Sanofi-Aventis v. Advancis Pharmaceutical Corp.

• Decision Date: 26 September 2006
• Docket Number: No. CIV. 03-1083-SLR.,CIV. 03-1083-SLR.
• Citation: 453 F.Supp.2d 834
• Parties: SANOFI-AVENTIS and Aventis Pharmaceuticals, Inc., Plaintiffs, v. ADVANCIS PHARMACEUTICAL CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

453 F.Supp.2d 834

SANOFI-AVENTIS and Aventis Pharmaceuticals, Inc., Plaintiffs, v. ADVANCIS PHARMACEUTICAL CORPORATION, Defendant.

No. CIV. 03-1083-SLR.

United States District Court, D. Delaware.

September 26, 2006.

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Francis DiGiovanni, Esquire, of Connolly Bove Lodge & Hutz LLP, Wilmington, DE, Of Counsel: Jonathan Z. King, Esquire, Richard S. Mandel, Esquire, and Midge M. Hyman, Esquire, of Cowan, Liebowitz, & Latman, P.C., New York City, for Plaintiffs.

Richard D. Kirk, Esquire, of The Bayard Firm, Wilmington, DE, Of Counsel: David H. Bamberger, Esquire, Ann K. Ford, Esquire, of DLA Piper Rudnick Gray Cary U.S. LLP, Washington, DC, for Defendant.

OPINION

SUE L. ROBINSON, Chief Judge.

I. INTRODUCTION

On December 1, 2003, Aventis and Aventis Pharmaceuticals, Inc. filed suit against defendant Advancis Pharmaceutical Corporation, alleging trademark infringement, 15 U.S.C. § 1114; false designation of origin, 15 U.S.C. 1125(a); federal trademark dilution, 15 U.S.C. § 1125(c); state trademark dilution pursuant to the Delaware Trademark Act, 6 Del. C. § 3313; unfair competition pursuant to the Delaware Uniform Deceptive Trade Practices Act, 6 Del. C. § 2531 et seq.; and common law unfair competition. (D.I. 51) In addition, plaintiffs seek cancellation of U.S. Trademark Registration No. 2,887,400 for the ADVANCIS mark.¹ (Id.) Defendant denied plaintiffs' allegations and counter claimed, seeking cancellation of plaintiffs' trademark registrations. (D.I. 52) The court conducted a bench trial in May 2005. (D.I. 68-71) The following constitutes the court's findings of fact and conclusions of law.

II. FINDINGS OF FACT

A. The Parties

1. Aventis, a French company, was formed in 1999 through the merger of Hoechst AG and Rhône-Poulenc S.A. (D.I. 68 at 245) In December 2004, Aventis merged with Sanofi-Synthelabo to form Sanofi-Aventis, a company based in Paris France. (D.I. 61 at 3) Sanoli-Aventis has been substituted as a plaintiff in this action. (D.I. 66)

2. Plaintiff Aventis Pharmaceuticals, Inc., part of the Sanofi-Aventis Group, is a Delaware corporation with its principal place of business in Bridgewater, New Jersey. (D.I. 61 at 3)

3. Defendant, a Delaware corporation with its principal place of business in Germantown, Maryland, was formed in 1999 by Edward Rudnic., (Id. at 4; D.I. 71 at 740) In October 2003, defendant went public with an initial public stock offering. (Id. at 789)

B. Plaintiffs' and Defendant's Marks

4. Plaintiffs own U.S. Trademark Registration Nos. 2,503,413 and 2,787,832 and Application Nos. 79/007,488 and 78/272,624, which all relate to the AVENTIS mark. (D.I. 61 at 3-4) Sanofi-Aventis has also filed a federal trademark application for Sanofi-Aventis. (Id. at 4)

5. The AVENTIS name was borrowed from a Hoechst Germany subsidiary. (D.I. 69 at 484-85) Prior to using the mark, several deals were struck by Aventis to ensure exclusive use, including a $2 million transaction with Alaris, the owner of the ADVANTIS mark. (Id. at 484-501; PX 77-79, 83)

6. Plaintiffs are contractually prohibited from using AVENTIS as anything other than a house mark to identify the company. (D.I. 68 at 282-83) The name AVENTIS is intended to suggest innovation, movement, and adventure. (D.I. 69, at 458, 510)

7. The AVENTIS mark consists of a symbol resembling a wheat shaft in front of the word "Aventis." (DX 13, 33) "Aventis" is written in Ocean SansAV font and is in italics. (Id.) The first letter is capitalized, while the rest of the word consists of lower-case letters. (Id.) The slogan, "Our challenge is life," sometimes appears on promotional materials. (Id.)

8. The Sanofi-Aventis mark consists of the words "sanofi aventis" in lower case letters and without a hyphen. (DX 81) Above "sanofi aventis" is a design, which consists of a heart and three people dancing. (D.I. 68 at 138; DX 81) Below "sanofi aventis" is a "smile," or curved line. (DX 81) Below the smile is the slogan, "Because health matters." (Id.)

9. Defendant owns U.S. Trademark Registration No. 2,887,400 and Application Nos. 76/513,925, 76/513,926, 76/513,224, and 76/291,066, which all relate to the ADVANCIS mark. (D.I. 61 at 5) Defendant has used or intends to use ADVANCIS as a trade name to identify the company, as a service mark for drug research and development, and as a trademark for use on pharmaceutical products. (Id.)

