La Terra Fina USA, LLC v. Resers Fine Foods, Inc.

Background

La Terra Fina USA, LLC and Reser’s Fine Foods, Inc. manufacture and sell specialty foods, including dips, spreads, and quiches, through the same retail channels. La Terra Fina brought claims against Reser’s for trade dress infringement and unfair competition. Reser’s responded with counterclaims for trade dress infringement and unfair competition. The court had previously dismissed two counterclaims for failure to state a claim. Reser’s then filed amended counterclaims, and La Terra Fina moved to dismiss them in part.

Fraudulent-Procurement Counterclaims

The order addresses Reser’s third counterclaim, which sought cancellation of a trademark registration, and fourth counterclaim, which sought civil penalties. Both counterclaims relied on the same theory: that La Terra Fina falsely represented to the Patent and Trademark Office that a product image, called a specimen, showed the mark being used in commerce.

Reser’s alleged that one of two submitted images appeared digitally created or altered. It pointed to differences between the images, the absence of information it considered typical in the trade, and features it characterized as showing that the image was staged. Reser’s also alleged that the Patent and Trademark Office must have relied on the challenged image because the other image did not show the entire mark.

Court’s Analysis

Because the counterclaims alleged fraud, Federal Rule of Civil Procedure 9(b) required Reser’s to describe the circumstances of the alleged fraud with particularity. The court held that Reser’s allegations did not plausibly show that the challenged image was false. The differences between the two images were at least equally consistent with La Terra Fina having two versions of its packaging, and cleaning up an image to remove a shadow did not show that the product was not used in commerce.

The court also held that Reser’s did not allege that La Terra Fina represented that both images showed the mark used in commerce. La Terra Fina had represented that at least one of the two specimens showed the mark used in commerce, and Reser’s did not allege facts supporting an inference that this representation was false. In addition, Reser’s allegations required unsupported assumptions that La Terra Fina intended the Patent and Trademark Office to rely specifically on the challenged image and that the office actually relied on it rather than the other image. The court therefore concluded that Reser’s failed to plausibly allege the required elements of fraud in obtaining the trademark registration.

Disposition

The court granted La Terra Fina’s motion to dismiss Reser’s third and fourth fraudulent-procurement counterclaims. In its conclusion, the court granted La Terra Fina’s motion to dismiss the amended counterclaims without leave to amend, finding that further amendment would be futile. The court also granted Reser’s objections to La Terra Fina’s supporting evidence because it had not relied on that evidence. The court vacated the July 25, 2024 hearing and moved the case-management conference to July 31, 2024.