[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JUNE 13, 2008
No. 06-15084 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 04-22646-CV-UUB
NATURAL ANSWERS, INC.,
a Florida Corporation,
BRIAN A. FEINSTEIN,
Plaintiffs-Appellants,
versus
SMITHKLINE BEECHAM CORPORATION,
a Pennsylvania Corporation,
f.k.a. Beecham Holdings, Inc.,
d.b.a. GlaxoSmithKline, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(June 13, 2008)
Before TJOFLAT, MARCUS and WILSON, Circuit Judges.
MARCUS, Circuit Judge:
At issue in this trademark infringement case is whether SmithKline Beecham
Corporation, SmithKline Beecham Consumer Healthcare, and GlaxoSmithKline
Consumer Healthcare (collectively “GSK”) infringed the trademark rights of
Natural Answers, Inc. and its Chief Executive Officer Brian A. Feinstein
(collectively “Natural Answers”) in their unregistered mark HERBAQUIT
LOZENGES, and whether GSK falsely advertised their product, Commit
Lozenges, which was billed as “the first and only stop smoking lozenge.” After
thorough review, we affirm the district court’s entry of final summary judgment for
GSK.
I.
The facts essential to this appeal are straightforward. Natural Answers
develops, manufactures, and markets a variety of herbal supplements, and from
2000 until 2002 it sold HerbaQuit Lozenges, which were designed to “help satisfy
cravings related to the smoking habit,” particularly the “psychological and habitual
aspects of smoking.” Although Natural Answers filed a federal trademark
application for HERBAQUIT with the United States Patent and Trademark Office
on April 12, 1994, and also filed an application for HERBAQUIT LOZENGES on
May 27, 1995, neither application was approved, and the mark HERBAQUIT
2
LOZENGES has never been registered as a trademark. Nonetheless, HerbaQuit
Lozenges entered the market in January 2000 and were sold by Natural Answers in
drugstores, supermarkets, convenience stores, and over the Internet. HerbaQuit
Lozenges were an herbal product containing no nicotine, but were designed and
marketed to help reduce and control tobacco cravings or to help quit smoking
entirely. In March 2001, Natural Answers contacted GSK to solicit interest in
forming a joint venture to promote HerbaQuit Lozenges. Although GSK expressed
some initial interest in learning about Natural Answers’s product, GSK ultimately
declined that offer in April 2001. Notably, the sale of HerbaQuit Lozenges was
discontinued in March 2002, after selling approximately 50,000 packages. Indeed,
by November 2002, the website affiliated with HerbaQuit Lozenges was no longer
operational, and neither the product nor its promotional materials have returned to
the public market since that time.
Natural Answers has conceded that it does not have the ability or resources
to market HerbaQuit Lozenges. However, Brian Feinstein, the CEO of Natural
Answers, testified that he sent a letter to Philip Morris in December 2003 to solicit
a joint venture to promote HerbaQuit Lozenges. He said that Philip Morris
responded to his solicitation by requesting further information. A deal was never
struck between Natural Answers and Philip Morris, and Natural Answers presented
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no other evidence, documentary or otherwise, about their negotiations.
On November 6, 2002, more than seven months after the sale of HerbaQuit
Lozenges was discontinued, GSK launched the Commit Lozenges product,
advertising it as “the first and only stop smoking lozenge.” Commit Lozenges are
an FDA-approved stop-smoking aid in the form of a fast-acting nicotine lozenge to
relieve the withdrawal symptoms that may accompany smoking cessation. GSK
began developing Commit Lozenges in January 1998, applied for FDA approval
on the product in late 2000, and received FDA approval following clinical tests in
October 2002. GSK has advertised Commit Lozenges in the national print media,
on television, and over the Internet. They are sold primarily in pharmacies,
supermarkets, and via the Internet. COMMIT is a registered federal trademark
held by GSK since May 20, 2003.
