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Karoun Dairies, Inc., A California Corporation v. Karlacti

January 4, 2013

KAROUN DAIRIES, INC., A CALIFORNIA CORPORATION,
PLAINTIFF,
v.
KARLACTI, INC., A DELAWARE CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. BattagliaU.S. District Judge

ORDER DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION OR, ALTERNATIVELY, REQUEST FOR CERTIFICATION OF ORDER FOR INTERLOCUTORY APPEAL
Before the Court is Plaintiff's Motion for Reconsideration or, alternatively, Request for Certification of the Court's Order for Interlocutory Appeal pursuant to 28 U.S.C. § 1292(b).*fn1 (Doc. No. 226.) Plaintiff seeks reconsideration of the Court's previous order granting Defendants' motion for summary judgment as to all of Plaintiff's claims. (Doc. No. 223.) Defendants oppose Plaintiff's motion with regard to both reconsideration and certification for interlocutory appeal. (Doc. No. 229.) For the reasons set forth below, Plaintiff's Motion for Reconsideration or, alternatively, Request for Certification of the Summary Judgment Order for Interlocutory Appeal is DENIED.

Background

I. Summary of the Case

This trademark infringement action arises from a family dispute over the right to use a trademark in the United States that was previously established in the family business in Lebanon. Plaintiff was first to use and register the mark in the United States and filed this infringement action against Defendants. Defendants filed a counterclaim alleging that Plaintiff is the infringer and requesting cancellation of Plaintiff's registered mark.

Plaintiff's founder, Anto Baghdassarian (hereinafter "Anto") and Defendant Ara Baghdassarian (hereinafter "Ara") are brothers. Anto and Ara both worked for many years in the family dairy business in Lebanon ("Karoun Lebanon").*fn2 Karoun Dairies is a trade name which has been used in the family business since 1931 and is registered in Lebanon. Karoun Lebanon was well known in the Middle East and exported its products as far as Paris and London.*fn3 (Answer and Countercl. at 10-11.) Ara was Karoun Lebanon's financial controller and manager. (Answer and Countercl. at 10.) Ara has been the Vice-President -- Director General (Vice-Chairman and General Manager) of Karoun Dairies Lebanon since 1981, and President -- Director General (Chairman and General Manager) since 1990. Id. Anto was a shareholder, director, and officer of Karoun Lebanon. In these capacities, he was privy to the company's plans to further expand its business outside Lebanon. (Id. at 11.) In approximately 1990, after the death of his father and due to civil unrest in Lebanon, Anto sold his interest in Karoun Lebanon to Ara, and moved to the United States.*fn4 While Ara asserts that they entered into an agreement that Anto would not enter the dairy business, Anto disputes this.*fn5

Subsequently, Ara continued to manage Karoun Lebanon, which proceeded to expand its business. Karoun Lebanon participated in local and international exhibitions, and advertised in international directories and journals. (Answer and Countercl. at 11.) In 1998, Karoun Lebanon registered the karoun.com and karoundairies.com domain names.*fn6 Karoun Lebanon focused its expansion efforts on the United States, Canada, Australia, and Europe because these regions were politically stable and had large Lebanese and Armenian communities. Karoun Lebanon registered its mark in Australia and Canada, attempted registration in the United States, and has a pending Community Trademark application in Europe. (Answer and Countercl. at 11-12.) In 2004 or 2005, Karoun Lebanon had to temporarily suspend production in Lebanon during a military conflict; however, it continued to use the Karoun mark through its exclusive licensees Defendants Karoun Dairies, Inc., a Canadian corporation ("Karoun Canada"), and Karlacti, Inc., a Delaware corporation ("Karlacti"). (See Ara Mot. to Dismiss Decl. at 2.)

