IP Law Daily Tobacco manufacturer obtains TRO against distributor for falsely registering its cigarette brand name
Friday, March 20, 2020

Tobacco manufacturer obtains TRO against distributor for falsely registering its cigarette brand name

By Linda O’Brien, J.D., LL.M.

A wholesale and distribution company has been temporarily enjoined from using a tobacco manufacturer’s SUNNY trademark in connection with the distribution and sale of tobacco products that it allegedly falsely registered with the USPTO.

The federal district court in Miami, Florida, has granted a temporary restraining order prohibiting Diplomatic International and its affiliated manufacturer Heritage Tobacco from using and infringing the SUNNY trademark owned by the Bacson Tobacco Company for the distribution and sale of tobacco products in Florida and Jamaica. The plaintiffs demonstrated a substantial likelihood of success on the merits and that an irreparable injury to its rights in the brand if the injunctive relief was not granted (Bacson Tobacco Co., Ltd. v. Diplomatic International Co., Ltd., March 18, 2020, Bloom, B.).

Bacson Tobacco Company manufactures and distributes tobacco products for the global market under the trademark SUNNY. Bacson, a Vietnamese company, owned the SUNNY brand since 1997 and registered its rights to use the trademark in Vietnam. Since 2015, Bacson has used the SUNNY trademark in the United States in association with its tobacco products. In 2015, Diplomatic International Company contacted Bacson to purchase SUNNY brand cigarettes for shipment through the United States. The companies agreed that, after Bacson shipped its cigarettes to Diplomatic in the United States, Diplomatic would resell the cigarettes to Bacson distributor Miami Warehouse Logistics (MWL) for resale in the markets in the Caribbean.

In May 2019, MWL discovered Diplomatic was selling Bacson’s products directly into the Jamaican market rather than through MWL pursuant to their agreement. In December 2019, the U.S. Customs and Border Protection (CBP) detained two shipments of Bacson products destined for sale to MWL as counterfeit products. Bacson subsequently learned that, without its knowledge or permission, in September 2015, Diplomatic filed for and obtained the trademark registration of the SUNNY mark with the USPTO for cigarettes and roll-your-own tobacco. In support of its application, Diplomatic had submitted an identical specimen of Bacson’s SUNNY branded cigarettes and passed it up as its own.

In March 2020, Bacson and MWL filed suit against Diplomatic and its affiliated manufacturer Heritage Tobacco, alleging causes of action for false designation of origin and unfair competition under the Lanham Act, cancellation of trademark registration, and trademark infringement and unfair competition under Florida law. Before the court was the plaintiffs’ motion for a temporary restraining order (TRO) and preliminary injunction.

The court found the plaintiffs demonstrated that they were substantially likely to succeed on the merits of their claim, they would suffer immediate and irreparable harm due to the defendants’ alleged actions if injunctive relief was not entered, the threatened harm to the plaintiffs outweighed the harm to the defendants, and the requested relief would not harm the public interest.

The plaintiffs presented evidence that Diplomatic did not have priority use of the SUNNY mark because, prior to submitting its application, Diplomatic had in at least three transactions where it purchased SUNNY branded cigarettes from Bacson which it resold to MWL, who then exported the product for sale to MWL’s customer in Jamaica. In addition, the plaintiffs demonstrated that Diplomatic’s actions were a threat to Bacson’s trademark rights in the SUNNY brand and its business operations, particularly in its Jamaican market. Also, Diplomatic was aware of Bacson’s rights in the SUNNY brand and of MWL’s longstanding customer relationships in Jamaica.

Further, the plaintiff certified why prior notice to the defendants was not required before the TRO was issued due to the concern that the defendants may have manufactured and exported a counterfeit product under the SUNNY brand. Thus, the entry of a temporary restraining order was warranted against the defendants, the court concluded.

This case is No. 1:20-cv-21066-BB.

Attorneys: Jorge Tadeo Espinosa (Gray Robinson, P.A.) for Bacson Tobacco Co., Ltd. and Miami Warehouse Logistics, Inc. Daniel Warren Raab (Daniel W. Raab, P.A.) for Diplomatic International Co., Ltd. Omar Ortega (Dorta & Ortega, P.A.) for Heritage Tobacco, LLC.

Companies: Bacson Tobacco Co., Ltd.; Miami Warehouse Logistics, Inc.; Diplomatic International Co., Ltd.; Heritage Tobacco, LLC

MainStory: TopStory Trademark FloridaNews GCNNews

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