C & L International Trading Inc. et al v. Chung Kee (USA) International Inc. et al

Filing 33

OPINION AND ORDER re: (19 in 1:13-cv-02638-LLS) MOTION to Dismiss Plaintiff's First Amended Complaint filed by Yong Long Supermarket Inc., Ron Feng Trading Inc., Yat Chau (USA) Inc., Chung Kee (USA) International Inc., Po Wing Hong Food M arket Inc., Tung Ren Tang: Defendants' motion to dismiss the amended complaint (Dkt. No. 19) is granted with respect to count two of the amended complaint. It is denied with respect to all other counts. (Signed by Judge Louis L. Stanton on 11/18/2013) ***Filed in 13cv2638 and 13cv2763. (tn)

USDCSDNY
DOCt:'fENT
ELfCTROXIC,\lI.\ FILED
DOC ;;:.
J I
DATE FiLED: /1

- , . ,'''1.1..
U~ITED

STATES DISTRICT COURT
D=STR=CT OF NEW YORK

IIYII:!

SOUT~ERN

X

C&L INTERNATIONAL TRADING INC., KAM NG,
And K&C INTERNATIONAL TRADING INC.
Plaintiffs,
aga

13 Civ. 2638
13 Civ. 2763

(LLS)
(LLS)

t
OPINION AND ORDER

AMERICAN TIBETAN HEALTH INSTITUTE, INC.,
CHUNG KEE (
INTERNATIONAL INC., YAT ";
CHAU (USA) INC., TUNG REN TP~G, RON FENG
TRADING INC., FARGO TRADING INC., YONG LONG
SUPERMARKET INC., and PO WING HONG FOOD
MARKET INC.,
Defendants.

----x
AMERICAN TIBETAN HEALTH INSTITUTE, INC.,
Plaintif s,
nst ­

KAM NG, C&L INTERNATIONAL TRADING, INC.,
KANG I TRADING, INC., and K&C
INTERNATIO~AL TRADING,
INC.,
Defendants.
---------- X
These
di

cases

are

cross

ts

aris

out

of

a

t

e over two products called "Tibetan Baicao Tea."

International
Institute,

Trading

Inc.

Inc.

( "ATHI

an Baicao Tea,

/I

/I

)

("C&L")

and

manufacture

in similar packagi

claims to own registered trademarks for
1

Both C&L

can Tibetan Health
and

sell

tea

called

ATHI and C&L eac.,,":
name "Tibetan

cao

Tea"

its packaging and logos,
inf

t

against

sui t
the

other

parcy,

allegi

among

other

cIa
ATHI
complaint

and
in

its
the

co de
accion

s

initiated

(LLS) .

In

("K&C") ,

and Kam Ng sue ATHI,

that

Internat
Ron
Inc.,

action,

Inc.,

move

C&L,

Yat

K&C

allegedly market

dismiss

C&L,

No.

che
13

International

Chau

Inc.

2638

Trading

Inc
Kee

J

Inc., Yong Long

ng Hong Food Market Inc.,
sell ATHI's inf

ng

which are stores that
t.

A.

The amended compl

Civ.

s

along wi th def

Trading Inc.,
and Po

to

nt alleges:

38.
The Plaintiffs's medicinal herbal
teas merchandized in packaging bearing the
Plaintiffs's Marks have come to be well­
known by the
community as effective
and
quality products effective in the
treatment
of
allergies
to
pollen,
lergies, colds, and pain in bones.
39.
Over
years, large
of
exposed
to
the
consumers
have
Plaintiffs's Marks through advertisement, in
various magazines and newspapers, and on TV
the internet.
40.
As
a
result,
the
Plaintiffs's
Marks are recognized,
famous and popular
trademarks in the Chinese communi
which
adds value to the
1 teas merchandi zed
in packaging
the Plaintiffs's Marks.
2

41.
The Plaintiffs are owners of the
entire right,
title and interest in the
trademarks,
es of which are contained
in
t
I,
2
and 3 of t
s Amended
Complaint. 1
aintiffs's Marks are valid,
stered under f
and New York State
law, and enforceable.
42.

Plaint i ff s

have two registered marks,

one

the United States Patent and Trademark Office

regi stered with

("USPTO"),

stered with New York State's Department of State.
mark

is

a

"the words

logo described on

its

as

The LJSPTO

consisting of

with the Chinese

ters of

same words traversing the English words vertic
Ex.

1 Y ," Ng Af f .

F

USPTO

(the

'Tibetan Baicao Tea',

certificate

and one

"composite mark").

supplemental

Plaintiffs'

second

ster,
mark,

see

registe

described as the words
(the "word mark")

That mark is registered on the
15

U.S.C.

with

an Baicao Tea"

New

§§

York

1091 1096.

State,

on its certificate

See id. Ex. B.

