Judge: Anne Richardson, Case: 20STCV47489, Date: 2024-04-16 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 20STCV47489    Hearing Date: April 16, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings Framing Motion

Plaintiff/Cross-Defendants Samuel Kim and Cali Blue Sky Investment, Inc. (CBSI) sue Defendants United Health and Care Center (UHCC), JRJS, LLC (JRJS), Jafar Rashid, Vikram Sood, Sanjiv Patel, and Mohammed Khalid, and Does 1-50 pursuant to a December 11, 2020 Complaint alleging claims of (1) Statutory Trademark Infringement/Counterfeiting, (2) Dilution of Famous Mark, (3) Common Law Trademark Infringement, (4) Unfair Competition, and (5) Deceptive Business Practices. (Chango Club, Inc., Vibha Patel, and Zahid Butt were dismissed from this action on October 23, 2023.)

The claims arise from allegations that Samuel Kim owns the trademarks to five “Big Chief” for pre-filled vaporizer cartridges, disposable pens containing cannabis extract, cannabis flower, and related products, and that in December 2018, Kim granted UHCC and JRJS the nonexclusive right to manufacture and distribute cannabis vape cartridges bearing the Big Chief marks, with Kim revoking the license on June 23, 2019, amid a fallout between the parties, only for Defendants to continue using the marks thereafter without authorization from Kim or Kim’s new licensee, CBSI.

On February 5, 2021, JRJS, LLC (JRJS) filed a Cross-Complaint against Samuel Kim, CBSI, and Roes 1 through 10, with the operative April 21, 2023, Second Amended Cross-Complaint (SAXC) alleging claims of (1) Declaratory Relief, (2) Trademark Infringement, (3) Cancellation of Registration for Trademark [Questions re: Ownership, Propriety of Registration, and Fraud], and (4) Cancellation of Registration for Trademark [Question re: Abandonment].

The crossclaims arise from allegations that JRJS became the rightful owner of the common law Big Chief marks with respect to cannabis products through the sale of such products and because Kim abandoned any right that he held in the Big Chief marks prior to being employed by JRJS. More specifically, the SAXC alleges that Kim abandoned the use of the marks in the United States by ceasing to use the marks in relation to the only product Kim sold bearing the marks in the United States (clothing) and where Kim cannot invoke rights in relation to his use of the Big Chief marks on tobacco products because these were sold outside the United States. Based on such abandonment, the SAXC alleges that Kim’s State of California registrations of the Big Chief marks filed in 2020 were fraudulently made, under which circumstances it is Kim and CBSI who have infringed on JRJS’s rights by continuing to use the Big Chief Marks. These circumstances entitle JRJS to the cancellation of Kim’s Big Chief marks registrations in the State of California, either on fraud or abandonment grounds.

B. Motion Before the Court

On January 19, 2024, Plaintiffs filed their third motion for summary adjudication. The motion seeks summary adjudication of the Complaint’s first, third, and fourth causes of action—i.e., statutory trademark infringement, common law trademark infringement, and unfair competition—and summary adjudication of all the SAXC’s claims—declaratory relief, trademark infringement, and two counts of cancellation of trademarks based on fraud and abandonment.

On March 21, 2024, Defendants filed an opposition to Plaintiffs’ motion.

On March 29, 2024, Plaintiffs Kim and CBSI filed a reply and objections to the declarations of Mohammed Khaled and counsel Angelica M. Leon, Esq.

On April 4, 2024, Plaintiffs’ motion came before the Court, at which time the Court continued the hearing to April 16, 2024, based on Angelica M. Leon, Esq.’s, unavailability that day.

Kim and CBSI’s motion for summary adjudication is now before the Court.

II. Requests for Judicial Notice

A. Kim and CBSI

Per Plaintiffs’ request, the Court takes judicial notice of Kim’s California and federal trademark registrations numbered 02005307 and 4417441, the existence of the NICE agreement, and the January 8, 2021, preliminary injunction order in this action. (Mot., RJN, Exs. 1-4; Evid. Code, §§ 452, subds. (c), (d), (h), 453, subds. (a), (b).)

B. UHCC, JRJS, Rashid, Sood, Khalid, and Lugo

Per Defendants’ request, the Court takes judicial notice of the California Secretary of State web search results for “Cali Sky Blue Investment, Inc.” (Opp’n, RJN, Ex. 1; Evid. Code, §§ 452, subds. (c), (h), 453, subds. (a), (b); see Business Search, Cali Blue Sky Investment, Inc. (4138071) (2024) California Secretary of State <https://bizfileonline.sos.ca.gov/search/business> [as of Apr. 16, 2024].)

III. Evidentiary Objections

A. Relevant Law

In granting or denying a motion for summary judgment or summary adjudication, the court need only rule on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review. (Code Civ. Proc., § 437c, subd. (q).) Evidentiary objections not made either in writing or orally shall be deemed waived. (Code Civ. Proc., § 437c, subd. (b).)

B. Opposition – Objection to Motion’s Declaration of Raquel Keledjian

Not ruled on as not material to disposition of Court’s ruling.

C. Reply – Objections to Opposition Declaration Mohammad Khaled

Not ruled on as not material to disposition of Court’s ruling.

D. Reply – Objections to Opposition Declaration Angelica M. Leon, Esq.

Not ruled on as not material to disposition of Court’s ruling.

