By Benjamin Alto. Benjamin Alto is a 3L Juris Doctorate candidate at Sandra Day O’Connor College of Law, Arizona State University with a focus on Intellectual Property law. He currently serves as a McCarthy Institute Fellow starting in 2023. Ben brings a background in patent and trademark prosecution and litigation, having worked with the Lisa Foundation Patent and Trademark Clinic, Unified Patents, as well as The Ideas Law firm PLLC, on a variety of trademark and patent matters. As an undergrad, Ben studied Materials Science & Engineering at the University of California Davis, where he learned to dress in a “bunny suit” and perform tests on microelectronics in a clean room. In addition to his academic pursuits, Ben is an endurance sport masochist. When he’s not studying you can usually find him riding or working on his bike or off on a ten-mile run. After completing his studies at the Sandra Day O’Connor College of Law, Ben intends to pursue a career in Intellectual Property Law at an enterprising law firm in Northern California. Feel free to connect with him on LinkedIn at http://www.linkedin.com/in/benjamin-alto-286046158.
Should the preparation of a restaurant’s signature dish be protectable under the Lanham Act as trade dress? The United States District Court for the Central District of California answered yes to this question in the recent case of Sun Nong Dan Foods, Inc. v. Kangnam1957, Inc.[1]
Factual background
The facts were as follows. Plaintiff, Sun Nong Dan Foods ( SND) is a Korean restaurant with locations in four neighborhoods around Los Angeles.[2] At these restaurants, SND serves a flagship dish named “Galbi Jjim,” consisting of “braised short ribs, ddukbokki, vegetables, and cheese, which is then torched before customers.”[3] In late 2017, Defendant Chan Won Park (C. Park) began working at SND under various roles, including kitchen assistant.[4] C. Park’s time at the restaurant was not long. Less than a year into his employment, C. Park quit to begin working at a new restaurant, Daeho Kalbijjim, with his brother, I. Park.[5] The new restaurant started serving “Daeho style” galbi jjim, which included braised short ribs, ddukbokki, vegetables, and cheese that is then torched before customers.[6] Additionally, the new restaurant distributed job postings in Korean claiming that C. Park was a former head chef at SND. The restaurant also instructed their employees to make false statements to customers associating the two restaurants.[7]
Claims brought
Noticing the new restaurant and its suspiciously similar “signature” dish, SND filed a complaint with seven causes of action against I. Park, C. Park, Daeho Hwang, and various others in 2023.[8] The claims were:
1) false designation of origin, false and fraudulent representation, and unfair competition under the Lanham Act;
2) false advertising under the Lanham Act;
3) trade dress infringement under the Lanham Act;
4) trade secret misappropriation under the Defend Trade Secrets Act (“DTSA”);
5) unfair competition under California’s Unfair Competition Law (“UCL”);
6) false advertising under California’s False Advertising Law (“FAL”); and
7) trade secret misappropriation under the California Uniform Trade Secrets Act (“CUTSA”).[9]
In response, the Defendants moved for summary judgment under FRCP 12(b)(6).[10]
Legal Analysis
The Court first considered SND’s claim of false designation of origin, reasoning that their decision could decide both claims 1 and 5, as “state common law claims of unfair competition … are ‘substantially congruent’ to claims made under the Lanham Act.”[11] The court found that “(1) Daeho disseminated misleading descriptions and false representations (2) in interstate commerce (3) regarding the origin of its flagship dish, galbi jjim; (4) that these descriptions and representations caused confusion among customers; and (5) that SND’s goodwill and reputation has been harmed and its market share has been reduced.”[12] In addition, the court also found that SND had satisfied the heightened FRCP 9(b) pleading standard of fraud, as Daeho disseminated misleading job postings and instructed its employees to mislead customers regarding its relation to SND.[13] Insofar as the claim rests on this specific evidence, the court denied the Defendants’ motion for summary judgment. Notably, the court stated that Daeho’s employees making false statements to customers does not meet the Rule 9(b) pleading standard.[14]