On October 20, 2004, Natural Answers filed this ten-count complaint against
GSK in the United States District Court for the Southern District of Florida
claiming: (1) Federal Trademark Infringement under 15 U.S.C. § 1125(a); (2)
Federal Trademark Infringement Based on Reverse Confusion under 15 U.S.C. §
1125(a); (3) Federal Unfair Competition under 15 U.S.C. § 1125(a); (4) False
Advertising under 15 U.S.C. § 1125(a); (5) Civil Theft of Trade Secrets under Fla.
Stat. §§ 771.11, 772.103, 772.194, 812.014 and 812.081; (6) Common Law
4
Trademark Disparagement; (7) Attempted and Actual Monopolization under the
Sherman Act, 15 U.S.C. § 2; (8) Common Law Unfair Competition; (9) Common
Law Trademark Infringement; and (10) Violation of Florida Deceptive and Unfair
Trade Practices Act (“FDUTPA”), Fla. Stat. §§ 501.201-501.213. Natural
Answers simultaneously moved for a temporary restraining order and preliminary
injunction. GSK, in turn, moved to dismiss the complaint on November 29, 2004,
and, on February 4, 2005, the district court dismissed the claims for civil theft of
trade secrets and attempted and actual monopolization pursuant to Fed. R. Civ. P.
12(b)(6).
On December 13, 2004 and January 12, 2005, evidentiary hearings relating
to the motion for a temporary restraining order and preliminary injunction were
conducted by a magistrate judge, who recommended denying the preliminary
injunction. The district court adopted the magistrate judge’s Report and
Recommendation in its entirety.
Thereafter, Natural Answers moved for partial summary judgment on its
false advertising claim. Not surprisingly, GSK moved for summary judgment on
all of Natural Answers’s remaining claims. Soon thereafter, the district court
granted GSK’s motion for summary judgment in its entirety and denied Natural
Answers’s motion for partial summary judgment. First, the district court granted
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summary judgment against Natural Answers’s false advertising claim, reasoning
that Natural Answers had not been and was not likely to be injured as a result of
GSK’s advertisement of Commit Lozenges as “the first and only stop smoking
lozenge,” because HerbaQuit Lozenges and Commit Lozenges were never
marketed or sold contemporaneously. The district court also granted summary
judgment against Natural Answers on the false advertising and trademark
disparagement claims concluding that GSK’s advertisements were not false,
because, under applicable federal statutes and regulations, Natural Answers was
prohibited from marketing HerbaQuit Lozenges as a smoking cessation product.
Second, the district court granted summary judgment against Natural Answers’s
federal and common law trademark infringement and unfair competition claims on
the ground that no reasonable juror could conclude on this record that a likelihood
of confusion exists between the marks HERBAQUIT LOZENGES and COMMIT
as used by the parties. Finally, the district court granted GSK summary judgment
on Natural Answers’s FDUTPA claim, because it was premised solely on meritless
claims of trademark infringement and false advertising.
This timely appeal ensued.
II.
The claims brought by Natural Answers are comprised of either violations of
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the Lanham Act or violations of Florida’s common law and statutes that are, in
turn, based on actual violations of the Lanham Act. As a result, if Natural Answers
cannot succeed on its Lanham Act claims, all of its claims necessarily fail. Our
analysis, therefore, begins, and ultimately ends, with a determination that Natural
Answers’s asserted Lanham Act claims, seeking relief from unfair competition
based upon theories of trademark infringement1 (taking the form of direct
trademark infringement, reverse confusion trademark infringement, and false
designation of origin), and false advertising,2 fail.
We review a district court’s grant of summary judgment de novo. Kingsland
v. City of Miami, 382 F.3d 1220, 1225 (11th Cir. 2004). Summary judgment is
appropriate where “there is no genuine issue as to any material fact and . . . the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). In
making this determination, “[w]e view the evidence and all factual inferences
therefrom in the light most favorable to the non-moving party, and resolve all
1
“Any person who shall, without the consent of the” trademark right holder, “use in
commerce any reproduction, counterfeit, copy, or 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 . . . shall be liable” for trademark infringement.” 15 U.S.C. § 1114(1).