IV. Opposition Request for Continuance: DENIED.

A. Legal Standard

If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just. (Code Civ. Proc., § 437c, subd. (h).) The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due. (Code Civ. Proc., § 437c, subd. (h).)

To succeed in moving or applying for such a continuance, the opposing party must provide a declaration that shows: (1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts. (Braganza v. Albertson’s LLC (2021) 67 Cal.App.5th 144, 152-153; Chavez v. 24 Hour Fitness USA, Inc. (2015) 238 Cal.App.4th 632, 643; Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 715.)

B. Court’s Determination

Here, the Court finds insufficient grounds for a continuance of the hearing on this motion, as requested by Defendants. (Opp’n, pp. 15-16 at § VIII.A.)

While Defendants may not have been able to depose Defendants Lomeli and Buckner, it is not clear how those depositions are essential to rebutting the multi-faceted evidence presented by Plaintiffs for whether Defendants sold or distributed cannabis products bearing the Big Chief marks without a proper license or without proper testing, with Plaintiffs offering evidence beyond the Lomeli and Buckner declarations to establish Defendants’ alleged unlawful conduct. Given that the universe of evidence supporting unlawful conduct is greater than the Lomeli and Buckner declarations (see, e.g., Mot., Sep. St., UMF Nos. 90-91, 96-99 [citing deposition of Jafar Rashid to support explicit knowledge and confirmation of unlawful sale of cannabis products by Defendants]), it is unclear how the sought-after testimony is essential to a disposition of this motion. The opposition does nothing more than generally argue that cross-examination is a right to which Defendants are entitled in civil litigation and that prejudice has generally arisen from failure to depose these two individuals. Such arguments hardly explain why the depositions are essential to a resolution of this motion, e.g., what specific impeachment information can be obtained from Lomeli or Bucker to determine that the other evidence of illegality by Defendants is completely undercut, or even undercut as to Lomeli and Buckner’s involvement in investigative purchases.  Generally, “summary judgment shall not be denied … for want of cross-examination of witnesses furnishing declarations.” (Code Civ. Proc. § 437c, subd. (e).)

Moreover, as a practical matter, the hearing date was actually continued from April 4, 2024 to April 16, 2024, at Plaintiffs’ counsel request due to illness. No further filing appears in the court file since that date updating the Court on any further discovery having occurred.

V. Reconsideration or Renewed Motions Pursuant to Code Civ. Proc., § 1008

A. Legal Standard

A party shall not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court unless that party establishes, to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion. (Code Civ. Proc., § 437, subd. (f)(2).)

To determine whether a second summary judgment motion is proper as filed by a party, courts consider whether the second motion involves “newly discovered facts or circumstances or a change of law.” (Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 739 (Schachter); see, e.g., ibid. [“The defendants, as parties to the case, were expressly bound by the requirements of section 437c (f)(2). Their motion, however, violated that provision because it failed to establish newly discovered facts or circumstances or a change of law. They are, therefore, barred from renewing their summary judgment motion. Accordingly, the trial court erred in considering defendants’ second motion for summary judgment.[] ….” Footnote omitted].)

However, subdivision (f)(2) does not preclude the Court’s inherent powers to reconsider prior summary judgment or adjudication orders. (Le Francois, supra, 35 Cal.4th pp. 1096-1097 [“We conclude that sections 437c, subdivision (f)(2), and 1008 prohibit a party from making renewed motions not based on new facts or law, but do not limit a court’s ability to reconsider its previous interim orders [for summary judgment or adjudication] on its own motion, as long as it gives the parties notice that it may do so and a reasonable opportunity to litigate the question”]; Marshall v. County of San Diego (2015) 238 Cal.App.4th 1095, 1106 (Marshall) [Advocating for “interpreting Code of Civil Procedure section 437c, subdivision (f)(2) as permitting a trial court to exercise its inherent authority to permit a party to file a successive motion for summary judgment and/or adjudication is both consistent with the Le Francois court’s interpretation of the statute […]. (See Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 846-847 [(Myers)][] […] [‘An established rule of statutory construction requires us to construe statutes to avoid “constitutional infirmit[ies]”’]; accord Le Francois, supra, at p. 1105, 29 Cal.Rptr.3d 249, 112 P.3d 636, citing Myers.”].)

B. Court’s Determination

Here, the Court exercises its discretion and inherent authority to permit a hearing on the merits of Plaintiffs’ third motion for summary adjudication.

Plaintiffs filed their first motion for summary adjudication on December 29, 2022. That motion sought summary adjudication of the Complaint’s first and fourth causes of action and the SAXC’s four causes of action. The Court denied Plaintiffs’ motion on March 14, 2023, as to “permit Defendants sufficient time to complete discovery as to essential facts supporting their opposition to Plaintiffs’ summary adjudication motion.” The March 14, 2023 denial thus had nothing to do with the sufficiency of Plaintiffs’ arguments and evidence in their December 29, 2022, papers. Accordingly, Plaintiffs’ first motion is not considered in this discussion because it was denied for Defendants’ discovery benefit.

Plaintiffs filed their second motion for summary adjudication on August 9, 2023. That motion sought summary adjudication of the Complaint’s first, third, and fourth causes of action, and the SAXC’s four causes of action. The Court denied Plaintiffs’ motion on November 6, 2023, based on Plaintiffs’ failure to file evidence carrying their burden as to continuous use of the Big Chief marks.

Plaintiffs filed their third motion for summary adjudication on January 19, 2024. This motion seeks summary adjudication of the Complaint’s first, third, and fourth causes of action, and the SAXC’s four causes of action, and is now before the Court.