The amended complaint alleges that "The Defendants,
authorization or license from t
intentionally

used,

is

without

Plaintiffs, have willfully and

reproduced,

and/or

copied

the

Plaintiff's

Plaint ffs do not attach any exhibits to the r Amended Complaint.
Hm·;ever
in
opposition
to
defendants
motion
to
dismiss
the
first
plaintiffs submitted an affidavit sworn to by Ms. Ng (Dkt. No. 12)
that
attaches as exhibits Band F plaintiffs' New York State and United States
Patent and Trademark
stration certificates
described
below
respect
Court
those cert if icates into the
amended complaint by reference.
1

I

I

I

I

I

3

ln

connection

exporting,

with

acturing,

their
ising,

importing,

selling

fering to sell their Counterfeit Products."
On that

1S,

plaintiffs pI

counterfeiting,
unfair

c

seq.

i::: ion

under

iffs

also

PI

and

des

the

~

54.

trade

lon of

Act,

ss

origin,

C.S.C.

:::rademark

e:::

1051

§

trade

unfair

coun:::erfeiting,

and/or

Am. CampI.

trademark

false

ead

distri

dress

competi ion,

and

ive acts and practices under New York state law.
B.

De

that

s

aintiffs'

marks are not en:::itl

to protection under the Lanham Act.
Defendants argue that

aintiffs' word mark is not entitled

to protection because "In actuali
Frincipal

to ATHI on
the exclusive r

the

ister of the CSFTO"

to use the Word

of

registration with

statements by officers

and

validity of ATHI's

favor

of

Br.

the

oyees

es-ablished,
def

and "ATHI owns

4,

and references its

USFTO

as

of ATHI

well

as

attest

sworn
to the

ing marks.

ATHI's
in

stered

in interstate commerce

in connection with tea goods," Defs.'
certificates

Mark is

s.

marks are not mentioned in,

would resolve

Nonetheless,

ATHI

I

S

the di

prior

I

superior

and are therefore extraneous to the
4

complaint at issue,

and would be more appropriately dealt

Wl

in the context of a motion for summary judgment.

Moreover,

the

adequately

abandoned

its

amended

compl

by al

that

1

ATHI

ing that:

69.
To the degree that Defendant ATHI
may have had rights in t
associated
with the trade name Tibetan Baicoa [sic]
Tea, Defendant ATHI expressly abandoned any
and aI'
rights it may have had in such
trademark when it announced any and all
rights it may have had in such t
when it announced
or about March 2011, in
the Sing Tao Dai
that it ceased to sell
Tibetan Baicoa [sic] Tea in North America.
A copy of this announcement with an Engli
translation is incorporated and made part of
this Amended Compl
as Exhibit 4.
70.
To the degree that De
ATHI
may have had rights in trademarks associated
with the trade name Tibetan Baicoa [sic]
Tea, Defendant ATHI expressly abandoned any
and all rights it may have had In such
trademarks when, on or about December 9,
2010,
it
stered
a
trademark
for
"Shengcao Tea" with the State Intellectual
Prope
Office of the People's Republic of
China.
A copy of the certificate issued as
a
t
of
this
registration with
an
ish translation is incorporated and made
part of
s Amended Complaint as Exhibit 5.
See

15

U.S.C.

§

1127

(providing

that

a

mark

11

be

deemed

abandoned "When its use has been discontinued with intent not to
resume such use") .

5

Although
fail

to

C&L's

prevail,

ide t

the

ions

facts

abandonment

are

not

issue as a matter

Defendants
not

all

also

entitled to
stered

on

argue

the primary

ultimat

sufficient

clear

to

mark

is

aw.

that

plaintiffs'

ection under

the

may

emental

the

i te

Lanham Act

register

of

the

because
USPTO,

it

is

and

not

257

(2d

v.

DAG

ster.

Registration in the
supplemental
register
which is reserved for nondistinct
marks,
entitles
owner of a mark to institute
actions based
it in the federal courts,
see 15 U.S.C.A. § 1121,
to obtain the
remedies provided in the Lanham Act,
15
U.S.C.A.
§§
1114 1122.
But
registration
cannot give
idi ty to a mark,
use of
ch would be invalid at common law.
Feathercombs

Inc.

Cir.

.,

Accord Jewish

1962).

Media,

Inc.

478

I

ownership,

c

or

enables

the

in f
ngly,

Lanham Act
common

34 0 ,

Supplemental

validi

infri

2d

F.

on

registration

under

Solo Products

306 F.2d 251,

Yellow

Ltd.

~ .. ~~~~-- ............ ~~~------ ............~~----~-,-~~---------

registration

the

v.

the

347

(E . D . N . Y .

