Primo Broodstock, Inc. v. American Mariculture, Inc. et al

Filing 281

OPINION and ORDER denying as moot defendants' 197 Motion to Dissolve Preliminary Injunction; granting in part and denying in part defendants' 228 Amended Motion to Dissolve Preliminary Injunction. See Opinion and Order for details. Signed by Judge John E. Steele on 1/9/2020. (CMG)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PB LEGACY,
Corporation
USA, LLC,

INC, a
and TB

Texas
FOODS

Plaintiffs,
v.

Case No:

2:17-cv-9-FtM-29NPM

AMERICAN MARICULTURE, INC.,
a
Florida
corporation,
AMERICAN PENAEID, INC., a
Florida
corporation,
and
ROBIN PEARL,
Defendants.
AMERICAN MARICULTURE, INC.,
a Florida corporation,
Counter-Plaintiff,
v.
PB LEGACY, INC, a Texas
Corporation,
KENNETH
GERVAIS, and RANDALL AUNGST,
Counter/Third-Party
Defendants.
OPINION AND ORDER
This matter comes before the Court on defendants' Amended
Motion to Dissolve Preliminary Injunction (Doc. #228) filed on
October 9, 2019.

Plaintiff’s Response in Opposition (Doc. #240)

was filed on November 6, 2019.

With the permission of the Court

(Docs. #251, 260), defendants filed a Reply (Doc. #256) on November

26, 2019 and plaintiff filed a Sur-Reply (Doc. #262) on December
9, 2019.

For the reasons set forth below, the motion is granted

in part and denied in part.
I.
On January 9, 2017, plaintiff Primo Broodstock, Inc. (Primo
Broodstock)

filed

a

three-count

defendants and others.

Complaint

(Doc.

#1)

against

A corresponding Motion for a Temporary

Restraining Order (Doc. #2) sought to preclude defendants from
removing or relocating any shrimp broodstock in their possession.
On January 11, 2017, the Court denied the motion for a temporary
restraining order. (Doc. #9.)
On

January

26,

2017,

Primo

Broodstock

filed

an

Amended

Complaint (Doc. #20) setting forth nine causes of action against
defendants and others.1
Temporary

Plaintiff also filed a Renewed Motion for

Restraining

Order

or

Alternatively

Preliminary

Injunction (Doc. #21) seeking an order enjoining defendants from
selling,

soliciting

the

particularly in China.

sale

of,

or

marketing

Primo

shrimp,

On January 29, 2017, the Court denied this

requested temporary restraining order, but scheduled a hearing on
the request for a preliminary injunction.

(Doc. #25.)

Defendants Advanced Hatchery Technology, Inc. and Charles
T. Tuan were dismissed by stipulation (Doc. #73) on March 16, 2017.
On April 6, 2017, the remaining three defendants filed an Answer,
Defenses and Affirmative Defenses (Doc. #81), and American
Mariculture, Inc. filed a Counterclaim (Doc. #80).
1

- 2 -

On February 10, 2017,

the Court conducted a hearing on

plaintiff’s pending motion for a preliminary injunction (Doc.
#53), which was followed by supplemental briefing.
67.)

(Docs. ##64,

On April 27, 2017, the Court filed an Opinion and Order

(Doc. #84) granting in part and denying in part plaintiff’s request
for a preliminary injunction.

On the same day, a Preliminary

Injunction (Doc. #85) was filed.
On May 10, 2017, plaintiff filed an unopposed motion to amend
the Amended Complaint to reflect that plaintiff Primo Broodstock,
Inc.’s name had been changed to PB Legacy, Inc. (PB Legacy) and to
add TB Foods USA, LLC (TB Foods) as an additional plaintiff.
#86.)

(Doc.

The motion recited that on February 17, 2017, TB Foods had

purchased

substantially

all

of

Primo

Broodstock’s

assets,

including intellectual property assets and rights in causes of
action, and that following the sale plaintiff had changed its name
to PB Legacy, Inc.

(Id.)

The Motion was granted on May 15, 2017.

(Doc. #87.)
On February 27, 2019, plaintiffs filed a motion for an order
to show cause why defendants should not be held in contempt for
violating the provisions of the Preliminary Injunction. (Doc.
#144.)

