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Vinh-Sanh Trading Corporation v. SFTC, Inc.

United States District Court, N.D. California

November 22, 2019

VINH-SANH TRADING CORPORATION, a California Corporation Plaintiff,
v.
SFTC, INC., D.B.A. SUN FAT TRADING CORPORATION, a California Corporation, Defendant.

          ORDER DENYING PRELIMINARY INJUNCTION

          CHARLES R. BREYER UNITED STATES DISTRICT JUDGE.

         Now pending is Plaintiff Vinh-Sanh Trading Corporation's (“Vinh-Sanh”) motion for a preliminary injunction against Defendant SFTC, Inc. (“Sun Fat”). See MPI (dkt. 39) at 1-2. Vinh-Sanh seeks to enjoin Sun Fat from further using allegedly infringing marks in its sale of Thai jasmine rice. Id. The Court DENIES the preliminary injunction for the reasons below.

         I. BACKGROUND

         Vinh-Sanh imports and distributes rice and rice-based products. Compl. (dkt. 1) ¶ 9. Its most popular product is Thai jasmine rice, which it sells throughout the United States. Id. ¶¶ 10, 12. In the mid-1980s, Vinh-Sanh established the THREE LADIES brand, and developed a trademark consisting of a drawing of three women wearing clothing representing the countries of Cambodia, Vietnam, and Laos. Id. ¶ 11. Vinh-Sanh has four trademarks in connection with the THREE LADIES brand. See Compl. ¶ 13; TRO App. (dkt. 11) at 4.

         Sun Fat is an importer, distributor, and wholesale buyer of Asian foods. Compl. ¶ 22. Vinh-Sanh works with a variety of distributors and briefly had a wholesale relationship with Sun Fat “for the sale of a small quantity of THREE LADIES rice.” Id. ¶ 23. Vinh-Sanh “terminated the relationship with Sun Fat” when it discovered that, in its view, Sun Fat was infringing the THREE LADIES mark. Id. ¶ 24. Sun Fat had started marketing and selling Thai jasmine rice with the images-photographs, not drawings-of three women wearing what Vinh-Sanh asserts is clothing representing the countries of Cambodia, Vietnam, and Laos. Id.

         Vinh-Sanh brought suit for federal trademark infringement under 15 U.S.C. § 1114, Federal Unfair Competition under 15 U.S.C. § 1125(a), Common Law Trademark Infringement, and Unfair Competition under Cal. Bus. & Prof. Code § 17200. See generally Compl. Vinh-Sanh applied for a temporary restraining order (TRO) on August 2, 2019. See generally TRO App. The Court denied the TRO. The Court concluded that while Vinh-Sanh was likely to succeed on the merits, and an injunction was in the public interest, Vinh-Sanh had not shown irreparable harm. See Tr. of Aug. 9, 2019 Proceedings (dkt. 27) at 3:19-22. The Court gave the parties leave to conduct further discovery on irreparable harm prior to briefing a preliminary injunction motion. Tr. of Aug. 9, 2019 Proceedings at 3:13-4:12. Vinh-Sanh subsequently filed a motion for preliminary injunction. See generally MPI. Sun Fat opposed the motion. See generally MPI Opp'n (dkt. 44). Vinh-Sanh replied. See generally MPI Reply (dkt. 45).

         In its motion for preliminary injunction, Vinh-Sanh asked the Court to enjoin Sun Fat from: (1) manufacturing, producing, sourcing, importing, selling or offering for sale, distributing, advertising, providing, or promoting any goods or services with the allegedly infringing marks; (2) using the infringing marks or any “false designation of origin, or false or misleading description or representation of fact”; (3) “further infringing the rights of Vinh-Sanh in and to its THREE LADIES Marks or otherwise damaging Vinh-Sanh's goodwill or business reputation”; (4) “competing unfairly with Vinh-Sanh in any manner”; and (5) “continuing to perform any other unlawful acts in any manner whatsoever complained of in the Complaint[.]” See MPI at 2.

         II. LEGAL STANDARD

         “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Rodriguez v. Robbins, 715 F.3d 1127, 1133 (9th Cir. 2013) (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)). The Ninth Circuit allows a “sliding scale approach, ” such that if the plaintiff can show “serious questions going to the merits, ” that a balance of hardships tips sharply toward the plaintiff, that there is likelihood of irreparable injury, and that the injunction is in the public interest, a preliminary injunction may still issue. See Kiva Health Brands, LLC v. Kiva Brands, Inc., 2019 WL 4249075, No. 19-cv-03459-CRB, at *3 (N.D. Cal. Sep. 6, 2019) (quoting Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (9th Cir. 2011) (internal quotation marks omitted).

