By On December 23, 2013, the Ninth Circuit Court of Appeals issued an Opinion in the federal trademark infringement action Hokto Kinoko Company v. Concord Farms, Inc. No. 11-56461, ruling in favor of Christie Parker & Hale client Hokto Kinoko (Hokto U.S.A.). The Ninth Circuit affirmed summary judgment of trademark infringement and unfair competition and the issuance of a permanent injunction against Concord Farms, enjoining it from importing and selling unauthorized mushrooms bearing Hokto U.S.A.'s federally registered trademarks. The marks include the Hokto name and several mushroom cartoon characters.
Christie, Parker & Hale litigation partner David Dillard, who obtained the summary judgment and permanent injunction at the district court and also argued the case on appeal, noted that Hokto U.S.A.'s reputation for high quality mushrooms is second to none. He explained that, "Hokto U.S.A.'s reputation was at risk every time Concord imported and sold in the U.S packages of mushrooms bearing Hokto U.S.A.'s trademarks. We are very pleased that The Ninth Circuit recognized the goodwill that Hokto U.S.A. has developed in its trademarks and the need to protect that goodwill against those who try to unfairly trade off of it."
Hokto Kinoko grows organically certified white beech, brown beech, and maitake mushrooms at its state-of-the-art growing facility in San Marcos, California. In its Opinion, the Ninth Circuit described Hokto's growing process:
Hokto USA's mushrooms are robotically transported within the facility in plastic bottles, and its entire process is computer controlled. While most mushroom-growing techniques involve manure and compost, Hokto USA uses a sterilized culture medium made of sawdust, corn cob pellets, vegetable protein, and other nutrients. Hokto USA also enforces strict temperature controls and other quality control standards, both in its San Marcos facility and during the transportation and storage of its mushrooms, to ensure that the mushrooms stay fresh for as long as possible. (Ninth Circuit Opinion at p. 5)
The dispute arose when Hokto Kinoko discovered that Concord Farms was importing non-organically certified mushrooms grown by Hokto U.S.A.'s parent Hokuto Corporation in Japan for the Japanese market. The Hokuto Japan mushroom products display the Hokto name and same mushroom cartoon characters, but differed from the same Hokto name and cartoon characters as the Hokto U.S.A. products. This raised the interesting issue of when it is permissible to import products that are legitimately created abroad (often referred to as "grey goods"). The Ninth Circuit concluded that this issue turns on whether there are material differences between the imported goods and the domestic goods.
In this case, the evidence showed that there were material differences between the Hokto U.S.A. mushrooms and those imported by Concord from Japan. These differences included the growing conditions, the content and language of the packaging (English vs. Japanese), quality controls, freshness, shelf life and that the domestic product is organically certified whereas the imported product is not. Both the District Court and Appeals Court found that the evidence established that consumers would likely be confused as to the source of the imported mushrooms, thinking that the mushrooms came from Hokto U.S.A. when they did not. The district court and Ninth Circuit further found that the evidence supports the conclusion that Concord intended to deceive the public by selling the imported mushrooms.
About Hokto Kinoko Company
Hokto Kinoko Company is a California company known for their nationally recognized specialty organic mushrooms grown at their state-of-the-art facility in San Marcos. Hokto Kinoko grows mushrooms under tightly controlled conditions to deliver the highest quality products to their customers. Those customers associate these high quality mushrooms with Hokto Kinoko's trademarks appearing on all of its packaging. Grown in California, Hokto Kinoko's maitake, brown and white beech, and king trumpet mushrooms can be found at retailers throughout the United States. To find a retailer near you, or find great recipes, please visit Hokto Kinoko's website, www.hokto-kinoko.com.
About Christie, Parker & Hale
Christie Parker & Hale is a leading intellectual property law firm operating at the intersection of science, technology, and the law. Engaged exclusively in all aspects of intellectual property law, most of the firm's attorneys hold degrees in engineering or the sciences, bringing added value and perspective to client service. Drawing on a 60 year heritage, the firm continues to propel innovation and stimulate business growth by protecting its client's most valuable assets -- intellectual property.
Christie Parker & Hale
David Dillard, 626-795-9900
info@cph.com
