Sunsauce Foods Industrial Corp., Ltd v. Son Fish Sauce USA Corporation

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 SUNSAUCE FOODS INDUSTRIAL Case No. 22-cv-08973-PCP CORP., LTD, 8 Plaintiff aintirt, ORDER DENYING MOTION FOR 9 y PRELIMINARY INJUNCTION 10 Re: Dkt. No. 43 SON FISH SAUCE USA CORPORATION, Defendant. a 12 13 In this lawsuit, plaintiff Sunsauce Foods Industrial Corp., Ltd alleges that California-based v 14 || Son Fish Sauce USA Corporation 1s infringing Sunsauce’s trademark under Section 32 of the 15 || Lanham Act, 15 U.S.C. § 1114 . Sunsauce now seeks a preliminary injunction enjoining Son Fish Q 16 || from using the SON SAUCE mark in packaging, marketing, selling, and distributing its sauce = 17 || products. For the following reasons, Sunsauce’s motion is denied. 18 BACKGROUND 19 Sunsauce is a Thailand-based company that produces and sells Thai-style sauces and 20 || related food products. Son Fish is a California-based company that produces and sells fish sauce in 21 || the United States. Sunsauce alleges that Son Fish’s “SON SAUCE” mark is likely to cause 22 || confusion among consumers given Sunsauce’s existing “SUNSAUCE” composite mark, which 23 || was registered with the USPTO in July 2013 in connection with sauces and related food products 24 (Reg. No. 4,363,095). Shown below for reference are the SUNSAUCE and SON SAUCE marks. 25 ues 5 =ars @ — f— =) - 26 b Ub □□ i i a 28 : | Sauce 1 Several years after Sunsauce registered its mark with USPTO, Son Fish applied for a 2 trademark for its SON SAUCE mark (both in word and design form). Its application, however, 3 was denied in 2020 based on the USPTO’s finding of a likelihood of confusion with Sunsauce’s 4 SUNSAUCE mark. Son Fish thereafter filed a petition with the Trademark Trial and Appeal 5 Board in June 2022 seeking to cancel Sunsauce’s trademark registration on the ground that 6 Sunsauce had either abandoned its mark or failed to adequately use it in the United States. 7 Sunsauce filed this lawsuit on December 19, 2022, asserting a Lanham Act trademark 8 infringement claim as well as claims for common law trademark infringement, unfair competition 9 under California’s Unfair Competition Law, and unfair competition under Section 43 of the 10 Lanham Act, 15 U.S.C. § 1125 (a). Sunsauce filed its motion for a preliminary injunction just over 11 one year later, on December 21, 2023. Sunsauce premises its motion solely upon its Lanham Act 12 trademark infringement claim. 13 LEGAL STANDARDS 14 “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on 15 the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 16 balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. 17 Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The Ninth Circuit also applies an 18 alternative “sliding scale” approach to the Winter factors wherein “the elements of the preliminary 19 injunction test are balanced, so that a stronger showing of one element may offset a weaker 20 showing of another.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 21 2011). “[S]erious questions going to the merits and a balance of hardships that tips sharply 22 towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also 23 shows that there is a likelihood of irreparable injury and that the injunction is in the public 24 interest.” Id. at 1135 . 25 ANALYSIS 26 For several reasons, Sunsauce has not established its entitlement to a preliminary 27 injunction. 1 injunctive relief. “A preliminary injunction is an extraordinary remedy” that is “never awarded as 2 of right” and “may only be awarded upon a clear showing that the plaintiff is entitled to such 3 relief.” Winter, 555 U.S. at 22, 24 (2008). Although “the rules of evidence do not apply strictly to 4 preliminary injunction proceedings,” Herb Reed Enterprises, LLC v. Fla. Entertainment Mgmt., 5 Inc., 736 F.3d 1239 , 1250 n.5 (9th Cir. 2013), the party seeking a preliminary injunction still bears 6 the burden to provide the Court with probative evidence demonstrating a likelihood that they will 7 be able to establish their case through admissible evidence at trial. 8 Notwithstanding this burden, Sunsauce initially supported its preliminary injunction 9 motion with only a single declaration from one of its attorneys. That declaration described the 10 USPTO proceedings involving Son Fish’s rejected trademark application and provided copies of 11 Son Fish’s website and product listing on Amazon. Dkt. No. 43-2. To establish both a likelihood 12 of success on the merits, including by showing a likelihood of consumer confusion, and that 13 irreparable injury was likely in the absence of injunctive relief, Sunsauce relied solely on the 14 allegations of its unverified complaint. After Son Fish’s opposition noted the absence of any 15 probative evidence that Sunsauce operated in the U.S. market, Sunsauce submitted a declaration 16 from another one of its attorneys containing purported receipts of shipments to the United States 17 by Sunsauce and copies of Amazon pages advertising Sunsauce’s products. Dkt. No. 49-1. The 18 declarant attorney does not contend that he has any personal knowledge of the shipments or sales 19 purportedly documented in the receipts or Amazon pages he provided with his declaration. Dkt. 20 No. 49-6 (Exhibit E). 