2
Liability for false advertising arises when “[a]ny person who, on or in connection with
any goods . . . uses in commerce any . . . false or misleading description of fact, or false or
misleading representation of fact, which . . . in commercial advertising or promotion,
misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another
person’s goods[.]” 15 U.S.C. § 1125(a).
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reasonable doubts about the facts in favor of the non-movant.” Kingsland, 382
F.3d at 1226.
A.
To bring a trademark infringement claim under the Lanham Act, a plaintiff
must hold a valid trademark. Under the Lanham Act, a trademark is deemed
abandoned, and, thus no longer valid, “[w]hen its use has been discontinued with
intent not to resume such use.” 15 U.S.C. § 1127; see also Cumulus Media, Inc. v.
Clear Channel Commc’ns, Inc., 304 F.3d 1167, 1173 (11th Cir. 2002) (“[A]
defendant who successfully shows that a trademark plaintiff has abandoned a mark
is free to use the mark without liability to the plaintiff.”); Tally-Ho, Inc. v. Coast
Cmty. Coll. Dist., 889 F.2d 1018, 1022-23 (11th Cir. 1989) (per curiam)
(“Trademark ownership is always appurtenant to commercial activity. Thus, actual
and continuous use is required to acquire and retain a protectible interest in a
mark.”) (footnote omitted). “Abandonment is trademark law’s way of recognizing
that trademark rights flow from use.” Cumulus Media, Inc., 304 F.3d at 1173
(quotation marks and citation omitted); 5 McCarthy on Trademarks and Unfair
Competition § 17:1 (4th ed. 2001) (explaining that if a trademark holder ceases
using a mark with an intent not to resume its use, the mark is deemed abandoned
and “falls into the public domain and is free for all to use . . . . Abandonment paves
8
the way for future possession and property in any other person”).
Thus, a defendant must establish two elements in order to show that a
plaintiff has abandoned his trademark: “[1] that the plaintiff has ceased using the
mark in dispute and [2] that he has done so with an intent not to resume its use.”
Cumulus, 304 F.3d at 1174 (footnote omitted). For the purposes of abandonment,
the Lanham Act defines “use” as “the bona fide use of such mark made in the
ordinary course of trade, and not made merely to reserve a right in a mark.” 15
U.S.C. § 1127. The Lanham Act directs that “[i]ntent not to resume [use] may be
inferred from circumstances.” Id. Such an intent cannot be far-flung or indefinite;
rather there must be an intent “to resume use within the reasonably foreseeable
future,” Silverman v. CBS Inc., 870 F.2d 40, 46 (2d Cir. 1989), in the United
States, Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d 1575, 1579 (Fed. Cir.
1990). See also Grocery Outlet, Inc. v. Albertson’s, Inc., 497 F.3d 949, 951 (9th
Cir. 2007) (per curiam) (finding “intent to resume use of the . . . mark within the
reasonably foreseeable future during the short period of alleged nonuse” prevented
the mark from being abandoned). “Nonuse for 3 consecutive years shall be prima
facie evidence of abandonment,” 15 U.S.C. § 1127, which creates a “rebuttable
presumption of intent not to resume use.” Cumulus Media, Inc., 304 F.3d at 1174.
Natural Answers has not used its mark in commerce for well over three years and,
9
thus, GSK has the benefit of the rebuttable presumption of intent not to resume its
use. The burden of production, although not the ultimate burden of persuasion,
shifts to Natural Answers “to produce evidence that [it] either used the mark during
the statutory period or intended to resume use.” Id. at 1177.
