17
Sep/09

Shocked, Shocked That There Is No Hoisin In The Hoisin Sauce – Rule 11 Sanctions Ordered


koon chun hoisin.jpg
On the one hand its prudent to advise all attornies to read any decision where Rule 11 sanctions are actually awarded. On the other hand, it’s hard to imagine an attorney finding him or herself in this situation.
Trademark owner, who sells hoisin sauce, prevails on partial summary judgment against infringer. Five months after summary judgment, defendant seeks to amend its answer. Hoisin means seafood and defendant has ‘just’ learned that there’s no seafood in trademark owner’s hoisin sauce. Therefore trademark owner has allegedly committed fraud on the PTO in obtaining its registration and has committed fraud in general. Judge rolls his eyes and points out that sauces are often named after what they are used with, not what they contain (think BBQ or steak sauce). Judge says in effect “I can’t stop you from making this motion but I can make you sorry that you did” and specifically warns of sanctions.
So defendant defers from making the motion to dismiss in that action before that judge and instead files a new action to cancel the registration, and alleging fraud on the hoisin sauce-using public. (The first action had concluded in chief, but apparenty there is still fighting over fees). Trademark owner moves to dismiss second action, and moves for Rule 11 sanctions.
The new judge finds that as the protectability of trademark owner’s registration was a litigated point in the first action, all claims were barred by res judicata and collateral estoppel. Furthermore, as defendant was aware of the ingredients of the hoisin sauce for years (given that the ingredients were on the label), the claims were also time-barred. And, as icing on the frivolous motion cake, none of the plaintiffs in the second action had standing (for various reasons).
So there you have it – claims dismissed and Rule 11 sanctions ordered.
Decision Rule 11 Hoisin

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