Ninth Circuit Court of Appeals Rules in Favor of Christie Parker & Hale Client in Grey Goods Case

  Ninth Circuit Court of Appeals Rules in Favor of Christie Parker & Hale
  Client in Grey Goods Case

Business Wire

GLENDALE, Calif. -- January 2, 2014

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.

Contact:

Christie Parker & Hale
David Dillard, 626-795-9900
info@cph.com
 
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