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Am. Rice, Inc. v. Producers Rice Mill, Inc.

United States Court of Appeals for the Fifth Circuit

February 22, 2008, Filed

No. 06-20645

Opinion

 [*325] 

 [***1165]  W. EUGENE DAVIS, Circuit Judge:

In this Lanham Act/breach of contract action, the district court entered judgment for Plaintiff-Appellant Cross-Appellee, American Rice, Inc ("ARI") against Defendant-Appellee Cross-Appellant Producers Rice Mill, Inc. ("PRMI"). PRMI challenges that judgment on multiple grounds, and ARI complains of the damage award. We affirm the district court's liability findings, vacate the attorney's  [***1166]  fee award, and remand for entry of judgment consistent with this opinion on the damage award.

 [*326]  I. Facts and Prior Proceedings

For thirty-five years, ARI, a Delaware corporation, has continuously sold parboiled, American long-grain rice in Saudi Arabia under ARI's "Abu  [**2] Bint" brand name. During this time, ARI has spent $ 25 million to $ 30 million to advertise and promote this brand with a design of a girl on the label ("Girl Design"). Because of the goodwill it has established in Saudi Arabia, ARI's rice sells at a premium over competitors' rice. ARI currently sells approximately 120,000 to 150,000 tons of rice in Saudi Arabia per year. Parboiled rice constitutes approximately ten to thirteen percent of the Saudi rice market, and ARI has approximately sixty-five percent of the Saudi parboiled market. ARI's Girl Design on its packaging is the key feature of its brand. Many consumers in Saudi Arabia identify ARI's "Abu Bint" rice by this Girl Design and ask for it as "girl brand" rice. ARI owns U.S. Trademark Registration No. 882,997, issued December 23, 1969, for the Girl Design, and this registration was most recently renewed on August 4, 2000.

PRMI is also a seller of parboiled, American long-grain rice in Saudi Arabia. PRMI is an Arkansas corporation that operates as a farmer-owned cooperative. A number of farmer members provide rice which the corporation then processes and sells. Any profit PRMI derives from rice sales flows through to the individual  [**3] farmer members. PRMI's rice bags depict a girl with a hat ("Girl with a Hat Design"), and it has used this image since 1985. Until 2005, its bags also featured the words "Al Falaha," which means "farmer's girl" in Arabic, and this was changed to "Bothaina," a girl's name, in 2005. Additionally, PRMI includes on its bags its registered script mark, "Par Excellence," alongside the Girl with a Hat Design. PRMI's Girl with a Hat Design has not been registered as a trademark. PRMI has sold only 1,000 to 3,000 tons of rice annually in Saudi Arabia since 1985 in bags depicting this Girl with a Hat Design.

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518 F.3d 321 *; 2008 U.S. App. LEXIS 3817 **; 86 U.S.P.Q.2D (BNA) 1162 ***

AMERICAN RICE, INC., Plaintiff-Appellant, Cross-Appellee v. PRODUCERS RICE MILL, INC., Defendant-Appellee, Cross-Appellant

Subsequent History: Rehearing denied by, Rehearing, en banc, denied by Am. Rice, Inc. v. Producers Rice Mill Inc, 277 Fed. Appx. 525, 2008 U.S. App. LEXIS 27534 (5th Cir. Tex., Feb. 29, 2008)

Prior History:  [**1] Appeal from the United States District Court for the Southern District of Texas.

Am. Rice, Inc. v. Producers Rice Mill, Inc., 2006 U.S. Dist. LEXIS 47932 (S.D. Tex., July 14, 2006)

Disposition: AFFIRMED IN PART. VACATED IN PART. REMANDED.

CORE TERMS

Girl, rice, profits, district court, infringement, brand, sales, Lanham Act, Hat, trademark, marks, attorney's fees, injunction, likelihood of confusion, parboiled, icon, Bint, bags, costs, label, disgorgement, registration, similarity, factors, farmers, argues, settlement agreement, election of remedy, advertising, customers

Civil Procedure, Appeals, Standards of Review, De Novo Review, Jurisdiction, Subject Matter Jurisdiction, General Overview, Clearly Erroneous Review, Trademark Law, Likelihood of Confusion, Questions of Fact & Law, Business & Corporate Compliance, Causes of Action Involving Trademarks, Infringement Actions, Determinations, Subject Matter of Trademarks, Eligibility for Trademark Protection, Strength of Trademark, Terms Requiring Secondary Meaning, Descriptive & Laudatory Terms, Trademark Cancellation & Establishment, Incontestability, Continuing Use Requirement, Effects, Factors for Determining Confusion, Intent of Defendant to Confuse, Consumer Confusion, Abuse of Discretion, Defenses, Demurrers & Objections, Affirmative Defenses, Defenses, Defenses to Incontestability, Laches, Remedies, Injunctions, Pretrial Matters, Conferences, Pretrial Orders, Damages, Types of Damages, Costs & Attorney Fees, Profits, Tax Law, Federal Taxpayer Groups, S Corporations, Shareholders, Tax Liability Determination, Limited Liability Companies & Partnerships, Income of Partners & Partnerships, Partners Subject to Tax