American Rice v. Arkansas Rice Growers Co-op.

• Decision Date: 02 March 1982
• Docket Number: Civ. A. No. G-81-308.
• Citation: 532 F. Supp. 1376
• Parties: AMERICAN RICE, INC., Plaintiff, v. The ARKANSAS RICE GROWERS COOPERATIVE ASSOCIATION, d/b/a Riceland Foods, Defendant.
• Court: U.S. District Court — Southern District of Texas

532 F. Supp. 1376

AMERICAN RICE, INC., Plaintiff, v. The ARKANSAS RICE GROWERS COOPERATIVE ASSOCIATION, d/b/a Riceland Foods, Defendant.

Civ. A. No. G-81-308.

United States District Court, S. D. Texas, Galveston Division.

March 2, 1982.

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Paul L. DeVerter, II, and Larry Jones, Fulbright & Jaworski, Houston, Tex., for plaintiff.

James L. Kurtz, Washington, D. C., George D. Martin, Martin, Carmona, Cruse, Micks & Dunten, Galveston, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

HUGH GIBSON, District Judge.

I.

This action which came on for hearing on February 5, 1982, was instituted by plaintiff American Rice, Inc. (ARI) against defendant the Arkansas Rice Growers Cooperative Association (Riceland) because of Riceland's alleged practices of unfair competition and trademark infringement claimed as causes of action under common law and under federal law (See § 32 and § 43 of the Lanham Act, 15 U.S.C. § 1114(1) and § 1125(a)). Plaintiff also alleged that defendant committed a deceptive trade practice in violation of the Texas Deceptive Trade Practice Act. Tex.Bus. & Comm. Code Ann. §§ 17.41-.62 (Vernon Supp. 1980-81). Plaintiff seeks a preliminary and a permanent injunction against defendant, an accounting of the profits defendant made from the allegedly infringing trademarks, and all damages sustained by plaintiff due to the alleged infringement and acts of unfair competition. The February 5th hearing concerned only the appropriateness of a preliminary injunction. Upon review of the records, the parties' memoranda, and the applicable law, the Court is of the opinion that a preliminary injunction should be issued.

II.

A. ARI

ARI is a cooperative of over 17,000 rice farmers in Texas, Louisiana and Arkansas. The cooperative processes and sells rice through various means and markets and returns the profits to its farmers. ARI sells its rice to American, foreign, and industrial customers. Its current sales to Saudi Arabia were estimated at over $100 million, and in 1981 ARI rice sales accounted for 73% of the Saudi Arabian market.¹

ARI purchased Blue Ribbon Mills in 1975, and Blue Ribbon assigned its trademarks to ARI. Plaintiff's exhibit # 5. Included in those trademarks were "Blue Ribbon," "Chopstick," and "Abu Bint." Blue Ribbon had branded its rice packages and bags sent to Saudi Arabia with the "Abu Bint" trade name and accompanying mark of a girl design since 1966. See plaintiff's exhibit # 8. Since the takeover of Blue Ribbon in 1975, ARI has continued the usage of the Abu Bint mark and design in its sales to Saudi Arabia and other Arab countries.

ARI has two United States registrations for the girl design trademark. Plaintiff's exhibits # 1 & 2. These designs are of oriental-looking women, dressed in oriental-style clothing with a bowl of rice in one hand and chopsticks in the other. The amended version of the design shown in plaintiff's exhibit # 2 appears to be the one used on the current packaging of ARI rice in Saudi Arabia. The mark "Abu Bint" has been registered twice with the Texas Secretary of State — once with Roman lettering and once in the Arabic script. Plaintiff's exhibits # 3 & 4. Since 1966, these designs and the Abu Bint mark have been used in Saudi Arabia by Blue Ribbon and today ARI. Plaintiff's exhibits # 6, 7, 8 & 9.

The total presentation on the 100-pound ARI burlap bags is comprised of the following elements:

1) Arabic script at the top;

2) the words "chopstick" and "rice" in large oriental-style writing;

3) the girl design set in the middle, in between chopstick and rice;

4) the words "golden parboiled" set into the table of the girl design;

5) additional Arabic writing below "rice;" 6) the logo and full name of ARI are at the bottom in smaller, modern print;

7) the predominant colors are yellow, red and black;

8) the words "chopstick," "rice," and "golden" are in yellow in addition to the face, hands, and rice of the girl design;

9) the bottom Arabic script, the words "long grain" above the word "RICE" (in bold capital letters), and the girl's dress, part of her hand, and part of her face are colored the same red hue;

10) black colors the top Arabic script, the outline of "chopstick" and "rice," ARI's final line, and the hair and table of the design;

11) "parboiled" is the color of the burlap bag.

Plaintiff's exhibit # 6.

