Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00707/USCOURTS-caed-1_06-cv-00707-4/pdf.json

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

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Honor Plastic’s original name is in Chinese. Though a more direct translation might use 1

the term “prosperity” instead of “honor,” the company has called itself Honor Plastic Industrial

Co., Ltd. in English documents since April 2004 at the latest. Doc. 33, Exs. D and E. Honor

Plastic also sold product to customers in California under the Honor Plastic name as early as

September 2004. Doc. 33, Exs. H and I. In its papers, Lollicup refers to Honor Plastic as RongChin, a transliteration of the Chinese name. Nevertheless, as Honor Plastic has submitted

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UNITED STATES DISTRICT COURT

 EASTERN DISTRICT OF CALIFORNIA

HONOR PLASTIC INDUSTRIAL CO.

LTD and P&P INTERNATIONAL INC.,

Plaintiffs,

v.

LOLLICUP USA, INC.,

Defendant.

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CIV-F-06-0707 AWI DLB

ORDER RE: PRELIMINARY

INJUNCTION

(Docs. 31 and 65)

Plaintiffs have moved for a preliminary injunction prohibiting Defendant from using

several trademarks. Defendant opposed the motion. Oral argument was held on October 25,

2006. For the following reasons, the Plaintiffs’ motion is granted.

I. History

Plaintiffs in the case are Honor Plastic Industrial Co., Ltd. (“Honor Plastic”) and P&P 1

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letterhead, shipping documents, and other papers referring to itself as Honor Plastic Industrial

Co, Ltd., that is the name that will be used.

There is uncertainty as to whether “Honor USA” was a reference to Honor Plastic or to 2

CTT. The boxes also bore the word “CTT” and a symbol that appears to be a graphical design

signifying CTT. 

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International, Inc. (“P&P”). Honor Plastic is a Taiwanese company that manufactures a variety

of products. For the U.S. market, Honor Plastic made plastic cups and lids with distinctive

marks on them starting in 2004. The first mark to be used showed the word “Honor” capitalized

with cup silhouettes forming the middle of the “o”s and with curved arrows above and below,

forming a circle (“Silhouette Mark”). Honor Plastic filed an application with the U.S. Patent and

Trademark Office for this mark on June 30, 2004. The application indicated that the Silhouette

Mark was first used in commerce on June 25, 2004. Doc. 34, Ex. O. The application was

published for comment on May 3, 2005 and received no opposition. The trademark (Registration

No. 2,976,261) was granted on July 26, 2005. The second mark used is identical to the

Silhouette Mark, but omits the cup silhouettes in the middle of the “o”s (“Plain Mark”). Honor

Plastic file an application with the U.S. Patent and Trademark Office for the Plain Mark on

August 15, 2005 (Serial No. 78693049). The application is still under review and has not yet

been published for comment. Honor Plastic asserts trademark rights in both the Silhouette and

Plain Marks. Honor Plastic also asserts rights in the word “honor” itself in the context of plastic

cup and related product branding and marketing (“Word Mark”). 

On April 17, 2004, Honor Plastic signed an agreement with CTT International, Inc.

(“CTT”) of Atlanta, GA which made CTT the exclusive distributor of Honor Plastic’s products

throughout the United States. One shipment of product was made, totaling $32,999 worth of

goods. Doc. 33, Ex. D. The boxes in which the products were shipped in bore the Silhouette

Mark and the words “HONOR USA.” Doc. 33, Ex. C. Notwithstanding the agreement with 2

CTT, Honor Plastic directly sold a shipment of plastic cup related products with a value of

$21,716 (bearing the Silhouette Mark) to Bubble & Crepe (formally named Honor Trading

Company in the documents) of Pleasant Hill, CA in September 2004,. Doc. 33, Exs. G, H, I, and

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Honor Plastic says that the Original Agreement made Lollicup its exclusive distributor in 3

the United States. At oral argument on October 25, 2006, Lollicup’s attorney said that Lollicup

is not corporately affiliated with Taijoint. The owner of Taijoint is the brother-in-law of a

director-shareholder of Lollicup. Furthermore, there is no ongoing contractual relationship

between the two; Lollicup submits purchase orders to Taijoint for specific shipments of goods. 