Plaintiffs come before the Court with a new record purporting to meet the statutory burden imposed on them to show a lack of triable issues on the challenged claims, and the purpose of summary judgment is to provide courts with a mechanism to cut through the parties’ pleadings to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) Defendants do not raise an objection to this third motion for summary adjudication, either as a motion for reconsideration pursuant to Code of Civil Procedure section 1008, subdivision (a), or renewed motion for summary adjudication pursuant to section 1008, subdivision (b).

The Court thus proceeds with a substantive analysis of Plaintiffs’ third motion for summary adjudication.

VI. Motion for Summary Adjudication

A. Legal Standard

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact for trial or that the moving party is entitled to a judgment as a matter of law. (Code of Civ. Proc., § 437c, subd. (c).) A party may also seek summary adjudication of select causes of action, affirmative defenses, claims for damages, or issues of duty, which may be made by a standalone motion or as an alternative to a motion for summary judgment and proceeds in all procedural respects like a motion for summary judgment, but which must completely dispose of the challenged cause of action, affirmative defense, claim for damages, or issue of duty. (Code Civ. Proc., § 437c, subds. (f)(1)-(2), (t).) The moving party bears the initial burden of production to make prima facie showing no triable material fact issues. (Aguilar, supra, 25 Cal.4th at p. 850.) This burden on summary judgment or adjudication “is more properly one of persuasion rather than proof, since he must persuade the court that there is no material fact for a reasonable trier of fact to find, and not to prove any such fact to the satisfaction of the court itself as though it were sitting as the trier of fact.” (Id. at p. 850, fn. 11; see Code Civ. Proc., § 437c, subd. (p)(1) [“A plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action”].) If the moving party meets this burden, the burden shifts to the opposing party to make a rebuttal prima facie showing that a triable issue of material fact exists. (Id. at p. 849; see also Code Civ. Proc., § 437c, subd. (p)(1) [“Once the plaintiff or cross-complainant has met th[e] [initial] burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto”].) “[I]n ruling on motions for summary judgment courts are to ‘“liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”’ [Citations.]” (Cheal v. El Camino Hospital (2014) 223 Cal.App.4th 736, 760.)

B. Court’s Ruling in Brief

As discussed below, while the Court denies relief as to the Complaint’s first cause of action, the Court grants affirmative summary adjudication in favor of Plaintiffs as to the Complaint’s third and fourth causes of action and the SAXC’s four causes of action. The reason for the partial grant of this motion, in contrast to the past two denials, is differing circumstances. Plaintiffs’ first motion was denied based on Defendants’ discovery needs, while Plaintiffs’ second motion was denied based on insufficient evidence as to continuous use of the Big Chief marks by Plaintiff Kim. In contrast, Plaintiffs’ third motion remedies the evidentiary deficiencies in Plaintiffs’ second motion re: continuous use and otherwise establishes a lack of prima facie issues as to common law trademark infringement, as well as to the derivative analyses that follow regarding unfair competition and the SAXC’s four causes of action.

With this framework in mind, the Court proceeds with a substantive discussion of Plaintiff’s motion for summary adjudication.

C. Analysis

1. Summary Adjudication, Complaint, First Cause of Action, Statutory Trademark Infringement/Counterfeiting: DENIED.

a. Relevant Law

The owner of a registered mark may file a civil action against a [1] defendant who “uses, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of a mark [2] registered under this chapter [1] in connection with the sale, distribution, offering for sale, or advertising of goods or services on or in connection with which [3] the use is likely to cause confusion of mistake, or to deceive as to the source of origin of the goods or services.” (Bus. & Prof. Code, § 14245.)

b. Parties’ Arguments

In support of their argument for summary adjudication of the Complaint’s first cause of action, Plaintiffs Kim and CBSI in essence argue and cite authority and evidence to support two points. First, the Court should consider Kim’s 2013 U.S. Patent & Trademark Office (USPTO) Class 34 trademark registration for “Big Chief,” as used in connection with tobacco product sales, as well as evidence of continuous sales of those products in the United States since 2012, as evidence of an established trademark registration with prior and continuous use. Second, the Court should adopt Kim’s 2013 federal registration for California statutory trademark infringement claim purposes and tack the prior and continuous use of the “Big Chief” mark in relation to tobacco sales to Kim’s prior and continuous use of the Big Chief marks for use on cannabis products sold in California, with cannabis sales as a natural expansion of the types of marks subject to a Class 34 classification. (Mot., pp. 14-19; see Mot., 8-9, 10-13 [background].)

c. Court’s Determination

A “mark” includes any trademark or service mark registered under the California Trademark Law. (Bus. & Prof. Code, § 14202.)

As noted in the August 9, 2023, motion filed by Plaintiffs: “Only the lawful use of a trademark can be recognized to grant any priority of use. CreAgri, Inc. v. USANA Health Sciences, Inc., 474 F.3d 626, 630 (9th Cir. 2007) [(CreAgri, Inc.)]. ‘It has long been the policy of the PTO's Trademark Trial and Appeal Board that use in commerce only creates trademark rights when the use is lawful.’” (8/9/23 Mot., p. 1, fn. 1; see 37 C.F.R., § 2.69 [USPTO may inquire into legality of commerce in relation to which trademark is sought]; 21 U.S. Code, § 801 et seq. [prohibiting, among other things, manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana and cannabidiols derived from cannabis].) Even if Class 34 classification involves “tobacco substitutes,” “oral vaporizers for smokers,” and “herbs for smoking” (Mot., RJN, Ex. 3, NICE Classification - 12th Ed., 2024, p. 1), Plaintiffs do not cite authority for extending “herbs” to marijuana, cannabidiols, and products derived from the two.

