Natural Answers, Inc. v. SmithKline Beecham Corp.

[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

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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

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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

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“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,

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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

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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

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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

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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

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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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