Notwithstanding these verbal assertions, the evidence suggests that Honor Plastic’s

characterization of the relationship is accurate. In another suit where Lollicup and Honor Plastic

were co-plaintiffs, the complaint stated, “Lollicup is the exclusive distribution agent of [Honor

Plastic] and is authorized to distribute products under the ‘Honor’ trademark in the United

States.” Doc. 34, Ex. S, at 2:7-12. As part of that litigation Alan Yu, Lollicup’s president, stated

on October 6, 2005, “That [Lollicup] is the exclusive distributor for [Honor Plastic] in the United

States.” Doc. 68, Ex. FF, Yu Declaration, at 1:22-24. The court accepts Lollicup as Taijoint’s

subsidiary and considers Lollicup to be Honor Plastic’s former exclusive distributor in the United

States.

Whether this sale was made directly to Lollicup by Honor Plastic or whether this was a 4

sale made through CTT is not specified.

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J. Honor Plastic terminated the agreement with CTT on December 31, 2004. 

On January 1, 2005, Honor Plastic signed or endorsed a contract (“Original Agreement”)

with Taijoint, Inc. (“Taijoint”), another Taiwan company, for Taijoint to be Honor Plastic’s

exclusive agent for market development and sales in the U.S. market. Doc. 33, Ex. L (Chinese

original) and Doc. 34, Ex. Q (English translation). The Original Agreement specified that

several of Taijoint’s duties under the contract could be performed by Lollicup, Taijoint’s “U.S.

subsidiary company.” Doc. 34, Ex. Q. In addition to selling plastic cup products, Lollicup also 3

operates a boba tea shop and sells supplies to affiliated boba tea shops. It appears that Lollicup

first purchased Honor Plastic cup products for its own use in early 2004. The exact date on 4

which Lollicup first sold Honor Plastic product to third parties is unclear; Lollicup claims to have

begun those sales in August or September 2004 and to have held itself out as the original source

of the goods. Doc. 50, Yu Declaration, at 2:14-25. Lollicup filed a fictitious business name

statement for “Honor America Inc.” and “Honor USA Inc.” in the County of Los Angeles

sometime in February 2005. Doc. 50, Ex. A (no indication of date statement was on the form). 

On that statement, Lollicup indicated that it has not yet begun to transact business under those

names. On November 17, 2005, Honor Plastic and Taijoint entered into a nonexclusive

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In that suit, it appears that Honor Plastic and Lollicup were jointly represented by 5

Charles Farano, Lollicup’s counsel in this suit. As no party has raised any issue with the

representation, the court presumes that any conflict has been waived by Honor Plastic.

Lollicup claims that it applied for the state trademark and service marks in January 2005. 6

Doc. 51, Opposition, at 7:13; Doc. 50, Yu Declaration, at 8:3-5. However, the copies of those

applications show that they were made on January 4, 2006. Doc. 34, Exs. U and V.

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distribution contract (“Amended Agreement”) which superceded the Original Agreement. Doc.

15, Ex. B. The Amended Agreement made no mention of Lollicup. 

At an unspecified time in 2005 Honor Plastic began distributing plastic cups and lids

bearing the Plain Mark in addition to the Silhouette Mark through Lollicup. As stated above,

Honor Plastic applied for registration of the Plain Mark on August 15, 2005. On September 20,

2005, the Solo Cup Co. (“Solo”) sued Honor Plastic and Lollicup for trademark infringement

over the use of cup silhouettes in the Silhouette Mark. Honor Plastic and Lollicup countersued,

and litigation ensued. On June 8, 2006, Honor Plastic and Lollicup jointly entered into a 5

settlement with Solo whereby Honor Plastics and Lollicup agreed to discontinue use of any cup

silhouettes in its trademarks, essentially giving up the Silhouette Mark while retaining the use of

the Plain Mark. Doc. 22, Ex. B. Harris Declaration. 

