A likelihood exists when (1) the goods were not intended to be sold in the market in question, and (2) the goods are materially different from the goods typically sold in that market under the mark. See Novartis Animal Health US, Inc. v. Abbeyvet Export Ltd., 409 F. Supp. 2d 264, 266 (S.D.N.Y. 2005). On the other hand, when no material difference exists between the goods in question, then the mere unauthorized sale of the trademarked good does not create an actionable likelihood of confusion.
Specifically, where a plaintiff alleges that the defendant's products exclude or alter nutritional information required for U.S. goods and articulates why that change would be relevant to consumers, courts have found that such a showing suffices to demonstrate a material difference. See, e.g., Novartis Animal Health US, Inc. v. Abbeyvet Exp. Ltd., 409 F.Supp.2d 264, 267 (S.D.N.Y. 2005) (finding that the absence of FDA-required information and labeling was a material difference); Helene, 890 F.Supp. at 159 (finding material differences where the labels of the allegedly infringing products did โnot contain certain information regarding product ingredientsโ and where the court found that โthe ingredients of a product are often relevant to consumers in determining whether to purchase a productโ); PepsiCo, Inc. v. F & H Kosher Supermarket, Inc., 11-CV-425 (RRM), No. 2011 WL 6181907, at *5 (E.D.N.Y. Aug. 26, 2011), report and recommendation adopted, 2011 WL 6179269 (E.D.N.Y. Dec. 12, 2011) (finding that the defendant's products were materially different because the labeling did not โcomply with the FDA regulations or the labeling standards followed by Plaintiff and its authorized bottlers in the United Statesโ); Abbott Lab'ys, 2015 WL 10906060, at *6-7 (finding material d
In gray market goods cases, courts often find that regulatory compliance is a material difference. See Abbott Labs. v. Adelphia Supply USA, No. 15-CV-5826, 2015 WL 10906060, at *6โ7 (E.D.N.Y. Nov. 6, 2015) (granting plaintiff's motion for a preliminary injunction), aff'd, 670 F. App'x 6 (2d Cir. 2016) ; Novartis Animal Health US, Inc. v. Abbeyvet Export Ltd., 409 F. Supp. 2d 264, 267 (S.D.N.Y. 2005) ; Bayer, 259 F. Supp. 2d at 506โ07. In the Amended Complaint, Plaintiffs incorporate all of their previous allegations into each of their claims brought under the Lanham Act.
Gray market goods are "neither counterfeit goods nor goods masquerading as genuine by adopting confusingly similar marks; they use the actual marks and the marks are lawfully affixed to them." Novartis Animal Health US, Inc. v. Abbeyvet Export Ltd., 409 F. Supp. 2d 264, 266 (S.D.N.Y. 2005). Dentsply contends that the products sold by Net32's vendors are "materially different" from the products sold by Dentsply and its authorized distributors.
Gray market goods are "neither counterfeit goods nor goods masquerading as genuine by adopting confusingly similar marks; they use the actual marks and the marks are lawfully affixed to them." Novartis Animal Health US, Inc. v. Abbeyvet Export Ltd., 409 F. Supp. 2d 264, 266 (S.D.N.Y. 2005). The preliminary injunction motion identified four products.
d. Courts have repeatedly found such violations of federal regulations to be material. See , e.g. , Helene Curtis , 890 F.Supp. at 159 ; Ferrero , 753 F.Supp. at 1244, aff'd , 935 F.2d 1281 ; see alsoNovartis Animal Health US, Inc. v. Abbeyvet Exp. Ltd. , 409 F.Supp.2d 264, 267 n.3 (S.D.N.Y. 2005).The Sleekcraft Factors Favor a Finding of Likely Confusion
In addition to those discussed, Heraeus America asserts that there is a material difference between the foreign and domestic products because Omni has failed to register as an importer of Class II medical devices and has failed to obtain clearance to sell the Heraeus dental products pursuant to 21 U.S.C. ยง 360. Failure to comply with these requirements can create a material difference between the authorized and the unauthorized products. See Novartis Animal Health US, Inc. v. Abbeyvet Exp. Ltd., 409 F. Supp. 2d 264, 267 (S.D.N.Y 2005). However, Heraeus America has provided no admissible evidence of Omni's failure to register.
The typical multi-factor likelihood-of-confusion tests used for trademark claims is not useful in the context of gray market goods because such goods typically use the exact same market, sold in the original packaging. Novartis Animal Health U.S., Inc. v. Abbeyvet Export Ltd., 409 F. Supp. 2d 264, 266 (S.D.N.Y. 2005). Therefore, courts have adopted a simpler, two-part test to determine if likelihood of confusion exists in a gray market goods context: (1) were the goods not intended to be sold in the United States; and (2) are they materially different from the goods typically sold in the United States? Id.