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C&L International Trading Inc. v. American Tibetan Health Institute, Inc.

United States District Court, S.D. New York

April 22, 2015

C&L INTERNATIONAL TRADING INC., KAM NG, and K&C INTERNATIONAL TRADING INC, Plaintiffs,
v.
AMERICAN TIBETAN HEALTH INSTITUTE, INC., CHUNG KEE (USA) INTERNATIONAL INC., YAT CHAU(USA)INC., TUNG REN TANG, RON FENG TRADING INC., FARGO TRADING INC., YONG LONG SUPERMARKET INC., and PO WING HONG FOOD MARKET INC., Defendants. AMERICAN TIBETAN HEALTH INSTITUTE, INC., Plaintiff,
v.
KAM NG, C&L INTERNATIONAL TRADING, INC., KANG LI TRADING, INC., and K&C INTERNATIONAL TRADING, INC., Defendants.

OPINION & ORDER

LOUIS L. STANTON, District Judge.

After a jury verdict against it in these cross-suits making reciprocal claims of trademark infringement, C&L International Trading, Inc. ("C&L") now moves for summary judgment denying all the successful American Tibetan Health Institute, Inc.'s ("ATHI") claims for damages. For the reasons that follow, the motion is denied.

BACKGROUND

This consolidated action concerns who has the right to sell medicinal herbal tea under the trademark TIBETAN BAICAO TEA: ATHI and its New York City retailers or Kam Ng, Kang Li Trading, Inc. ("Kang Li"), K&C International Trading, Inc. ("K&C")(two corporations controlled by Ms. Ng), and Ms. Ng's distributor, C&L (together "defendants").

Procedural History

In April 2013, Ms. Ng and C&L sued seven New York City retailers of ATHI's Tibetan Baicao Tea, claiming they were infringing her exclusive rights to the TIBETAN BAICAO TEA trademark. Three days later, ATHI sued Ms. Ng, the Ng companies, and C&L claiming that it was ATHI that owned the mark. The two cases were consolidated, and Ms. Ng and C&L amended their complaint to add claims against ATHI.

ATHI moved for a preliminary injunction against defendants' use of the mark. The parties agreed that their products, packaging, and trademarks were virtually identical and that the only material issues in substantial dispute were which of them had first used the mark in commerce in the United States and, if it was ATHI, whether ATHI had thereafter abandoned the marks. Accordingly, the trial of the merits was advanced on consent and consolidated with the preliminary injunction hearing. See Fed.R.Civ.P. 65(a) (2). A jury trial of the two stipulated issues was held from March 24 to 27, 2014. The jury determined that ATHI was the first to use its trademarks in commerce and that it did not later abandon the marks.

Consistent with all parties' understanding, I issued an order to show cause (Dkt. No. 65[1]) "why the Court should not enter an order granting a permanent injunction and judgment on the merits in favor of ATHI, and respectfully referring the case to Magistrate Judge Gabriel w. Gorenstein to hold an inquest, hear and determine the amount of damages to be recovered by ATHI." In response, no party raised any issues or questions of the propriety of that relief except for Ms. Ng's claim she was an innocent prior user with common law rights to the mark in the New York market, which I rejected in an opinion and injunction dated June 25, 2014 (Dkt. No. 84), later amended on December 3, 2014 (Dkt. No. 118).

After the issuance of the injunction, defendants discharged their original trial counsel. Appearing through new counsel, C&L now claims that it did not consent to be named a plaintiff in this litigation, was unaware that it had been sued by ATHI, and in any event cannot be liable for any damages incurred by Ms. Ng and her controlled companies.

C&L's Relationship with Ms. Ng and its Original Counsel

C&L is a New York corporation organized in June 2011. ATHI's Rule 56.1 Statement of Disputed and Undisputed Material Facts ("ATHI SOF") ¶ 1, Mar. 30, 2015, Dkt. No. 163. It is now solely owned by Sammy Chow who is listed as C&L's Chief Executive Officer by the New York Secretary of State. See id. ¶ 3. C&L is a distributor who helps place goods in Chinatown grocers. Id. ¶ 2.

