Bayer Corp. v. Custom School Frames, LLC, CIV.A.02-2604.

• Decision Date: 16 April 2003
• Docket Number: No. CIV.A.02-2604.,CIV.A.02-2604.
• Citation: 259 F.Supp.2d 503
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: BAYER CORPORATION, Plaintiff, v. CUSTOM SCHOOL FRAMES, LLC and Dale J. "Jerry" Autin, Defendants.

259 F.Supp.2d 503

BAYER CORPORATION, Plaintiff, v. CUSTOM SCHOOL FRAMES, LLC and Dale J. "Jerry" Autin, Defendants.

No. CIV.A.02-2604.

United States District Court, E.D. Louisiana.

April 16, 2003.

Mark P. Seyler, Barkley & Thompson, New Orleans, LA, for Defendants, Custom School Frames, LLC and Dale J. Autin.

Mary Ellen Roy, T.A., J. Michael Monahan, II, Phelps Dunbar LLP, New Orleans, Raymond I. Geraldson, Jr., Jonathan S. Jennings, Thad Chaloemtiarana, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, Chicago, IL, for Plaintiff, Bayer Corporation.

FINAL JUDGMENT

MCNAMARA, District Judge.

I. INTRODUCTION

Bayer Corporation brought this Action on August 22, 2002, against defendants, Custom School Frames, LLC, ("CSF") and Dale J. Autin, to prevent the unlawful sale of foreign manufactured flea control preparations bearing Bayer's ADVANTAGE mark and the prominent use of this mark on Defendants' no-fleas.com web site. The parties stipulate to the following findings of fact and conclusions of law, and consent to entry of a permanent injunction as set forth below. Accordingly, the court enters the following:

II. FINDINGS OF FACT

Bayer Corporation is an Indiana corporation with its principal place of business in Pittsburgh, Pennsylvania and is a wholly-owned subsidiary of Bayer AG, an entity formed under the laws of, and based in, Germany. Bayer AG and Bayer Corporation are collectively referred to herein as "Bayer."

Bayer AG manufactures animal flea control preparations, among other goods, and markets these products outside the United States. Bayer Corporation markets the animal flea control preparations it receives from Bayer AG solely within the United States. Bayer Corporation has made continuous use of the trademark ADVANTAGE ("ADVANTAGE mark") in connection with the sale and advertising of animal flea control preparations ("ADVANTAGE products"). Bayer Corporation also offers a variety of computer services in connection with the ADVANTAGE ADVISORY mark.

Bayer Corporation owns a federal registration for its ADVANTAGE mark in the United States Patent and Trademark Office, namely, Registration No. 2,044,733 for ADVANTAGE for "flea control preparations for dogs and cats," and Registration No. 2,474,534, for ADVANTAGE ADVISORY for "computer services, namely, providing an electronic mail newsletter in the field of pet care, veterinary medicine and veterinary technology." Both registrations are valid and subsisting, and Registration No. 2,044,733 is incontestable in accordance with 15 U.S.C. § 1064.

Bayer Corporation has sold tens of millions of dollars worth of animal flea control preparations under the ADVANTAGE mark throughout the United States and has expended tens of millions of dollars to advertise and promote these ADVANTAGE products and the ADVANTAGE mark. As a result of Bayer Corporation's extensive sales, promotion and advertising, the ADVANTAGE mark has become famous, and represents an extraordinarily valuable goodwill owned by Bayer Corporation.

Bayer AG tailors the manufacture of ADVANTAGE products to suit the requirements, laws and regulations of specific geographic regions or countries to reflect the differences among these areas in, among other things, environmental laws and regulations, language, climate, local addresses and telephone numbers. Bayer AG appoints distributors for specific geographic regions, including the regions of Australia, and the United Kingdom and Ireland, and for specific countries, such as the United States, in order to maintain the quality associated with ADVANTAGE products within each particular region or country.

Bayer AG prohibits the sale of the ADVANTAGE products by such distributors or agents outside of their designated region or country. The ADVANTAGE products sold in the region incorporating the United Kingdom and Ireland, and the ADVANTAGE products sold in the Australia region, are not authorized or intended for exportation out of these areas, or for importation into, or sale or distribution in, the United States.

In the United States, Bayer Corporation sells the ADVANTAGE products only to authorized and licensed veterinarians for resale to their pet owner clients. Bayer Corporation offers these authorized veterinarians information and training on the safe and appropriate use of the ADVANTAGE products.

Since 1996, Bayer Corporation has advertised its ADVANTAGE products through, and provided useful dosage and safety information to pet owners on, its Internet web site located at www.no-fleas.com, but Bayer does not sell the ADVANTAGE products through the Internet.

