Decision Rule 11 Hoisin

UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORK-----------------------------------XSTAR MARK MANAGEMENT, INC., MEMORANDUM & ORDERGREAT MARK CORPORATION, 07-CV-3208 (KAM)(SMG)JIMMY ZHAN a/k/a YI Q. ZHAN,Plaintiffs,-against-KOON CHUN HING KEE SOY & SAUCEFACTORY, LTD.Defendant.-----------------------------------X

KIYO A. MATSUMOTO, UNITED STATES DISTRICT JUDGE:

Plaintiffs Star Mark Management, Inc., Great MarkCorporation, Jimmy Zhan a/k/a Yi Q. Zhan (collectively,“plaintiffs” or “Star Mark”) filed the instant action againstdefendant Koon Chun Hing Kee Soy & Sauce Factory, Ltd.(“defendant” or “Koon Chun”) under the Trademark Act of 1946(the “Lanham Act”), 15 U.S.C. §§ 1051

et seq

. Plaintiffs seek adeclaratory judgment, cancellation of a trademark held bydefendant, and additional relief. At this time, there are twomotions before the court: (i) Koon Chun’s motion to dismiss,pursuant to Rule 12(c) of the Federal Rules of Civil Procedure(“Rule 12(c)”), and for sanctions, pursuant to 28 U.S.C. § 1927(

see

Defendant’s Motion to Dismiss (“Def. Mot. to Dism.”), Doc.Entry No. 21), and (ii) Koon Chun’s motion for sanctions,pursuant to Rule 11 of the Federal Rules of Civil Procedure

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(“Rule 11”) (

see

Defendant’s Motion for Sanctions (“Def. Mot.for Sanc.”), Doc. Entry No. 10). Plaintiffs consolidated theiropposition to both motions into one memorandum. (

See

Plaintiffs’Opposition to Dismissal and Sanctions (“Pl. Opp.”), Doc. EntryNo. 27.) For reasons set forth below, both of defendant’smotions are granted. The complaint is dismissed in its entiretyand plaintiffs are sanctioned in the form of costs andreasonable attorneys’ fees.

BACKGROUND

Star Mark is a New York-based food productsdistributor with a distribution center located in Brooklyn, NewYork. (Complaint, Doc. Entry No. 1 ¶¶ 5-6.) Koon Chun is aHong Kong-based food products manufacturer. (

Id

. ¶¶ 9-10.) KoonChun manufactures a variety of sauces and seasonings used inAsian cooking, including hoisin sauce. (

Id

. ¶ 10.) Hoisinsauce is a sweet and spicy sauce used both in cooking and as acondiment for Chinese foods. (

Id

. ¶¶ 12, 24.) Koon Chun usesthe mark “Koon Chun Sauce Factory” on the labels on all of itsproducts, and this mark is registered with the United StatesPatent and Trademark Office (“PTO”), Registration No. 1,410,790(the “Koon Chun Mark”). (

Id

. ¶¶ 14-15.)

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This action arises out of a prior litigation betweenthe parties, in which Koon Chun sued Star Mark for trademarkinfringement based on Star Mark’s sales of counterfeit versionsof Koon Chun’s hoisin sauce.

See

Koon Chun Hing Kee Soy & SauceFactory, Ltd. v. Star Mark Mgt., Inc., Great Mark Corp., & Yi Q.Zhan

, 04-CV-2293 (JFB)(SMG) (the “First Action”). In the FirstAction, discovery concluded and motion practice ensued: KoonChun moved for summary judgment on the issue of liability, StarMark sought partial summary judgment, seeking to preclude KoonChun from recovering lost profits, and Koon Chun soughtsanctions against Star Mark for filing its preclusion motion inthe First Action.In a Memorandum and Order dated January 8, 2007,District Judge Joseph F. Bianco consolidated and addressed themotions in the First Action.

See Koon Chun Hing Kee Soy & SauceFactory Ltd. v. Star Mark Mgt., Inc.

, 04-CV-2293 (JFB (SMG),2007 WL 74304 (E.D.N.Y. Jan. 8, 2007). Judge Bianco grantedpartial summary judgment in Koon Chun’s favor, finding Star Markliable for trademark and trade dress infringement (15 U.S.C. §§1114(1), 1125(a)) and unfair competition (15 U.S.C. § 1125(a)).

See id

. at *8-11. He denied Koon Chun’s motion to the extentthat Koon Chun sought judgment on whether Star Mark’s violationof the Lanham Act was willful.

See id

. at *11-13. He deniedStar Mark’s motion, holding that Koon Chun could seek recovery

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