N. Food I/E v. OCM Globe Inc.

1

NORTHERN FOOD I/E, INC., Plaintiff, v. OCM GLOBE INC., OCM GROUP USA INC., OCM GROUP USA, NJ, INC., GANG WANG, YAOTIAN LI, and JOHN DOES #1-5, Defendants.

No. 21-CV-1813 (MKB)

United States District Court, E.D. New York

July 8, 2024

FILED UNDER SEAL

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiff Northern Food I/E, Inc. commenced the above-captioned action on April 2, 2021, against Defendants OCM Globe Inc. (“OCM Globe”), OCM Group USA Inc. (“OCM USA”), OCM Group USA, NJ, Inc. (“OCM NJ”) (collectively, the “OCM Entities”), Gang Wang Yaotian Li, and John Does #1-5, alleging claims of trademark counterfeiting and trademark infringement in violation of section 32 of the Lanham Act, 15 U.S.C. § 1114; unfair competition, false designation of origin, and false description in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and trademark infringement and unfair competition under New York common law. (Compl ¶¶ 40-56, Docket Entry No. 1.) In their Answer Defendants asserted counterclaims for cancellation of Plaintiff's trademark on the grounds of abandonment fraud, and lack of right to register. (Answer 24-32, Docket Entry No. 35.)

Defendants move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure as to all of Plaintiff's claims and as to Defendants' counterclaims for cancellation of Plaintiff's trademark on the grounds of abandonment and fraud, and Plaintiff opposes the motion.^[1] For the reasons discussed below, the Court denies Defendants' motion.

I. Background

The following facts are undisputed unless otherwise noted.^[2]

a. Factual background

i. The parties

Plaintiff is a New York corporation based in Westbury, New York and is in the food production, importation, and wholesale business. (Defs.' 56.1 Resp. ¶ 5; Compl. ¶¶ 1, 5.) It sells various food products across the United States, including “candy, biscuits, cakes, cookies, cereal[-]based snack food, wheat[-]based snack food, oatmeals, sesame powder, [and] noodles,” distributed under the federally registered trademark “Dao Xiang Cun,” U.S. Trademark Registration No. 3,344,149 (the “Dao Xiang Cun Mark”). (Defs.' 56.1 Resp. ¶¶ 5, 17, 23.) OCM Globe and OCM USA are two California corporations based in City of Industry, California (the “California corporations”). (Id. ¶ 1.) OCM N.J. is a New Jersey corporation based in Bayonne, New Jersey. (Id.) Wang is the chief executive officer (“CEO”) of the California corporations. (Id. ¶ 4.) Li is an employee of the California corporations, and was one of the employees in charge of communicating with Defendants' foreign manufacturer, DXC Co.^[3](Id. ¶¶ 3, 68, 73.)

ii. Plaintiff's application and filings for the Dao Xiang Cun Mark

On July 18, 2006, Plaintiff filed Application Serial No. 78/931,657 (the “Application”) with the U.S. Patent and Trademark Office (the “USPTO”) for registration of the Dao Xiang Cun Mark. (Defs.' 56.1 Resp. ¶ 15.) In support of the Application, Plaintiff submitted (1) a sworn declaration by its V.P. Mark Ma, stating that “he/she believes the applicant to be the owner of the trademark/service mark sought to be registered,” and (2) a photograph of a specimen bearing the Dao Xiang Cun Mark manufactured by Beidao, a foreign manufacturer located in China that uses the same mark in connection with its goods outside the United States. (Id. ¶¶ 9-10, 16, 18-20.) On July 23, 2006, Plaintiff executed an exclusive distribution agreement with Beidao (the “EDA”). (Id. ¶¶ 8, 13.) The EDA states that it “takes effect after execution” and did not assign any of Beidao's trademark rights to Plaintiff.^[4] (Id. ¶¶ 13-14.) On November 27, 2007, the USPTO approved Plaintiff's Application and issued Trademark Registration No. 3,344,149 to Plaintiff for the Dao Xiang Cun Mark. (Id. ¶ 23.)

On November 28, 2012, Plaintiff filed a “Combined Declaration of Use and Incontestability under Sections 8 [and] 15 of the Lanham Act” for the Dao Xiang Cun Mark, and an accompanying sworn declaration from Qishu Lin, Plaintiff's President, stating that:

[T]he mark is in use in commerce on or in connection with all of the goods . . . listed in the existing registration for this specific class: candy, biscuits, cakes, cookies, cereal[-]based snack food, wheat[-]based snack food, oatmeals, sesame powder, [and] noodles; and the mark has been continuously used in commerce for five (5) consecutive years after the date of registration . . ., and is still in use in commerce on or in connection with all goods ....