The bottom line of Arabic means "American Rice 100 pounds net weight." The top line of Arabic script, "Abu Bint," means, according to plaintiff's witnesses,² "of the girl" or, more aptly, "girl brand." "Bint," without contest, means girl. "Abu" apparently can have several meanings. Peter Petritis — who works for Alpha Trading Company, ARI's shipping agent in Saudi Arabia — testified that in its content, on the bag, "Abu" meant "of the." He testified that other brands of rice in Saudi Arabia similarly used "abu," for example, Abu Gamel, or camel brand. See plaintiff's exhibit # 46. In rebuttal, the defendant offered the testimony of an Arabic linguist who stated that "abu" means "father's." The Court observes that "abu" may have many meanings; one clearly is "father," and another is "of the." In the context of product labeling, as demonstrated by other Arabic rice labels, the Court is inclined to find that it means "of the" or "brand."

A large percentage of the Saudi Arabian population is illiterate in the Arabic language because only in recent times has compulsory education been instituted. Consequently, the Saudi Arabian public, for the most part, distinguishes rice brands on the basis of the design on the package. The illiteracy rate and its consequences are the primary reasons that ARI's rice is referred to only as Abu Bint, and not Chopstick brand, as it might be in this country. The illiteracy rate also explains, in part, why ARI does not use media advertising.

Instead, ARI has relied on a number of promotional items to help it gain and retain brand recognition. ARI has used giveaway items to promote Abu Bint sales: bumper stickers (plaintiff's exhibit # 30), sets of Cross pens, which have the girl design along with the Arabic script of Abu Bint (plaintiff's exhibit # 28); paper weights, which have the girl design along with Arabic script of Abu Bint (plaintiff's exhibit # 31); digital clock-calendars with the Arabic script of Abu Bint (plaintiff's exhibit # 32); and posters depicting the burlap bag design on a white background (plaintiff's exhibit # 33).

A large part of ARI sales occur in merchant "offices" in which Saudi Arabians chose among various samples, purchase their items, and pick them up there or in warehouses. In this process, rice is purchased in large quantities, 100- or 25-pound burlap bags. The large bags are convenient for the extended Saudi family, which often shares living quarters together, or for Bedouins who buy large amounts of food at one time. In addition, with the advent of western supermarkets, some ARI rice is also sold in smaller "poly" bags, in cartons, and in 25-pound burlap bags (which have the same design, marks, and colors as the 100-pound bags).

Due to earlier, unrelated problems with counterfeit Abu Bint bags, ARI began to attach identifying tabs to every 100-pound burlap bag; these tags have the same Abu Bint design, colors, and Arabic script. Plaintiff's exhibits # 25 & 26. Moreover, the rice itself contains paper discs identifying the goods as ARI rice. Plaintiff's exhibit # 27.

ARI's exclusive agent in Saudi Arabia is Alpha Trading Company (Alpha), which operated as the selling arm of ARI there. ARI gave Alpha the right to represent ARI regarding its attempts to register its trademark under Saudi Arabian law. Plaintiff's exhibit # 18. However, ARI did not intend to transfer its title to the girl design marks to Alpha. The general manager of Alpha's trading and shipping, Peter Petritis, confirmed that Alpha does not own the girl design mark.

Alpha received the right to represent ARI's interest in the Saudi Arabian registration because of ARI's difficulty in registering its mark. ARI's attempt in 1972 to register the mark in the Saudi Arabian trademark office failed when an official rejected the application. ARI is presently endeavoring to have that decision overturned by a Saudi Arabian court. At least, ARI has registered its trademark with a quasi-governmental body, the Chamber of Commerce and Industry. This body apparently has greater clout and authority than the typical American chamber of commerce.

B. RICELAND

Riceland is a cooperative similar to ARI and is contributed to by over 14,000 farmers. Riceland competes with ARI in the Saudi Arabian market. It sells rice in 100-and 25-pound bags through the same system of merchants used by ARI.

Originally Riceland used a lion design on its rice bags. Then in 1974 Riceland introduced its "two girl" brand, which is still in use today. Defendant's exhibit # 12. In the fall of 1978, Riceland began packaging "Bint al-Arab" brand. Riceland contends that it "owns" the mark here in this country, but claims that it only has the right to use the mark elsewhere because the mark's original and current owner is an Arabian merchant named Alamoudi. In effect, Riceland "private labels" its rice for Alamoudi's trade in Saudi Arabia.

The 1978 Bint al-Arab label consisted of the following:

1) Arabic script in black at the top.

2) A black outline seal encircles a girl design figure; bold face Arabic script is on the top curve of the seal and bold face black Roman lettering is on the bottom of the seal's circle;

3) The girl design has Arab facial features, yellow-colored skin, a green shawl covering her head and flowing in front of her body, and a black-shaded gown; her left arm holds one edge of the shawl;

4) Below the seal are the English words "extra long grain, parboiled American RICE, 100 lbs. net" which are colored green and are in bold capital letters, with "rice" presented in

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