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King Tuna, Inc., A California Corporation v. Anova Food

February 24, 2011

KING TUNA, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
ANOVA FOOD, INC., A GEORGIA CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Hon. Otis D. Wright, II, United States District Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO ANOVA FOOD, INC.'S COUNTERCLAIMS

The Court held a two-day bench trial from September 7, 2010 to September 8, 2010. The bench trial involved Defendant and Counterclaimant, Anova Food, Inc.'s ("Anova"), counterclaims against Plaintiff and Counter-Defendant, King Tuna, Inc. ("King Tuna"). Based on the evidence and testimony at trial and further post-trial briefing, the Court makes the following findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure:

FINDINGSOFFACT

1. Anova filed counterclaims against King Tuna, a California corporation, alleging: (a) violations of the Lanham Act, 15 U.S.C. § 1051 et seq., (b) false patent marking under 35 U.S.C. § 292 et seq., and (c) violations of CAL. BUS. & PROF. CODE § 17200 et seq. Anova's allegations stem from its contention that King Tuna knew it was not processing its filtered wood smoke ("FWS") treated tuna according to U.S. Patent No. 5,484,619 ("the '619 patent").

2. King Tuna is licensed to practice the '619 patent. In addition, King Tuna and its affiliated company, Tuna Processors, Inc. ("TPI"), holds a license to the Philippine Patent No. I-31138 (the "Philippine patent") that is substantially similar to the '619 patent.

3. Kanemitsu Yamaoka ("Yamaoka"), one of the inventors of the '619 and the Philippine patents, instituted a patent infringement suit ("Philippine Infringement Action") at the request of King Tuna and TPI against Phillips Seafood before the Philippine Intellectual Property Office ("IPO"). The Philippine Infringement Action was dismissed on October 30, 2006.

BACKGROUND FACTS AS TO KING TUNA

4. King Tuna was formed as a California corporation in late 2003. (PreTrial Conference Order dated April 19, 2010 ("PTCO") at 4:2.) Mr. Joaquin Lu ("Lu") is the majority owner of King Tuna. (PTCO at 4:15.)

5. Between January 1, 2004 and September 30, 2008, King Tuna imported and sold in excess of 7,109,000 pounds of tuna into the United States (PTCO at 4:3-4.) Mr. Christian Tregillis ("Tregillis"), King Tuna's damages expert, submitted an adjusted amount: 7,222,787 pounds sold at an average price of $4.11 per pound with revenues of $29,685,655.00. Using Tregillis' adjusted data, sales of King Tuna's FWS tuna from October 30, 2006 to September 30, 2008 were 1,845,522 pounds with revenues of $7,585,095.00 and from August 27, 2007 to September 30, 2008 were 742,897 pounds with revenues of $3,053,308.00. (Tregillis Rebuttal Report 13 Nov 2009.)

6. Substantially all of King Tuna's seafood imported into the United States were from Citra Mina Seafood Corporation ("Citra Mina") and Mommy Gina Tuna Resources ("MGTR"), both located in the Philippines. (PTCO at 4:8-10.)

7. MGTR was a sole proprietorship under Lu until it was incorporated. (PTCO at 4:11-12.) Citra Mina owned the vast majority of the MGTR stock, and Lu and/or members of his family own a majority interest in Citra Mina. (PTCO at 4:13-14.) Thus, Lu and his family controlled King Tuna and its two suppliers, MGTR and Citra Mina, during the entire relevant damages period.

8. Lu became a member of TPI and had a vote in its operations in January 2003. Lu became the sole member of TPI no later than February of 2006 (Trial Tr. 9-8-10 at 1286:21 to 1287:1). From February of 2006, Lu was "effectively TPI" and "determined all of its strategies at that point" in consultation with Richard Friend ("Friend"), the Vice President of TPI. (Trial Tr. 5-7-10 at 493:12 to 494:10.)

BACKGROUND FACTS AS TO ANOVA

9. Since 1998, Anova was a Georgia corporation with its principal place of business in Tampa, Florida, and with its Quality Control office in Miami, Florida. (PTCO at 2:2-3.) Sometime between 1998 to1999, Anova entered the business of selling seafood preserved with FWS, including FWS tuna products, in the United States. Anova continues in that same business today.

10. Anova sells its FWS tuna products under different "brands:" (a) the Anova brand, (b) the MyFish brand, (c) the Clearsmoke® brand, and (d) some private label brands.

FINDINGS AS TO PATENT FALSE MARKING VIOLATIONS

11. The Court finds that King Tuna advertised that its FWS tuna was made in accordance to the '619 patent and marked its products accordingly. Specifically, King Tuna and its wholly-owned suppliers, MGTR and Citra Mina and their successors-in-interest, marked and advertised that all King Tuna's FWS tuna sold in the United States were produced under the '619 patent during the relevant period.

12. Lu admitted at trial that he told all his customers from the beginning that the FWS tuna was protected by the '619 patent:

"Q: BY MR. HUFF: Didn't you want to tell your customers that you were making this tasteless smoke under the '619 patent that was earlier than Yamaoka [sic: Kowalski's patent] so they wouldn't worry about infringement suits from Kowalski? A: Yes, Mr. Huff. We tell them that. * * * Q: But . the '619 patent . was reduced to practice by Pescarich? A: Yes, Mr. Huff. Q: And you were telling them that; right? A: Yes. This is how the '619 patent was reduced to practice, Mr. Huff. " (Trial Tr. 9-8-10 at 1299:3-25.)

13. Byron Easley ("Easley"), King Tuna's Sales and Marketing Director, testified he gave the Point of Sale brochure (Trial Exh. 621, p. 2) to all the customers andpotential customers during the entire time of his employment with King Tuna. (May 6, 2010 Trial Tr. at 325:6-12; 393:14 to 394:18.) Particularly, Easley testified that marketing the tuna "as consistent with a patented process" of the '619 patent was a "key" part of their marketing. (Trial Tr. 5-6-10 at 325:6-12; 393:14 to 394:18.) He testified how important the '619 patent was to his customers: "I think the ability to establish ...


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