use in commerce" definition is nonetheless applicable in infringement cases.
Attempting to avoid this conclusion, plaintiff points to a sentence from a Senate report, stating that "use of any type will continue to be considered in an infringement action." S. Rep. No. 100-515, at 44-45 (1988). But reliance on this sentence in the Senate report is hardly persuasive because as Justice Scalia sensibly teaches us, "[t]he Constitution gives legal effect to the 'Laws' Congress enacts [ ] not the objectives its Members aimed to achieve in voting for them[.]"
*422Graham Cty. Soil & Water Conservation Dist. v. United States ex rel. Wilson ,
Given that
Plaintiff makes a further attempt to escape the use in commerce requirement by relying on cases that have concluded that certain preparatory steps to enter a market are sufficient to state trademark infringement, unfair competition and trademark dilution claims. Here, too, plaintiff is mistaken; defendant's preparatory steps to enter the United States market are not sufficient and the cases plaintiff cites are distinguishable. Courts have noted that where, as here, a defendant simply expresses an intent to use a particular mark by filing an application with the PTO or by presenting an idea at a conference, these activities, without more, are not sufficient to constitute use in commerce.
The complaint here does not allege, nor does the record reflect, that defendant is imminently preparing to market its products in the United States. Instead, what the record discloses is that defendant, at one time, took preparatory steps to enter the United States market, but has now put its preparations on hold pending the resolution of the TTAB appeal. Specifically, *424plaintiff held one unsuccessful meeting in Germany with a United States distributor six years ago. Plaintiff's communications with a United States based consultant also occurred more than five years ago and involved a presentation on regulatory information related to defendant's FDA application. And most importantly, Angela Thevessen, Expert Manager of defendant, testified under oath that defendant has put its plans to market VAGISAN products in the United States on hold because it will not know if it can legally use the VAGISAN mark in the United States until the conclusion of this litigation. See Thevessen TTAB Dep. 34:11-21.
These facts stand in stark contrast to the facts of the cases on which plaintiff relies; the defendants in those cases were (i) widely disseminating information regarding their upcoming services,
Plaintiff next contends that defendant's website is sufficient to constitute use in commerce for purposes of plaintiff's trademark infringement, dilution, and unfair competition claims. Although the use of a website may be sufficient to establish use in commerce in some instances, the cases plaintiff cites do not squarely address this issue. In People for Ethical Treatment of Animals v. Doughney , cited by plaintiff, the Fourth Circuit did not address the Lanham Act's "use in commerce" requirement because the parties did not dispute that element of plaintiff's claim. 263 F.3d at 365. Instead, the Fourth Circuit in that case focused on whether the defendant there used the website "in connection with goods or services" and in a manner engendering a likelihood of confusion. Id. Similarly, in Lamparello v. Falwell ,
In the end, it is unnecessary to resolve the question whether defendant's website alone is sufficient to constitute "use in commerce" because even if it were sufficient, an injunction with respect to the website would be inappropriate. The record reflects that defendant has no offices in the United States and no United States employees. Accordingly, an injunction regarding defendant's advertising efforts on its website would necessarily have to have an extraterritorial effect because it would restrain defendant's activities in Germany. This is important as Fourth Circuit precedent makes clear that courts may only issue such injunctions to prevent violations under the Lanham Act "where the extraterritorial conduct would, if not enjoined, have a significant effect on United States commerce...."
*425Nintendo of Am., Inc. v. Aeropower Co. ,
IV.
In sum, for a plaintiff to state a claim of trademark infringement, dilution, or unfair competition, federal law-the Lanham Act-and Virginia law-the VTMSA-require that the defendant's goods be sold or transported in United States and Virginia commerce respectively. Because there are no allegations in the complaint and no record evidence suggesting that defendant has sold or transported a product bearing the VAGISAN mark in the United States or to a United States citizen, let alone in Virginia or to a Virginia citizen, plaintiff cannot satisfy the use in commerce requirement of the Lanham Act or Virginia law. This is so even through defendant has taken preparatory steps to enter the United States market because those preparations are not imminent and have been placed on hold pending resolution of the TTAB appeal. And this is so even through defendant operates a website because an injunction concerning defendant's extraterritorially-operated website would be inappropriate where the website has had no effect on United States commerce. Accordingly, Counts II-VI of plaintiff's complaint must be dismissed without prejudice. It is important to note, however, that this decision will not preclude plaintiff from filing a subsequent action should changed circumstances warrant. At this time, however, it is simply premature to adjudicate the infringement, dilution, and unfair competition claims on the basis of these allegations and the current record.
An appropriate Order will issue.
The facts pertinent to defendant's motion to dismiss are appropriately derived from the complaint, documents incorporated into the complaint by reference, and matters of public record of which a court may take judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd. ,
Although the following facts, describing defendant's steps to enter the United States market, are not alleged in the complaint, it is appropriate to take judicial notice of these facts as they are in the public record as a part of the TTAB proceedings. Papasan ,
Defendant did not at the time, and does not now, seek dismissal of the TTAB appeal.
Specifically, section 32 of the Lanham Act imposes trademark infringement liability on "any person who shall, without the consent of the registrant,...use in commerce any...colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive ...."
A plaintiff alleging causes of action for trademark infringement and unfair competition must prove (1) that it possesses a mark; (2) that the defendant used the mark; (3) that the defendant's use of the mark occurred "in commerce"; (4) that the defendant used the mark "in connection with the sale, offering for sale, distribution, or advertising" of goods or services; and (5) that the defendant used the mark in a manner likely to confuse consumers.
People for Ethical Treatment of Animals v. Doughney ,
As described supra , the Fourth Circuit has concluded that Virginia common law trademark infringement and unfair competition claims are subject to the same analysis as federal claims under sections 32 and 43(a) of the Lanham Act. See Swatch AG ,
the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For the purposes of this chapter, a mark shall be deemed to be in use (i) on goods when it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and the goods are possessed in the Commonwealth or sold or otherwise distributed in commerce in the Commonwealth....
Va. Code § 59.1-92.22. Accordingly, if there has been no "use in commerce" sufficient to satisfy the requirements of the Lanham Act, it follows a fortiori that there cannot be use in commerce for the purposes of plaintiff's Virginia law claims.
See, e.g. , 1-800 Contacts Inc. v. WhenU.Com, Inc. ,
Compare Steele v. Bulova Watch Co. ,
See, e.g. , Marshall Tucker Band, Inc. v. M T Indus., Inc. ,
See also Essie Cosmetics, Ltd. v. Dae Do Int'l Ltd. ,
Plaintiff cites to Capital One Financial Corp. v. Drive Financial Services, LP ,
Maritz, Inc. ,
AARP v. 200 Kelsey Assocs., LLC ,
PDK Labs, Inc. v. Proactive Labs, Inc. ,
De Simone ,
Reference
- Full Case Name
- COMBE INC. v. DR. AUGUST WOLFF GMBH & CO. KG ARZNEIMITTEL
- Cited By
- 4 cases
- Status
- Published