The federal Lanham Act goes beyond trademark protection and establishes causes of action, as well, for unfair competition, false advertising, and false association. Section 43(a), however, does not contain a statute of limitations for claims that arise under the Lanham Act for any of these improper activities. That’s different from the Copyright and Patent Acts which each provide for limitations and apparently that’s the way Congress wants it.
The question is, then, should a United States district court apply the state statute of limitations that would govern, say, an unfair competition claim in the state where the action is brought, or is some other measure of a bar to bring an action more appropriate?
While it is traditional for a district court to borrow the most analogous statute from state law, the Fourth Circuit Court of Appeals held, last year, that doing so in a Lanham Act case is wrong. Belmora LLC v. Bayer Consumer Care AG, 987 F.3d 284 (2021). The Court observed that when a federal law does not express limitations on the time to bring an action, using state statutes of limitations to bar suit can be “unsatisfactory vehicles for the enforcement of federal law.” Laches, held the Court, which are equitable in nature, “provide a closer analogy than available state statutes.” In part, this is due to Section 43(a)’s language that claims for damages are subject to principles of equity. Laches applies to claims that are equitable in nature, and are a defense that must be affirmatively pled to preclude an action by a plaintiff who has unreasonably slept on its rights.
Still, the Court referenced the analogous state statute of limitations, holding that whether a Lanham Act claim is brought within the analogous limitations period is not the sole indicator of whether laches should be applied (the United States Supreme Court has held in a copyright matter that because the Act provides a three-year limitation on suit, laches can not be applied to bar suit if suit is brought before limitations expire). The Court held that the statute of limitations from the most analogous state law will “continue to play an important role in the district court’s laches analysis.”
The appellate court left the district court to determine the appropriate analogous statute of limitations, and to determine whether a presumption exists that the claim was barred because it was brought outside the limitations period, here over ten years. A reading of the Court’s decision would support the proposition that if the claim is filed inside of analogous limitations, there is no equitable bar, but perhaps that gives credit where none is due. On remand the district court was instructed to consider the following factors to determine whether the plaintiff could overcome such a presumption: Whether plaintiff knew of defendant’s use of the mark; whether plaintiff’s delay in bringing suit was inexcusable or unreasonable; and whether defendant had been prejudiced by the delay. What’s clear, however, is that a suit brought ten years after knowledge of the infringement might not be barred by limitations and might survive. That appears novel.