         III. DISCUSSION

         A. Likelihood of Success on the Merits

         The Court continues to conclude that Vinh-Sanh is likely to succeed on the merits of a trademark infringement claim. To prevail on such a claim, a plaintiff must demonstrate (1) ownership of a valid trademark and (2) use by defendant in commerce of a mark likely to cause confusion. See Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir. 2011).

         1. Ownership of Mark

         Vinh-Sanh owns its trademarks. Vinh-Sanh registered the THREE LADIES Composite Mark on May 31, 2005, claiming a first use in commerce in May of 1986, and registered its Vietnamese-language Word Mark on October 8, 2013, with a first use in commerce of 2004. See MPI at 9; Aug. 2. Chen Decl. Ex. C, D, E, F (dkt. 12). Vinh-Sanh's registration and ownership of the marks constitutes prima facie evidence of the marks' validity and Vinh-Sanh's exclusive right to use the marks in commerce. See 15 U.S.C. § 1115(b); Applied Info. Scis. Corp. v. eBAY, Inc., 511 F.3d 966, 970 (9th Cir. 2007). Vinh-Sanh has used the marks continuously in commerce since 1986. See MPI at 9; Aug. 2 Chen Decl. ¶ 10.

         2. Likelihood of Confusion

         Vinh-Sanh is also likely to succeed in demonstrating a likelihood of confusion. There is a likelihood of confusion between two products “when consumers are likely to assume that a product or service is associated with a source other than its actual source because of similarities between the two sources' marks or marketing techniques.” Int'l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 825 (9th Cir. 1993) (quoting Metro Publishing, Ltd. v. San Jose Mercury News, 987 F.2d 637, 640 (9th Cir. 1993) (abrogated on other grounds)). The Ninth Circuit analyzes likelihood of confusion by referring to eight factors identified in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979) (abrogated in part on other grounds by Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 (2003)): (a) strength of the mark; (b) similarity of the marks; (c) proximity of the goods/services sold; (d) similarity in the marketing channels used; (e) type of goods/services and degree of care likely to be exercised by purchasers; (f) evidence of actual confusion; (g) defendant's intent in selecting its mark; and (h) likelihood of expansion into other markets.

         a. Strength of the Mark

         Strong marks are inherently distinctive and are “afforded the widest ambit of protection, ” whereas a “descriptive mark tells something about the product [and] will be protected only when secondary meaning is shown.” Sleekcraft, 599 F.2d at 349. That Vinh-Sanh registered the trademarks without being required to prove secondary meaning supports the conclusion that the marks are inherently distinctive. See Americana Trading, Inc. v. Russ Berrie & Co., 966 F.2d 1284, 1287 (9th Cir. 1992) (registered marks presumed to be distinctive). Moreover, the THREE LADIES mark is distinctive on its face. See Lahoti v. Vericheck, Inc., 586 F.3d 1190, 1198 (9th Cir. 2009) (“‘primary criterion' for distinguishing between a suggestive and a descriptive mark ‘is the imaginativeness involved in the suggestion, that is, how immediate and direct is the thought process from the mark to the particular product.'”) (internal citation omitted)). “THREE LADIES” does not describe the rice or its features-it is instead fanciful and arbitrary, like “Dutch Boy” as a name for paint. See Sleekcraft, 599 F.2d at 349 (citing National Lead Co. v. Wolfe, 223 F.2d 195, 199 (9th Cir. 1955), cert. denied, 350 U.S. 883 (1955)).

         Trademarks consisting of non-English words must pass the “foreign equivalents” test: the mark is translated into English to see whether, “to those American buyers familiar with the foreign language, the word would have a descriptive connotation.” See McCarthy on Trademarks, § 11:34 (5th Ed.); see also Bart Schwartz Intern. Textiles, Ltd. v. F.T.C., 129 U.S.P.Q. 258, 289 F.2d 665, 668 (1961) (“[A] descriptive word in a foreign language cannot be registered in the United States as a trademark for the described product.”). Because Vinh-Sanh's Vietnamese mark translates to “Three Ladies” or “Three Girls, ” it is just as arbitrary and fanciful as the English mark and is thus just as distinctive a mark.

         Strong marks also show “commercial strength, ” a feature “based on ‘actual market recognition[.]'” Network Automation, Inc., 638 F.3d at 1149. Though the commercial strength inquiry is “evidence-intensive” and “unnecessary at the preliminary injunction stage[, ]” it is worth noting that Vinh-Sanh would likely make a successful showing here as well. See id. at 1150. Vinh-Sanh asserts that the brand “is widely recognized by customers, and has further attained incredible commercial success over some thirty-plus years of use[.]” MPI at 11.