C&L's precise relationship with Ms. Ng is disputed. Id. On a motion for summary judgment, the court construes the evidence in the light most favorable to the non-moving party (ATHI) and draws all reasonable inferences in its favor. Lindsay v. Ass'n of Prof'l Flight Attendants , 581 F.3d 47, 50 (2d Cir. 2009). Under that standard, having reviewed the evidence submitted in support of and opposition to the motion, I accept for its purposes ATHI's summary of the record:

C&L's relationship with Ms. Kam Ng and her companies started around August 2011, when C&L began renting space from K&C's retail store location at 84 Hester Street, New York, NY. (Deposition Transcript of Sammy Chow attached as Exhibit A to the Declaration of Otto Lee filed herewith ("Chow Depo. Tr."), 43:5-14, 49:17-25, 53:20-25.) Shortly thereafter, Sammy Chow, Manager of C&L, authorized Kam Ng to use C&L's name in promoting her business. (Chow Depo. Tr. 12:9-11, 45:18-47:16.).... In early March 2012, C&L began a relationship with Kam Ng selling K&C's tea product under the mark "Tibetan Baicao Tea." (Chow Depo. Tr., 54:18-25.) Kam Ng's business card presented name, "C&L Int'l Trading Inc." and "Kang Li Trading Inc." (Chow Depo. Tr., 44:16-45:25; Chow Depo. Tr. Exh. 2.) Defendants' joint representations continued online, where C&L was listed on the "Contact Us" page of the website www.us-tt.net, along with Kam Ng's address, her email address, and a phone number routed to Kam Ng's cell phone. (Deposition Transcript of Kam Ng dated Mar. 21, 2014 attached as Exhibit D to the Declaration of Otto Lee filed herewith ("Ng Depo. Tr., Mar. 21, 2014"), 12:2-15:25, Ng Depo., Mar. 21, 2014, Exh. 15.) TIBETAN BAICAO TEA products were prominently displayed on C&L's said website. (Ng Dep., Mar. 21, 2014, Exh. 15.) With things coming full circle, Kam Ng is "renting an office desk now" from C&L in a shared space at the 6221 20th Avenue, New York, NY retail store location. (Chow Depo Tr., 47:22-24.)

ATHI Opp'n Mem. 1-2, Mar. 30, 2015, Dkt. No. 162.

Mr. Chow was introduced to C&L's original counsel, Giuttari & Mertz Law Office, P.C., by Ms. Ng. ATHI SOF ¶ 20. The firm had previously registered trademarks for Ms. Ng, and Mr. Chow engaged the firm to register trademarks on his behalf as well, id. ¶ 21-22, including one application filed three days before Ms. Ng and C&L sued ATHI's retailers, see Wong Decl. Ex I, at 2, Mar. 15, 2015, Dkt. No. 150.

On March 15, 2013, a cease and desist letter was sent to New York City merchants claiming that Ms. Ng's company Kang Li owned exclusive rights to the TIBETAN BIACAO TEA mark and threatening legal action for its unauthorized use. Wong Decl. Ex. D. The letter's heading listed Giuttari & Mertz, C&L, and Kang Li. It was signed by Ms. Ng as CEO of Kang Li and two attorneys. The letter was republished as an advertisement for Kang Li's Tibetan Baicao Tea in the Sing Tao Daily newspaper for several days in late March 2013. Chow Dep. Final Tr. 85:5-16, Nov. 20. 2014, filed as Lee Decl. Ex. A, Mar. 30, 2015, Dkt. No. 164; Lee Decl. at ATHI Trial Ex. 17 ¶ 3.

Mr. Chow claims he first saw the letter in the Sing Tao Daily, but that K&C gave him a Chinese language version of the letter, which was also sent to local merchants. Chow Dep. Draft Tr. 86:4-6, 89:3-8, Nov. 20, 2014, filed as Wong Decl. Ex. A. He states the letter was sent without his knowledge, and he spoke to both Ms. Ng and a Giuttari ...


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