(Id. ¶¶ 24-26.) In addition, Plaintiff attached a “specimen in support of its statement of use, which was for sesame cookies.” (Id. ¶ 27.) On December 29, 2012, the USPTO accepted Plaintiff's Combined Declaration of Use and Incontestability. (Id. ¶ 29.) Accordingly, Plaintiff maintained its registration and obtained incontestability status for the Dao Xiang Cun Mark. (Id.)

On January 3, 2017, Plaintiff filed a “Combined Declaration of Use and Application for Renewal under Sections 8 [and] 9 of the Lanham Act” for the Dao Xiang Cun Mark, an accompanying sworn declaration from Lin that materially stated the same information as Lin's 2012 declaration, and the same specimen for sesame cookies submitted with its 2012 declaration of use. (Id. ¶¶ 30-33.) On March 2, 2017, the USPTO accepted Plaintiff's Combined Declaration of Use and Application for Renewal, and Plaintiff maintained and renewed its registration for the Dao Xiang Cun Mark. (Id. ¶ 34.)

iii. The alleged trademark infringement

Plaintiff alleges that Defendants are “importing [and] distributing products within this judicial [d]istrict using the exact or closely similar mark (the ‘Accused Mark') to the Dao Xiang Cun Mark.” (Compl. ¶ 23.) Plaintiff contends that Defendants (1) sell infringing products bearing the Accused Mark (the “Infringing Products”), (2) maintain and operate an interactive website - www.ocmfoods.com - to promote and advertise their products, including the Accused Mark and the Infringing Products, (3) have run an advertisement about the Accused Mark and the Infringing Products in a Chinese language New York newspaper, and (4) circulated a product catalogue containing the Accused Mark and Infringing Products, both online and physically in New York, in which Defendants used the registered trademark symbol next to the Accused Mark even though it is not a registered mark in the United States. (Id. ¶¶ 25-27.) Plaintiff further contends that between August of 2019 and June of 2021, Defendants' sale of products branded with the Accused Mark in New York accounted for approximately 12% of the overall sales of the products branded with the Accused Mark in the United States. (Decl. of Gang Wang ¶ 9, annexed to Defs.' Mot. to Dismiss, Docket Entry No. 25-2.)

Plaintiff contends that it has no association with Defendants and has never authorized them to use the Dao Xiang Cun Mark for any purpose. (Compl. ¶ 28.) In a letter dated February 9, 2021, Plaintiff notified Defendants that their use of the Accused Mark infringed Plaintiff's rights and demanded that Defendants cease and desist use of the Accused Mark. (Id. ¶ 30.) Defendants refused to cease using the Accused Mark and continue to use it in their operations. (Id. ¶ 31.)

b. Procedural history

On April 2, 2021, Plaintiff commenced this action. (Compl.) On August 20, 2021, Li moved to dismiss Plaintiff's claims pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction, and all Defendants moved to dismiss Plaintiff's claims pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure for improper venue or, in the alternative, to transfer venue to the Central District of California pursuant to 28 U.S.C. § 1404(a). (Defs.' Mot. to Dismiss, Docket Entry No. 25.) On March 28, 2022, the Court denied Defendants' motion in its entirety (the “March 2022 Decision”). (Mar. 2022 Decision, Docket Entry No. 33.)

The parties engaged in discovery and completed fact discovery in February of 2023, and expert discovery in March of 2023. (Min. Entry & Order dated Jan. 17, 2023; Order Extending Time to Complete Expert Discovery dated Mar. 21, 2023; see also Defs.' Pre-Motion Conf. Letter dated Apr. 17, 2023, at 1, Docket Entry No. 45.) During discovery, Defendant requested that Plaintiff produce “[f]or each good identified in the application or registration for the [Dao Xiang Cun] Mark, documents sufficient to show continuous use of the [Dao Xiang Cun] Mark in connection with each such good.” (Defs.' 56.1 Resp. ¶ 37; see also id. ¶ 38 (requesting from Plaintiff all documents that Plaintiff “intends to rely upon to show that it has and still uses the [Dao Xiang Cun] Mark in commerce and has not abandoned the [Dao Xiang Cun] Mark”).) The parties dispute both Plaintiff's response to this request for production and whether Plaintiff was able to comply with this request.^[5]In March of 2022, Plaintiff's counsel confirmed that, for the document requests in dispute, Plaintiff “has produced responsive representative samples to [Defendants'] requests” and “confirm[ed] that it has substantially completed its document production with respect to these [r]equests,” but “reserv[ed] its right to supplement its production before the close of the production.” (Id. ¶ 39 (emphasis omitted).)

On September 1, 2023, after discovery closed, Defendants moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure on their counterclaims for cancellation of Plaintiff's trademark registration on the grounds of abandonment and fraud on the USPTO and on all counts of Plaintiff's Complaint for federal and state law trademark infringement and unfair competition. (Defs.' Mot. 2.) Plaintiff opposed the motion and...