Wednesday, June 21, 2006

Nature Made makes unnaturally bad removal argument

From the Nutritional and Dietary Supplement Law Blog comes this report on Pinecrest Consortium, Inc. v. Pharmavite LLC: Defendant makes Nature Made vitamins; Nature Made is an incontestable federally registered mark. Some Nature Made Vitamin E is not, in fact, from natural sources (which may make a difference in performance, and certainly makes a difference in perception).

Plaintiff sues under Florida’s consumer protection law in Florida state court – though the plaintiff is incorporated, it’s apparently an individual customer. Defendant removes, arguing that plaintiff’s complaint is against its federally registered trademark and thus raises a federal question.

Defendant argues that plaintiff’s lawsuit would bar it from using its registered mark in Florida and is thus equivalent to a cancellation, which can only happen federally. Problems with that: (1) A cancellation wouldn’t bar use of the mark, just get rid of the benefits of registration, so there’s no equivalence. (2) Anyway, a registration is an exclusive right to use as against confusing marks, but it’s not an affirmative right to use – a law firm’s name may be a registered trademark for providing law services, but if the firm members all lose their state-issued licenses for malpractice, they can’t continue to offer services under the mark. (3) Anyway again, if plaintiff wins, defendant could still use its mark in Florida, as long as it uses it for natural vitamins.

Bottom line: Just as courts may reject infringement claims even if the PTO refused to register the defendant's mark, courts may conduct an independent analysis of deceptiveness. The PTO's determination -- often on a very limited record, and one that may not reflect present reality -- cannot control.

In the papers, defendant makes a slightly more sophisticated and more deeply wrong argument: Its registration is incontestable, thus it has secondary meaning as a matter of law, thus it can’t be deceptive (because consumers understand the name as a designation of source rather than a claim about composition). If this were true, it might justify complete preemption and thus removal. If only the Lanham Act didn’t provide that incontestability is no defense to a violation of §2(a), which prohibits the registration of deceptive marks. (See also Harjo, a case about cancelling incontestable marks on §2(a) disparagement grounds even after decades of use.) If Nature Made used to be all natural, its registration would have been fine and nondeceptive. But if, despite its secondary meaning, the term also continues to indicate to a substantial number of consumers that the main ingredients are natural and Nature Made now produces artificial vitamins, there’s no Lanham Act barrier to the lawsuit.

This particular claim may fail on other grounds, but removal is silly.

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