On this record, it is undisputed that the HERBAQUIT LOZENGES mark
(which has never been registered) has not been used in commerce since, at the
latest, March 2002. Drawing all reasonable inferences in favor of Natural
Answers, as we must on summary judgment, no reasonable fact finder could
determine that Natural Answers had used or evinced any intention to use the
HERBAQUIT LOZENGES mark in the United States at any point after the
product was removed from the market in March 2002. Indeed, Natural Answers
has provided no evidence of actual and concrete plans to resume use in the
reasonably foreseeable future. All it presented to the district court was the bare
assertion by its CEO that it intended to resume use if it could find ample funding
and the unsupported assertion that Philip Morris had requested more information
from Natural Answers after it sent Philip Morris a letter soliciting a joint venture
in 2003. Such putative negotiations amount to nothing more than an unsolicited
proposal by Natural Answers that led nowhere. Quite simply, that is not enough.
Indeed, if all a party had to do to avoid a finding of abandonment was to aver that
10
it never intended to abandon the trademark, then no trademark would ever be
abandoned, no matter how long its use had been withdrawn from the market, or
how inchoate and speculative any intention to resume its use. See Imperial
Tobacco Ltd., 899 F.2d at 1581 (“An averment of no intent to abandon is little
more than a denial in a pleading, which is patently insufficient to preclude
summary judgment on the ground the facts are disputed.”). Because the record on
summary judgment unquestionably demonstrates that Natural Answers has in no
way undertaken “actual and continuous use” to “retain” an enforceable interest in
HERBAQUIT LOZENGES, see Tally-Ho, Inc., 889 F.2d at 1022-23; 15 U.S.C. §
1127, Natural Answers does not hold a valid trademark upon which it can base a
Lanham Act trademark infringement claim.
B.
Not only is Natural Answers barred from bringing a Lanham Act trademark
infringement claim because it does not hold a valid trademark, it also lacks
prudential standing to bring its separate Lanham Act false advertising claim. A
Lanham Act false advertising claim arises when “[a]ny person who, on or in
connection with any goods . . . uses in commerce any . . . false or misleading
description of fact, or false or misleading representation of fact, which . . . in
commercial advertising or promotion, misrepresents the nature, characteristics,
11
qualities, or geographic origin of his or her or another person’s goods[.]” 15
U.S.C. § 1125(a). The intent of this provision is to protect “commercial interests
[that] have been harmed by a competitor’s false advertising, and [to secure] to the
business community the advantages of reputation and good will by preventing
their diversion from those who have created them to those who have not.”
Phoenix of Broward, Inc. v. McDonald’s Corp., 489 F.3d 1156, 1168 (11th Cir.
2007), cert. denied, 128 S. Ct. 1647 (2008) (quoting Conte Bros. Auto., Inc. v.
Quaker State-Slick 50, Inc., 165 F.3d 221, 234 (3d Cir. 1998)).
In Phoenix, this Court, as a matter of first impression, determined when a
plaintiff has prudential standing to bring a Lanham Act false advertising claim.
489 F.3d at 1167. In that case, a class of Burger King franchisees sued
McDonald’s, their undisputed competitors in the fast food restaurant industry,
alleging that McDonald’s’ promotional games advertisements constituted false
advertising under the Lanham Act. We posited that five factors should be
weighed to determine whether a plaintiff has prudential standing to bring a
Lanham Act false advertising claim:
(1) The nature of the plaintiff’s alleged injury: Is the
injury of a type that Congress sought to redress in
providing a private remedy for violations of the [Lanham
Act]?
(2) The directness or indirectness of the asserted injury.
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(3) The proximity or remoteness of the party to the
alleged injurious conduct.
(4) The speculativeness of the damages claim.
(5) The risk of duplicative damages or complexity in
apportioning damages.
Phoenix, 489 F.3d at 1163-64 (citing Conte Bros. Auto., 165 F.3d at 233).
Applying these factors in Phoenix, we concluded that the plaintiffs lacked
prudential standing, because, while there were “commercial interests . . . harmed
by a competitor’s false advertising,” and the plaintiffs were the most proximate
class of persons subject to the alleged injury, the connection between the plaintiffs’
asserted lost sales and increased promotional expenses and the defendant’s false
advertisements was tenuous, the nature of the alleged damages was speculative,
and there was a risk of duplicative damages. Id. at 1169-73.
