On July 2, the Ninth Circuit decided that a district court must find a “substantial risk of danger to the public” or other special circumstances before entering a preliminary injunction requiring a product recall in a trademark case.
In Marlyn Nutraceuticals Inc. v. Mucos Pharma GMBH & Co., plaintiff Mucos argued that its former distributor’s use of Mucos’ WOBENZYM registered trademark in connection with enzyme products that differed from Mucos’ formula confused consumers and infringed its trademark rights. Marlyn argued it had a right to manufacture and sell enzyme products under the WOBENZYM mark pursuant to an informal agreement between the parties. The District of Arizona disagreed. It granted Mucos’ motion for a preliminary injunction and ordered Marlyn to stop manufacturing and distributing its WOBENZYM-branded products, recall its already-distributed products, and provide restitution to the affected customers.
Marlyn appealed, challenging, among other things, the scope of the injunction. The Ninth Circuit adopted the Third Circuit’s standard for imposing recalls, which requires the plaintiff to meet the higher standard for a disfavored “prohibitory injunction,” and for the district court to consider: “(1) the willful or intentional infringement by the defendant; (2) whether the risk of confusion to the public and injury to the trademark owner is greater than the burden of the recall to the defendant; and (3) substantial risk of danger to the public due to the defendant’s infringing activity.”
The court then sent the case back to the district court to consider these factors. “As the district court did not have the benefit of this decision when deciding this case, it did not analyze these additional factors. It did, however, rest its recall decision in part on the third factor — substantial risk of danger to the public due to the defendant’s infringing activity — in concluding that there was a public health hazard in allowing the product to remain on the market. However, the record does not support the existence of a public health risk necessary to invoke the interlocutory remedy of product recall. The only record support for the proposition that Marlyn’s Wobenzym is unsafe for public consumption is the testimony of Dr. Scavetta that the proteolytic activity in some batches of Marlyn’s Wobenzym was 250% greater than what it should have been. However, Scavetta did not testify that this formulation was unsafe for human consumption. Moreover, the district court stated that it did not find Dr. Scavetta’s testimony to be credible. There was no other testimony or evidence upon which the district court could make its conclusion that the product was hazardous for public consumption.”
The case cite is Marlyn Nutraceuticals, Inc. v. Mucos Pharma GMBH & Co., No. 08-15101, __ F.3d. __, 2009 WL 1886172 (9th Cir. July 2, 2009).