Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued February 6, 2018 Decided August 10, 2018 No. 17-7075 PALETERIA LA MICHOACANA, INC., A CALIFORNIA CORPORATION, ET AL., APPELLEES v. PRODUCTOS LACTEOS TOCUMBO S.A. DE C.V., A MEXICAN CORPORATION, APPELLANT Appeal from the United States District Court for the District of Columbia (No. 1:11-cv-01623) Martin B. Schwimmer argued the cause for appellant. With him on the briefs were Lauren B. Sabol, Lauren B. Emerson, Lori L. Cooper, and John L. Welch. Laura L. Chapman argued the cause for appellees. With her on the brief were Toni Qiu and Paul Werner. Before: GRIFFITH and PILLARD, Circuit Judges, and EDWARDS, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge PILLARD. 2 PILLARD, Circuit Judge: Paletas are frozen, fruit-based Mexican-style desserts akin to popsicles. Two vendors of paletas, one based in Mexico and one in the United States, assert conflicting trademark and false-advertising claims over words and images they use in their competing paleta sales in the United States. Productos Lacteos Tocumbo (Prolacto) is a Mexican paleta company whose owners claim their ancestor started the first paleteria in the Mexican state of Michoacán in the 1940s. Paleteria La Michoacana (PLM) is another paleta company, started by two Mexican-American brothers with pushcarts in northern California in the 1990s. Today PLM sells paletas in the United States through major retail outlets. The two companies now find themselves toe-to-toe, both selling their wares in certain U.S. markets using variants of the name “La Michoacana” (meaning “the Michoacán woman”) and an image of a girl in traditional dress holding a paleta or ice cream cone (the “Indian Girl”). Broadly speaking, the parties dispute whether Prolacto or PLM, if either, owns the contested phrase and image—and, accordingly, which paleta company, if either, unfairly competed or otherwise infringed the other’s trademark rights. Prolacto and PLM disagree about the key evidence and events that determine ownership and infringement. As Prolacto sees it, PLM’s adoption of the “La Michoacana” name and Indian Girl logo, the latter of which PLM registered as its own in the United States, is culturally exploitative. Prolacto insists that it has long sold paletas in Mexico under the name and image of “La Michoacana.” The founders of competitor PLM first encountered the mark, says Prolacto, when they visited Mexico before opening their own paleta business in the United States. On Prolacto’s account, PLM, acting in bad faith, appropriated the marks, along with the associated goodwill and reputation Prolacto had developed over decades, and passed them off here as PLM’s own. 3 Prolacto unsuccessfully sought to register certain marks with the United States Patent and Trademark Office, but Prolacto did manage to persuade the Trademark Trial and Appeal Board to cancel the registration of one of PLM’s marks, an updated version of the Indian Girl encircled by the words “La Indita Michoacana.” PLM, in turn, challenged the Board’s cancellation order in district court, and added fresh claims that a Prolacto version of the Indian ...

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