The U.S. Court of Appeals for the Fifth Circuit affirmed a finding of infringement by the U.S. District Court for the Southern District of Texas that defendant's "Girl Design" was confusingly similar to plaintiff's trademark. American Rice, Inc. v. Producers Rice Mill, Inc., 2008 U.S. App. LEXIS 3817 (5th Cir., Feb. 22, 2008) (Davis, J.).
Plaintiff American Rice, Inc. (ARI) had sold rice in Saudi Arabia under the "Abu Bint" brand name for 35 years, using a "girl design" that is well-known in Saudi Arabia. The plaintiff had a valid trademark registration for the "girl design." Defendant Producers Rice Mill, Inc. (PRMI) also sold rice in Saudi Arabia for the past 20 years, using a "girl with a hat design." PRMI did not have any trademark registrations for the "girl with a hat design." ARI sought injunctive relief, which the Southern District of Texas granted.
The Fifth Circuit affirmed, finding that the mark was strong and fanciful because the image of a girl icon being used to sell rice is not intrinsic to rice as a product. Even if not fanciful, there was strong evidence of secondary meaning based on the well-known association of the girl icon with the "Abu Bint" brand. The court also found that the designs were similar, the products were similar (both were on bags of rice), and the court further found an inference of bad faith since the defendant at all times knew of the Abu Bint brand. Furthermore, the court found that the PRMI only used the girl icon on bags of rice sold in Saudi Arabia and not in other countries, thus further supporting PRMI's bad faith intent to benefit from the goodwill associated with ARI's brand.
In response, PRMI argued that laches prevented ARI from pursuing this action 20 years after it started selling rice with the girl icon. The Fifth Circuit found no laches here since, although the defendant had sold rice in Saudi Arabia since 1985, the evidence did not support that plaintiff knew about the product until 2005. The court thus affirmed the injunctive relief granted by the district court.
In calculating the defendant's profits due to ARI under the Lanham Act, 15 U.S.C. § 1117(a), the court determined that the bad faith intent of defendant warranted such an award and that injunctive relief was insufficient to remedy the misuse. The court awarded over $1.2 million in damages to ARI, even though PRMI claimed it was a cooperative whose profits, once disbursed to members, were minimal.
Practice Note: Bad faith in trademark infringement actions is often a strong factor that goes not only to infringement but also to damages. If a defendant trades off a plaintiff's goodwill, the plaintiff is entitled to all of the defendant's profits.
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