Defendants have advertised and sold within the United States, and within this District, two types of animal flea control preparations bearing the ADVANTAGE mark, which are manufactured by Bayer AG for sale and use outside of the United States, namely, one type manufactured and packaged for sale exclusively in the United Kingdom and Ireland (the "U.K. Product"), and another type manufactured and packaged for sale in the Australia region (the "Australian Product") (collectively, "Foreign Product"). As more thoroughly discussed below, the Foreign Product is not authorized for sale or use in the United States.

Defendant CSF has used an Internet web site located at the domain name www. no-fleas.com to advertise and sell the Foreign Product. Defendant CSF, without authorization from Bayer, registered and first used the no-fleas.com domain name well after Bayer Corporation's registration and use of its nofleas.com domain name. Also without Bayer's authorization, Defendant CSF has made prominent use of the ADVANTAGE mark on the no-fleas.com web site, including the unauthorized use of ADVANTAGE FLEA CONTROL as a title of the web site and as a trade name, the unauthorized portrayal of the distinctive packaging of the ADVANTAGE products, and the unauthorized use of the putative copyright notice "© 2000 Advantage Flea Control." Defendant CSF also used, without Bayer's permission, Bayer Corporation's ADVANTAGE mark in the computer code for their no-fleas.com web site to obtain a high placement in Internet search results when consumers conduct Internet searches for, among other things, purchasing or safety information about the ADVANTAGE products using the keywords or search terms "ADVANTAGE" or "ADVANTAGE FLEA CONTROL." Defendant CSF has without Bayer's authorization, paid at least one Internet search engine to secure highly prominent placement for its no-fleas.com web site in search results when consumers conduct Internet searches for, among other things, purchasing or safety information about the ADVANTAGE products, and using the keywords or search terms "ADVANTAGE" or "ADVANTAGE FLEA CONTROL."

Defendants are not licensed veterinarians, and the Foreign Product is sold directly to consumers without offering a consultation with a veterinarian concerning the consumers' safe use of these products on the dog or cat in question.

The Foreign Product also has the following material differences from the ADVANTAGE product authorized by Bayer for sale in the United States:

(1) it has not been registered with the United States Environmental Protection Agency ("EPA") and does not feature an EPA registration number on the label; therefore the Foreign Product constitutes an unregistered pesticide in violation of the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. §§ 136 et. seq., and the unauthorized sale of the Foreign Product harms consumers by undermining the EPA's ability, through FIFRA's requirements, to provide consumers with appropriate health and safety guidelines for use of the pesticides sold in the United States;

(2) the Foreign Product has not been registered with the Louisiana Department of Agriculture and Forestry ("LDAF"), and does not feature certain statutorily required information on the labels; therefore, the Foreign Product constitutes an unregistered pesticide in violation of the Louisiana Pesticide Law ("LPL"), La.Rev.Stat. Ann. 3:3201, et seq., and the unauthorized sale of this Foreign Product harms the public by undermining the LDAF's ability, through LPL's requirements, to provide Louisiana consumers with appropriate health and safety guidelines for the use of pesticides in Louisiana. See e.g., La.Rev. Stat. Ann. § 3:3221;

(3) the Australian Product does not include safety information pertaining to both human and animal first aid;

(4) the U.K. Product does not identify any emergency or customer service telephone numbers and the Australian Product packaging identifies a customer service telephone number that is inaccessible from the United States;

(5) the Foreign Product is sold through the Internet "over-the-counter" which does not permit veterinarians the opportunity to correctly prescribe dosages based on a personal evaluation of the dog or cat and to determine whether a potential health risk to the pets may exist;

(6) there are different instructional pamphlets enclosed in the Foreign Product that, among other things, contain different statements from those in the authorized ADVANTAGE product sold in the United States about the efficacy of this product after shampooing or washing the animals;

(7) the marketing of the Foreign Product conflicts with Bayer Corporation's return policy for the ADVANTAGE products;

(8) the Foreign Product is not subject to Bayer Corporation's quality control procedures for shipment and storage of the ADVANTAGE products and therefore is subject to damage;

(9) the Foreign Product is not subject to the labeling, marketing or advertising plans and procedures followed by Bayer Corporation in the United States;

(10) the Foreign Product does not inform consumers of, or allow them to participate in, Bayer Corporation's promotions meant for authorized ADVANTAGE products sold in the United States;

(11) the Foreign Product uses metric measurements (e.g., kilograms), for dosage instructions, pet weight and other matters of...