Here, an application of the Phoenix factors undeniably establishes that
Natural Answers lacks prudential standing to bring a Lanham Act false advertising
claim. Indeed, not a single one of the five factors favors Natural Answers.
In the first place, Natural Answers has not alleged the type of injury
Congress sought to redress in the false advertising provision of the Lanham Act.
As we explained in Phoenix, the purpose of the Lanham Act is to protect
commercial interests from a competitor’s false advertising and to protect the
13
business community from having its reputation and goodwill diverted. 489 F.3d at
1168; see also 15 U.S.C. § 1127 (explaining that the Lanham Act is designed “to
protect persons engaged in . . . commerce against unfair competition”). This factor
weighed in favor of prudential standing in Phoenix, because the plaintiffs alleged
that the defendant was their direct competitor and that the defendant’s false
advertisements caused the plaintiffs to both lose sales and incur increased
promotional costs. Id. Here, in sharp contrast, Natural Answers could suffer no
such commercial or competitive injury, because it was no longer selling or
promoting HerbaQuit Lozenges at the time of the alleged injury. Simply put,
Natural Answers could not have lost any customers or potential customers. To the
extent that Natural Answers suffered any injury at all, it did not sustain the kind of
injury Congress was concerned about when it passed the Lanham Act. See id. at
1163 (explaining that “[t]he congressionally-stated purpose of the Lanham Act
evinces a congressional intent to limit standing to a narrow class of potential
plaintiffs possessing interests the protection of which furthers th[e] congressionally
stated purpose” and denying standing to “parties that have not had their
competitive or commercial interests affected by the defendant’s conduct”) (internal
quotation marks omitted).
Second, there is no direct relationship between GSK’s conduct and the
14
claimed injury. The “typical false advertising claim” is one where “a plaintiff
alleges that it lost sales and/or market share as a result of the defendant’s false or
misleading representations about some characteristic of the defendant’s product or
services.” Id. at 1169. Thus, in Phoenix, we found this factor weighed against
standing. Here, the injury claimed is far more remote. Natural Answers alleges
only that GSK misled smoking cessation consumers by claiming that Commit
Lozenges was the “first and only stop smoking lozenge”; that this statement “more
than likely influenced the purchasing decision of customers since GSK, an industry
giant, can influence the purchasing decisions of customers”; and that, as a result,
“[t]he HERBAQUIT LOZENGES mark was weakened.” (Compl. ¶¶ 168, 173-74).
Again, because Natural Answers was not selling or promoting HerbaQuit Lozenges
at the time of the allegedly false advertising, it cannot claim to have suffered lost
sales, lost market share, or increased promotional costs. In fact, all it can allege is
that GSK’s conduct “might” cause the value of the HERBAQUIT LOZENGES
mark to “weaken” at some wholly unknown time if Natural Answers chooses to
reintroduce it to the market. This factor, too, weighs against prudential standing.
Further, GSK’s allegedly false advertising obviously affects companies that
actually sell smoking cessation products far more directly than it could affect
Natural Answers. Moreover, the amount of Natural Answers’s claimed damages is
15
entirely speculative. This is not a case where the plaintiff has lost any sales or
market share. Rather, Natural Answers has merely postulated that the weakening
of its HERBAQUIT LOZENGES mark might cause it to lose sales in the future if
it reenters the smoking cessation market. So indefinite a prediction of harm will
not support standing.
Finally, allowing Natural Answers to sue also presents a risk of duplicative
damages. Id. at 1172. In Phoenix, we concluded that this factor weighed against
prudential standing, because “[i]f we were to hold that Phoenix has prudential
standing to bring the instant claim, then every fast food competitor of McDonald’s
asserting that its sales had fallen by any amount during the relevant time period
would also have prudential standing to bring such a claim.” Id. The instant case
presents this problem in an even more extreme form. Indeed, if Natural Answers
has prudential standing to bring this claim, then any company that ever had, will
have, or, possibly, may have a smoking cessation product whose associated
trademark could potentially be “weakened” would have prudential standing.