In the Court’s November 6, 2023, ruling, the Court raised the following issue in denying Plaintiffs’ second motion for summary adjudication, as related to the Complaint’s first cause of action: “Plaintiff[]s[’] briefing also does not explain how federal registrations of three of the Big Chief marks[ … ]can serve as the ‘mark’ for the purposes of a California statutory trademark infringement and counterfeiting claim, let alone a statutory infringement claim that involves use of the mark(s) on products that are illegal at a federal level (cannabis products containing THC).” (11/6/23 Ruling, p. 4.)

Despite this note, the moving papers fail to explain (1) why a federal trademark should support a statutory trademark infringement claim based on California law and (2) how tacking should be permitted based on continuous and prior use connected to a federal trademark, but where the tacking relates to use of the Big Chief marks on cannabis products sold in California, the sale and distribution of which is illegal at a federal level. (See Mot., pp. 8-9, 10-13.) This is particularly relevant where the moving papers only discuss and cite authority for tacking in relation to lawful activities and not in relation to conduct that is unlawful at a federal level while lawful at a state level. (Mot., pp. 11-13.)

Based on these grounds, the Court determines that Plaintiffs failed to carry their burden as to the Complaint’s first cause of action as based on the 2013 federal “Big Chief” trademark registration.

Summary adjudication thus cannot be granted as to the Complaint’s first cause of action insofar as it is premised on the 2013 federal “Big Chief” registration. (See, e.g., Mot., p. 18 at § VI.B.7. [likelihood of confusion argued solely in relation to 2013 registration, not 2020 California registrations]; cf. Mot. 19 at § VII [arguments basing start date of trademark damages from registration of Kim’s California “Big Chief” trademark on May 28, 2020].)

As a result, Plaintiffs’ motion cannot completely dispose of this cause of action for summary adjudication purposes. This is because a triable issue arises where a reasonable trier of fact could find for the nonmoving party on the element of a cause of action. (Powell v. Kleinman (2007) 151 Cal.App.4th 112, 122.) If the Court cannot grant Plaintiffs’ motion as to the Complaint’s first cause of action insofar as the 2013 registration supports that claim as alleged in the Complaint, then Plaintiffs have not “proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(1).)

It therefore follows that summary adjudication cannot be granted as to the Complaint’s first cause of action because “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).)

The Court thus need not address, to the extent that they are raised, (1) arguments relating to the 2020 registrations where the Complaint does not specify in the first cause of action whether the 2013 federal registration alone supports the first cause of action (see Complaint, ¶¶ 85-97; cf. Complaint, ¶ 81 [alleging priority of use and registration of federal and state trademarks prior to infringement]) or (2) arguments relating to prior use, subsequent use, lack of consent, likelihood of confusion, and damages or other remedies, i.e., the other elements of a California statutory trademark infringement claim.

d. Disposition

Summary adjudication of the Complaint’s first cause of action is DENIED.

2. Summary Adjudication, Complaint, Third Cause of Action, Common Law Trademark Infringement: GRANTED.

a. Relevant Law

In contrast to a statutory claim, registration is not a prerequisite for a common law trademark infringement claim. To state such a claim, a plaintiff must show (1) existence of prior and continuous use of a trade name in such a way that a secondary meaning is acquired (2) subsequent use of a confusingly similar trade name by the defendant, and (3) likelihood of confusion in the minds of the public of the defendant’s business as that of, or as one affiliated with, the plaintiff. (Sunset House Distributing Corp. v. Coffee Dan’s, Inc. (1966) 240 Cal.App.2d 748, 753 (Sunset House).)

b. Note Regarding Scope of Moving Papers

A review of the moving papers shows that they focus on how Defendants’ use of all five of the Big Chief marks on cannabis products—(1) “Big Chief,” (2) “Big Chief Extracts,” (3) “Big Chief’n,” (d) , and (e) —could cause a likelihood of confusion with Plaintiffs’ cannabis products bearing the “Big Chief” trademark alone, not with Plaintiffs’ cannabis products bearing all five of the Big Chief marks. (See, e.g., Mot., pp. 16-17.)

In contrast, the Complaint alleges that all five marks were registered and used by Plaintiff Kim prior to use of the same five marks by Defendants and that use of the same five marks by Defendants has caused a likelihood of confusion and consequential damages to Plaintiff. (Complaint, ¶¶ 106-115.)

Separately, the evidence attached to the moving papers and referenced in the separate statement makes a prima facie showing of prior and continuous use of all five of the Big Chief marks in relation to tobacco and cannabidiol products. (See, e.g., Mot., Kim Decl., ¶ 5, Ex. 3 [evidence of sales of tobacco products bearing Big Chief marks as of at least 2017], cited in Mot., Sep. St., UMF No. 7.)