Sometime in late 2005 or early 2006, Honor Plastic terminated the Amended Agreement

with Taijoint and ultimately selected P&P, based in Selma, CA, to be its new distributor in the

U.S. Lollicup registered “Honor USA” as a service mark (Registration No. 61,563) and the Plain

Mark as a trademark (Registration No. 00111367) with the State of California on January 4,

2006. In late May-early June, Lollicup sent letters to Honor Plastic, P&P, and Plast Techs 6

Enterprises (“Plast Techs,” a P&P client) demanding they cease and desist from selling products

bearing the Plain Mark. Plaintiffs allege that Lollicup has recently begun manufacturing and

selling plastic cups bearing the Plain Mark. In addition, Lollicup has been selling goods bearing

the Plain Mark on its websites (www.lollicupstore.com and www.honorusa.com).

 Honor Plastic and P&P filed the present suit against Lollicup for trademark infringement

in Fresno on June 6, 2006. The operative complaint is the First Amended Complaint Doc. 15. In

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pertinent part, Plaintiffs allege trademark infringement under federal and California law and

interference with a contractual relationship under California law. They seek monetary damages,

declaratory relief, and to have Lollicup’s California trademark and service mark registrations

cancelled. 

Meanwhile, Lollicup filed suit against P&P and Plast Techs in the Los Angeles Superior

Court on various causes of action related to trademark infringement. The complaint was dated

June 4, 2006 but was not filed with the clerk’s office until June 8, 2006. That court stayed that

case on August 1, 2006. Lollicup then filed suit in the Central District of California on August

16, 2006. On October 19, 2006, Lollicup filed a cross claim against Honor Plastic, P&P, and

Plast Techs in this suit for trademark infringement.

Plaintiffs seek a preliminary injunction preventing Lollicup from using any of the

Trademarks in advertising or selling any a disposable cup related product. Plaintiffs filed their

motion on September 6, 2006, with hearing set for October 10, 2006.. Lollicup did not file a

timely opposition and instead filed an ex parte application to continue the hearing on September

29, 2006. The court transformed the scheduled hearing to one for a temporary restraining order. 

On October 10, 2006, the hearing was held. The court granted a temporary restraining order

enjoining Lollicup from using the Plain Mark or any other confusingly similar mark subject to

Honor Plastic’s posting of a $25,000 bond. Honor Plastic deposited the funds and the

preliminary injunction hearing was reset for October 25, 2006. Lollicup filed a timely opposition

and Plaintiffs filed a timely reply. Oral argument was held on that date. 

II. Legal Standards

Title 15 U.S.C. §1125(a)(1) states: “Any person who, on or in connection with any goods

or services, or any container for goods, uses in commerce any word, term, name, symbol, or

device, or any combination thereof, or any false designation of origin, false or misleading

description of fact, or false or misleading representation of fact, which- (A) is likely to cause

confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of

such person with another person, or as to the origin, sponsorship, or approval of his or her goods,

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services, or commercial activities by another person, or (B) in commercial advertising or

promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her

or another person’s goods, services, or commercial activities, 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.”

“A plaintiff is entitled to a preliminary injunction in a trademark case when it

demonstrates either (1) a combination of ‘probable success on the merits’ and ‘the possibility of

irreparable injury’ or (2) the existence of ‘serious questions going to the merits’ and that ‘the

balance of hardships tips sharply in his favor.’” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d

1199, 1204-5 (9th Cir. 2000), quoting Sardi’s Restaurant Corp. v. Sardie, 755 F.2d 719, 723 (9th

Cir. 1985). With trademark suits, likelihood of confusion is the indispensible element. “[I]n

order to show a probability of success in the causes of action for trademark infringement, false

designation of origin and unfair competition, [parties] need show that a likelihood of confusion

exists.” Sardi’s Restaurant Corp. v. Sardie, 755 F.2d 719, 723 (9th Cir. 1985), citations omitted. 