21 By premising its motion solely upon an unverified complaint and two declarations from 22 attorneys lacking personal knowledge, Sunsauce has failed to provide the Court with the kind of 23 probative evidence required to justify the extraordinary remedy of a preliminary injunction. Courts 24 apply looser evidentiary standards when considering preliminary injunction motions because those 25 motions are usually filed early in the litigation under exigent circumstances. See, e.g., Herb Reed 26 Enterprises, 736 F.3d at 1250 n.5 (explaining that courts may rely on inadmissible evidence at the 27 preliminary injunction stage “[d]ue to the urgency of obtaining a preliminary injunction at a point 1 more than a year before Sunsauce ever sought preliminary injunctive relief. Moreover, Sunsauce 2 has not provided any compelling reason why it could not have produced a declaration from an 3 owner or employee of Sunsauce with personal knowledge of the allegations in its complaint and 4 Sunsauce’s business in the U.S. market—evidence available to Sunsauce both upon the filing of 5 its complaint and more than a year thereafter. 6 Second, Sunsauce fails to show that it is likely to succeed on the merits of its trademark 7 infringement claim or that its claim presents serious questions on the merits. 8 To succeed on a Lanham Act trademark infringement claim, a plaintiff must show that it 9 has a protectible ownership interest in its registered mark and that the defendant’s use of its mark 10 is likely to cause consumer confusion. Network Automation, Inc. v. Advanced Sys. Concepts, 638 11 F.3d 1137, 1144 (9th Cir. 2011). “[F]ederal registration of a trademark constitutes prima facie 12 evidence of the validity of the registered mark and of [the registrant’s] exclusive right to use the 13 mark in commerce.” Quiksilver, Inc. v. Kymsta Corp., 466 F.3d 749, 755 (9th Cir. 2006). Because 14 the Court can take judicial notice of Sunsauce’s trademark registration, Sunsauce has satisfied the 15 first requirement for a Lanham Act trademark infringement claim. 16 The second element of such a claim is a likelihood of consumer confusion. To determine if 17 another’s use of a registered mark is likely to cause consumer confusion, courts in the Ninth 18 Circuit consider: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; 19 (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of 20 care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) 21 likelihood of expansion of the product lines. Punchbowl, Inc. v. AJ Press, LLC, 90 F.4th 1022 , 22 1027 (9th Cir. 2024) (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979)). 23 Sunsauce argues that the similarity of the marks on related products sold in convergent 24 marketing channels to the same class of purchasers engenders customer confusion. Sunsauce also 25 contends that Son Fish’s use of its mark notwithstanding actual knowledge of Sunsauce’s mark 26 through Son Fish’s rejected trademark applications establishes an intent to deceive the public. 27 Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1394 (9th Cir. 1993) (“When an alleged 1 the public.”). Sunsauce further argues that this Court should consider that the USPTO rejected Son 2 Fish’s trademark applications on the grounds that there was a likelihood of confusion with 3 Sunsauce’s pre-existing mark. Dkt. No. 43-6 (final office action); see JL Beverage Co., LLC v. Jim 4 Beam Brands Co., 828 F.3d 1098, 1109 (9th Cir. 2016) (considering the USPTO’s preliminary 5 observations during the assessment process in finding there may be a likelihood of confusion). 6 Son Fish responds that the marks are sufficiently distinct such that a “reasonably prudent 7 consumer in the marketplace” would not be confused by the origin of a good bearing one of the 8 marks. Rearden LLC v. Rearden Commerce, 638 F.3d 1190, 1214 (9th Cir. 2012). Specifically, 9 Son Fish argues that the marks look very different despite their phonetic similarity, that its 10 products are primarily sold in the United States whereas Sunsauce’s are largely and possibly 11 entirely sold abroad, and that Sunsauce has not presented any evidence of actual confusion in the 12 marketplace. 