The court next considered the false advertising claims, which covered claims 2 and 6 as “[c]laims under the FAL are substantially congruent to those under the Lanham Act.”[15] A false advertising claim under the Lanham Act requires “(1) commercial speech, (2) by the defendant who is in commercial competition with the plaintiff, (3) for the purpose of influencing consumers to buy defendant’s goods or services and (4) that is sufficiently disseminated to the relevant purchasing public.”[16] Here, the court granted summary judgment for the Defendants. Daeho’s misleading job postings did not sufficiently reach the relevant purchasing public, as they were “written in Korean and targeted”[17] potential and prospective employees within the Korean community. Rather, these postings were disseminated to potential and prospective employees.[18] In addition, the postings by consumers conflating the two restaurants were not created by Daeho, making them insufficient for a false advertising claim.[19]
The next issue that the court considered was trade dress infringement under the Lanham Act, which was included in claim 3.[20] Here, the court required the Plaintiff to prove “(1) the design is inherently distinctive or acquired distinctiveness through a secondary meaning, (2) the design is nonfunctional, and (3) there is a likelihood that the defendant’s use of the Plaintiff’s trade dress [will] cause consumer confusion.”[21] The court found that SND had satisfied its pleading requirement.[22] In particular, the court found that while each of the individual ingredients of the Galbi Jjim might be generic, the court must consider the dish’s unique ingredients and visual presentation to qualify for protectable trade dress.[23] In addition, the court found that the dish had acquired secondary meaning, as evidenced by media coverage of the dish as well as Yelp reviews associating the visual presentation of the dish with SND.[24] As to the second factor, the court found that the presentation of SND’s dish was “distinctive” but not “essential for its use or purpose.”[25] The third factor was satisfied by the Yelp reviews showing that many Yelp users recognized the dish “as being affiliated, associated or connected to SND.”[26]
The court then considered the claims of trade secret misappropriation under the DTSA and CUTSA, covered under claims 4 and 7.[27] To make a trade secret misappropriation claim, a plaintiff must own a trade secret, which is information that is valuable to the owner because it is unknown to others, and the owner has attempted to keep it secret.[28] In addition, the plaintiff must prove that the defendant: misappropriated the trade secret and the defendant’s actions damaged the plaintiff.[29] The court found that the Plaintiffs did own a trade secret (the recipe to Galbi Jjim), but they failed to prove that the Defendants misappropriated it because C. Park did not sign a non-disclosure agreement. The court granted summary judgment for the claim of trade secret misappropriation.[30]
Summary
In Sun Nong Dan Foods, Inc. v. Kangnam1957, Inc., the court addressed whether the preparation and presentation of a restaurant’s signature dish could be protected as trade dress under the Lanham Act. Sun Nong Dan Foods sued Kangnam1957, alleging false designation of origin, false advertising, trade dress infringement, and trade secret misappropriation after Kangnam1957, staffed by a former SND employee, served a dish similar to SND’s flagship dish and misrepresented connections to SND. The court ruled in favor of SND on the false designation and trade dress claims. However, it granted summary judgment for Kangnam1957 on false advertising and trade secret misappropriation claims, concluding that the false advertising was insufficiently targeted at consumers and that there was no evidence of trade secret misappropriation. This case highlighted how the unique presentation of food can qualify for trade dress protection even if the individual ingredients themselves are common and functional.
[1] See Sun Nong Dan Foods, Inc. v. Kangnam1957, Inc., No. 2:23-cv-09779-WLH-RAO, 2024 U.S. Dist. LEXIS 155853, at *14 (C.D. Cal. Aug. 29, 2024).
[2] Id.
[3] Id. at 2.
[4] Id.
[5] Id.
[6] Id.
[7] Id. at 11.
[8] Kangnam1957, Inc., U.S. Dist. LEXIS 155853 at 4.
[9] Id.
[10] Id.
[11] Id. at 6. (citing Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994)).
[12] Kangnam1957, Inc., U.S. Dist. LEXIS 155853 at *8, *9.
[13] Id. at 11.
[14] Id. at 13.
[15] Id. at 12 (quoting Allergan USA, Inc. v. Prescribers Choice, Inc, 364 F. Supp. 3d 1089, 1108 (C.D. Cal. 2019)).
[16] Id. at 12 (quoting Ariix, LLC v. NutriSearch Corp., 985 F.3d 1107, 1114-15 (9th Cir. 2021)).
[17] Id. at 13.
[18] Id.
[19] Id. at 14.
[20] Id.
[21] Kangnam1957, Inc., U.S. Dist. LEXIS 155853, at *14, *15 (quoting Green Crush LLC v. Paradise Splash I, Inc., 2018 U.S. Dist. LEXIS 238207, 2018 WL 4940824, at *3 (C.D. Cal. Mar. 8, 2018)).
[22] Id.
[23] Id.at 16.
[24] Id.
[25] Id.at 18.
[26] Id.
[27] Id.at 18.
[28] InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020).
[29] Kangnam1957, Inc., U.S. Dist. LEXIS 155853 at *19.
[30] Id. at *20.