“[I]rreparable injury may be presumed from a showing of likelihood of success on the merits of a

trademark infringement claim.” Brookfield Communs., Inc. v. West Coast Entertainment Corp.,

174 F.3d 1036, 1066 (9th Cir. 1999), citing Metro Publ’g, Ltd. v. San Jose Mercury News, 987

F.2d 637, 640 (9th Cir. 1993). “[A] plaintiff is therefore entitled to a preliminary injunction in a

trademark case simply when it shows a likelihood of confusion.” GoTo.com, Inc. v. Walt Disney

Co., 202 F.3d 1199, 1205 (9th Cir. 2000). The same standard applies to registered and

unregistered trademarks. See Brookfield Communs., Inc. v. West Coast Entertainment Corp., 174

F.3d 1036, 1046 n.6 (9th Cir. 1999).

III. Discussion

In this motion Plaintiffs claim they can demonstrate probable success on the merits;

Plaintiffs do not argue the alternative standard (case raises serious questions and the balance of

hardships tips sharply in their favor). 

A. Trademarks in Question

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Plaintiffs assert protection in the Word Mark (“Honor”) itself. “There are five categories

of trademarks: (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; and (5) fanciful. The

latter three categories are deemed inherently distinctive and are automatically entitled to

protection because they naturally serve to identify a particular source of a product....A descriptive

mark can receive trademark protection if it has acquired distinctiveness by establishing

‘secondary meaning’ in the marketplace.” Yellow Cab Co. v. Yellow Cab of Elk Grove, Inc., 419

F.3d 925, 927 (9th Cir. 2005), citations omitted. The burden of proof is on Plaintiffs to establish

that the Word Mark is subject to trademark protection, but Lollicup has not asserted that the

Word Mark is generic or descriptive without secondary meaning. Lollicup has been doing

business as Honor USA and has a website (www.honorusa.com). Granting a preliminary

injunction as to the Word Mark would force Lollicup to give up the fictitious business name,

restrict use of the website, and would prohibit Lollicup’s use of the “Honor” brand in selling

disposable cups and related products. 

The relationship between the Silhouette and the Plain Marks must be clarified. The

products which Lollicup are now selling bear the Plain Mark. Much of the evidence presented by

Plaintiffs refers to sales of products bearing the Silhouette Mark. The Lanham Act deems a mark

“abandoned,” “[w]hen its use has been discontinued with intent not to resume such use. Intent

not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima

facie evidence of abandonment. ‘Use’ of a mark means the bona fide use of such mark made in

the ordinary course of trade, and not made merely to reserve a right in a mark.” 15 U.S.C. §1127. 

Due to the settlement with Solo, Honor Plastic expressed its intent to abandon the Silhouette

Mark. However, the Plain Mark must be seen as a variation of the Silhouette Mark. “Minor

changes in a mark which do not change the basic, overall commercial impression created on

buyers will not constitute any abandonment. So long as the owner continues use of the ‘key

element’ of the registered mark, courts generally will not find abandonment.” Sands, Taylor &

Wood Co. v. Quaker Oats Co., 978 F.2d 947, 955 (7th Cir. 1992), quoting 1 J. Thomas

McCarthy, Trademarks and Unfair Competition § 17:10, at 787 (2nd ed. 1984). The overall

visual impression of the two marks is the same. The key element of both is the word “Honor” in

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all caps. Cf. Forum Corp. of North America v. Forum, Ltd., 903 F.2d 434, 441 (7th Cir. 1990)

(word “Forum” the key so changing between “The Forum Corporation of North America,” “The

Forum Corporation,” and “The Forum” immaterial). For the purposes of this analysis, the Plain

Mark is considered a continuation and evolution of the Silhouette Mark. 

B. Ownership of the Trademarks

“It is axiomatic in trademark law that the standard test of ownership is priority of use. To

acquire ownership of a trademark it is not enough to have invented the mark first or even to have

registered it first; the party claiming ownership must have been the first to actually use the mark

in the sale of goods or services. When proving ownership of a trademark, federal registration of

the mark is prima facie evidence that the registrant is the owner of the mark. Therefore, the

registrant is granted a presumption of ownership, dating to the filing date of the application for

federal registration, and the challenger must overcome this presumption by a preponderance of

the evidence.” Sengoku Works v. RMC Int’l, 96 F.3d 1217, 1219 (9th Cir. 1996), citations

omitted. 