In short, each of the five Phoenix factors weighs decidedly against finding
that Natural Answers has prudential standing to bring a Lanham Act false
advertising claim against GSK.
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C.
Since Natural Answers is unable to bring an unfair competition claim under
the Lanham Act under the theory of either false advertising or trademark
infringement, it follows that the common law claims based on unfair competition
and trademark infringement must fail as well. Planetary Motion, Inc. v.
Techsplosion, Inc., 261 F.3d 1188, 1193 n. 4 (11th Cir. 2001) (“Courts may use an
analysis of federal infringement claims as a ‘measuring stick’ in evaluating the
merits of state law claims of unfair competition.”) (quoting Investacorp, Inc. v.
Arabian Inv. Banking Corp. (Investcorp) E.C., 931 F.2d 1519, 1521 (11th Cir.
1991)). Thus, Natural Answers’s common law trademark infringement claims
must fail because it has abandoned the HERBAQUIT LOZENGES mark by not
using it in commerce or maintaining any intent to use it in commerce since 2002.
See Tally-Ho, Inc., 889 F.2d at 1023 n.6 (explaining that common law trademark
rights “can be lost through abandonment”). Similarly, Natural Answers’s common
law claim sounding in false advertising fails because, just as with the false
advertising claim brought under the Lanham Act, Natural Answers does not have a
commercial or competitive interest, lacks a direct injury, lacks proximity to the
alleged conduct, and presents a speculative and potentially duplicative damages
claim. See 5 McCarthy on Trademarks and Unfair Competition §§ 14:24, 27:2; see
17
also Conte Bros. Auto., Inc., 165 F.3d at 230 (explaining that the Lanham Act’s
standing requirements, including those pertaining to false advertising claims, are
codifications of the common law standing requirements).
D.
Finally, as Natural Answers concedes, its claim for a violation of the Florida
Deceptive and Unfair Trade Practices Act rises or falls on the success of its
trademark infringement and false advertising claims. The purpose of the FDUTPA
is “[t]o protect the consuming public and legitimate business enterprises from those
who engage in unfair methods of competition, or unconscionable, deceptive, or
unfair acts or practices in the conduct of any trade or commerce.” Fla. Stat. §
501.202(2) (2006). To bring a claim under this Act, the plaintiff must have been
aggrieved by the alleged unfair and deceptive act. See Citibank (South Dakota)
N.A. v. Nat’l Arbitration Council, Inc., No. 3:04-cv-1076, 2006 WL 2691528, at
*3 (M.D. Fla. Sept. 19, 2006); State of Fla., Office of Atty. Gen., Dep’t of Legal
Affairs v. Tenet Healthcare Corp., 420 F. Supp. 2d 1288, 1309 (S.D. Fla. 2005)
(citing Haun v. Don Mealy Imps., 285 F. Supp. 2d 1297, 1308 (M.D. Fla. 2003)).
As we have made clear already, Natural Answers could suffer no injury as a result
of the alleged trademark infringement, because it does not hold a valid mark in
HERBAQUIT LOZENGES that is subject to infringement. Moreover, Natural
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Answers could suffer no injury as a result of the allegedly false advertising,
because its product is not and has never competed with Commit Lozenges, and
Natural Answers’s complaint does not allege that it was injured in any manner as a
consumer of Commit Lozenges. Thus, just as with its other claims, Natural
Answers lacks standing to pursue a claim under the FDUPTA.
In short, because Natural Answers cannot assert claims for unfair
competition, trademark infringement, and false advertising under the Lanham Act,
as well as its common law claims for unfair competition, trademark infringement,
and trademark disparagement, and because there is no basis for its claim under
FDUPTA, we affirm the district court’s entry of final summary judgment for
GSK.3
AFFIRMED .
3
We need not and do not address the other grounds upon which the district court granted
Appellees final summary judgment.
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