10. Defendant was initially named Advanced Pharmaceutical Systems, Inc. (D.I. 71 at 740; DX 101) Shortly after the company was formed, defendant's name was shortened to Advanced Pharma, Inc. (D.I. 71 at 740-41; DX 101) In September 2001, defendant changed its name to Advancis Pharmaceutical Corporation ("Advancis") after defendant became aware of a nutritional drug company with a name similar to Advanced Pharma. (D.I. 69 at 521; D.I. 71 at 746-47; DX 101)

11. Defendant spent several months selecting a name before it chose Advancis. (D.I. 71 at 737-49) Defendant wanted a name that started with "A", in keeping with the "advanced" theme. (Id. at 737, 742) In its search, defendant considered the name "Advansys," but determined that it was too close to DelSys, an existing company. (Id. at 801-05) Defendant's lawyers also conducted an investigation on the name "Advantis," the name assigned to Aventis. (Id. at 815-16) Eventually, defendant settled on the name "Advancis." (Id. at 746-48)

12. The ADVANCIS mark consists of the name ADVANCIS written in all capital letters. (DX 101) Below ADVANCIS is a line and below the line, in small capital letters, are the words PHARMACEUTICAL CORP. (Id.) The "v" in ADVANCIS is shaped like a checkmark and, above and encompassing the top of the "v," are three slanted half ovals. (Id.)

C. Plaintiffs' and Defendant's Products and Services

13. Sanofi-Aventis is the third-largest pharmaceutical company in the world and is in the business of researching, developing, and manufacturing prescription drugs. (D.I. 61 at 3) Plaintiffs' products cover many areas, including allergy, oncology, diabetes, and human vaccines. (D.I. 68 at 168) Plaintiffs' most well-known products include Allegra (allergies), Taxotere (cancer), Lovenox (thrombosis), and Lantis (diabetes). (Id.; PX 9, 14, 15, and 20) Plaintiffs have also recently launched a new product, Ketek, which is an anti-infective with a low risk of resistance. (D.I. 68 at 154-57)

14. Sanofi-Aventis invests billions each year in the research and development of prescription drugs. (D.I. 51 at 3)

15. Defendant specializes in the development and marketing of anti-infective pharmaceutical products. (D.I. 61 at 4) Defendant's primary technology is a drug-delivery system known as Pulsys, which increases the efficacy of a drug by delivering it to the patient in pulsatile doses. (D.I. 71 at 738-39) The Pulsys system releases doses in smaller time increments, as opposed to taking a pill every twelve hours, thereby killing bacteria before they can mutate and resist the hostile environment created by the antibiotic. (Id.) Defendant has not yet put any of its Pulsys products on the market. (Id. at 774-75)

16. Defendant also markets the antibiotic Keflex, the North American rights to which defendant recently acquired from Eli Lilly. (Id. at 773) At the time of trial, Keflex had not yet been sold with the ADVANCIS name on it. (Id. at 775)

D. Plaintiffs' Use Of The Aventis Mark Before And After The Sanofi-Aventis Merger

17. Prior to the merger between Aventis and Sanofi-Synthelabo, the AVENTIS mark was printed on labels, packaging, and promotional materials along with the mark of the specific drug. Aventis was listed on the New York Stock Exchange ("NYSE") as AVE. (D.I. 68 at 324)

18. Since the merger, AVENTIS has been used as a part of the SANOFI-AVENTIS mark. Aventis Pharmaceuticals, Inc. continues to operate in the United States. (Id. at 220-21) There is a separate website for the U.S.-based affiliate at www.aventis-us.com. (Id. at 208-09; PX 57)

19. The SANOFI-AVENTIS mark is used on business and communication materials and signs. (Id. at 293) Aventis has been de-listed from the NYSE and Sanofi-Aventis is now listed as SNY. (Id. at 324)

20. Packaging for products sold in the United States still contains the AVENTIS mark. (Id. at 221-22) Promotional and advertising materials now include the SNOFI-AVENTIS mark along with a subline reading "Aventis Pharmaceuticals, a member of the sanofi-aventis Group." (Id. at 222, 311-13; DX 79, 123) All promotional materials and advertisements that carried the AVENTIS mark prior to the merger continue to be used, rather than destroyed. (D.I. 68 at 223-24, 288)

E. Customers

21. Plaintiffs' customer base consists of physicians, patients, pharmacists, managed care customers, key opinion leaders, and insurers. (D.I. 68 at 179-87) Plaintiffs also target potential employees, the investment community, and potential clinical trial participants. (Id. at 179, 188-94)

22. Because defendant's products and name are not on the market yet, defendant's customer base primarily consists of researchers, potential employees, and investors. (D.I. 71 at 765-71) However, with the introduction of Keflex as an Advancis product and the potential introduction of the Pulsys system, defendant will begin to target many of the same customers as plaintiffs. (Id. at 773-75)

F. Advertising

23. Most of plaintiffs' advertising efforts are directed to promoting their products. Plaintiffs conduct direct-to-consumer advertising, which contains the AVENTIS name. (D.I. 68 at 198-200; PX 50) The AVENTIS name is also on the packaging of products sold by Aventis Pharmaceuticals, Inc. (D.I. 68 at 178, 221)

24. Plaintiffs market their products through several media channels, including television, radio, print, and brochures left with doctors. (Id. at 195; PX 30; DX...