On May 7 and 8, 2019, the Court conducted an evidentiary

hearing on the motion. (Docs. ##190, 191.)

On May 22, 2019, the

Court filed an Opinion and Order (Doc. #196) denying the motion.

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Two days later, on May 24, 2019, defendants filed their Motion
to Dissolve Preliminary Injunction (Doc. #197.)

An Amended

Motion to Dissolve Preliminary Injunction (Doc. #228) was filed on
October 9, 2019, and is the operative motion.
II.
The narrow scope of the Preliminary Injunction issued in this
case was a far cry from that requested by plaintiff.
#84, pp. 8-9.)

See (Doc.

The Preliminary Injunction was premised on the

unfair competition and false advertising claim under the Lanham
Act (Count VI), and also referenced the unfair competition claim
under Florida common law (Count VII) and the violations of the
Florida Deceptive and Unfair Trade Practices Act (Count VIII).
(Doc. #84, pp. 29-42.)

The operative portion of the Preliminary

Injunction provides:
1.
Defendants American Mariculture, Inc.
(AMI), American Penaeid, Inc. (API), and Robin
Pearl, and all officers, agents, servants,
employees, and attorneys, and other persons
who are in active concert or participation
with Defendants within the meaning Federal
Rule of Civil Procedure 65(c)(2), and who
receive proper notice of the preliminary
injunction, are enjoined from:
a.
Referring to AMI’s or API’s shrimp as
“Primo” anything, including “Primo shrimp,”
“Primo animals,” “Primo breeders,” or “Primo
broodstock”;
b.
Stating that AMI’s or API’s shrimp
were created by breeding a male shrimp and
a female shrimp from the same Primo family
line;

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c.
Stating that AMI or API acquired or
possessed Primo’s “genetic bank” or “full
genetic bank” or that Primo left or abandoned
its “genetic bank” or “full genetic bank” at
the AMI Facility; and
d.
Appearing
via
teleconference,
videoconference, or in person at any Primo
China or Dingda promotional event.
2.
Defendants are not enjoined from stating
that certain of their animals were derived
from pure Primo stock whose genetic makeup was
unknown to Defendants at the time.
(Doc. #85, p. 2.)
As the Court noted in its Opinion and Order explaining the
issuance of the Preliminary Injunction, there is no direct Chinese
translation for the English word “Primo.”

Rather, there are two

similar phonetic words, “pu rui mo” and “pu li mao,” each of which
has distinct Chinese characters and different literal meanings.
The prohibition in the Preliminary Injunction against referring to
defendants’ shrimp as “‘Primo’ anything” includes the English
“Primo” and both Chinese phonetic words.
III.
At the hearing on the motion for a preliminary injunction,
defendants agreed that the use of the Primo name was improper and
that they did not necessarily oppose an injunction preventing the
use of the “Primo” name.

(Doc. # 53, p. 111.)

this position in its Opinion and Order.

The Court noted

(Doc. #84, p. 30.)

At

the show cause hearing on May 7, 2019, counsel for defendants noted
that defendants had agreed to the narrow preliminary injunction

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forbidding the future use of “Primo”.

(Doc. #190, p. 35.)

At the

same hearing, defendant Robin Pearl testified that he had “no
problem being barred forever and ever and ever from [using] the
word

Primo”

(Doc.

#190,

p.

185)

and

had

permanently barred from using “pu li mao.”

no
Id.

problem

being

Defendants now

see things differently, and they seek to dissolve the entire
Preliminary Injunction.2
A.
The

Court

has

the

discretionary

modify, or clarify its injunction.

authority

to

dissolve,

Dillard v. Baldwin County

Com'rs, 376 F.3d 1260, 1264 (11th Cir. 2004); CBS Broad. Inc. v.
EchoStar Comm. Corp., 532 F.3d 1294, 1299 (11th Cir. 2008).
“Before exercising its power to modify, a court must be convinced
by the party seeking relief that existing conditions differ so
substantially from those which precipitated the decree as to
warrant judicial adjustment.”