Thus, the Court considers common law trademark infringement as to all five Big Chief marks, even though arguments for such relief are not explicitly raised in the moving papers. (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59 [A trial court has discretion “to grant a motion for summary judgment upon a ground of law not explicitly tendered by the moving party” provided that the opposing party is given “an opportunity to identify triable issues of fact material to the ground relied upon by the trial court”].)

c. Parties’ Arguments

i-ii. Prior and Continuous Use; Subsequent Use

In their moving papers, Plaintiffs (1) cite evidence to show prior and continuous use of the Big Chief marks in relation to tobacco products since 2012 and (2) cite evidence supporting the position that the Court should tack Kim’s prior use of the Big Chief marks for tobacco products to the prior use of those marks on cannabis products given that use of the marks on cannabis products is a natural expansion of the use of the marks on tobacco products. (Mot., pp. 8-9 at § III.A. [ownership of marks, natural expansion] & pp. 10-13 at § III.C. [natural expansion] & pp. 14-15 at § V.A. [prior and continuous use].)

Plaintiffs cite evidence supporting a prima facie showing that Plaintiff Kim has used the “Big Chief” trademark in relation to the sale of tobacco products since 2012 and that he has continuously used the Big Chief mark, and other Big Chief marks, continuously since 2012. (Mot., p. 2, citing Mot., Sep. St., UMF No. 7.) Plaintiff argues that this evidence shows the lack of triable issues of material fact in Plaintiffs’ favor as to prior use in relation to tobacco products. Plaintiffs also argue use of the Big Chief mark, and the subsequent marks, in relation to tobacco products should support a priority of right in using the same marks in relation to the sale or distribution of cannabis products in California based on “tacking” and/or use of the Big Chief marks on cannabis products being a natural zone of expansion of use of those marks on tobacco products.

In opposition, Defendants argue that use of a trademark on tobacco products should not tack on to the use of the same marks on cannabis products where sale or distribution of the latter is illegal at a federal level. (Opp’n, pp. 11-12.)

Defendants also argue that Plaintiff Kim has failed to show prior use in four ways. First, through Plaintiffs’ failure to attach evidence of domestic sales of tobacco products bearing the Big Chief marks in past motions, where Evidence Code section 412 merits a conclusion that any new evidence filed by Plaintiffs for that purpose must be viewed with skepticism. Second, through Plaintiffs relying on a federal trademark registration to support a state claim for statutory trademark infringement in relation to commerce that is illegal at a federal level, undercutting tacking and zone of expansion. Third, through Kim and CBSI’s failure to sell cannabis products bearing the Big Chief marks until 2020, after Defendants had already sold or distributed cannabis products bearing those marks, thus making the 2020 registrations fraudulent. And fourth, through Kim granting JRJS an irrevocable license in the Big Chief marks. (Opp’n, pp. 6-8 at § II.A. [prior testimony, Evid. Code, and subsequent use arguments] & p. 8 at § II.B. [irrevocable license] & pp. 9-11 at § III.B. [prior use by Defendants] & pp. 11-12 at § III.C. [tacking and zone of expansion].)

In reply, Plaintiffs argue that Defendants’ arguments are misleading as to Defendants’ representation of the “disputed issues of fact” in the opposition separate statement and that Plaintiff Kim has priority based on expansion of use. (Reply, pp. 3-8 at §§ II-III.)

iii. Unlawful Conduct

In their moving papers, Plaintiffs argue that Defendants cannot support prior use where their use of Big Chief marks arose in relation to their unlawful sale and distribution of cannabis products, which cannot confer priority rights for trademark infringement purposes. (Mot., pp. 13-14 at § IV.)

In opposition, Defendants add that triable issues remain as to the illegality of their conduct. (Opp’n, p. 12 at § IV.)

In reply, Plaintiffs reiterate that federal and California law does not recognize Defendants’ unlawful trademark use. (Reply, pp. 8-10 at § IV.)

iv. Likelihood of Confusion

In their moving papers, Plaintiffs cite evidence to show seven grounds supporting likelihood of confusion. (Mot., pp. 15-18 at §§ V.C.-V.C.7.)

The opposition fails to address likelihood of confusion other than in conclusory form. (Opp’n, p. 14 at § VI.)

v. Damages

In their moving papers, Plaintiffs cite evidence to show seven grounds supporting damages: “Defendants admit to selling 5,000 illegal Big Chief cartridges per week at $8.00 to $14.00 per unit. (SSUF 68, 71) The undisputed facts confirm that as many as 80,000 boxes for “Big Chief” cartridges were delivered to JRJS in June 2019 at around the time Defendant Rashid kicked Plaintiff Kim out of JRJS. (SSUF 121-122) Defendants admitted to having “tons of customers” and did not stop their sale of Big Chief products until this Court enjoined them on January 8, 2021 (SSUF 68, 89) From the date the Big Chief mark was registered in California on May 28, 2020 (SSUF 48: 49), until the Court’s issuance of the Preliminary Injunction on January 8, 2021 (SSUF 119), approximately 7 months transpired (or approximately 32 weeks). Using an average sale price of $10.00/unit for each Big Chief cartridge sold and a quantity of 5,000 units per week for 32 weeks, the calculation is simply 160,000 units x $10.00/unit = $1,600,000 USD. Defendants have no knowledge of their costs of production or expenses relating to Big Chief products. (SSUF 111-113) Therefore, Plaintiffs are entitled to Defendants’ treble revenue of $4,800,000 USD. [¶] Also, Plaintiffs are entitled to their own loss sales under section §14250(a). Plaintiffs sell genuine Big Chief cartridges to over one-hundred thirty licensed dispensaries in California at a wholesale price of $8.50 per unit with a profit margin of approximately 50% before taxes ($4.25 per unit). (SSUF 110) The calculation is 160,000 units x $4.25/unit = $680,000 USD. Plaintiffs are also entitled to recover their treble loss of profit of $2,040,000 USD. The Court may thus also properly reward Plaintiffs trademark damages up to the sum of $6,840,000 USD.” (Mot., pp. 19-20 at § VII.)

