Horphag Research Ltd. v. Garcia

• Decision Date: 09 January 2007
• Docket Number: No. 04-55373.,04-55373.
• Citation: 475 F.3d 1029
• Parties: HORPHAG RESEARCH LTD, Plaintiff-Appellee, v. Larry GARCIA, dba Healthierlife.Com, Defendant-Appellant, and Mario Pellegrini, dba Healthdiscovery.Com, Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

475 F.3d 1029

HORPHAG RESEARCH LTD, Plaintiff-Appellee, v. Larry GARCIA, dba Healthierlife.Com, Defendant-Appellant, and Mario Pellegrini, dba Healthdiscovery.Com, Defendant.

No. 04-55373.

United States Court of Appeals, Ninth Circuit.

Submitted October 16, 2006.^*

Filed January 9, 2007.

Larry Garcia, San Antonio, TX, pro se.

Marvin S. Gittes, Timur E. Slonim, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, NY, for the plaintiff-appellee.

Appeal from the United States District Court for the Central District of California; Virginia A. Phillips, District Judge, Presiding. D.C. No. CV-00-00372-VAP.

Before HARRY PREGERSON and SIDNEY R. THOMAS, Circuit Judges, and LOUIS F. OBERDORFER,^** Senior Judge.

PREGERSON, Circuit Judge.

We are called upon to consider, for a second time, Defendant Larry Garcia's use of Horphag Research Ltd's ("Horphag's") trademark Pycnogenol. In a previous appeal, we affirmed the district court's grant of judgment as a matter of law on Horphag's trademark infringement claims. See Horphag Research Ltd. v. Pellegrini, 337 F.3d 1036, 1042 (9th Cir.2003). We vacated the district court's order on Horphag's trademark dilution claim and asked the district court to reconsider its decision in light of the Supreme Court's opinion in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 123 S.Ct. 1115, 155 L.Ed.2d 1 (2003). On remand, the district court granted Horphag's motion for summary judgment on its trademark dilution claim and reinstated its original attorneys' fees award. Defendant Larry Garcia, appealing in pro per, again challenges the district court's grant of summary judgment on Horphag's trademark dilution claim and the corresponding attorneys' fees award. We have jurisdiction under 28 U.S.C. § 1291, and we affirm the district court.

I. Factual and Procedural Background

The facts of this case are largely the same as those upon which we based our previous opinion, and we recount them only in brief detail here. In 1969, Dr. Jack Masquelier, a French professor of pharmacology, discovered a chemical antioxidant substance made from the bark of a French maritime pine tree. The substance supposedly assists in nutritional distribution and proper circulation. Around 1978, Masquelier brought the product to market under the name "Pycnogenol." Masquelier¹ received the trademark in France for the mark Pycnogenol in 1989.

Around 1987, Horphag began selling the pine bark extract outside of France under contractual relationship with Masquelier. Thereafter, things between Horphag and Masquelier went sour, and the two parties dissolved their relationship. In 1993, Horphag was granted the United States trademark for the mark Pycnogenol.² Since then, Horphag has made extensive efforts to control the quality of Pycnogenol and has invested heavily in research and marketing its product. Pycnogenol is now one of the fifteen most sold herbal supplements in the United States. Horphag has not authorized any other entity to use its mark.

Garcia was once a licensed dealer for Horphag and sold Horphag's products through his Internet site "healthierlife.com." In February 1999, Garcia stopped distributing products manufactured by Horphag and began selling products manufactured by Masquelier. One of the products Garcia sells is "Masquelier's Original OPCs," a supplement derived from grape pits that competes with Horphag's pine-bark-based supplement. Garcia claims that he stopped distributing for Horphag after he discovered that Masquelier's product, rather than Horphag's product, was the "true Pycnogenol."

Horphag contends that Garcia used the mark Pycnogenol as a "bait and switch" to induce customers to purchase his product, Masquelier's Original OPC. Garcia used the term Pycnogenol as a metatag³ to lure would-be customers to his website. Once at the website, consumers could find information designed to educate prospective users about the debate over the "rightful ownership" of the Pycnogenol patent and trademark. Other parts of Garcia's website, however, were more problematic.