Register

exclusive

registrant,

is
right

inter

2007)

not

( "wh i 1 e

evidence

to

use,

alia,

to

sue

of

such
for

court.") .
pIa ntiffs

only

law

distinctive to disti

if

may

obtain

their marks

that

is,

f

are

their

reI ief
entitl
marks

sh their goods from
6

provided by

to
are

ion

sufficient

goods of others,

see Star Indus. ,
(2d Cir.

2005) .

its

Bacardi

v.

dist

\\

of two ways.

el

Co.

&

ly,

meaning'

by

virtue

ly distinctive'
l

if

its

stinctive,

having

acquired

in the minds of consumers."

certain producer,

association
\

)

,

is

when
used

an
on

and will

identical

Id.

another

be

a

(or

er's

a

that

usingly

product.

same

similar

Yarmuth-Dion

(2d Cir. 1987).

leges

49.
Consumers
are
exposed
to
PI
iffs's Products and the Plaintiffs's
Marks
through
magazines,
newspapers,
televis on, and the internet.
As a resul t,
the Plaintiffs's
have become
ly
knowr. and valuable trademarks, possess
a
st
se
meaning among consumers.
50.
The Plaintiffs' Marks are valuable
among consumer trademarks
ause
are
constant
exposed to consumers.
As
a
result, the Plaintiffs's Marks have come to
symbolize
er.ormous
goodwill
of
the
Plaintiffs's
business
in
the
Chinese
communi
No other manufacturer lawfully
uses the Plaintiffs's Marks or any other
substantial
similar
marks
for
similar
t
s of

7

'secondary

"A mark or trade name

likely to make

Inc. v. D'ion Furs, Inc., 835 F.2d 990, 993
aint

the mark may

er will associate it

mark

- - _..

The amended

icular source.

ly
of

381
in

acquired secondary meaning if a
with a

412 F.3d 373,

may be demonstrated

mark may

even if not

distinctive

Ltd. ,

iveness

intrinsic nature serves to

Alternat
be

Inc.

ions

all

associate plaintiffs'
that

are

Accordi

marks

stinct

marks

are

state

th pl

iffs'

by

s'

de

aintiffs'

ficient

that

consumers

products,

thus

sec

motion

to

not

smiss

ted

on

r

the

the

ground

Lanham Act

is

claims fa Is

to

deni

c.
Defendants argue that each of pla
state a plausibl

iffs'

claim for relief.
1.

Count
trade

one

of

§

comp ai:l.t

ame:l.ded

compl

nt

is

for

trademark

and

ngeme:l.t under section 32 of the Lanham Act,

ss

u.S.C.

the

1114(1) (a)
are

Counts

for

se

competition under sectio:l.

three

ion

des
43

and

(a)

four

of

of

origin

of the Lanham Act,

the

amended

and
15

15

unfair

U.S.C.

§

125(a).2
Section 32
recover

against
tion,

allows

the

owner of

defendants

counterfeit,

who

copy,

or

a

registered trademark to

"use

in

colorable

registered mark in connection with the sale,
distribut

commerce
imita~ion

any
of

a

offering for sale,

or advertising of any goods or services on or in

Count two of the
discussed below.

amended

complaint

8

relates

to

a

separate

ssue

and

s

with

connect
to cause

stake,

prohibits

t

ch such use is likely to cause

1 3,

117

Section 43 (a)

"s

stered,

If

common

infringement

"

t

[. 1

or to dece

Inc.

(2d

1999 )

v.

ion,

Petersen Pub.
prima

"

Co.
ie

or

larly
law

L.L.C.,

173 F.3d

is

out

case

[under section 43(a)]

by showing the use of one's trademark by

another in a way t

is likely to confuse consumers as to

source of
Strauss
As

&

t

product."

Lois

swear

U. S .A.

Inc.

v.

Levi

p ead

that

Act.

The

Co., 799 F.2d 867, 871 (2d Cir. 1986).
scussed

above,

aintiffs

their marks are valid and protectable
amended compl

sufficiently
the

~anham

nt also alleges that:

54.
The
Defendants,
wi thout
authorization
or
license
from
the
PI ntiffs, have willfully and intent
ly
used,
reproduced,
and/ or
copied
the
Plaintiff's
in connection with their
manufac
stributing,
exporting[
importing[
advertising[ marketing[
selling
and/or offering to sell
lr Counterfeit
Products.

74.

The
Defendants's
actions
have
and are likely to cause confus
and
and to dece
potential consumers
general purchasing public as to
source,
origin or
sponsorship
of
their
Counterfeit
Products[
and are
likely to
decei ve the publ ic into bel ieving
the
Counterfeit Products sold by t
Defendants
originate from[ are associated with[ or are
otherwise authorized by the Plaintiffs, all
9

of
es.

to the
reputation,
e

allegat

plaint:iffs'
consumers,
cl

marks

sufficient
in

and

a

manner

the

under sect:ions 32 and 43(a)
Defendants'

motion

of the amended campI

to

ead

di

ss

t:hat

defendants

to

like

amended

Plainti f s' s

cause

confusion

complaint

ely

used
among

stat s

of the Lanham Act.
counts

one,

three,

and

four

nt is denied.
2.