Hodge v. Dep't of Hous. & Urban

Dev., Hous. Div., Dade County, Fla., 862 F.2d 859, 862 (11th Cir.
1989).

While not contesting the Court’s authority to dissolve or

modify an injunction, the parties disagree as to whether the Court
should exercise that authority in this case.

The motion to dissolve also mentions in passing that the
Court should dismiss the entire Amended Complaint (Doc. #228, p.
13.) Clearly, there is no basis for such relief, even if such a
request had been procedurally proper.
2

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B.
Defendants

assert

that

the

Preliminary

Injunction

is

no

longer appropriate because “there can be no on-going violations.”
(Doc. #228, p. 3.)
four

reasons

entirety:
any

to

Specifically, defendants argue that there are
dissolve

the

Preliminary

Injunction

in

its

(1) Plaintiff is not the owner of, and has disavowed

interest

in,

the

pu

rui

mo

translation

of

“Primo”;

(2)

plaintiff has abandoned its interest in the English term “Primo”;
(3) plaintiff has not made an application to trademark the term pu
rui mo; and (4) defendants have permission to use the pu rui mo
mark

in

China.

Additionally,

defendants

assert

that

considerations of comity and sovereignty preclude the application
of the Preliminary Injunction to events which occur in China.
(Doc. #228, pp. 8-16.)

The Court discusses each, although not in

the same order.
(1)

Abandonment of Interest in English Term “Primo”

Defendants assert that plaintiffs have abandoned any interest
in the English term “Primo,” and therefore that term cannot form
a basis for a Lanham Act-based preliminary injunction.

If there

has been an abandonment, the Court agrees that the underlying basis
for the Preliminary Injunction disappears.
Defendants

provide

two

bases

for

their

argument

that

plaintiffs have abandoned their interest in the name “Primo.”
First, that abandonment occurred when TBA Foods purchased Primo

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Broodstock’s

intellectual

property

on

February

17,

2017

thereafter changed the company’s name to PB Legacy, Inc.

and

Second,

that abandonment occurred because TB Foods could have taken action
in China against persons using the pu rui mo mark without its
permission, but declined to do so since it preferred to be in a
court in the United States.

(Doc. #228, pp. 10-12.)

Plaintiffs concede that abandonment can be a Lanham Act
defense.

Plaintiffs assert, however, that abandonment is not

applicable in this case because they “have always intended to
resume

use

of

its

intellectual

property

and

have

only

been

prevented from doing so because of Defendants’ actions.” (Doc.
#240, p. 9.)
Abandonment is an affirmative defense “by which a defendant
may demonstrate that a trademark plaintiff no longer holds the
rights

to

a

mark.

Abandonment

is

trademark

law's

way

of

recognizing that ‘[t]rademark rights flow from use.’” Cumulus
Media, Inc. v. Clear Channel Commc'ns, Inc., 304 F.3d 1167, 1173–
74 (11th Cir. 2002)(citations omitted).
If a mark holder stops using a mark with an
intent not to resume its use, the mark is
deemed abandoned and “falls into the public
domain and is free for all to use....
Abandonment
paves
the
way
for
future
possession and property in any other person.”
. . . Thus, a defendant who successfully shows
that a trademark plaintiff has abandoned a
mark is free to use the mark without liability
to the plaintiff.

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. . .
Under the Lanham Act, a protectable mark or
name is considered abandoned if “its use has
been discontinued with intent not to resume
such use.” 15 U.S.C. § 1127. A putative
trademark infringer thus must prove two
separate elements to interpose the defense of
abandonment successfully: that the plaintiff
has ceased using the mark in dispute, and that
he has done so with an intent not to resume
its use. . . .
Because proving the subjective intent of a
trademark holder may prove burdensome for a
defendant, the Lanham Act provides two aids
for demonstrating intent. First, it provides
that “[i]ntent not to resume may be inferred
from circumstances.” 15 U.S.C. § 1127; . . .
Second, it allows a showing of three years of
consecutive nonuse to create a rebuttable
presumption of intent not to resume use:
“[n]onuse for 3 consecutive years shall be
prima facie evidence of abandonment.” 15
U.S.C. § 1127.
Id.

at

1173–74

(internal

citations

and

punctuation

omitted).

