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James Brito v. Urbina

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

August 2, 2018

JOSE ANTONIO JAIMES BRITO, JAVIER DE LA PAZ EVANGELISTA, CREACIONESINNOVADORAS EN EXHIBICION S.A. DE C.V., and MEXCELANIUS PRODUCTS CORPORATION, Plaintiffs,
v.
KARINA URBINA D/B/A DEL REY, and MOISES BRITO, Defendants.

          MEMORANDUM OPINION AND ORDER

          RUBEN CASTILLO CHIEF JUDGE.

         Jose Antonio Jaimes Brito ("Jose Brito"), Javier De La Paz Evangelista ("Evangelista"), Creaciones Innovadoras en Exhibicion S .A. de C.V. ("Creaciones"), and Mexcelanius Products Corporation ("Mexcelanius") (collectively, "Plaintiffs") filed this trademark and copyright infringement suit against Karina Urbina ("Urbina"), who Plaintiffs allege is doing business as "Del Rey," and Moises Brito (collectively, "Defendants"). (R. 1, Compl.) Defendants move to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). (R. 27, Am. Mot.) For the reasons stated below, the motion is denied.

         BACKGROUND

         "Mole" is the name of a Mexican delicacy sauce that contains dozens of ingredients and is carefully prepared over several hours or even days. (R. 1, Compl. ¶ 10.) The complex process of making mole involves balancing the spiciness, sweetness, and sourness of ingredients, as well as adding thickening agents and other ingredients for flavor enrichment. (Id. ¶ 11.) Ingredients can include but are not limited to chili peppers, spices, dried fruits, sugar, chocolate, sour tomatillos, nuts, and aromatic cloves. (Id.) The ingredients are stirred together in a heated cauldron, eventually producing a rich and thick mixture that is poured over a variety of Mexican dishes, often turkey and chicken dishes. (Id. ¶ 12.) Mole is tied to Mexican culture and is often considered the "national dish" of Mexico. (Id. ¶ 14.) Over the last fifteen years, this delectable sauce has become increasingly popular in the United States. (Id. ¶ 15.)

         In the late 1990s, Jose Brito's uncle, Javier Brito, created the "Del Rey" mole recipe, the "DEL REY" name and trademark, and business operations for manufacturing mole in Iguala, a city in the Mexican state of Guerrero. (Id. ¶ 16.) After two decades, DEL REY became a venerated brand of mole in Mexico. (Id. ¶ 17.) In 2000, Javier Brito designed a label for DEL REY mole containers featuring a large maroon banner with the stylized name "Del Rey" in gold and a crown on top of the "e" in "Rey," as follows:

         (Image Omitted)

( Id. ¶ 18.)

         In 2001, Javier Brito, operating together with Fabricas De Mole Rey, S.A. de C, V. ("Fabricas"), registered the DEL REY trademarks with the Mexican Institute of Industrial Property, which is Mexico's trademark office. (Id. ¶ 19.) For fifteen years, Javier Brito spent significant money and effort developing, establishing, and expanding the DE LREY mole product and brand, which achieved success in Mexico. (Id. ¶ 20.)

         In 2013, after witnessing DEL REY mole's popularity within Mexico, Jose Brito and Evangelista (the "Owner Plaintiffs") decided to distribute DEL REY mole in the United States. (Id. ¶ 22.) In My 2014, the Owner Plaintiffs allegedly purchased Fabricas for $460, 000, including Fabricas' customer lists, equipment, recipes, manufacturing techniques, and the DEL REY trademarks. (Id. ¶ 23.) The Owner Plaintiffs then added elements to the DEL REY label's artwork, including an original turkey design at the top left of the label, a ribbon containing a crown and the words "special especial," and a gold banner containing either the word "TELOLOAPAN" or "IGUALA, GUERRERO" in maroon letters at the bottom of the label, as follows:

         (Image Omitted)

(Id. ¶ 24.) The Owner Plaintiffs filed copyright registrations for the turkey and crown designs depicted above. (Id. ¶ 25.) Since 2014, the Owner Plaintiffs have directed the manufacturing and labeling of DEL REY mole in Mexico through their exclusive manufacturer, Creaciones, which is a company owned and operated by the Owner Plaintiffs' wives. (Id. ¶ 26.) The Owner Plaintiffs and Creaciones also registered DEL REY mole with the U.S. Food and Drug Administration ("FDA") and complied with the FDA's mandatory chemical testing. (Id. ¶ 27.)

         In December 2014, the Owner Plaintiffs allegedly entered into a distribution agreement with Defendant Moises Brito-Javier Brito's brother, (R. 28-1, Moises Brito Aff. at 2)-and Eric Bryan ("Bryan") to distribute DEL REY mole in the United States. (Id. ¶ 28.) Pursuant to the distribution agreement, the Owner Plaintiffs sold DEL REY mole to Moises Brito and Bryan at a discounted price, and then Moises Brito and Bryan could then distribute and sell DEL REY mole to retail stores and consumers in Illinois and other locations throughout the United States. (Id. ¶¶ 28-29.) Moises Brito and Bryan, however, allegedly failed to pay the Owner Plaintiffs for several shipments of DEL REY products they had received. (Id. ¶ 30.) The Owner Plaintiffs then allegedly terminated Moises Brito and Bryan as distributors in October 2016 and granted Mexcelanius the exclusive rights to distribute DEL REY mole in the United States. (Id. ¶¶ 30-31.) Since 2014, the Owner Plaintiffs have sold DEL REY mole in Chicago, Georgia, Texas, and New York, and they intend to expand their business to other locations in the United States. (Id. ¶32.)

         Urbina is Moises Brito's wife, (R. 28-1, Moises Brito Aff. at 4), and she allegedly had direct access to DEL REY products and "know-how" through Moises Brito, (R. 1, Compl. ¶ 34). Plaintiffs allege that from February 2016 to May 2017, Urbina filed several trademark applications and other documents with the United States Patent and Trademark Office claiming rights in the Owner Plaintiffs' trademarks. (Id. ¶¶ 35-45.) Plaintiffs claim that Urbina, with the assistance of Moises Brito, made and distributed mole using "counterfeit" DEL REY labels and packaging. (Id. ¶¶ 46-47, 54-56.) Plaintiffs allege that Defendants intentionally copied the Owner Plaintiffs' trademarks to deceive consumers into believing that Defendants' mole was authentic DEL REY mole even though Defendants produce and sell "counterfeit" and "inferior" mole. (Id. ¶¶ 48, 54.) Defendants allegedly sell their counterfeit mole in Georgia and Illinois, including in at least nine different Chicago retail stores. (Id. ¶ 54.) Plaintiffs claim that several Chicago stores have expressed confusion as to "what is and what is not authentic DEL REY mole," and that Chicago stores have "refused to buy and sell the Owner Plaintiffs' mole because they sell [Defendants'] infringing products," (Id. ¶¶ 55-56.) Urbina has also allegedly created social media pages holding herself out as the authentic source of DEL REY products in Atlanta. (Id. ¶¶ 58-59.) Plaintiffs claim that Defendants' conduct has diverted customers and tens of thousands of dollars in sales. (Id. 61.)

         PROCEDURAL ...


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