Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-00415/USCOURTS-caed-2_14-cv-00415-2/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

FARM AND TRADE, INC., 

Plaintiff, 

v. 

FARMTRADE, LLC, a North Carolina 

limited liability company, and DOES 1 

through 25, inclusive, 

Defendants. 

No. 2:14-cv-00415-MCE-CMK 

MEMORANDUM AND ORDER 

Plaintiff Farm and Trade, Inc. (“Plaintiff”) has filed a Second Amended Complaint 

(“SAC”) (ECF No. 29) alleging trademark infringement and related claims against 

Defendant Farmtrade, LLC (“Defendant”). Presently before the Court is Defendant’s 

Motion to Dismiss the SAC pursuant to Federal Rule of Civil Procedure 12(b)(6) (ECF 

No. 30).1

 For the reasons that follow, Defendant’s Motion to Dismiss is denied.2

/// 

/// 

/// 

 1

 All subsequent references to “Rule” are to the Federal Rules of Civil Procedure. 

 2

 Because oral argument would not have been of material assistance, the Court ordered this 

matter submitted on the briefs. See E.D. Cal. Local R. 230(g). 

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BACKGROUND3

A. Plaintiff 

Plaintiff has been using the trade name and service mark “Farm and Trade” 

(“Mark”) in commerce since June 2003, and has used the Mark continuously in 

commerce since Plaintiff’s incorporation in July 2004. Since July 2004, Plaintiff has 

exclusively used the Mark to identify its international crop brokerage services and related 

advisory/consulting services pertaining to commodity crop (primarily rice) trading and 

exporting. Plaintiff acts as a buyer, broker, and consultant to rice growers in California 

and around the world. According to Plaintiff, the Mark has become publicly associated 

exclusively with Plaintiff and has become so closely associated with Plaintiff that Plaintiff 

has developed appreciable goodwill and industry-wide name recognition based on the 

Mark. Plaintiff therefore claims it has established protectable common law trademark 

rights flowing from its use of the Mark. 

Plaintiff is also well known in the rice and commodity trading industry generally. 

For example, Plaintiff’s October 2013 acquisition of California Rice Exchange was wellpublicized in the commodity industry. Moreover, Plaintiff is active and involved in the 

rice and food commodity industries and is an active participant in state and federal 

commissions. Specifically, Plaintiff publishes a monthly Farm and Trade Report, which 

has a circulation of over 1500 electronic and 500 paper copies. When redistribution 

patterns are taken into account, Plaintiff estimates that its Report is seen by over 5,000 

readers in California and several hundred in other parts of the country. Plaintiff also 

publishes The Rice Trader, a weekly market analysis bulletin devoted to rice, and until 

recently published Rice Today, which was sent by direct mail to 35,000 readers. 

Plaintiff’s rice market publications are widely respected as authoritative in its field, and 

Plaintiff is widely considered to be an international rice industry leader. According to 

Plaintiff, these publications have created mental recognition in the minds of consumers 

 3

 The following statement of facts is based on the allegations in Plaintiff’s SAC. 

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and substantial consumer awareness of Plaintiff’s services, such that Plaintiff is widely 

recognized as the exclusive purveyor of goods under the Mark. 

Plaintiff also sponsors and hosts national and international conferences that 

feature world-renowned rice industry leaders, decision makers, and research experts. 

Additionally, through its affiliate ICI, Plaintiff offers a fully integrated media source 

connecting clients to all critical aspects of the rice industry, including research, analysis, 

conferences, and trading. 

Plaintiff has actual and potential consumers of its services worldwide, and has 

achieved a strong degree of consumer recognition through these efforts. Plaintiff’s 

annual gross revenues have averaged approximately $5 million over the past five years 

and are projected to reach $100 million this year. These revenues reflect, in part, 

Plaintiff’s goodwill and name recognition in the Mark. 

Since its inception, Plaintiff has spent well over $1 million advertising and 

marketing the Mark in the form of advertisement placements, online promotions, printed 

and digital publications, personal meetings with growers, and industry conferences. As a 

further part of its commitment of funds and resources to promoting and controlling use of 

the Mark, Plaintiff owns and controls a host of internet domain names, many of which are 

used to enhance search engine optimization associated with online searches related to 

the Mark, including but not limited to “FARMANDTRADE.COM,” 

“FARMANDTRADE.BIZ,” “FARMANDTRADE.INFO,” “FARMANDTRADE.NET,” 

“FARMANDTRADE.ORG,” and “FARMANDTRADE.US.” 

B. Defendant and the Dispute 

Defendant currently operates an online trading floor for agricultural chemicals at 

XSAg.com, which is identified by the URL www.xsag.com and derivations thereof. 

Defendant promotes XSAg.com as “A FarmtradeTM Company.” Defendant filed its 

articles of organization in North Carolina on December 14, 2012, then under the name 

FarmTrader, LLC. On February 7, 2013, Defendant changed its name to “FarmTrade, 

LLC” (“Accused Mark”). In May 2013, Defendant filed an application for federal 

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registration of the Accused Mark. In support of its application for registration, Defendant 

represented to the United States Patent and Trademark Office (“USPTO”) its intent to 

use the Accused Mark in commerce; by public press releases and online 

announcements, Defendant has used and continues to use the mark in commerce in an 

attempt to build consumer name recognition in the Accused Mark. Plaintiff alleges 

Defendant is infringing on Plaintiff’s rights in the Mark by causing potential and actual 

confusion among consumers. 

On December 10, 2013, the USPTO issued a Notice of Allowance assigning the 

Accused Mark serial number 85931184. Plaintiff did not discover Defendant’s 

application for registration until after the Notice of Allowance was issued, when Plaintiff 

received an online announcement that Defendant would change the name of its website 

from “XSAg.com” to “Farmtrade.” 

