Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V.
247 F. Supp. 3d 76
| D.D.C. | 2017Background
- PLM (Paleteria La Michoacana entities) and PROLACTO dispute rights to overlapping trademarks (including Indian Girl designs and "La Michoacana" variants) used on frozen confections in the U.S.; prior TTAB cancellation favored PROLACTO against PLM’s LA INDITA MICHOACANA registration.
- After extensive summary-judgment rulings, a 13-day bench trial produced detailed Findings of Fact and Conclusions of Law; the court entered mixed judgment (some counts for PLM, Count I for PROLACTO).
- Post-trial, PLM transferred the asserted trademarks to PLM Operations, LLC and moved under Fed. R. Civ. P. 25(c) to substitute and join PLM Operations as plaintiff and counter-defendant.
- Both parties filed multiple post-trial motions: PLM sought to amend the judgment (raising the Morehouse/prior-registration defense); PROLACTO sought a new trial based on a newly discovered domain name and moved to amend findings about incontestability of PLM’s Indian Girl registrations.
- The court evaluated Rule 25(c) substitution, waiver and timeliness of new theories under Rules 52(b) and 59(e), the adequacy of newly discovered evidence for a new trial, and allocation of costs given the mixed result.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Substitution under Rule 25(c) | PLM: marks transferred to PLM Operations; substitute transferee as sole plaintiff and join as counter-defendant to avoid prejudice | PROLACTO: require proof that successor assumed liabilities and request discovery/hearing | Granted: transfer documents and USPTO record establish transfer; PLM Operations volunteered to join, so substitution and joinder granted to facilitate litigation |
| Use of Morehouse (prior-registration) defense to overturn cancellation | PLM: registrant’s prior incontestable registrations bar PROLACTO’s standing to cancel (invoking Morehouse) | PROLACTO: new theory raised too late; standing and Morehouse arguments not preserved | Denied: Morehouse is an affirmative equitable defense waived when not timely raised; Rule 59(e)/52(b) not a vehicle to assert new theory |
| PROLACTO’s attack on incontestability of PLM’s Indian Girl registrations | PROLACTO: PLM’s Section 15 affidavits were defective because proceedings were pending; incontestability should not have been treated as established | PLM: incontestability was on the record and judicially noticed; issue was not timely raised by PROLACTO | Denied: PROLACTO waived the challenge by failing to timely and adequately raise the argument; court took judicial notice of USPTO records |
| Motion for new trial based on domain name evidence | PROLACTO: newly discovered domain (laflordemichoacan.com) shows PLM bad faith and would alter credibility/outcome | PLM: domain was discoverable earlier, is largely impeachment/cumulative, and would not change outcome | Denied: domain evidence is impeaching/cumulative and would not change the court’s prior factual findings or legal conclusions |
Key Cases Cited
- Burka v. Aetna Life Ins. Co., 87 F.3d 478 (D.C. Cir. 1996) (district court’s Rule 25(c) substitution decision reviewed for abuse of discretion)
- Luxliner P.L. Exp. Co. v. RDI/Luxliner, Inc., 13 F.3d 69 (3d Cir. 1993) (discussing due process concerns when forcing substitution of unwilling parties)
- Morehouse Mfg. Corp. v. J. Strickland & Co., 407 F.2d 881 (C.C.P.A. 1969) (establishing prior-registration equitable defense to cancellation/opposition)
- O-M Bread, Inc. v. U.S. Olympic Comm., 65 F.3d 933 (Fed. Cir. 1995) (describing Morehouse defense as an equitable/prior-registration defense)
- Citibank v. Grupo Cupey, Inc., 382 F.3d 29 (1st Cir. 2004) (noting substituting transferee under Rule 25(c) is appropriate when it facilitates conduct of litigation)