“Because a finding of abandonment works an involuntary forfeiture
of

rights,

federal

courts

uniformly

agree

that

defendants

asserting an abandonment defense face a ‘stringent,’ ‘heavy,’ or
‘strict burden of proof.’”

Id. at 1175 (citations and footnotes

omitted).
Defendants’ showing of abandonment is woefully inadequate.
First, defendants have failed to plead an abandonment defense as
to the word “Primo”.

See (Doc. #81.)

The only reference to

abandonment relates to the shrimp, not the word.

(Id. at ¶ 73.)

Second, even if such a defense had been pled, a company’s name

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change is not dispositive, and may not even be probative, of
abandonment of an interest in a word.

Choosing a preferred forum,

even if misguided, does not speak at all to an abandonment of
Lanham

Act

rights.

Quite

the

contrary.

The

Court

finds

defendants have made no showing which would justify dissolution or
modification

of

the

Preliminary

Injunction

based

upon

an

submitted

by

abandonment of an interest in the English word “Primo.”
(2)

Ownership/Interest in Term Pu Rui Mo

Defendants

assert

that

all

the

documents

plaintiff to show defendants’ use of the term “Primo” in China
used only the term “pu rui mo.”

This is significant, defendants

argue, because prior to entry of the Preliminary Injunction,
plaintiffs had disavowed any ownership, rights, or intent to use
the Chinese term pu rui mo (although they failed to so inform the
Court).

Defendants argue that plaintiffs have no right to obtain

a preliminary injunction under the Lanham Act because plaintiffs
are not the owner of the pu rui mo mark, have no enforceable rights
to it, and have stated they will not use the mark.
pp. 8-10.)

(Doc. #228,

Defendants also assert that pu rui mo has become a

generic term used by those involved in shrimp farming in China,
and therefore cannot support a Lanham Act-based injunction.

(Doc.

#228, p. 11.)
Plaintiffs respond that these arguments fail because they do
not represent a change of circumstance and “the Lanham Act claim

- 10 -

raised

by

the

preliminary

injunction

advertising, not trademark infringement.”

deal[s]

with

false

(Doc. #240, p. 8.)

It is true that defendants rely upon facts which existed prior
to the entry of the Preliminary Injunction in now arguing that
plaintiffs had disavowed any ownership, rights, or intent to use
the Chinese term pu rui mo.
of circumstance.

Thus, there is literally no change

It is also true, however, that this factual

information was not presented to the Court at the evidentiary
hearing prior to the issuance of the Preliminary Injunction.
While not every newly-discovered fact will justify reconsideration
or modification of a preliminary injunction, the Court finds that
this information is of sufficient gravitas that the Court should
consider it.
Nonetheless, the Preliminary Injunction is focused on a false
advertising claim, not a trademark infringement claim.

The issues

of ownership and interest in the term pu rui mo are discussed below
in the context of comity and sovereignty, but are not otherwise
sufficient to dissolve or modify the Preliminary Injunction.
Defendants also assert that pu rui mo has become a generic
term used by those involved in shrimp farming in China, and
therefore cannot support a Lanham Act claim or injunction.

This

argument lacks a sufficient factual predicate to justify modifying
or

dissolving

the

Preliminary

Injunction.

The

snippets

of

testimony cited by defendants are insufficient in themselves, even

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when coupled with the view of a language expert, and do not
outweigh the other probative evidence supporting the Preliminary
Injunction.
The Court finds that defendants have made no showing which
would

justify

dissolution

or

modification

of

the

Preliminary

Injunction based upon the lack of ownership of the pu rui mo term
or its alleged generic meaning in China.
(3)

Defendants Have Permission to Use pu rui mo

In a variation of the prior argument, defendants assert that
in addition to the mark pu rui mo being owned and controlled by
someone other than plaintiffs, defendant American Penaeid, Inc.
and its customers have been granted the right to use pu rui mo by
its true Chinese owner (Wudi Tenfly Agriculture Co., Ltd.) in
China.

