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KJ Korea, Inc. v. Health Korea, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 2, 2014

KJ KOREA, INC., d/b/a HEALTH KOREA, and YOUNG KI EUN, individually, Plaintiffs,
HEALTH KOREA, INC., and KAY PARK, individually, Defendants

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For KJ Korea, Inc., administrator, d/b/a Health Korea, Young Ki Eun, individually, Plaintiffs: John Kahn Park, PRO HAC VICE, Park Law Firm, Los Angeles, CA; Samuel S. Bae, Law Office of Samuel S. Bae, Des Plaines, IL.

For Health Korea, Inc., Kay Park, individually, Defendants: Chol M. Yang, LEAD ATTORNEY, Law Office of Chol M. Yang, Chicago, IL; John Michael Brom, LEAD ATTORNEY, Querrey & Harrow, Ltd., Chicago, IL.

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Robert M. Dow, Jr., United States District Judge.

Plaintiffs KJ Korea, Inc. (" KJ Korea" ) and Young Ki Eun filed their complaint against Defendants Health Korea, Inc. (" Health Korea" ) and Kay Park, alleging Trademark Infringement (Count I) and Unfair Competition (Count II) under the Lanham Act; Unfair Competition in violation of Illinois's Uniform Deceptive Trade Practices Act (Count III); Unfair Competition in violation of Illinois's Consumer Fraud and Deceptive Business Practices Act (Count IV); Common Law Trademark Infringement (Count V); Common Law Unfair Competition (Count VI); and Unjust Enrichment (Count VII). Defendants move for dismissal under Federal Rule of Civil Procedure 12(b)(6) on all counts. For the reasons stated below, the Court denies Defendants' motion to dismiss [16] in its entirety.

I. Background[1]

The complaint alleges that, since 2008, Plaintiffs have sold nutritional supplements, massage instruments, and other health products in association with three marks, all of which read " Health Korea" in Korean or both Korean and English. See Compl. at ¶ 15.[2]

Plaintiffs allege that they own the first mark, " ," under the Lanham Act. Compl. at ¶ ¶ 13, 15; Exh. A. This mark is registered in the Supplemental Register of the U.S. Patent and Trademark Office (" U.S.P.T.O" ) with a Registration Number of 3,968,033 (hereafter " the '033 Mark" ). Compl. at ¶ ¶ 13, 15; Compl. Exh. A.

The complaint alleges that Plaintiffs own the second mark, " HEALTH KOREA," under Illinois common law. Compl. at ¶ 15. This mark has no pending application or registration with the U.S. P.T.O. See id.

The complaint further alleges that Plaintiffs own the third mark,

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, under Illinois common law. Id. at ¶ ¶ 14, 15. This mark is allegedly in the application stage before the U.S. P.T.O. with a Serial Number 86040691 (hereafter, the " '691 Mark" ). Id.

Plaintiffs allege that, since 2008, they have sold goods and services, including massage apparatuses and nutritional supplements, in association with the three marks in California, where they now own four retail stores. Id. at ¶ 16. Plaintiffs allege that, since May 2009, they have spent more than one million dollars advertising these goods and services in association with their three marks in Chicago and nationwide through various television channels, including but not limited to The Asia Network, Inc., SBS International, and Television Korea 24, Inc. Id. at ¶ ¶ 17-18. According to the complaint, plaintiffs have sold and shipped goods, including massagers and nutritional supplements, with these three marks to various retailers and distributors in Chicago since at least as early as November 2011. Id. at ¶ 19. They allege that, as a result of five continuous years of advertising, sales and promotions of goods and services associated with the three marks, all three marks have acquired secondary meaning in the United States. Id. at ¶ 20.

Plaintiffs allege that Defendants have knowingly violated Plaintiffs' rights to the three marks in two ways. First, they have allegedly operated a retail store named and labeled in Chicago since 2013. Id. at ¶ 36. Second, Defendants have allegedly published newspaper advertisements displaying the English words " HEALTH KOREA." Id. at ¶ 37.

Plaintiffs allege that, prior to opening the store in Cook County, Defendant Kay Park visited two of KJ Korea's retail stores in Los Angeles. Id. at ¶ ¶ 27-28. While in the stores, she allegedly observed Plaintiffs' three marks in connection with massagers and nutritional supplements as well as the store layout, the display and merchandise arrangement, and the store ambiance. Id. During subsequent conversations between Defendant Kay Park and KJ Korea's marketing director, Defendant Kay Park allegedly stated that she had learned of " HEALTH KOREA" through televised advertisements on SBS in Chicago and that her research showed that the mark " HEALTH KOREA" was well recognized and popular in the Korean community. Id. at ¶ ¶ 30-31. According to Plaintiffs, she stated that any products and services bearing the " HEALTH KOREA" trademark/service mark would be successful and stated that she therefore intended to use the mark in her new store. Id.

The complaint alleges that KJ Korea's marketing director " clearly told Defendant Kay Park that she cannot use the trademark 'HEALTH KOREA' in any form" and that the '033 Mark was federally registered trademark. Id. at ¶ 32. Plaintiffs further allege that the marketing director sent an e-mail to the same effect on July 29, 2013. Id. On August 14, 2013, Defendant Kay Park allegedly replied to the e-mail, stating that she nevertheless intended to name her new business " HEALTH KOREA" and that she would not remove the storefront sign marked with this same name. Id. at ¶ 34. Plaintiffs allege that the marketing director replied via e-mail that same day, again stating that Defendant Kay Park " cannot use 'HEALTH KOREA''' and requesting that she " not

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open the new retail store using the mark 'HEALTH KOREA.'" Id. at ¶ 35.

Plaintiffs allege that their attorney sent a letter demanding that Defendants cease and desist from using infringing marks that would likely cause confusion with Plaintiffs' registered '033 Mark and its common law trademarks. Id. at ΒΆ 37. They allege that Defendants ignored the letter, that they continue to use at least one infringing mark with full knowledge of Plaintiffs' federal and common law rights, and that ...

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