In 1992, Anto started a dairy business in California, incorporated Plaintiff, and started selling cheese products. (Decl. of Anto Baghdassarian in Supp. of Karoun Dairies, Inc.'s Mot. for Prelim. Inj. ("Anto PI Decl.") at 1-2.) Plaintiff is a corporation organized and existing under the laws of the State of California. (Id.) Anto named his business after the family business in Lebanon and marketed his products to Middle Eastern emigrants in California and elsewhere in the United States. (Nading Decl. Ex. B at 5; see also id. at Ex. A.) In 1993, Plaintiff registered the trademark "Karoun Dairies" and in 2003, it registered the mark "Karoun's California Cheese, a Whole Milk Cheese." (Kimball Decl. Ex. A & B.) Plaintiff has invested in advertising and promoting these marks in the United States by attending national trade shows and placing newspaper and television advertising. (Anto PI Decl. at 4-5; Kimball Decl. Ex. B at 32-33.) Plaintiff registered its first domain name, karouncheese.com, in 1999 and its second, karoundairiesinc.com, in 2006. (Ara Mot. to Dismiss Decl. at 1.) Starting in February 2007, Plaintiff registered a number of additional marks, including a circular logo with a drawing of a cow's head and the word "karoun." (Kimball Decl. Ex. C-H.)

In January 2006, Ara retained intellectual property counsel in California. (Decl. of Ara Baghdassarian in Supp. of Mot. to Dismiss for Lack of Personal Jurisdiction ("Ara Personal Jurisdiction Decl.") at 1.) In June 2006, Ara's counsel filed a trademark application to register the Karoun mark in the United States on behalf of Karoun Lebanon. Plaintiff objected and demanded Ara withdraw the application. Ara refused and asserted that Karoun Lebanon intended to expand its business into the United States under the Karoun name and demanded that Plaintiff cease and desist using the name. Ara argued that Anto had sold his right to use the mark to Ara when he sold him his interest in the family business. In May 2007, Ara's trademark application was abandoned. (See Order Denying Defendants' Motion to Dismiss for Lack of Personal Jurisdiction, dated July 13, 2009 ("Personal Jurisdiction Order"), at 4.) InNovember 2007, Karoun Lebanon was able to register in the United States a circular logo with two cows. (Ara PI Decl. Ex. B at 14.)

In July 2006, following the outbreak of military conflict in Lebanon, Ara and his family immigrated into the United States. (Ara Personal Jurisdiction Decl. at 1.) In October 2006, Ara and his family visited Anto and his family in California. While the precise nature of this visit is disputed, Anto contends that Ara demanded a share in Plaintiff corporation or compensation, both of which Anto denied. (See Personal Jurisdiction Order at 4-5.)

From October 2006 to August 2008, Ara contacted "a couple of times" Raffi Kradjian of Kradjian Importing Co. in California. Mr. Kradjian is in the business of importing and distributing Middle Eastern specialty foods in the United States. The precise nature of Ara's contacts with Mr. Kradjian are disputed. According to Ara, he contacted Mr. Kradjian on behalf of Karoun Lebanon to "get a general feel of the U.S. market." According to Anto, Ara represented that his business was the "real" Karoun Dairies and asked him to deal only with Ara to the exclusion of Plaintiff. (See Personal Jurisdiction Order at 5.)

In February 2007, Ara incorporated Karlacti in Delaware, and in July 2008, he registered the domain name karlacti.com. Although Karlacti has not and is not using the Karoun mark in commerce in connection with any goods or services in the United States, plans for expansion in the United States were put on hold due to this litigation.*fn7

In September 2007, Ara incorporated Karoun Canada, and in July and August 2008, he registered domain names karoundairies.ca, karouncheese.ca, karounfoods.com, karoundairiesgroup.com, karouncheese.net and karoundairy.com. The company had sales in Canada starting in November 2007. All of its customers have been in Canada, and it has never sold or offered for sale any products in the United States and the products sold in Canada are labeled "Not for sale in the USA." Karoun Canada's operations have been suspended due to this litigation.*fn8

Plaintiff admits that Karoun Canada registered the Karoun mark in Canada and has a right to market and sell its goods under the Karoun name there. (Pl.'s Mot. for Prelim. Inj. at 19.) In addition, in response to Plaintiff's demand letters (Ara PI Decl. at 1-2), Defendants' websites include notices stating, "Licensees of the original KAROUN DAIRIES S.A.L. Beirut - Lebanon. Not affiliated with KAROUN DAIRIES, Inc. California - USA incorporated without our consent" and "KAROUN DAIRIES S.A.L. does not sponsor ARZ, GOPI LASSI and YANNI branded dairy products." (Anto PI Decl. Ex. G.) Defendants are not "currently using the KAROUN mark in commerce in ...


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