1. Use by Honor Plastic

Honor Plastic filed an application with the U.S. Patent and Trademark Office for the

Silhouette Mark on June 30, 2004, which was granted on July 26, 2005 (Registration No.

2,976,261). Honor Plastic sold $32,999 worth of cups to CTT in April 2004 and $22,069.50

worth of cups and lids to Bubble & Crepe in September 2004. Doc. 33, Exs. D and J. The

general sales manager of Honor Plastic states that all of the cups and sleeves in which they were

shipped were labeled with the Silhouette Mark. Doc. 33, Chang Declaration, at 3:11-12 and 4:4-

5. However, the principal register for the Silhouette Mark shows that it was first used on June

25, 2004. Doc. 34, Ex. O. This evidence establishes that Honor Plastic owned and was using

(selling products bearing) the Silhouette Mark in the United States as of June 2004. 

Lollicup argues that Honor Plastic only had “single sales in two limited areas prior to

[Lollicup’s] marketing efforts.” Doc. 51, Opposition, at 9:10-12. That ignores the fact that CTT

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was acting as a distributor of Honor Plastic’s products in the overall U.S. market and presumably

resold the goods to other parties. Lollicup itself admits to having procured Honor Plastic

products before August 2004. This fact alone suggests that the goods had wider distribution than

Lollicup has suggested.

Further, Lollicup seems to implicitly admit that Honor Plastic was the first company

associated with the Word Mark in the disposable plastic cup business. Lollicup says “By

September 2004, Lollicup was getting orders from distributors for the [Honor Plastic] “Honor”

product line...” Doc. 51, Opposition, at 4:25-26. That is, in the minds of distributors, the

products labeled “Honor” was already a distinct brand tied to Honor Plastic.

Lollicup also notes that Honor Plastic’s application for the Silhouette Mark was

unopposed. Doc. 51, Opposition, at 6:19-20. The application was published for opposition on

May 3, 2005. Lollicup notes that it advertised product bearing the Trademarks at least “five

months before [Honor Plastic’s] trademark application was published.” Doc. 50, Yu Declaration,

at 11. Yet, Lollicup chose not to oppose Honor Plastic’s application when it was published. 

Lollicup does not say that it was unaware of the application. As stated above, once an

application for trademark is granted, that party is presumed to have established ownership of the

mark as of the filing date of the application. See Sengoku Works v. RMC Int’l, 96 F.3d 1217,

1219 (9th Cir. 1996). 

2. Use by Lollicup

Lollicup has presented evidence of use of the Trademarks, but none of it predates Honor

Plastic’s use. That is, Lollicup’s initial use was simply distribution of Honor Plastic product. 

Honor Plastic clearly says “[Honor Plastic] never sold its cup or lid products to [Taijoint] or

[Lollicup] prior to August 2004.” Doc. 67, Chang Declaration, at 2:16-17. Lollicup’s statement

is ambiguous. Alan Yu states, “In the early part of 2004, in view of the price and quality of the

[Honor Plastic] product, I began to explore the possibility of selling the plastic cups that I was

importing from [Honor Plastic] to the suppliers from which I was obtaining the plastic glasses

and cups here in the United States.....Lollicup sales personnel began selling “Honor” products

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throughout Southern California in August 2004, using the name “Honor.” Doc. 50, Yu

Declaration, at 2:14-25. The text suggests that Lollicup had some access to Honor Plastic’s

products in early 2004, but did not sell those goods (use the Trademarks) until August 2004. 

In February 2005, Lollicup filed a fictitious business name statement for “Honor America

Inc.” and “Honor USA Inc.” in the County of Los Angeles. On January 4, 2006, Lollicup filed a

state trademark registration for the Plain Mark. As part of the state registration, Alan Yu stated

that the mark was first used on May 1, 2005. Doc. 34, Ex. U. 

Lollicup argues that any prior use of the Trademarks by Honor Plastic would only grant

limited rights to the Trademarks in “areas where prior use was substantial enough to create

common-law rights.” Doc. 51, Opposition, at 9:12-15. However, all of the cases Lollicup cites to

deal with parties who independently adopted a common trademark in good faith. See Adray v.

