Industria De Alimentos Zenu S.A.S. v. Latinfood U.S. Corp.

679 F.Supp.3d 53

INDUSTRIA DE ALIMENTOS ZENU S.A.S., Plaintiff/Counter Defendant, v. LATINFOOD U.S. CORP. d/b/a Zenu Products Co.and Wilson Zuluaga, Defendants/Counter Claimants/Third Party Plaintiffs, v. Cordialsa USA, Inc., Third Party Defendant.

Civ. No. 16-6576 (KM) (MAH)

United States District Court, D. New Jersey

Signed June 27, 2023

David G. Murphy, Reed Smith LLP, Princeton, NJ, Jason Louis Libou, Wachtel Missry LLP, New York, NY, Samuel Kadosh, Reed Smith LLP, New York, NY, Sarah Levitan Perry, Loeb & Loeb LLP, New York, NY, for Plaintiff/Counter Defendant.

Mark J. Ingber, The Ingber Law Firm, Livingston, NJ, for Defendants/Counter Claimants/Third Party Plaintiffs.

Jason Louis Libou, Wachtel Missry LLP, New York, NY, Samuel Kadosh, Reed Smith LLP, New York, NY, Sarah Levitan Perry, Loeb & Loeb LLP, New York, NY, for Third Party Defendant.

OPINION

KEVIN MCNULTY, UNITED STATES DISTRICT JUDGE:

Plaintiff Industria De Alimentos Zenu S.A.S. ("Industria"), commenced this trademark and copyright action against Latinfood U.S. Corp. doing business as Zenu Products Co. ("Latinfood"), and Wilson Zuluaga¹. Latinfood also asserted a counterclaim for tortious interference with prospective economic advantage against Industria and Cordialsa, Inc. ("Cordialsa").

Fact discovery is complete, and now before the Court are two motions for summary judgment.² In the first, plaintiff Industria moves for summary judgment on its own claims, and Industria and Cordialsa jointly move for summary judgment in opposition to defendants' counterclaims. (DE 265.) In the second, defendants Latinfood and Zuluaga jointly move for summary judgment in opposition to Industria's claims, but do not move for summary judgment on their counterclaims. (DE 268.) For the reasons expressed below, as to Industria's claims, Industria's motion for summary judgment is GRANTED in part and DENIED in part and Latinfood and Zuluaga's motion for summary judgment is GRANTED in part and DENIED in part. As to defendants' counterclaims, Industria and Cordialsa's motion for summary judgment is GRANTED.

I. BACKGROUND

A. Facts³

Industria is "a foreign corporation organized under the laws of Colombia and with its principal place of business in Medellín, Colombia." (Def. St. ¶ 1; Pl. Resp. ¶ 1.) Industria produces and distributes food products under two brand names relevant to this dispute: Zenú and Ranchera.⁴ (See Pl. St. ¶ 1; Def. Resp. ¶ 1.) Industria's Zenú-branded products, which it has sold in Colombia for more than 60 years, include various meat products, canned vegetables, and frozen dishes. (Pl. St. ¶¶ 2-3; Def. Resp. ¶¶ 2-3.) The Zenú packaging displays "the Zenú mark in red stylized type; red and white packaging; and photographs of the food on a white background." (Pl. St. ¶ 4; Def. Resp. ¶ 4.) Industria's Ranchera-branded products, which it has sold in Colombia for more than 30 years, include various meat products and sausages. (Pl. St. ¶¶ 5-6; Def. Resp. ¶¶ 5-6.) The Ranchera name is displayed on packaging in a red "western" or "rancher-inspired" font which is "outlined first in white and then in black, curving slightly upward in the middle of the word." (Pl. St. ¶ 7; Def. Resp. ¶ 7.) For Ranchera "salchicha" sausages, a "rancher theme" is used on the packages showing a family around a campfire at sunset. (Pl. St. ¶ 9; Def. Resp. ¶ 9.)

