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Koon Chun Hing Kee Soy & Sauce Factory, Ltd. v. Kun Fung USA Trading

August 6, 2007

KOON CHUN HING KEE SOY & SAUCE FACTORY, LTD., PLAINTIFF,
v.
KUN FUNG USA TRADING, A/K/A KUN FUNG TRADING CO., SONIC GROUP, INC., WONG FAT MARKET INC., A/K/A GUNG FAT MARKET, CHEUNG FAT TRADING INC., A/K/A CHEUNG FAT MARKET, GUNG FAT TRADING INC., METROPOLITAN GROUP USA INC., CHUN WAI CHAK, A/K/A AH CHAK, YUAN XI LI A/K/A LI YUEN, A/K/A AH YUEN, XUE MEI HUANG, A/K/A MAY HUANG, SHU FONG WONG A/K/A SHU WONG, ZHE DOE, AND JOHN DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff Koon Chun Hing Kee Soy & Sauce Factory, Ltd., brings this action against defendants Kun Fung USA Trading, a/k/a Kun Fung Trading Co.; Sonic Group, Inc.; Wong Fat Market Inc., a/k/a Gung Fat Market; Cheung Fat Trading Inc., a/k/a Cheung Fat Market; Gung Fat Trading Inc.; Metropolitan Group USA Inc.; Chun Wai Chak, a/k/a Ah Chak; Yuan Xi Li a/k/a Li Yuen, a/k/a Ah Yuen; Xue Mei Huang, a/k/a May Huang; Shu Fong Wong a/k/a Shu Wong; Zhe Doe; and John Does 1-10. In the Complaint, plaintiff alleges that defendants engaged in (1) trademark infringement, pursuant to 15 U.S.C. § 1114; (2) counterfeiting, pursuant to 15 U.S.C. § 1116; (3) trade dress infringement, pursuant to 15 U.S.C. § 1125(a); (4) unfair competition, pursuant to 15 U.S.C. § 1125(a); (5) dilution, under NY Gen. Bus. Law, Section 360-L; and (6) common law unfair competition. On July 18, 2007, the undersigned granted, in part, plaintiff's motion for an ex-parte seizure order, and also granted plaintiff's motion for a temporary restraining order.*fn1 The seizure was conducted on July 24, 2007 and confirmed by this Court after a hearing on July 31, 2007, on which date the temporary restraining order was extended until August 7, 2007.

This Court held oral argument as to a preliminary injunction against all defendants on August 6, 2007, at which point defendants Sonic Group, Wong Fat Market, Yuan Xi Li, Xue Mei Huang, and Shu Fong Wong agreed to extend the temporary restraining order by consent until argument could be held regarding the preliminary injunction, scheduled for September 5, 2007.*fn2 The remaining parties have made no appearance before this Court.

Now before this Court is plaintiff's motion for a preliminary injunction against the non-appearing parties. Upon the findings of fact and conclusions of law set forth below, this motion is granted.

Background

The following findings of facts are derived from plaintiff's Complaint, filings and affidavits submitted in connection with this action, and from hearings and oral arguments held before the undersigned on July 31, 2007 and August 6, 2007.

Plaintiff's Business and Trademarks

Plaintiff, a Hong Kong company, manufactures and distributes Cantonese food products such as sauces and seasonings under the name Koon Chun. These products are manufactured in Hong Kong and sold to exporters who buy the products on behalf of distributors around the world. The United States is one of plaintiff's largest markets.

Plaintiff has a registered trademark featuring a distinctive design that is used on all Koon Chun products, that it uses in conjunction with distinctive colors and shapes (including the shape of an antique Chinese wine glass) on product labels (the "trade dress"), which serves to distinguish the products for consumers. The label design has become widely associated by consumers and industry with plaintiff, and plaintiff enjoys substantial goodwill from the label design owing to the length of use and the design's distinctive nature.*fn3

Defendants' Activities

There exists an illicit industry manufacturing, importing, distributing and selling unauthorized versions of products of the type made by plaintiff bearing counterfeit versions or colorable imitations of plaintiff's trademark in the United States. Over the last several years, since discovering that such counterfeiting was going on, plaintiff has initiated several actions in United States courts to halt these activities and has, on order of appropriate courts, seized many counterfeit items as a result. In the current action, plaintiff alleges that the defendants are interrelated entities*fn4 and individuals engaged in selling counterfeit products bearing plaintiff's trademark and trade dress.

Plaintiff began investigating the activities of the current defendants in November 2006, when one of plaintiff's distributors reported that a customer, Win's Produce Inc. ("Win's"), had returned five cases of soy sauce with plaintiff's labels on them after complaining about the taste and color. The distributor sent the product to plaintiff who inspected the product and discovered that it was a counterfeit Koon Chun product, though it looked almost identical to authentic Koon Chun products.

Upon investigation, plaintiff was told that Win's had purchased the counterfeit product from a defendant named Ah Yuen. The invoice provided by Ah Yuen identified the distributor of the counterfeit product as defendant Gung Fat Trading Inc. Ah Yuen also provided Win's with a contact phone number, which plaintiff identified as a cell phone owned by defendant Xue Mei Huang. Plaintiff identified Huang's home address as 441 Maryland Avenue in Staten Island, a house co-owned by Huang and an individual known as Yuan Xi Li, who are husband and wife. Based on observations by plaintiff's investigator, it was determined that Yuan Xi Li and defendant Ah Yuen are the same person.

To further their investigation, plaintiff arranged for Win's to order additional products from Ah Yuen. That order was delivered in a white van registered in the name of Yuan Xi Li and driven by Au Yuen. The van was ...


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