Nerium International LLC v. AloeVeritas Americas LLC
3:17-cv-02994
N.D. Tex.Apr 24, 2018Background
- Nerium International, LLC (NI) sells high-end skin-care products using the NERIUM mark and alleges widespread consumer recognition and fame for that mark.
- Aloeveritas Americas, LLC and related defendants sell similar nerium-based day and night creams and used phrases like "nerium night cream" and "nerium day cream," plus "bestselling," and allegedly referenced NI’s clinical research in promotions.
- NI sued Aloeveritas for federal trademark infringement, trade dress infringement, false advertising, and trademark dilution under 15 U.S.C. § 1125, alleging consumer confusion and dilution of its famous mark.
- Aloeveritas moved to dismiss under Rule 12(b)(6) (failure to state a claim) arguing NI does not own the mark, holds only a services mark not a goods mark, failed to plead actionable false advertising, and failed to plausibly plead fame for dilution; it also moved under Rule 12(b)(7) asserting a necessary-party defect (Nerium Biotechnology, Inc. (NBI) allegedly owns the mark).
- The court denied dismissal under Rule 12(b)(6), finding NI’s pleadings sufficiently plausible on ownership/use, false advertising, and fame for dilution, and held NI may proceed under § 1125(a) even as a user rather than registered owner.
- The court granted joinder relief under Rule 19, concluding NBI is a necessary party (its interests could be impaired and Aloeveritas faces risk of inconsistent obligations), and ordered NBI to be joined within 30 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/ownership for § 1125(a) claims | NI alleges it has used the NERIUM mark since 2011 and thus owns/uses the mark | NBI, not NI, owns the mark (registration evidence) | NI’s pleadings plausibly allege ownership/use; ownership is not required for § 1125(a) standing; motion denied |
| Goods vs. services trademark class | NI pleads use of goods mark for skin-care products | Aloeveritas says NI only owns a services mark, so goods-infringement claim fails | NI’s pleadings plausibly allege goods use; claim survives |
| False advertising under § 1125(a) | Aloeveritas used confusing labeling, "bestselling" claims, and referenced NI’s studies to promote products | Aloeveritas says NI failed to identify false statements | Court finds allegations sufficient to state a false-advertising claim |
| Trademark dilution and mark fame | NI alleges extensive promotion, millions spent, thousands of brand partners, and wide consumer recognition | Aloeveritas says fame not plausibly alleged | Court finds NI’s allegations adequate to plausibly plead fame; dilution claim survives |
| Necessary party (Rule 19) / joinder of NBI | NI disputes NBI’s relevance; opposes joinder | Aloeveritas contends NBI claims ownership and licensed Aloeveritas; its absence risks prejudice and inconsistent obligations | Court finds NBI a necessary party (prejudice and risk of inconsistent obligations) and orders joinder within 30 days |
Key Cases Cited
- Union Nat’l Bank of Tex., Laredo v. Union Nat’l Bank of Tex., Austin, 909 F.2d 839 (5th Cir.) (ownership of trademarks established by use, not registration)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (complaint must plead facts sufficient to state a plausible claim)
- Hood ex rel. Miss. v. City of Memphis, 570 F.3d 625 (5th Cir.) (initial burden in Rule 19 joinder analysis and burden-shifting once a possibly necessary party is identified)
- Ass’n of Co-op Members, Inc. v. Farmland Indus., Inc., 684 F.2d 1134 (5th Cir.) (absence of a party claiming trademark rights can create risk of inconsistent obligations and prejudice)