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

Background

Sunsauce Foods Industrial Corp., Ltd. brought trademark infringement claims against Son Fish Sauce USA Corporation under the Lanham Act, California’s Unfair Competition Law, and common law. Sunsauce alleged that Son Fish Sauce’s “SON SAUCE” mark was likely to confuse consumers with Sunsauce’s registered “SUNSAUCE” composite mark.

Son Fish Sauce asserted counterclaims seeking cancellation of Sunsauce’s trademark registration, declarations that the registration was invalid, and declarations 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 its mark in commerce when it applied for registration and later falsely represented its use of the mark.

In December 2024, the court granted Son Fish Sauce’s motion for summary judgment on Sunsauce’s infringement claims, finding no likelihood of confusion between the marks. The court denied Son Fish Sauce’s motion as to its counterclaims and denied Sunsauce’s motion for summary judgment. The counterclaims were the only claims remaining.

Jurisdictional issue

Sunsauce moved for entry of final judgment or, alternatively, for permission to file a motion to dismiss the counterclaims for lack of subject-matter jurisdiction. Federal courts may decide only actual, ongoing disputes. If no plaintiff continues to face an actual injury that a court can remedy, the dispute is moot and the court lacks jurisdiction.

The court held that Son Fish Sauce’s cancellation counterclaim did not present a live controversy because, under Ninth Circuit law, cancellation is not an independent cause of action. It may be sought as a remedy when another claim provides federal jurisdiction. Once Sunsauce’s infringement claim was dismissed, the court concluded that Son Fish Sauce could no longer pursue cancellation as a standalone counterclaim.

The court separately considered Son Fish Sauce’s requests for declaratory judgments of non-infringement and invalidity. The Declaratory Judgment Act does not itself create federal jurisdiction. For trademark declaratory claims, the Ninth Circuit asks whether the claimant has a real and reasonable apprehension of future liability.

Son Fish Sauce relied on the lawsuit and the absence of an agreement by Sunsauce not to sue in the future. The court concluded that those circumstances initially supported jurisdiction because Son Fish Sauce had actually been sued. But the circumstances changed after the court rejected Sunsauce’s infringement claims. Unless that decision was overturned on appeal, issue preclusion would prevent Sunsauce from bringing the same infringement claims against Son Fish Sauce in the future. The court therefore found little likelihood of future liability and no continuing case or controversy.

Disposition

The court dismissed Son Fish Sauce’s remaining counterclaims for lack of jurisdiction. It denied Sunsauce’s motion for entry of final judgment as moot. The opinion does not state that the dismissal was with or without prejudice. The order was entered by Judge P. Casey Pit on February 5, 2025.