After learning of Defendant’s intent to use the name, Plaintiff contacted Defendant 

by e-mail on December 17, 2013, and formally demanded that Defendant cease and 

desist using the Accused Mark. Plaintiff informed Defendant that Plaintiff had already 

experienced multiple instances of customer confusion—that is, according to Plaintiff, 

“customers mistaking Defendant for Plaintiff or Plaintiff’s affiliate.” ECF No. 15 ¶ 27. 

Plaintiff elaborates on this allegation in its SAC: 

Plaintiff received several telephone calls after the 

December 10, 2013 announcement asking if www.xsag.com 

was Plaintiff’s company based upon the proposed name 

change. One of Plaintiff’s customers forwarded the press 

release to Plaintiff on December 11, 2013, after the two 

discussed the issue over the telephone. Shortly after learning 

of Defendant’s announcement and receiving the 

aforementioned phone calls expressing customer confusion, 

Plaintiff contacted Defendant . . . . 

Plaintiff alleges that Defendant has done nothing to address Plaintiff’s complaints 

and has taken no action to remedy the actual or probable consumer confusion caused 

by Defendant’s use of the Accused Mark. 

/// 

/// 

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STANDARDS 

A. Rule 12(b)(6) 

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all 

allegations of material fact must be accepted as true and construed in the light most 

favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 

(9th Cir. 1996). Rule 8(a)(2) requires only “a short and plain statement of the claim 

showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of 

what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A 

complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual 

allegations; however, “a plaintiff’s obligation to provide the grounds of his entitlement to 

relief requires more than labels and conclusions, and a formulaic recitation of the 

elements of a cause of action will not do.” Id. (internal quotation marks and citations 

omitted). A court is not required to accept as true a “legal conclusion couched as a 

factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 

550 U.S. at 555). “Factual allegations must be enough to raise a right to relief above the 

speculative level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. 

Miller, Federal Practice and Procedure § 1216 (3d ed. 2004). 

Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 

assertion, of entitlement to relief.” Twombly, 550 U.S. at 556 n.3 (internal quotation 

marks and citation omitted). Thus, “[w]ithout some factual allegation in the complaint, it 

is hard to see how a claimant could satisfy the requirements of providing not only ‘fair 

notice’ of the nature of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing 

5 Charles Alan Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain 

“only enough facts to state a claim to relief that is plausible on its face.” Id. at 570. If the 

“plaintiffs . . . have not nudged their claims across the line from conceivable to plausible, 

their complaint must be dismissed.” Id. However, “a well-pleaded complaint may 

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proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 

‘that a recovery is very remote and unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 

416 U.S. 232, 236 (1974)). 

B. False Designation of Origin 

Any person who, on or in connection with any goods or 

services . . . uses in commerce any . . . name, symbol, or 

device, or any combination thereof . . . which . . . is likely to 

cause confusion, or to cause mistake, or to deceive as to . . . 

the origin, sponsorship, or approval of his or her goods, 

services, or commercial activities by another person . . . shall 

be liable in a civil action by any person who believes that he 

or she is or is likely to be damaged by such act. 

15 U.S.C. § 1125(a). 

ANALYSIS 

 Defendant argues that the Court should dismiss Plaintiff’s claim for false 

designation of origin because the SAC “fail[s] to allege any facts that establish likelihood 

of confusion.” Def.’s Mot. at 10, Dec. 29, 2014, ECF No. 31. As the Ninth Circuit has 

explained: 

The “likelihood of confusion” inquiry generally considers 

whether a reasonably prudent consumer in the marketplace 

is likely to be confused as to the origin or source of the goods 

or services bearing one of the marks or names at issue in the 

case. To succeed, a plaintiff must show more than simply a 

possibility of such confusion. 

Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1209 (9th Cir. 2012) (citations 

omitted). 

The Court dismissed Plaintiff’s First Amended Complaint because it did not allege 

sufficient facts to establish a likelihood of confusion. See Mem. and Order at 11, 

Nov. 21, 2014, ECF No. 28. In the SAC, however, Plaintiff added a specific factual 

allegation that Plaintiff received several telephone calls—including at least one from a 

customer—asking if Defendant’s website was Plaintiff’s company. SAC at 8. Thus, 

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Plaintiff now alleges more than a possibility of confusion, as the SAC describes a 

specific instance of consumer confusion. The Court finds that this new allegation 

nudges Plaintiff’s claim across the line from conceivable to plausible, and is therefore 

sufficient to survive Plaintiff’s Motion to Dismiss. See also Johnson v. City of Shelby, 

Miss., 135 S. Ct. 346, 347 (2014) (per curiam) (finding complaint satisfied Twombly and 

Iqbal because it “stated simply, concisely, and directly events that, [plaintiffs] alleged, 

entitled them to damages from the [defendant]”). 

Defendant further argues that because Plaintiff has not stated a claim for false 

designation of origin, the Court (1) does not have jurisdiction over Plaintiff’s request for a 

declaratory judgment, and (2) should decline to exercise supplemental jurisdiction over 

Plaintiff’s claims under California’s Unfair Competition Law. Because the Court finds that 

the SAC adequately states a claim for false designation of origin, the Court has 

jurisdiction over Plaintiff’s request for a declaratory judgment. Additionally, because this 

Court has original jurisdiction over Plaintiff’s false designation of origin claim, the Court 

has supplemental jurisdiction over Plaintiff’s Unfair Competition Law claims under 

28 U.S.C. § 1367(a). 

CONCLUSION 

For the foregoing reasons, Defendant’s Motion to Dismiss Plaintiff’s Second 

Amended Complaint (ECF No. 30) is DENIED. 

IT IS SO ORDERED. 

Dated: April 9, 2015 

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