The opposition fails to address damages other than in conclusory form. (Opp’n, p. 14 at § VII.)

d. Court’s Determination

i. Prior and Continuous Use

Plaintiffs carry their burden as to prior and continuous use of the Big Chief marks by Plaintiff Kim, and Defendants fail to carry their responsive burden on the same issue.

Unless the facts are so clear that only one inference may reasonably be drawn, mixed questions of law and fact are for the jury. (See Hana Financial, Inc. v. Hana Bank (9th Cir. 2013) 735 F.3d 1158 (Hana I) [jury was entitled to find tacking since the bank’s marks created a consistent commercial impression and that there had been no abandonment], aff’d, 574 U.S. 418, 422-425 (Hana II) [question of “tacking” in trademark cases is typically for jury resolution because it presents a mixed question of law and fact].) “‘The standard for tacking … is exceedingly strict: The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked. In other words, the previously used mark must be the legal equivalent of the mark in question or indistinguishable therefrom, and the consumer should consider both as the same mark. This standard is considerably higher than the standard for likelihood of confusion.’” (Hana I, supra, at pp. 1064-1065, quoting Brookfield Communications, Inc. v. West Coast Entertainment Corp. (9th Cir. 1999) 174 F.3d 1036, 1048.)

California secondary sources point to Hana II as controlling for whether questions of fact relating to tacking may be resolved by summary judgment. (Bosek, et al., Actions and proceedings in which summary judgment is available (Feb. 2024) Cal. Jur. 3d. Judgments, § 56.)

Alternately, where “articles or services so similar that the public might reasonably conclude that plaintiff had merely enlarged the scope of its basic operations,” for priority of use and infringement purposes, use of the trademark on similar articles or for similar services may fall within the natural zone of expansion of the plaintiff’s use of a trademark. (Sunset House, supra, 240 Cal.App.2d at p. 753.)

Here, Plaintiffs provide prima facie evidence that shows that Defendants’ use of the five Big Chief marks can create the “same, continuing commercial impression” as Plaintiffs’ use of the same marks. (Mot., Kim Decl., ¶ 5, Ex. 3 [receipts and images for sales or distrbution of tobacco and cannabidoil products bearing all five Big Chief marks to some degree and in varying forms—(1) “Big Chief,” (2) “Big Chief Extracts,” (3) “Big Chief’n,” (d) , and (e) —as of at least 2017, with the “Big Chief” and the “war bonnet” (, otherwise known as headdress) marks appearing on the face of the evidenced products, the “Big Chief Extracts” mark appearing as part of the email address and Instagram handle (@ address), and the crossed arrows with BC () and “Big Chief’n” marks appearing appearing at times on the spine, with Big Chief’n appearing insofar as it is part of  the #staybigchiefn hashtag], cited in Mot., Sep. St., UMF No. 7.) And Plaintiffs provide evidence for subsequent use of the same marks by Defendants in relation to cannabis products in 2019. (Mot., Buckner Decl., ¶¶ 1-6, Exs. 1-3 [investigative report purchases of Defendants’ cannabis products bearing five Big Chief marks in some form], cited in Mot., Sep. St., UMF Nos. 53, 63, 70; see also Mot., Sep. St., UMF Nos. 90-91, 96-99 [testimony of Jafar Rashid to show knowledge and confirmation of unlawful sales of cannabis products bearing Big Chief marks].)

This comparison provides a basis for tacking, as well as for the natural zone of expansion concept discussed in Sunset House.

The burden thus shifts to Defendants to show a triable issue as to prior and continuous use, which Defendants fail to carry.

The opposition does not address Plaintiffs’ evidence of Kim’s sales or distribution of tobacco and cannabidiol products bearing the Big Chief marks as of at least 2017. (Mot., Kim Decl., Ex. 3.) This weakens Defendants’ prior use argument in the opposition, which claims that JRJS first used the Big Chief marks on cannabis products in 2018. (Opp’n, p. 6 [“JRJS was the first to use the Big Chief name on cannabis product in California in 2018”].)

The opposition’s references to Evidence Code section 412 and Mattei v. Corporate Mgmt Solutions, Inc. (2020) 52 Cal.App.5th 116, 126, footnote omitted (Mattei) are unavailing. Plaintiffs did not “fail[] to preserve evidence” for summary adjudication purposes or for this action in general. The portion of Mattei the opposition means to cite simply explains that the court of appeal noted that a party’s “failure to produce its contract with [another party] or any sample contract” was viewed with skepticism where weaker and less satisfactory evidence was offered when it was within the power of the party to produce stronger and more satisfactory evidence, such as when a party has documentation of an event, but instead offers oral testimony by a potentially biased witness. (Mattei, supra, at p. 126, fn. 9.) Here, Plaintiffs have provided direct evidence of sales and/or distribution of cannabidiol and tobacco products bearing the Big Chief marks as of 2017. (Mot., Decl., Ex. 3.) As such, Mattei is distinguishable. Otherwise stated, because Plaintiffs rely on direct proof of sales or distribution, rather than on a declaration or deposition testimony from Kim, the application of Evidence Code section 412 fails.

