Order recalling potentially infringing goods requires extra burden of proof

United States of America
In Marlyn Nutraceuticals Inc v Mucos Pharma GmbH & Co (Case 08-15101, July 2 2009), the US Court of Appeals for the Ninth Circuit has affirmed the issuance of a preliminary injunction that halted the defendant’s sale of a dietary supplement bearing the plaintiff’s trademark, but vacated the district court's decision insofar as it required product recall and restitution.

Mucos Pharma GmbH & Co developed a dietary supplement under the trademark WOBENZYM. Marlyn Nutraceuticals Inc exclusively distributed and sold the product in the United States. The parties entered into an agreement whereby Marlyn would have the exclusive right to manufacture and sell Wobenzym in the United States if Mucos ceased producing it. In 2006 Marlyn believed that Mucos had ceased producing Wobenzym because the product delivered in fulfilment of Marlyn’s purchase orders contained a different amount of active ingredients than as listed on the label. In 2007 Marlyn began to manufacture and sell Wobenzym in the United States. 

Mucos filed an action for trademark infringement and requested a preliminary injunction to stop Marlyn from selling the product under the WOBENZYM mark. Mucos argued that Marlyn’s formula differed from that of Mucos, thereby causing consumer confusion. The district court granted Mucos’s request for a preliminary injunction and ordered Marlyn to:
  • halt its sales of the product;
  • recall the products that it had already sold; and
  • provide restitution to consumers who had purchased Marlyn’s Wobenzym. 
Marlyn appealed.

The Ninth Circuit affirmed the district court’s decision to issue a preliminary injunction against Marlyn, yet vacated the order because of its scope. Adopting Third Circuit precedent, the court held that a party seeking product recall through a preliminary injunction must satisfy the traditional preliminary injunction test and establish the following three factors: 
  • the defendant’s infringement was wilful or intentional;
  • the risk of confusion to the public and injury to the trademark owner is greater than the burden of the product recall to the defendant; and
  • the defendant’s infringing activity caused substantial risk of danger to the public.
While the district court did not analyze all three additional factors, it based its recall order in part on substantial risk of danger to the public, finding that Marlyn’s product would create a public health hazard if it remained on the market. Finding no evidence in the record to support the existence of a public health risk, the Ninth Circuit vacated the district court’s recall and restitution order, remanding the issue for further consideration.

The Ninth Circuit rejected Marlyn’s defence that Mucos ceased production of Wobenzym, finding that the changes in the product formula were insignificant and that “trademark owners are permitted to make small changes to their products without abandoning their marks”.

Elisabeth Malis, McDermott Will & Emery LLP, Los Angeles

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