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Koon Chun Hing Kee Soy & Sauce Factory, Ltd. v. Excelsior Trading Corp.

September 18, 2007

KOON CHUN HING KEE SOY & SAUCE FACTORY, LTD., PLAINTIFF,
v.
EXCELSIOR TRADING CORP., D/B/A EXCELSIOR TRADING NEW YORK, L.W. IMPORT, INC., HIGHLAND TRADING, INC., TONY LAM, TUNG LAM A/K/A TONY LAM, JANE CHOW A/K/A MS. CHOW, FIRST NAME UNKNOWN, 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 Excelsior Trading Corp. d/b/a Excelsior Trading New York; L.W. Import, Inc.; Highland Trading, Inc.; Tony Lam; Tung Lam a/k/a Tony Lam; Mandy Chow a/k/a Jane Chow a/k/a Ms. Chow; 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 August 6, 2007 the undersigned granted plaintiff's motion for an ex-parte seizure order, and also granted plaintiff's motion for a temporary restraining order, effective from the date of seizure. The seizure was conducted on August 14, 2007 and confirmed by this Court after a hearing on August 16, 2007, on which date the temporary restraining order was extended until September 4, 2007. On August 31, 2007, the parties consented to a further extension of the temporary restraining until September 18, 2007, which was ordered by the Court on September 13, 2007.

Now before this Court is plaintiff's motion for a preliminary injunction against all defendants. Upon the findings of fact and conclusions of law set forth below, this motion is granted against Excelsior Trading Corp., Tony Lam, Tung Lam, and Mandy Chow and denied as to defendants L.W. Import, Inc., and Highland Trading, Inc.

Background

The following findings of facts are derived from the underlying allegations in plaintiff's Complaint, affidavits submitted by plaintiff in connection with this motion, and from proceedings before the undersigned on August 16, 2007 and September 18, 2007. There are no factual disputes between the parties requiring an evidentiary hearing. See Davis v. New York City Housing Authority, 166 F.3d 432, 437-38 (2d Cir.1999).*fn1

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.

Since September 1986, Plaintiff has been the owner of a trademark registered with the United States Patent and Trademark Office, featuring a distinctive design that is used on all Koon Chun products and 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 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.*fn2

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 a substantial number of counterfeit items. In the current action, plaintiff alleges that the defendants have engaged in selling counterfeit products bearing plaintiff's trademark and trade dress.*fn3

Koon Chun became aware (via an undisclosed source on an undisclosed date) that a business by the name of Excelsior was selling counterfeit Koon Chun products. At 8:30 AM on July 30, 2007, plaintiff's investigator went to a warehouse at 15 South 11th Street in Brooklyn, where he observed a sign reading "Excelsior Trading Co." and a telephone number of (718) 821-2199. After finding the gates locked, the investigator called the phone number from his cell phone and the call was answered by a voicemail system; he did not leave a message. At noon, the investigator returned to the location and found the door open. He informed a Chinese male employee at the location that he wished to purchase 10 cases of various sauce products. The employee led him into an office and introduced him to a Chinese female employee to take the order. The investigator then ordered 3 cases of Koon Chun Hoisin sauce, 2 cases of Koon Chun Ground Bean sauce, 2 cases of Koon Chun Thin Soy sauce, 2 cases of Koon Chun Double Black Soy Sauce, and 2 cases of Lee Kum Kee Panda brand Oyster sauce. The female employee wrote out an invoice by hand, with product descriptions but without brand names or the name of the her company, and gave a copy to the investigator. The investigator paid $240 in cash and asked for a company card, whereupon he was given the name card of one "Tony Lam."

While watching the male employee fill the order, the investigator saw about 240 cases labeled as Koon Chun Hoisin sauce in the warehouse. The female employee then approached the investigator and refunded him $25 due to a price miscalculation and gave him an amended invoice. When the investigator asked for her card, she gave him a name card with the handwritten words "Ms. Chow" on it. The investigator then left with his purchase.

Later that day, the investigator received a call on his cell phone from a male who spoke Cantonese and asked whether the investigator had called his phone.*fn4 When asked, the investigator gave his name and identified himself as an employee of Koon Chun. The caller then told the investigator to talk to someone named Tony, who came to the phone. The investigator recalled that the president of Kung Fun Trading, a target in the July seizure, was named Tony and, concerned that his cell phone number may have ...


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