Adry-Mart, Inc., 76 F.3d 984, 987 (9th Cir. 1995) (two electronics stores independently using

“Adray” family name); Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 412 (1916) (“junior

use adopted mark “in perfect good faith, with no knowledge that anybody else was using or had

used those words in such a connection”); Natural Footwear, Ltd. v. Hart, Schaffner & Marx, 760

F.2d 1383, 1391 n.16 (3rd Cir. 1985) (junior user unaware for approximately four years that

another company used the common mark). As Honor Plastic points out, “In the ordinary case of

parties competing under the same mark in the same market, it is correct to say that prior

appropriation settles the question. But where two parties independently are employing the same

mark upon goods of the same class, but in separate markets wholly remote the one from the

other, the question of prior appropriation is legally insignificant, unless at least it appear that the

second adopter has selected the mark with some design inimical to the interests of the first user,

such as to take the benefit of the reputation of his goods, to forestall the extension of his trade, or

the like.” Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 415 (1916). Here, with the

distributor relationship between Honor Plastic and Lollicup, the court is not dealing with two

parties independently employing the same mark in separate markets. 

/ / /

/ / /

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3. Manufacturer v. Distributor

Plaintiffs allege the relationship between Honor Plastic and Lollicup was that of

manufacturer and distributor. Lollicup disputes that characterization, but its previous

representations clearly indicate that it was Honor Plastic’s distributor, acting as its agent in

marketing and selling the Trademarked goods. 

“When disputes arise between a manufacturer and distributor, courts will look first to any

agreement between the parties regarding trademark rights. But in the absence of an agreement

between the parties, the manufacturer is presumed to own the trademark. That presumption

applies with equal force to cases involving foreign manufacturers.” Sengoku Works v. RMC

Int’l, 96 F.3d 1217, 1220 (9th Cir. 1996). Neither the Original Agreement nor the Amended

Agreement directly discusses trademark rights. See Doc. 34, Exs. Q and R. The language of the

Original Agreement does suggest that Honor Plastic sought to ensure that customers knew the

Honor brand. Part of the agreements states, “[Honor Plastic] does not agree for its U.S. clients

(including its distributors) to change the brand name “HONOR” imprinted at the bottoms of the

container products in principle. However, if each order is more than 500, it will consider client

requests to print other customized packaging designs with HONOR brand name included.” Doc.

34, Ex. Q. In the suit against Solo, Mr. Yu declared under penalty of perjury that “the ‘Honor’

trademark has been assigned to [Lollicup]. A copy of said assignment is attached hereto and

marked as Exhibit A.” Doc. 68, Ex. FF, at 2:1-2. In fact, the “assignment” referred to is a

Lollicup drafted text that Honor Plastic refused to sign. Doc. 67, Chang Declaration, at 2:19-20. 

The proposed agreement actually states, in relevant part, 

With the consent and approval of [Honor Plastic], [Lollicup] is given a license and is

entitled to use the name “HONOR” and any logos, trademarks or tradenames that [Honor

Plastic] has used or uses, in the past, now or in the future, to market, advertise, sell and

distribute the Product in the Territory. If this Agreement is terminated, [Lollicup] shall be

entitled to continue to use the name “HONOR” and any logos, trademarks and

tradenames of [Honor Plastic] in order to sell or dispose of any inventory of the Product

that is still in the possession of [Lollicup] at time of termination, otherwise [Lollicup]

will cease to use the name “HONOR” and any logos, trademarks and tradenames of

[Honor Plastic] after such termination.

Doc. 68, Ex. FF. Contrary to Mr. Yu’s interpretation, the text suggests that Lollicup

acknowledged the Trademarks belonged to Honor Plastic, reinforcing the implication of the

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Original Agreement.. 

