Facts

San Miguel Pure Foods Co. Inc., Arko Foods International Inc. doing business as Asian Commodities Co., and Rayland Enterprises LLC filed an infringement lawsuit against Ramar Foods International Corp. in relation to San Miguel's butter, margarine and cheese products bearing the "Magnolia" trademark.

In response, Ramar filed a cross-complaint against San Miguel, Arko, Rayland, San Miguel Corp. and Magnolia Inc.

PLAINTIFFS' CONTENTIONS:
Plaintiff claimed that San Miguel was a corporation organized under the laws of the Philippines, with its principal place of business in Manila, Philippines. San Miguel was a food company that produced and sold food products internationally. Its products included beer, juices, dairy products, and many others.

Plaintiffs claimed that Arko, a California corporation, was one of the largest Asian food importers and distributors in the U.S.and distributed San Miguel's products. Plaintiffs claimed that Rayland, a New Jersey corporation, also distributed Asian food products, including San Miguel's products, throughout the eastern half of the country.

Meanwhile, plaintiffs claimed that Ramar, a California corporation, manufactured and sold food and drink products in the U.S. Plaintiffs claimed that Ramar allegedly claimed ownership of U.S. trademark registration over the use of the mark "Magnolia" in connection with prepared meats and ice cream. As a result, Ramar threatened litigation against plaintiff over plaintiffs' use of the Magnolia mark. In response, plaintiffs sued Ramar for declaratory judgment of non-infringement.

Plaintiffs alleged that plaintiffs Asian and Rayland had been selling San Miguel's dairy products, other than ice cream, that bore the Magnolia trademark since 2003. Further, plaintiffs alleged that Ramar had been aware of plaintiffs' use of the Magnolia mark. Hence, plaintiffs claimed that Ramar consented to and acquiesced in plaintiffs' use of the Magnolia mark.

Plaintiffs also alleged that Ramar's recordation of the Magnolia marks in 2010 was for the sole purpose of interfering with plaintiffs' rights to import and sell within the U.S. San Miguel's dairy products under the Magnolia mark.

Plaintiffs sought a declaratory judgment of non-infringement, and requested the court to enter an injunction against Ramar.

On the contempt proceeding, plaintiff contended that it involved a small amount of non-San Miguel Magnolia butter, margarine and cheese products received in the U.S. after the injunction issued. San Miguel contended it promptly took curative steps to stop the distribution of those products in the U.S.

Before trial, the court granted summary judgment to Ramar for infringement of its U.S. Magnolia trademark, however, at trial, the jury found unanimously that there was no "willful" infringement and that Ramar suffered $0 in damages.

DEFENDANT'S CONTENTIONS:
Defendant denied plaintiffs' allegations, and asserted various affirmative defenses. In addition, defendant filed a cross-complaint against plaintiffs, SMC and Magnolia Inc. for willful trademark infringement, federal unfair competition, common law trademark infringement, and violation of the California unfair competition law.

Defendant claimed that its Magnolia mark was incontestable, because it was one of the nations leading Filipino and Asian food manufacturers since 1968. Further, defendant alleged that its trademarks were federally registered in connection with prepared meats and ice cream products. As such, defendant claimed it had the conclusive presumption to use the mark on the goods in its registrations.

Defendant also alleged that its Magnolia products were well-known for uncompromised quality, and accused plaintiffs of using the Magnolia mark without authorization to sell inferior products in the U.S.

Moreover, defendant alleged that it had consistently prevailed against SMC's attempts to challenge its rights to the Magnolia mark. It also accused San Miguel of submitting a false declaration with the U.S. Patent and Trademark Office to register the Magnolia mark for dairy and cheese products.

Defendants sought, among others, an injunction against plaintiffs from further infringing on its Magnolia mark.

In March 2013, the trial court entered a judgment enjoining plaintiffs from prospective use of Ramar's Magnolia trademark for new Magnolia products in the U.S. However, the injunction excluded the type of San Miguel Magnolia butter, margarine, and cheese products sold by plaintiffs in the U.S. prior to Dec. 19, 2011.

In May 2013, the court issued an amended order enjoining San Miguel from prospective use of the Magnolia trademark for food products and food services. It also excluded the type of products mentioned in the March 2013 injunction order.

Ramar later moved to find San Miguel in contempt for violating the injunction by repeatedly and willfully continuing to sell Magnolia Chocolait chocolate milk, Magnolia Powdered Fruit Drink Mix, and Magnolia "Pancake Plus" mix, waffle mix, and "All Purpose Flour."

Result

Before trial, the court granted summary judgment to Ramar for infringement of its U.S. Magnolia trademark. The court found San Miguel in civil contempt for violating the injunction. As such, the court granted Ramar's motion in part, and ordered plaintiff to pay $20,000.

Other Information

At the bench trial following the Dec. 2012 jury verdict, the court found in favor of San Miguel's affirmative defense that Ramar was guilty of laches, barring enforcement of Ramar's U.S. Magnolia trademark against San Miguel's Magnolia butter, margarine and cheese products. FILING DATE: Nov. 23, 2011.