         Sun Fat argues that the Design Mark is not strong because “there are other well-known rice brands that feature on the bags drawings of three Asian figures.” TRO Opp'n (dkt. 23) at 11. Sun Fat CEO Benny Hong declares that there are “other popular rice brands” that include drawings of three Asian people, such as Three Farmers and Three Kings. Hong Decl. (dkt. 23-1) ¶ 20; see also Xiong Decl. (dkt. 23-7) ¶ 10 (“several companies in the rice and Asian foods market . . . use drawings of three ancient Asian characters.”). The Court was presented with no examples. While examples of extensive third party use of an image much like the THREE LADIES mark would weaken Vinh-Sanh's claim, see Hero Nutritionals LLC v. Nutraceutical Corp., No. SACV 11-1195 AG (MLGx), 2013 WL 4480674, at *4 (C.D. Cal. Aug. 16, 2013) (extensive third party use demonstrated weakness of marks), at this stage, the Three Ladies mark appears strong.

         b. Similarity of the Marks

         “Similarity of the marks is tested on three levels: sight, sound, and meaning, ” and each must be considered as encountered in the marketplace. Sleekcraft, 599 F.2d at 351. Even assuming that the THREE ASIAN LADIES identifier from the Sun Fat website, Chen Decl. Ex. H (dkt. 12), is no longer on display, the image on the Sun Fat rice, Chen Decl. Ex. G-a photograph of three women in traditional Asian clothing-is strongly reminiscent of the image on Vinh-Sanh's rice, Chen Decl. Ex. B, a drawing of three women in traditional Asian clothing with the words “Three Ladies Brand” underneath. Both show three women smiling while wearing different traditional Asian dresses, though the Vinh-Sanh image shows the women's full bodies and the Sun Fat image cuts off above the women's knees, the women are doing different things with their hands in the two images, and the Vinh-Sanh image is a drawing while the Sun Fat image is a photograph. Compare Chen Decl. Ex. B and Chen Decl. Ex. G.

         Sun Fat argues that the distinction between a drawing and a photograph is significant. See TRO Opp'n at 8; MPI Opp'n at 10. But the likelihood of confusion for a consumer in the marketplace is not necessarily that they mistake one image for another-it is that they will perceive Sun Fat's package, with a photograph of three women in traditional Asian dress, as an updated version of the drawing of three women in traditional Asian dress that they are accustomed to seeing on Vinh-Sanh's product. See MPI at 12. Sun Fat's citation to Funrise Canada (HK) Ltd. v. Zauder Bros., Inc., No. 99-cv-1519 (ARR), 1999 WL 1021810, at *22 (E.D.N.Y. July 2, 1999), in which the court noted the difference between a “photograph of a witch” and a “drawing of a fanciful phantom-like ghoul” is not helpful-this case is more like a photograph of a witch versus a drawing of a witch. See TRO Opp'n at 8. The same is true of Gameologist Group, LLC v. Scientific Games Int'l, Inc., 838 F.Supp.2d 141, 160-61 (S.D.N.Y. 2011), where the images were “visually dissimilar, ” not only because one was a photograph and one a drawing, as Sun Fat asserts, see TRO Opp'n at 8, but because, among other things, one “depicts photographs of cars, scantily-clad women, and stacks of hundred dollar bills” while the other “depict[s] drawings of diamonds, flowers, butterflies, and in one instance, a cartoon of an anthropomorphized lottery ticket, ” see Gameologist Group, 838 F.Supp.2d at 161.

         Sun Fat also made much of the argument that its three women are not wearing clothing representing Cambodia, Vietnam, and Laos (as in the Vinh-Sinh image) but either Cambodian, Hmong and Vietnamese clothing, or Thai, Vietnamese, and Hmong clothing. See TRO Opp'n at 9. It is true that the dresses are different. Of the three women pictured in the two designs, the first woman looks the most similar in both images, with an elaborate, pointed headpiece; the second woman in both images has a long-sleeved floral dress (though the second Vinh-Sanh woman is wearing a headpiece while the second Sun Fat woman is not); and the third woman is the most different-while the Vinh-Sanh woman wears a flower in her hair and a sleeveless dress, the Sun Fat woman wears a triangular headpiece and three-quarter sleeve dress, though both dresses exhibit prominent collars. Compare Chen Decl. Ex. B and Chen Decl. Ex. G.

         Sun Fat also argues that the THREE LADIES name appears below the image of the three women on the Vinh-Sanh rice, while Sun Fat does not use the name “three ladies” anywhere on its rice. See TRO Opp'n at 8; MPI Opp'n at 11. This is a difference between the two images-and of course other words on the rice bags are different as ...


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