From 2012 to 2017, Industria "spent over $33 million in advertisement for its Ranchera products line and over $77 million in advertisement for its Zenú products line including for advertisement on television, radio and magazines." (Pl. St. ¶ 15; Def. Resp. ¶ 15.) Annually, Industria makes approximately $300,000,000 in sales of Zenú products and $100,000,000 in sales of Ranchera products. (Pl. St. ¶ 16; Def. Resp. ¶ 16.) However, Industria does not advertise or sell its Zenú or Ranchera products in the United States.⁵ (Def. St. ¶¶ 6-7, 14; Pl. Resp. ¶¶ 6-7, 14.) Industria has also not conducted any market surveys specific to the United States for its Zenú or Ranchera marks. (Def. St. ¶ 34; Pl. Resp. ¶ 34.)

Industria has never owned a registered U.S. trademark for Ranchera. (Def. St. ¶ 4; Pl. Resp. ¶ 4.) On November 14, 2016, Industria filed an application with the U.S. Patent and Trademark Office ("USPTO") to register its Ranchera mark, but a U.S. corporation (unrelated to this action) filed a notice of opposition to the application based on its ownership of a U.S. trademark for "Ranchero." (Def. St. ¶¶ 21-22; Pl. Resp. ¶¶ 21-22.) On November 6, 2019, the USPTO suspended the opposition proceeding until resolution of the instant action. (Def. St. ¶ 22; Pl. Resp. ¶ 22.) Additionally, although Industria once owned a registered U.S. trademark for Zenú, such registration is no longer in effect. (Def. St. ¶ 2; Pl. Resp. ¶ 2.) Industria never sold any Zenú or Ranchera products in the United States when it owned that registered trademark. (Def. St. ¶ 61; Pl. Resp. ¶ 61.)

Mr. Zuluaga was born in Medellín, Colombia, and lived in Colombia until he was approximately 17 years old. (Pl. St. ¶¶ 19-20; Def. Resp. ¶¶ 19-20.) In around 2010, Mr. Zuluaga founded a company called HWZ Distributors ("HWZ"). (Pl. St. ¶ 24; Def. Resp. ¶ 24.) "HWZ distributed perishable and non-perishable food products, including panela, guava-based snacks, beverages, and meat products such as sausages." (Pl. St. ¶ 25; Def. Resp. ¶ 25) "HWZ distributed its products in New York, New Jersey and Connecticut," and generally targeted customers of Hispanic origin. (Pl. St. ¶¶ 26-27; Def. Resp. ¶¶ 26-27.)

At some point after founding HWZ, Mr. Zuluaga began distributing products under the Zenú name. The parties dispute when Mr. Zuluaga first used the Zenú name in commerce, with Mr. Zuluaga claiming first use in 2011. (Def. St. ¶ 16; Pl. Resp. ¶ 16.) On January 25, 2013, HWZ submitted an application to register the Zenú trademark with the USPTO through a filing service called Idaho Falls IS USTM Corp. ("USTM"). (Pl. St. ¶¶ 28-29; Def. Resp. ¶¶ 28-29.) The application bears Mr. Zuluaga's signature. (Pl. St. ¶ 32; Def. Resp. ¶ 32.) Attached to that application were exemplars consisting of actual images of Industria's products. (Pl. St. ¶ 33; Def. Resp. ¶ 33.) Mr. Zuluaga disclaims any knowledge of this act by USTM, and claims to have been unaware of Industria's Zenú mark prior to the filing of that application. (See Pl. St. ¶ 30; Def. Resp. ¶ 30.) The USPTO registered the Zenú trademark to HWZ for International Class 29 goods on September 17, 2013. (Pl. St. ¶ 36; Def. Resp. ¶ 36.) That same day, HWZ recorded an assignment of its entire interest in the Zenú trademark to Latinfood, the successor company to HWZ. (Pl. St. ¶ 37; Def. Resp. ¶ 37; Def. St. ¶¶ 16-17; Pl. Resp. ¶¶ 16-17.) Almost two years after the initial trademark registration, Mr. Zuluaga wrote an email to USTM stating that "we need to replace / change the pic of the specimen loaded in the application . . . . [T]he one showed in the application is not mine." (Pl. St. ¶ 34; Def. Resp. ¶ 34.)