If the opposition is instead attempting to argue that the evidence advanced by Plaintiffs to show prior use—even if supported by direct evidence of sales or distribution—should be disregarded or shown to be unreliable because, in past motions, Plaintiffs have failed to produce that evidence, this point is not clearly conveyed, and insufficient authority (Evid. Code, § 412; Mattei) supports the point.

Last, the Court finds no merit to the tacking and zone of expansion arguments in the opposition. The tacking and zone of expansion arguments in the opposition are focused on a California statutory trademark infringement claim as based on a federal trademark registration, not on common law trademark infringement and the applicability of tacking and zone of expansion to California common law theories. (Opp’n, pp. 11-12 at § IV.)

Consequently, no triable issues remain as to prior and continuous use of the Big Chief marks by Plaintiff Kim.

ii. Subsequent Use

The Court refers to its discussion of subsequent use by Defendants in the preceding subsection (Section VI.C.2.d.i.) in which the Court determined that subsequent use occurred (as framed by Defendants in their opposition points and authorities) in 2018, contrasted with prima facie evidence of Plaintiffs’ 2017 prior use of the marks in relation to the sale or distribution of tobacco or cannabidiol products.

iii. Unlawful Conduct

As discussed above, at a federal level, trademarks may only follow lawful use of a trademark. (See VI.C.1.c. discussion supra, citing CreAgri, Inc, supra, 474 F.3d at p. 630, 37 C.F.R., § 2.69, and 21 U.S. Code, § 801 et seq.)

In California, “[a] person or entity shall not engage in commercial cannabis activity without a state license issued by the department pursuant to this division” and “[c]annabis goods shall not be sold or transferred to a licensed retailer or licensed microbusiness, or released for retail sale, unless a representative sample of the cannabis goods has undergone and passed all testing as required by this section.” (Bus. & Prof. Code, § 26037.5, subd. (a); Cal. Code Regs., § 5715.)

Plaintiffs presented evidence showing that Defendants (1) admitted to selling cannabis products bearing the Big Chief marks without a proper license and (2) admitted to not conducting the necessary testing of its cannabis products prior to sale or distribution. (See, e.g., Mot., Sep. St., UMF Nos. 90-109; see also Mot., Buckner Decl., ¶¶ 1-6, Exs. 1-3 [investigative report purchases of Defendants’ cannabis products bearing five Big Chief marks in some form], cited in Mot., Sep. St., UMF Nos. 53, 63, 70.)

This evidence amounts to a prima facie showing of lack of triable issues of material fact as to illegal conduct by Defendants in relation to the Big Chief marks.

The burden thus shifts to Defendants to show a triable issue as to unlawful conduct by Defendants, which Defendants fail to carry.

In relevant part, Defendants argue that triable issues remain as to the lawfulness of their conduct in relation to the sale or distribution of cannabis products bearing the Big Chief marks. This argument is premised on the positions that (1) Plaintiff Kim was in control of testing and the legality of the final product to be sold, (2) Defendants had no reason to believe that the product created by Kim was illegal or untested, and (3) Defendants operate through a valid sub-license provided by UHCC. (Opp’n, p. 12, citing Opp’n, Sep. St., Responses to UMF Nos. 26-27, 56, 91.)

Defendants’ first two categories of evidence are irrelevant because Kim only worked with Defendants until 2019. Otherwise stated, Defendants’ evidence does not respond to evidence of illegal sales of cannabis products, for example, on or after April 2020.

Defendants’ third category of evidence, even if credited, only undercuts unlawful conduct as to operating without a license, not as to proper testing of the products sold by Defendants following the 2019 split of the parties’ working relationship.

Defendants thus fail to carry their responsive burden as to this issue, at least insofar as the issue involves unlawful conduct from failing to properly test cannabis product put into commerce in California.

Consequently, no triable issues remain as to unlawful conduct by Defendants in relation to the distribution and/or sale of cannabis products.

iv. Likelihood of Confusion

Likelihood of confusion is the test in California for whether use of a similar business name constitutes unfair competition. Prevailing on a state trademark infringement claim also entails prevailing on the state unfair competition claim, since common law and statutory trademark infringements are merely specific aspects of unfair competition. (Century 21 Real Estate Corp. v. Sandlin (9th Cir. 1988) 846 F.2d 1175, 1180 (Century 21).)

Courts determine the likelihood of confusion by balancing the following factors: (1) strength of the mark; (2) similarity between the two marks; (3) proximity of the goods; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchasers; (7) defendant’s intent in selecting his mark; and (8) likelihood of expansion of product lines. (Mallard Creek Indus., Inc. v. Morgan (1997) 56 Cal.App.4th 426 (Mallard Creek).)

Whether confusion is likely is a factual determination. (Levi Strauss & Co. v. Blue Bell, Inc. (9th Cir. 1985) 778 F.2d 1352, 1356, 1361-1362 (Levi Strauss) [trial courts disfavor deciding trademark cases in summary judgments because the ultimate issue is so inherently factual].)

Here, the Court finds that Plaintiffs meet their burden as to likelihood of confusion.

The Court has already discussed factor (1), the complete overlap in the trademarks at issue, based on a comparison of the evidence in the moving papers. (See Section VI.C.2.d.i discussion supra [comparison of evidence showing same five Big Chief marks on Plaintiffs’ and Defendants’ products, i.e., (1) “Big Chief,” (2) “Big Chief Extracts,” (3) “Big Chief’n,” (d) , and (e) ].)