In several places, Garcia used the term Pycnogenol as a generic term, referring to both Horphag's product and Masquelier's product as Pycnogenol. Garcia attributes the results of research conducted on Horphag's Pycnogenol to Masquelier's product. For example, Garcia's website describes Masquelier's OPC as "a patented peak performance nutrient . . . among the best new weapons . . . to maintain overall good health for longer and longer periods of time." On the "Safety Factor" section of Garcia's healthierlife.com website, Garcia states "Pycnogenol studies carried out at the Pasteur Institute in Lyon, France, have shown it to be nontoxic to humans. . . . Pycnogenol should be viewed as a completely safe nutrient." Both of these statements are direct quotes from Dr. Steven Lamm and Gerald Secor Couzens' book, Younger at Last (1997), which makes explicit that the health and safety benefits to which it is referring attach to Horphag's product. Indeed, Lamm and Couzens warn consumers not to purchase Pycnogenol imitators not manufactured by Horphag.

Garcia's website also contains quotations from scientific literature discussing Horphag's Pycnogenol that were altered to make them appear as though the quotes were discussing Masquelier's product. For instance, Garcia altered a quotation taken from Dr. Richard A. Passwater's book, Pycnogenol: The Super "Protector" Nutrient (1994). On Garcia's website, the quotation reads: "Masquelier's Original OPC has not only withstood the test of time (since 1953),⁴ it was extensively tested before it was made available as a food supplement." But Passwater's book actually reads: "Pycnogenol has not only withstood the test of time, it was extensively tested before it was made available as a food supplement." Pycnogenol: The Super "Protector" Nutrient 99. Passwater's book makes clear that it intended to refer to Horphag's product, a fact Garcia's website does not acknowledge.

Based on these and other alleged misuses of the Pycnogenol trademark by Garcia, Horphag argues that Garcia "has lessened the capacity of Pycnogenol to uniquely identify and distinguish [its] product," thereby diluting Horphag's trademark. Garcia, in turn, argues that Horphag's suit is merely an attempt to stifle the debate on the "true" origins of Pycnogenol.

On June 18, 1999, Horphag sued Garcia alleging trademark infringement, false designation of origin, and trademark dilution under federal law, as well as trademark dilution and unfair competition under California law. On July 24, 2000, the district court granted summary judgment in favor of Garcia on Horphag's claim of false designation of origin. The district court also denied Horphag's request for a preliminary injunction. A jury trial was held on the remaining claims from July 24 through 27, 2001.

After both sides rested their cases on July 27, 2001, but before the case was submitted to the jury, the district court granted Horphag's motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) on both its trademark dilution claim and infringement claim. The district court held that Garcia infringed and unlawfully diluted Horphag's trademark Pycnogenol and awarded attorneys' fees to Horphag in its judgment on August 28, 2001. Garcia appealed the judgment as a matter of law and the award of attorneys' fees.

On July 29, 2003, this court issued an amended opinion affirming the district court's summary judgment in favor of Horphag on its trademark infringement claim. See Horphag Research, 337 F.3d at 1042. We vacated the judgment on Horphag's trademark dilution and remanded it for reconsideration of the claim in light of Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 123 S.Ct. 1115, 155 L.Ed.2d 1 (2003), which altered the showing of dilution required for an anti-dilution claim. See id. at 1041. We also directed the lower court to reconsider the portion of the attorneys' fees analysis that related to the dilution claim. See id. at 1042.

On November 24, 2003, Horphag filed a motion for summary judgment with respect to its dilution claim.⁵ Horphag argued that evidence already admitted at trial conclusively proved that Garcia actually diluted its trademark. On January 22, 2004, the district court granted Horphag's motion for summary judgment. It concluded that none of Garcia's purported "material questions of fact" were relevant and that Horphag was entitled to summary judgment as a matter of law. The court also reinstated the award of attorneys' fees. Garcia appealed.⁶

II. Standard of Review

A grant of summary judgment is reviewed de novo. See Buono v. Norton, 371 F.3d 543, 545 (9th Cir.2004). In reviewing an order granting summary judgment, we view the evidence in the light most favorable to the nonmoving party, drawing all reasonable inferences in his favor. See Hernandez v. Hughes Missile Sys. Co., 362 F.3d 564, 568 (9th Cir.2004). We must determine whether there are genuine issues of material fact and whether the district court correctly applied the relevant substantive law. See Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004). The moving party bears the initial burden to demonstrate the absence of any genuine issue of material fact. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987). Once the moving party meets its initial burden, however, the burden shifts to the non-moving party to "set forth, by affidavit or as otherwise provided in Rule 56, `specific facts showing that there is a genuine issue for trial.'" Id. (citing Fed.R.Civ.P. 56(e)) (emphasis omitted). In reviewing an order granting summary judgment, this court may not weigh the evidence or pass on the credibility of witnesses but is instead limited to determining whether there is any genuine issue for trial. See Abdul-Jabbar v. Gen. Motors Corp., 85 F.3d 407, 410 (9th Cir.1996).

As an initial matter, Garcia argues...