According to defendants, this permission, coupled with

plaintiffs’ disclaimer of ownership, means there should be no
prohibition

on

the

customers3 in China.

use

of

this

term

by

defendants

or

their

(Doc. #228, pp. 12-13.)

As with the prior argument, the Court finds this to be
insufficient in itself to modify or dissolve the Preliminary
Injunction.

The issues of ownership and interest in the term pu

rui mo, and the permission of Wudi Tenfly to use the term, are
discussed below in the context of comity and sovereignty, but are

The Court has already stated that the Preliminary Injunction
does not apply to customers. (Doc. #196, p. 13.)
3

- 12 -

not otherwise sufficient to dissolve or modify the Preliminary
Injunction.
(4)

No Application for Protection of “Primo”

Defendants assert that Kenneth Gervais, the president of
Primo Broodstock, testified by deposition that at no time had he
ever sought trademark protection for “Primo” either in the United
States

or

China.

Thus,

defendants

argue,

plaintiffs

cannot

establish the mandatory element of proof for a Lanham Act claim ownership and control of an enforceable mark for either pu rui mo
or the English term Primo in China.

(Doc. #228, pp. 11-12.)

Defendants argue that this precludes plaintiffs’ Lanham Act claims
and any preliminary injunction based on such claims.
Defendants recognize that the Eleventh Circuit has stated
that even if a mark is not federally registered, “the use of
another's

unregistered,

i.e.,

common

law,

trademark

‘can

constitute a violation of [section 43(a) of the Lanham Act].’”
Crystal Entm't & Filmworks, Inc. v. Jurado, 643 F.3d 1313, 1320
(11th Cir. 2011).

They argue, however, that this does not apply

here since “American Common law does not apply to trademarks in
China.”

(Doc. #228, p. 12.)

While this statement is undoubtedly

true, it does not provide a basis to dissolve the Preliminary
Injunction.

As both sides agree, a false advertising claim can

be established without a valid trademark.

The Court finds that

defendants have made no showing which would justify dissolution or

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modification of the Preliminary Injunction based upon the failure
to seek trademark protection of the term Primo.
(5)

Comity and Sovereignty Considerations

Finally,

defendants

argue

that

issues

of

comity

and

interference with the sovereignty of China require dissolution of
the Preliminary Injunction.

It was disclosed at the show-cause

hearing in May, 2019, that there was and is litigation in China in
which plaintiffs are attempting to invalidate the mark pu rui mo
held

by

Wudi

Tenfly

Agriculture

Co.,

Ltd.,

fraudulently obtained and should be cancelled.

claiming

it

was

That litigation

recently resulted in an adverse decision against plaintiffs by the
National Intellectual Property Office in China, but plaintiffs
have filed an appeal, which is pending.

The current status of the

litigation is that Wudi Tenfly Agriculture Co., Ltd. is recognized
as the owner of the pu rui mo mark in China.

Defendants assert

that Wudi Tenfly has given its permission to use the term pu rui
mo in China to American Penaeid, Inc.
Defendants assert that the decision in China is inconsistent
with

the

portion

of

the

Preliminary

Injunction

prohibiting

defendants from using the pu rui mo mark, and that plaintiffs are
simply trying to use an American court to skirt the rulings of a
lawful proceeding in China.

(Doc. #228, pp. 14-15.)

Defendants

assert that the Preliminary Injunction, when applied to this
conduct in China, exceeds the extraterritorial power of the Court.

- 14 -

The Court agrees that a portion of the Preliminary Injunction must
be modified in light of the ongoing legal proceedings in China.
In Steele v. Bulova Watch Co., the Supreme Court addressed
the

issue

of

“whether

a

United

States

District

Court

has

jurisdiction to award relief to an American corporation against
acts of trade-mark infringement and unfair competition consummated
in a foreign country by a citizen and resident of the United
States.”

Steele v. Bulova Watch Co., 344 U.S. 280, 281 (1952).

After examining the Lanham Act, the Court held:

“Where, as here,

there can be no interference with the sovereignty of another
nation, the District Court in exercising its equity powers may
command persons properly before it to cease or perform acts outside
its territorial jurisdiction.”

Id. at 289.