The Court also adopts Plaintiffs’ arguments and/or cited prima facie evidence for other likelihood of confusion factors:

(2) Strength of the five Big Chief marks based on distinctiveness of the Big Chief names (Big Chief, Big Chief Extracts, and Big Chief’n), the war bonnet (), and the cross-arrows with BC logo () commonly associated with them, particularly where the marks are used collectively in packaging for Plaintiffs’ tobacco and cannabidiol products (Mot., p. 16 at § V.C.1, citing Mot., Sep. St., UMF Nos. 1-9; see also Mot., Kim Decl., ¶¶ 1-3, Exs. 1-2);

(3) The convergence of marketing channels based on Plaintiffs’ and Defendants’ products using a web address on their packaging as a marketing channel with nearly identical website names (Mot., p. 17 at § V.C.3; see also Mot., Kim Decl., Exs. 1-2; cf. Mot., Buckner Decl., Exs. 1-3); and

(4) Intentional infringement based on, among other things listed in the moving papers, Defendants receiving cease and desist letters from Plaintiff Kim but continuing to sell or distribute cannabis products bearing the Big Chief marks (Mot., p. 17 at § V.C.5, citing Mot., Sep. St., UMF Nos. 37, 42-45, 49, 91-92, 97-100; see also Mot., pp. 4-6 at § II.C. [citing evidence for cease and desist and Defendants’ sales or distribution of cannabis products bearing Big Chief marks prior to and after cease and desist letters were delivered]).

This evidence amounts to a prima facie showing of lack of triable issues of material fact as to likelihood of confusion.

The burden thus shifts to Defendants to show a triable issue as to likelihood of confusion, which Defendants fail to carry. This is because the opposition fails to address likelihood of confusion other than in conclusory form (Opp’n, p. 14 at § VI), thus failing to carry Defendants’ responsive burden.

v. Damages

The Court “shall require the defendants to pay to the owner up to three times their profits from, and up to three times all damages suffered by reason of, the wrongful manufacture, use, display, or sale” of products that constitute trademark infringement. (Bus. & Prof. Code, §14250, subd. (a).)

Here, the Court adopts Plaintiffs’ arguments and/or cited prima facie evidence for damages. This is because Plaintiffs’ evidence gives: (1) fixed dates for damages, i.e., May 28, 2020, when the Big Chief mark was registered (Mot., RJN, Ex. 1, cited in Mot., Sep. St., UMF No. 4), and the January 8, 2021, issuance of a preliminary injunction (Mot., RJN, Ex. 4, cited in Mot., Sep. St., UMF No. 119); and (2) the factual bases for the requested amount of $6.84 million (Mot., pp. 19-20, citing Mot., Sep. St., UMF Nos. 68, 71, 121-222, [Defendants’ sales of counterfeit products] & Mot., Sep. St., UMF Nos. 111-113  [Defendants lack knowledge of costs of production and expenses] & Mot., Sep. St., UMF No. 110 [Plaintiffs’ lost sales]).

The opposition fails to address damages other than in conclusory form (Opp’n, p. 14 at § VII), thus failing to carry Defendants’ responsive burden.

vi. Irrevocable License

The Court briefly notes that the irrevocable license argument is not sufficiently elaborated in the opposition papers, for which reason it fails. (Opp’n, pp. 6, 8, 17 [only references to irrevocable license with no controlling authority].)

e. Disposition

Summary adjudication is thus GRANTED as to the Complaint’s third cause of action.

3. Summary Adjudication, Complaint, Fourth Cause of Action, Unfair Competition: GRANTED.

a. Relevant Law

Likelihood of confusion is the test in California for whether use of a similar business name constitutes unfair competition. Prevailing on a state trademark infringement claim also entails prevailing on the state unfair competition claim, since common law and statutory trademark infringements are merely specific aspects of unfair competition. (Century 21, supra, 846 F.2d at p. 1180.)

b. Court’s Determination

Here, the Court adopts its discussion at Section VI.C.2.d. above to determine that because Plaintiff is entitled to summary adjudication on the common law trademark infringement claim, relief is derivatively merited as to the unfair competition claim. (Ibid.)

c. Disposition

Summary adjudication is thus GRANTED as to the Complaint’s fourth cause of action.

4. Summary Adjudication, Second-Amended Cross-Complaint, First to Fourth Causes of Action: GRANTED.

a. Court’s Determination

Given that the SAXC’s claims depend on triable issues as to Defendants’ priority of use of the Big Chief marks (see SAXC, ¶¶ 56-89), and given that the Court has found that no triable issues exist as to Plaintiffs’ prior use of the Big Chief marks and infringement by Defendants’ subsequent use of the marks on cannabis products (see Section VI.C.2.d. discussion supra), Plaintiffs are derivatively entitled to summary adjudication of the SAXC’s first to fourth causes of action.

b. Disposition

Summary adjudication is thus GRANTED as to the SAXC’s four causes of action. 

VII. Conclusion

Plaintiff/Cross-Defendants Samuel Kim and Cali Blue Sky Investment, Inc.’s Motion for Summary Adjudication is GRANTED in part and DENIED in part as follows:

(1) DENIED as to summary adjudication of the Complaint’s first cause of action; and

(2) GRANTED as to summary adjudication of the Complaint’s third and fourth causes of action and Second Amended Cross-Complaint’s first to fourth causes of action.