The

Lanham Act

defines

a

counterfeit

mark which is identical with,
a

count:erfeit:
ster

t:hat
ief

U.S.C.

of

in

goods
and

the

a

mark

United

or
is

ces
in

use

1

ff
1

or subst:antia
U.S.C.A.

15

that

is

Stat:es

as

"a

t

11271

§

on

regist

t

the

and
for

sale,

or

such

mark

are

not

was

so

"a

Of ice

or

person

not

is

ncipal

Trademark

offered

sold,

e

indisti

Pat:ent:

whet:her

knew

is
§

mark

regist:

mark

for

distributed

against

stered,U

whom

see

15

1116(d) (1) (B) (i)

marks
ster of
co:r.plaint,

the

USPTO.

or

count

registered
ly,

iting

dismissed.

10

count:

on

t:

two

of

ncipal
t

Lanham

a:r:ended
Act,

is

3•

The

Cl

rements

brought

under

amended complaint,
the Lanham Act:
s

de

New

state

are int

law,

marks

ions

in

the

in

motion

requirements of

manner
§§

to

cause

~o

360-k.
that

Act are sufficient

r New

dismiss

Ii

complaint

the

to plead trademark infringement
Defendants'

a

amended

trademark infringement

of

the unauthori zed use by

See N.Y. Gen. Bus. Law

ion.

five

coun~

e with

aintiffs'

all

infri

plaintiffs must pI

of

consumer
The

plaintiffs'

of

law.

count

five

the

complaint is deni
4.

Count

of

s

amended

t

aint

is

unfair

for

competition under New York common law.
"The
law

is

essence

of

ir

faith

the

Inc.- -v. --

--

1995)

aw,

misappropriation

to the
r

New York common
of

likely to cause

expenditures of anot
purchasers as

competition

In

Lawlor

of

Roth
-

.. ~--~ ............ ~~.--------~ .............

Inc.,

labors

Jeff

58 F.3d 27,

34-35

"In a common law unfair competition claim
the

action for

aintiff
s

must
or a

show

either

likelihood of
11

and

ion or to deceive

goods."

.. ~~------

the

actual

(2d Cir.

r New York

confusion

confusion for

in

an

equit

e

As discussed above,
that

some showing of bad fai

Additionally, there must

relief.

defendants

were

Plaintiffs's

amended complaint

plaintiffs'

cause confusion.
actions

t

The amended compl

taken

in

in

nt

a

bad

faith,

Wl

and/or

manner

ff

full

~

Am. CompI.

likely

to

leges that "such

exclusive

license the Plaintiffs's Marks,

eads

ely

so

oC

ownership

Accordi

marks

ff

knowl
rl

of
use

to

the
and

58.

y, the amended complaint states a valid claim for
r

common law

competition.

count six of the

Defendants'

motion

to

di

ss

decept~ve

acts

complaint is denied.
5.

Count seven of the amended compla

is for

and practices brought under New York law.
Section 349
"Deceptive

acts

New York's
or

practices

General

Business

conduct

in

Law prohibits

of

business,

trade or commerce or in the furnishing of any service."
Gen.

Bus.

Law

§

349 (a) .

"A pI

prove three elements: first,
was

consumer oriented;

ntiff

under

N.Y.

section 349 must

that the challenged act or

second,

that

it

was

ice

misleading

in

a

material way; and third,

that the

aintiff suffered injury as a

resul t

act."

afe-One,

of the decept

Supp.

367

(S.D.N.Y.

....

2009)
12

Inc.

-~~~

aff'd,

....

v.

379 F.

Hawks,

639

4

( 2d

IX

r.

2010)

cit.....--=

1

--~

Stutman
..

~---

v.

Bankl

95

N.Y.2d

241

29

~.-------.~------------

(2000)

fendants l use of plaintiffs'

Plaintiffs allege

sales to consumers was misleading,
Defendants'

acts are caus

and

11

and also allege that "
continue to cause

and i

e

Products

ation and goodwill with purchasers and consumers,"

Am. Compl.
Thus,
under N.Y.

~

harm to the Plaintiffs and to t

Plaintiffs's

68.

the

amended

Gen.

Bus.

cOMplaint

Law

count seven of the compl

De

3 9.

§

sufficiently
s'

eads

a

claim

motion to di

ss

nt is

Conclusion

Defendants'
No.

19)

amended complaint

to dismiss

with

is

complaint.

fr.otion

re

to

count

two

It is denied with respect to allot

of

the

(Dkt.

amended

r counts.

So ordered.

Dated: New York, New York
November 18, 2013

~. L. St.•.&....
LOUIS L. STANTON
U.S.D.J.

1

3