Lollicup argues that despite the relationship between the parties, Lollicup should prevail

based on the precedent in a District of Nebraska case which granted trademark rights to the

distributor, Wrist-Rocket Mfg. Co. v. Saunders, 379 F. Supp. 902 (D. Neb. 1974), affirmed in

part and reversed in part by 516 F.2d 846. In that case, a manufacturer and distributor came

together and branded a product the “Wrist Rocket” (the mark whose ownership the parties

dispute). Before the agreement, the manufacturer had called the product “Howard’s Wrist

Locker Slingshot.” Importantly, “The evidence discloses that Ellenburg sold no slingshots under

the name ‘Wrist Rocket’ after the name was developed by Saunders and before the first group

was delivered to Saunders Archery Target Company in the late summer of 1954.” Wrist-Rocket

Mfg. Co. v. Saunders, 379 F. Supp. 902, 910 (D. Neb. 1974). Wrist-Rocket is distinguishable as

the Eighth Circuit explained, “This is not then a case where a distributor appropriates to its own

use an existing trademark of the manufacturer. The issue here is who, as between the

manufacturer and distributor, has ownership of a trademark created after the formation of the

business relationship.” Wrist-Rocket Mfg. Co. v. Saunders Archery Co., 516 F.2d 846, 850 (8th

Cir. 1975). In this case, the Trademarks were in use/created before Honor Plastic and Taijoint

signed the distributorship agreement, or indeed before the two companies had contact in 2004. 

Honor Plastic had sold product to CTT in April 2004. The product was shipped in boxes that

showed both the Silhouette Mark and the term “Honor USA.” Honor Plastic also made an

application to the U.S. Patent and Trademark Office concerning the Silhouette Mark in June

2004. The Trademarks were not something that were created in the course of Honor Plastic’s

and Lollicup’s business relationship. 

B. Likelihood of Confusion

“A plaintiff will succeed on the merits of its trademark infringement claim under the

Lanham Act if it establishes that the defendant’s use of its mark gives rise to a ‘likelihood of

confusion’ in the consuming public. A likelihood of confusion exists when consumers are likely

to assume that a product or service is associated with a source other than its actual source

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because of similarities between the two sources’ marks or marketing techniques. The Ninth

Circuit has developed an eight-factor test to assess likelihood of confusion: 1) strength of the

allegedly infringed mark; 2) proximity or relatedness of the goods; 3) similarity of the sight,

sound, and meaning of the marks; 4) evidence of actual confusion; 5) degree to which the

marketing channels converge; 6) type of goods and degree of care consumers are likely to

exercise in purchasing them; 7) intent of the defendant in selecting the allegedly infringing mark;

and 8) likelihood that the parties will expand their product lines.” Metro Pub. v. San Jose

Mercury News, 987 F.2d 637, 640 (9th Cir. 1993), citations omitted. A trial court need not

formally consider all of these factors at the preliminary injunction stage. Apple Computer, Inc. v.

Formula International, Inc., 725 F.2d 521, 526 (9th Cir. 1984). 

 Taking factors two and three, it is undisputed that the marks used by Lollicup and Honor

Plastic are identical (the Plain Mark) and affixed on the same type of products (plastic cups, lids,

and packaging). Notwithstanding the other factors, the Ninth Circuit has said it is clear error for

a trial court to find no likelihood of confusion when two products with virtually identical marks

are in the same market. Lindy Pen Co. v. Bic Pen Corp., 796 F.2d 254, 257 (9th Cir. 1986). In

addition, both sides agree that there is actual confusion in the market. Doc. 50, Yu Declaration, at

8:13-19; Doc. 32, Brief, at 26:25-27:1.

C. Bond Amount

Lollicup seeks a bond of $10 million if any preliminary injunction is granted, presumably

based on its total estimated gross sales for the upcoming year. Lollicup claims sales of hot and

cold cups totaled $2.66 million in 2005 and $4.5 million thus far in 2006. Doc. 50, Yu

Declaration, at 7:1-5. However, Lollicup’s own attached sales summary shows that sales of cups,

glasses, and lids from April 2004 through August 2006 only totaled $2.70 million. Doc. 50, Ex.

M. At oral argument, Lollicup’s attorney was directly asked about the discrepancy, but could

provide no rational explanation for it. These figures are contradictory and can not be relied on. 

The court is forced to use the evidence and financial figures provided by Honor Plastic in

determining the proper bond amount. 

