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

Background

Sunsauce Foods Industrial Corp., Ltd. produces and sells Thai-style sauces and related food products. Son Fish Sauce USA Corporation produces and sells fish sauce in the United States. Sunsauce owns a “SUNSAUCE” composite trademark registered with the United States Patent and Trademark Office in 2013 for sauces and related food products.

Son Fish Sauce later applied to register “SON SAUCE” in word and design forms. The application was denied in 2020 based on a finding of likely confusion with Sunsauce’s mark. Son Fish Sauce then petitioned the Trademark Trial and Appeal Board to cancel Sunsauce’s registration, alleging that Sunsauce had abandoned the mark or had not adequately used it in the United States.

Sunsauce sued under the Lanham Act, the common law, and California’s Unfair Competition Law. Son Fish Sauce asserted counterclaims seeking cancellation of the registration, a declaration that the registration was invalid, and a declaration that Son Fish Sauce’s mark did not infringe Sunsauce’s trademark or common-law rights. Son Fish Sauce alleged that Sunsauce lacked a genuine intent to use the mark in commerce when it applied for registration and falsely represented its use of the mark in a 2019 declaration.

Summary-judgment standard

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court must view the evidence and reasonable inferences favorably to the party opposing the motion, without deciding witness credibility or weighing conflicting evidence.

Sunsauce’s infringement claims

The court analyzed Sunsauce’s federal and related trademark claims under the likelihood-of-confusion test. That test asks whether a reasonably prudent consumer is likely to be confused about the source of goods. The court considered the eight factors commonly used in the Ninth Circuit: the mark’s strength, the relatedness of the goods, the similarity of the marks, actual confusion, marketing channels, the typical buyer’s level of care, intent, and likely expansion of the product line.

The court concluded that no reasonable jury could find likely confusion. It found that:

- Sunsauce’s mark was at least suggestive and possibly arbitrary, but its very limited United States sales and advertising, along with extensive third-party use of marks containing “sun” and “sauce,” made the mark commercially weak or diluted. - The parties’ goods were related because both involved East Asian sauces, although they were not the same types of sauces. - The marks were largely dissimilar in appearance, spelling, spacing, capitalization, fonts, stylization, packaging, and meaning. Although “SUNSAUCE” and “SON SAUCE” sounded the same in English, the court found that sound was relatively unimportant because the products were bought in stores and online. - Sunsauce introduced no evidence of actual consumer confusion. - There was little evidence of meaningful overlap in the parties’ actual distribution channels, given Sunsauce’s limited presence in the United States. - The parties presented no factual evidence about the level of care used by typical buyers, so that factor was neutral. - Son Fish Sauce had not known of Sunsauce’s mark when it designed its own mark, and the record did not show an intent to trade on Sunsauce’s goodwill after Son Fish Sauce learned of the registration. - Sunsauce’s limited sales, lack of United States offices or employees, lack of retailer agreements, lack of United States trade-show attendance through 2023, and deletion of fish sauce from its registration did not show a likely expansion into the United States fish-sauce market.

Balancing these factors, the court held that Sunsauce could not prove the likelihood-of-confusion element of its claims. It therefore granted Son Fish Sauce’s motion for summary judgment as to all of Sunsauce’s claims and denied Sunsauce’s motion for summary judgment as to those claims.

Son Fish Sauce’s counterclaims

The court denied Son Fish Sauce’s motion for summary judgment on its counterclaims because genuine factual disputes remained.

For the counterclaim based on lack of bona fide intent, the court explained that a trademark applicant must have an actual, firm intent to use the mark in commerce, supported by objective evidence. Son Fish Sauce relied on Sunsauce’s lack of United States business plans, contacts, partners, suppliers, marketing, and significant sales. Sunsauce relied on its knowledge that third parties resold its products in the United States, its use of English words in its mark and packaging, and its United States marketing expenditures. The court found that Son Fish Sauce’s evidence raised serious questions but that Sunsauce’s evidence was enough to create a genuine dispute about Sunsauce’s intent. The court therefore found the issue unsuitable for summary judgment.

For the fraud-based counterclaim, Son Fish Sauce argued that Sunsauce falsely stated in its 2019 declaration that the mark was used on several sauces, including fish sauce, even though Sunsauce did not directly sell fish sauce in the United States until December 2022. Sunsauce argued that it reasonably believed its products entered United States commerce through third-party distribution and that it relied in good faith on advice from counsel. The court stated that the applicable standard requires proof that Sunsauce actually knew its statements were false. Because the record did not establish beyond dispute that Sunsauce knew its statements were false, the court denied summary judgment on this counterclaim as well.

Other motion

In a footnote, the court denied without prejudice Son Fish Sauce’s motion to exclude the testimony and report of Erik M. Pelton. The court said the materials consisted almost entirely of impermissible legal opinions but would give them minimal weight when resolving the cross-motions for summary judgment. The court also considered the rebuttal report of Amanda V. Dwight.

Disposition

The court granted Son Fish Sauce’s motion for summary judgment as to Sunsauce’s claims, denied Son Fish Sauce’s motion as to its counterclaims, denied Sunsauce’s motion for summary judgment, and denied without prejudice Son Fish Sauce’s motion in limine to exclude expert testimony.