Teng v. Tao, No. 2:25-cv-05360-WLH-AJR, 2026 WL 2055494
(C.D. Cal. Jun. 5, 2026)

Teng sued Tao for various trademark-related claims. Teng is
allegedly the chairman of Plaintiff Heilongjiang Tang Huo Kung Fu Catering Co.,
a Chinese company that operates restaurant businesses abroad. The Tang Huo Kung
Fu brand allegedly operates widely in Asia, including in China and South Korea
and has received various awards and media recognition, under these marks:

Teng alleged that overseas reputation has created
recognition of their marks among certain U.S. consumer communities,
particularly in Asian communities in the United States, such as in Los Angeles
(specifically Los Angeles’ Koreatown) and Berkeley, California, but alleged no
first use in US commerce, though it did allege that, when Tao filed to register
at the USPTO in 2019, it had already existed for 11 years with nearly 300
restaurants in China and 150 restaurants in South Korea, among other locations.
Teng did not allege first use in the US or anything more than an application to
register in the US, which was abandoned.

Defendants operate at least one restaurant in California
using the name “TANG HUO KUNG FU SPICY HOT POT.” Defendant Tao Jin secured a
registration for its word + design mark in July 2020.

The court concluded that plaintiffs didn’t, and apparently couldn’t,
allege a valid ownership interest in the mark at issue. They claimed that the
famous mark exception applied under Grupo Gigante (whose logic I don’t think
survives Abitron, but the Fourth Circuit’s Belmora workaround probably
does).

Under Grupo Gigante, “where the mark has not before
been used in the American market, the court must be satisfied, by a
preponderance of the evidence, that a substantial percentage of consumers in
the relevant American market is familiar with the foreign mark.” “At this
stage, the Court is persuaded that Plaintiffs have sufficiently alleged the
necessary level of consumer recognition necessary to invoke the famous mark
exception to the territoriality principle with respect to the market in which
Defendants use the mark.” (That is, Berkeley and LA’s Koreatown.) But they
needed to replead to actually allege a date of first use (which was also key to
their cybersquatting claim).

False association: §43(a) doesn’t explicitly require
ownership (citing Blinded Veterans). Thus plaintiffs sufficiently pled a
claim. (Query: suppose they’re the junior user, full stop—if ownership isn’t required
for a §43(a) claim, why can’t big entrants use reverse confusion to eliminate small
senior users? Is your answer “causation”? Is your answer that this wouldn’t
work because the small senior user could assert a counterclaim? But, if there’s
no registration, how would a §43(a) counterclaim be resolved except by using
ownership priority rules? Abandoning a separate concept of unfair competition has
caused many such puzzles.)

Anyway, plaintiffs sufficiently pled confusion, e.g., a post
on Red Note that a customer was disappointed in the quality of defendants’
food, apparently attributing the failure to Tang Huo Kung Fu.

Puzzlingly, the court held that the inability to make a
trademark infringement claim also meant there was no actionable statement under
California’s FAL, despite the survival of the false designation of origin
claim.

Cancellation of registration: Fraud requires pleading with particularity.
“Fraud in procuring a trademark registration or renewal occurs when an
applicant knowingly makes false, material representations of fact in connection
with his application.” “Plaintiffs’ insufficient allegations of foreign fame
and diaspora recognition do not establish U.S. use or ownership. Without a
plausible allegation that Plaintiffs possessed superior U.S. rights at the time
of the trademark application, Plaintiffs cannot demonstrate that any USPTO
statement about ownership or others’ rights was false, much less knowingly
false.” (Plaintiffs’ counsel really needs to use Belmora to replead.)
Nor did they allege facts demonstrating that any specific USPTO submission was
actually false, material or made with an intent to deceive.

They also sought cancellation on §2(a) false affiliation grounds.
Under Belmora, “[t]o determine if a petitioner falls within the
protected zone of interests, we note that § 14(3) pertains to the same conduct
targeted by § 43(a) false association actions—using marks so as to misrepresent
the source of goods.” That worked here for services, too, at the pleading
stage.

from Blogger https://tushnet.blogspot.com/2026/08/always-plead-first-use-date-court.html