At some point in 2013, "HWZ was wound down and Mr. Zuluaga founded Latinfood . . . as the successor company to HWZ." (Pl. St. ¶ 37; Def. Resp. ¶ 37.) Latinfood is a distributor of perishable and non-perishable food items such as groceries, brown sugar, beverages, processed meats, flour, and corn. (Pl. St. ¶ 38; Def. Resp. ¶ 38.) Latinfood targets primarily Hispanic customers in the U.S. (Pl. St. ¶ 39; Def. Resp. ¶ 39.)

Mr. Zuluaga used a company called Cibao Meats Products ("Cibao") to design Latinfood's Zenú and Ranchera product labels and recipes. (Pl. St. ¶¶ 44, 63; Def. Resp. ¶¶ 44, 63.) Mr. Zuluaga instructed Ms. Jaline Isidor Horta, a marketing assistant at Cibao, to look at Industria's website when creating Latinfood's packaging designs. (Pl. St. ¶¶ 46-53; Def. St. ¶¶ 46-53; Def. Supp. St. ¶ 20; Pl. Supp. Resp. ¶ 20.) Mr. Zuluaga also brought one of Industria's Ranchera labels to Ms. Isidor's office.⁶ (Pl. St. ¶ 57; Def. Resp. ¶ 57.)

Examples of both Industria's and Latinfood's Zenú and Ranchera labels are attached to this opinion as Exhibit A. (Kadosh Decl. Exs. 16-17, 20-21; Salazar Decl. Exs. D-G, V-W; Pl. St. ¶¶ 65-66, 68-69; Def. Resp. ¶¶ 65-66, 68-69.)⁷ However, Latinfood has since modified its Zenú mark, which is attached to this Opinion as Exhibit B. (Kadosh Decl. Exs. 18-19; Pl. St. ¶ 67; Def. Resp. ¶ 67.)

Some of Latinfood's Zenú and Ranchera product labels state that the product is manufactured or distributed by "Zenú Products US, Inc."; display the web address www.zenu.us.com; and contain the phrase "Linea de Exportacion," which translates to "exportation line." (Pl. St. ¶¶ 71-73; Def. Resp. ¶¶ 71-73.) Latinfood does not export its Zenú or Ranchera products outside the United States. (Pl. St. ¶ 74; Def. Resp. ¶ 74.) In 2016, the Latinfood website contained the phrase "We have products from" followed by marks of imported brands, among which was an image of Industria's Zenú mark.⁸ (Pl. St. ¶ 75; Def. Resp. ¶ 75.) Advertisements made for Latinfood Zenú products used the phrase "una deliciosa tradición," which translates to "a delicious tradition." (Pl. St. ¶ 76; Def. Resp. ¶ 76.)

Latinfood sold its products in various supermarkets. One supermarket, Food Fair, sold Latinfood's products in an aisle designated for "Hispanic and Latin imported goods," despite having another aisle designated for similar goods made in the U.S. (Pl. St. ¶¶ 80-81; Def. Resp. ¶¶ 80-81.) On July 15, 2015, Alejandro Yepes, a sales manager for Cordialsa, made a visit to Food Fair. (Pl. St. ¶ 120; Def. Resp. ¶ 120.) Yepes told Elvis Rodriquez, the manager of Food Fair, that he was "surprised to find" Zenú-marked products at the store. (Pl. St. ¶ 121; Def. Resp. ¶ 121.) It is unclear whether, as part of that conversation, Mr. Yepes stated that the Zenú products were "fake." (See Pl. St. ¶ 127; Def. Resp. ¶ 127.) As it turns out, Mr. Zuluaga was also at Food Fair on July 15. After Mr. Rodriguez explained to Mr. Zuluaga what Mr. Yepes's had said,...