For our weekly SoCal IP Institute meeting on Monday, April 4, 2016, we will discuss the following cases:
Clearcorrect Operating LLC et al. v. ITC (Fed. Cir. March 31, 2016) (available here) (en banc petition denied). On petition for rehearing en banc, the Federal Circuit denied rehearing of the prior opinion in which a three-judge panel led by Judge Prost reversed the ITC’s determination that ITC jurisdiction did not extend to digital files consituting, in this case, three-dimensional data used to create teeth aligners (e.g. invisible braces). Specifically, the original case was dismissed as a lacking of jurisdiction because 19 U.S.C. § 1337(a)(1)(B) provides the ITC with authority over “importation … of articles that (i) infringe a valid and enforceable U.S. patent.” The ITC had found that so-called “digital articles” fell within this category — seemingly expanding their jurisdiction. The Federal Circuit disagreed and, the petition for en banc rehearing was denied 11 to 1, with a single dissent from Judge Newman.
Belmora LLC v. Bayer Consumer Care AG (4th Cir. March 23, 2016) (available here). Here, the 4th Circuit determined that the owner of a foreign trademark need not plead “prior use” within the U.S. of the foreign trademark in order to adequately plead Lanham Act 43(a) unfair competition. Here, Bayer petitioned for cancellation, and won, of Belmora’s FLANAX trademark registration. Simultaneously, Bayer sued Belmora alleging false association and false advertising. Belmora appealed the cancellation to district court and the cases were consolidated. The district court reversed the cancellation and dismissed Bayer’s complaint on a motion to dismiss and judgment on the pleadings. In particular, the district court understood that Lexmark Supreme Court precedent bound it to find standing for Bayer only when Bayer possessed use of its mark within the U.S.
On appeal, the Fourth Circuit disagreed. Based upon a plain reading of Lanham Act 43(a), no “use” is required for a false advertising or false association claim. Lexmark, the Fourth Circuit further reasoned, only requires that standing only be found when the cause of action is within the “zone of interests” envisioned by the statute and be the “proximate cause” of the alleged violations. Here, within the ambit of trademark law and an alleged infringer intentionally pawning off goods as the same as or incredibly similar to goods known within the U.S. to be of a certain quality and to have certain characteristics, the “zone of interests” and proximate cause limitations on standing were clearly met. For the same reasons, Bayer had standing for each of the false advertising, false association, and the TTAB cancellation actions.