The Eleventh Circuit

has held that Steele stands for the proposition “that the Lanham
Act

conferred

jurisdiction

over

extraterritorial

disputes

involving trademark infringement and unfair competition when: 1)
Defendant is a United States corporation; 2) the foreign activity
had substantial effects in the United States; and 3) exercising
jurisdiction would not interfere with the sovereignty of another
nation.”

Int'l Cafe, S.A.L. v. Hard Rock Cafe Intern. (U.S.A.),

Inc., 252 F.3d 1274, 1278 (11th Cir. 2001).
Addressing these elements, the Court concludes that the first
two, but not the third element, have been satisfied.

- 15 -

Both sides

agree that the first element is satisfied.

(Doc. #228, p. 5; Doc.

#240, p. 2.)
As to the second element, plaintiffs respond that defendants’
activities in China have had substantial effects in the United
States by their postings on industry-focused Yahoo Groups and
statements

in

trade

plaintiffs

have

publications.

made

a

sufficient

The

Court

showing

to

agrees
support

that
the

Preliminary Injunction.
As to the third element, plaintiffs assert there is no
interference with China’s sovereignty because there is no final
order

in

the

China

case,

and

an

appeal

is

still

pending.

Additionally, plaintiffs argue that the Preliminary Injunction is
not inconsistent with any possible ruling in China because their
Lanham Act claims do not turn on whether or not the pu rui mo mark
is valid in China, but whether defendants misrepresented facts
about

its

shrimp

contrary

to

15

U.S.C.

§

1125(a)(1)(B).

Plaintiffs assert that this does not require that they have a valid
trademark in the product.

Finally, plaintiffs argue that because

of the similarity in the phonetic pu rui mo and pu li mao, the
Preliminary Injunction remains necessary to avoid creating further
confusion in the Chinese marketplace. (Doc. #240, pp. 5-8.)
The Court finds that defendants have the better argument as
to the comity and sovereignty issues.

One of the effects of the

Preliminary Injunction is to preclude defendants from using the

- 16 -

word pu rui mo in China to describe shrimp.

But the proceedings

in China have determined that the word pu rui mo in connection
with shrimp is a mark which does not belong to plaintiffs, but in
fact belongs to someone else (Wudi Tenfly).

Wudi Tenfly is

represented to have given defendant permission to use the term,
which defendant could not do under the Preliminary Injunction.
The inconsistency between the determinations made in China and a
portion of the Preliminary Injunction is clear.
While the legal proceedings in China are not yet final, even
potential interference with pending litigation in China would
weigh against jurisdiction.

Hard Rock Café, 252 F.3d at 1279.

Additionally, the prevailing party in the China proceedings is
entitled to the benefit of the favorable ruling unless and until
it is overturned by the further proceedings in China.

Plaintiffs

essentially ask the Court to stay the effect of the decision in
China,

which

clearly

would

constitute

the

type

of

improper

interference with the judicial system of another country which is
foreclosed by

Steele.

The Court finds that defendants

have

demonstrated that the Preliminary Injunction should be modified,
at least on a temporary basis, to exclude the term pu rui mo from
its scope.

If plaintiffs prevail in their appeal in China, they

can request that the Preliminary Injunction be again modified to
reflect pu rui mo.

- 17 -

(6)

Laches

Finally, plaintiffs argue that laches prevents defendants
from raising trademark-related defenses.

(Doc. #240, pp. 9-10.)

But plaintiffs simultaneously assert they are not relying on
trademark claims, and the Court finds no reason it may not consider
dissolution or modification of the injunction at this stage of the
proceedings.
Accordingly, it is hereby
ORDERED:
1.

Defendants'

Amended

Motion

to

Dissolve

Preliminary

Injunction (Doc. #228) is GRANTED in part and DENIED in part.
Until further order of the Court, the Preliminary Injunction (Doc.
#85) shall not be construed to forbid defendants’ use of the term
pu rui mo in China.
2.

The Motion to Dissolve Preliminary Injunction (Doc.

#197) is DENIED as moot.
DONE and ORDERED at Fort Myers, Florida, this
January, 2020.

Copies: Counsel of Record

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9th

day of