In Ferring B.V. v. Fera Pharmaceuticals, LLC, the Eastern District of New York was called upon to determine the importance of the United States Patent and Trademark Office’s Trademark Manual of Examining Procedure (“TMEP”) and its guidelines in determining the validity of a federally registered trademark. The Court declined to afford the TMEP an elevated status.
Ferring is a pharmaceutical company focused largely on gastrointestinal medications, and medicines intended for the treatment in the fields of fertility and endocrinology. In its long history in this field, Ferring obtained numerous federal trademark registrations for FERRING and FERRING PHARMACEUTICALS. Many of those registrations have become incontestable under the provisions of the Trademark Act due to their continuous and exclusive use for five years. Ferring also owned numerous FERRING marks that had not yet achieved incontestable status.
Long after Ferring launched and established its FERRING brand, Fera launched its own brand of ophthalmologic pharmaceutical products under the FERA and FERA PHARMACEUTICALS marks. Ferring sued Fera for trademark infringement of its federally registered marks, unfair competition, common law trademark infringement and unfair competition, and trademark dilution under New York law. Fera counterclaimed seeking cancellation of Ferring’s registered trademarks, alleging non-use and fraud. The basis for the “non-use” claim relied on wording of the identification of goods in the registration. The basis for the fraud claim was statements Ferring made to the USPTO Examining Attorney during the prosecution of the application.
The first counterclaim — targeted against Ferring’s non-incontestable marks — was for cancellation of those marks for non-use in connection with the goods listed in the registration. This claim relied on a very technical reading of how the USPTO interprets language in a trademark application’s identification of goods. In this case, Ferring’s registration claimed:
HOUSE MARK FOR A FULL LINE OF PHARMACEUTICALS AND PHARMACEUTICAL PREPARATIONS FOR THE TREATMENT OF UROLOGICAL DISORDERS AND CONDITIONS, DIABETES INSIPIDUS, ENURESIS, BED WETTING, ARTHRITIS, FOR TREATMENT IN THE FIELD OF INFERTILITY, AND FOR USE AS A DIAGNOSTIC AGENT AND THERAPEUTIC AGENT FOR HORMONAL DISORDERS
The crux of Fera’s argument was that TMEP Section 1402.03(c) instructs USPTO Examining Attorneys only to accept a description of goods for “full line of” products if the specimens or evidence of record demonstrate that the mark is used on a sufficient number or variety of products in its line. This, the TMEP states, is a rare occurrence. Fera noted that this section of the TMEP was amended in 2011 (i.e., after the Plaintiff’s mark in this case was approved) to state that if the goods are a “full line of pharmaceuticals,” the trademark applicant must produce evidence to the USPTO that it uses the mark in connection with pharmaceuticals to treat diseases or health problems in all categories in the World Health Organization (“WHO”) International Statistical Classification of Diseases. Ferring’s registrations did not meet this standard.
The Court was unimpressed with this argument. First, the Court noted that the 2011 amendment was a new requirement, rather than a clarification of existing policy. More importantly, however, the Court declared that the TMEP is not a statute, but merely a guideline the agency issued for the benefit of the Trademark Examining Operation. Thus, there was no basis or authority showing that failure to comply with TMEP 1402 is proper ground for cancelling a trademark.
The Court was more willing to entertain Fera’s counterclaim to cancel Ferring’s incontestable registrations based on claims of fraud. Fera’s argument centered on representations Ferring made to the Examining Attorney during the prosecution of the trademark application. The Examining Attorney issued the first Office Action, denying registration of Ferring’s mark on the ground that the specimens of use did not show use of the mark on “a house mark for a full line of…” pharmaceuticals, but were in fact the same drug marketed under different brand names. In fact, the Examining Attorney issued three Office Actions, all concerning the sufficiency of the evidence demonstrating use of a “house mark for a full line of” pharmaceuticals. Ferring responded to each Office Action with more specimens of use and arguments in support of the claim that these were different drugs. Eventually, on Reconsideration, the Examining Attorney was convinced by Ferring’s statements that the specimens showed use of the mark on twelve different drugs. However, Fera presented strong arguments to the Court that Ferring made false statements to the USPTO, and that the specimens only showed use in connection with five drugs. The Court was satisfied that Fera’s pleadings of fraud were sufficiently pled to allow this counterclaim to stand.
The question of trademark “non-use” and the way identifications of goods are seen by the USPTO, as opposed to the Courts, is novel. In some instances, trademark examination practice can be arcane. Cancellation of a trademark registration based on “non-use,” as interpreted by the TMEP, is a harsh outcome. As the Court noted here, modification of the identification of goods sometimes may be the better remedy, but only if modification would reasonably allow the junior user’s mark (here, defendant’s FERA mark) to register. In this case, however, the Court indicated that, even if the identification of goods in Plaintiff’s FERRING registrations were modified by taking out the “full line of” language, the parties’ marks would still be confusingly similar.