13 At this stage of the proceedings, Son Fish appears to have the better argument with respect 14 to the likelihood of consumer confusion. “To constitute trademark infringement, use of a mark 15 must be likely to confuse an appreciable number of people as to the source of the product.” 16 Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1151 (9th Cir. 2002). Here, the marks appear to 17 be sufficiently distinct to avoid confusing an appreciable number of consumers. Despite their 18 phonetic similarity, the marks are spelled differently, the SUNSAUCE composite mark contains 19 Thai lettering, and the SON SAUCE mark includes a space before the word “sauce.” 20 Further, Sunsauce has failed to provide probative evidence that it actually sells fish sauce 21 in the United States bearing its mark. As noted already, Sunsauce provided (with its reply brief) a 22 declaration by one of its attorneys with attached exhibits containing purported receipts of product 23 shipments from Thailand to the United States. Dkt. Nos. 49-1; 49-6 (Exhibit E). Even if those 24 receipts are considered probative evidence notwithstanding the attorney’s failure to provide any 25 basis for concluding that he has personal knowledge regarding their authenticity, the majority of 26 shipments occurred after the complaint was filed, and the receipts themselves do not identify 27 where the sauces were actually marketed or sold. Conversely, Son Fish has provided declarations 1 have never even heard of Sunsauce’s products and do not recognize the SUNSAUCE mark. Dkt. 2 Nos. 46-3, 46-4. Moreover, many of the listed Sunsauce products that were shipped to the United 3 States were not fish sauces but chili suki sauces. Given the limited number of (largely post4 complaint) shipments to the United States by Sunsauce of primarily non-fish sauce products and 5 the lack of evidence that the two companies’ products are in proximity or sold through the same 6 marketing channels, the likelihood of American consumer confusion as between Sunsauce’s 7 products and Son Fish’s fish sauce appears to be limited.1 8 In addition, Sunsauce has not provided any probative evidence of actual confusion in the 9 marketplace, while Son Fish (as noted already) has provided two declarations by experienced 10 Asian / Ethnic sauce distributors in the United States who suggest that no such confusion exists 11 because Sunsauce has not operated in the U.S. market to any meaningful extent. Although 12 evidence of actual consumer confusion is generally less important at the preliminary injunction 13 phase, Network Automation, Inc., 638 F.3d at 1151 , that Son Fish has produced evidence 14 undermining any finding of actual confusion while Sunsauce has provided no contrary evidence 15 more than a year after the filing of its lawsuit suggests that this factor will also weigh in Son 16 Fish’s favor at trial. 17 For these reasons, Sunsauce has demonstrated neither a likelihood of success on the merits 18 nor serious questions going to the merits of its trademark infringement claim. 19 Third, and finally, the balance of the equities does not favor the issuance of an injunction 20 here. Sunsauce’s proposed injunction would entirely halt Son Fish’s business, as it would be 21 unable to package, market, sell, or distribute the products bearing the SON SAUCE mark that 22 constitute the entirety of its existing business. It would also deprive Son Fish of the benefits of all [24] 1 While the USPTO denied Son Fish’s trademark applications due to a likelihood of confusion [25] with Sunsauce’s mark, the USPTO was not presented with evidence regarding the limited presence of Sunsauce’s fish sauce products in the United States and thus could not comment on [26] actual marketplace confusion. Additionally, the USPTO did not (and could not) find that Son Fish’s mark infringed Sunsauce’s mark, only that the marks may cause consumer confusion. The [27] Court accordingly cannot find on this basis alone that Son Fish intended to deceive the public 1 of the work that it has put into developing its mark over more than ten years of operations. 2 || Conversely, Sunsauce waited more than a year after filing this lawsuit to seek a preliminary 3 injunction, suggesting that the harm it is suffering in the absence of an injunction is limited. That 4 || the balance of hardships does not tip “sharply towards the plaintiff’ but instead strongly favors 5 || denying relief further supports denial of Sunsauce’s preliminary injunction motion. Cottrell, 632 6 || F.3d 1135. 7 CONCLUSION 8 For the foregoing reasons, Sunsauce’s motion for a preliminary injunction is denied. 9 IT IS SO ORDERED. 10 || Dated: May 14, 2024 11 Me Za 12 . P. Casey Pitts 13 United States District Judge [16] = 17 Z 18