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The preliminary injunction does not oust Lollicup from the industry. It only prohibits

Lollicup from using any of the Trademarks on the products it sells or in any advertisement. 

Lollicup is free to sell products that have no marks on them or to adopt a dissimilar mark as its

own. The court must then estimate what amount of business Lollicup would lose under the new

mark compared with its sales under its existing mark. See Russell v. Caesar, 2001 U.S. Dist.

LEXIS 23679, *22 (N.D. Cal. 2001) (court must estimate amount of lost sales when winery

forced to sell wine under new label). On its websites, Lollicup already sells equivalent products

bearing other marks (Karat, Solo). See Doc. 68. Ex. Z. Customers might very well purchase

these other products instead, greatly lessening any loss Lollicup might suffer. Honor Plastic

claims that total sales to Lollicup to date total $1.97 million. Doc. 67, Chang Declaration, at 3:5-

12. Based on those figures, Honor Plastic estimates that gross sales of Lollicup’s Trademark

bearing goods total approximately $84,923/month. Doc. 66, Reply, at 20:16-19. P&P asserts that

the gross margin in the industry (distributing plastic cups and lids) averages 6-8%. Doc. 69,

Spencer Declaration, at 2:7-11. So, net monthly profit on goods bearing the Trademarks is

estimated at $5,095-$6,794. The court will infer that Lollicup might lose $2,000 a month in

profit based on its inability to sell goods bearing the Trademarks. Assuming an 18 month

interval until the case is resolved, a $36,000 bond is appropriate. 

D. Lollicup’s Motion for Preliminary Injunction

On October 19, 2006, Lollicup filed what it termed an “application for an ex part order

enjoining cross-defendants from doing business under the name ‘Honor’ or ‘Honor USA.’” Doc.

63, Notice. The court interprets this as a motion for preliminary injunction to prohibit Plaintiffs

from using the Word Mark. The motion calls for relief diametrically in conflict with Plaintiffs’

motion. As the court is granting Plaintiffs’ motion, Lollicup’s motion is denied. 

IV. Order

Pending further order of the court, it is hereby ORDERED that:

1. Defendant Lollicup, its officers, agents, servants, employees, representatives, partners,

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and all persons acting in concert or participating with it are enjoined from using the Trademarks

(namely the word “Honor” capitalized with curved arrows above and below, forming the

impression of a circle and the word “Honor” itself as a brand) or any confusingly similar

variation thereof printed on or in association with any disposable cup or related products that

Lollicup distributes, imports, sells, manufactures, or otherwise promotes. Defendant Lollicup is

enjoined from representing itself as Honor USA; is enjoined from distributing literature,

advertising, marketing material, or business cards bearing the name “Honor” in any format; and

is enjoined from distributing products bearing the Trademarks. Defendant Lollicup must cease

use of the website (www.honorusa.com) unless there is an agreement with Plaintiffs as to its

future operation.

2. Defendant Lollicup, its officers, agents, servants, employees, representatives, partners,

and all persons acting in concert or participating with it be, and hereby are specifically enjoined

from using the Trademarks or any confusingly similar variation thereof at tradeshows and are

specifically enjoined from using a booth display bearing the name “Honor” in any format. 

3. Defendant Lollicup, its officers, agents, servants, employees, representatives, partners,

and all persons acting in concert or participating with it are required to, no later than November

15, 2006, segregate all products in their possession, custody, or control that bear any of the

Trademarks or any confusingly similar variation thereof and destroy or store these products in a

secure location.

4. Defendant Lollicup must file with the court and serve on Plaintiffs an affidavit setting

forth in detail the manner and form in which Lollicup has complied with the terms of this

injunction by 4 PM November 15, 2006.

This preliminary injunction shall take effect immediately on the condition that Plaintiffs

file a bond in the sum of $36,000 within three (3) business days of entry of this order. Upon

posting this $36,000 bond, the temporary restraining order bond of $25,000 will be released.

IT IS SO ORDERED.

Dated: November 3, 2006 /s/ Anthony W. Ishii 

0m8i78 UNITED STATES DISTRICT JUDGE

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