Sushi Nozawa Group filed a lawsuit in the United States District Court for the Central District of California against The Hand Roll Bar Experience, or HRB, alleging trademark infringement and unfair competition. The owners of Sushi Nozawa Group operate Sugarfish, Nozawa Bar, and KazuNori, which uses the slogan “The Original Hand Roll Bar.” The group alleges that Downtown Los Angeles Japanese hand roll bar is liable for infringing their trademark in this phrase.
Sushi Nozawa was founded by its namesake chef Kazunori Nozawa. KazuNori creates specially crafted sushi hand rolls and deems itself the first of its kind in the United States. Sushi Nozawa currently owns standard character registration for “The Original Hand Roll Bar” and a design mark registration for “The Original Hand Roll Bar Founded 2014 Los Angeles” as applied to “restaurant services.” Both marks were applied for in 2015 but Sushi Nozawa claims to have first used both marks in 2014.
The Hand Roll Bar Experience has advertised a similar “hand roll bar” and plans to operate two Los Angeles restaurants specializing in the same. In February 2019, HRB filed a trademark application for “HRB” as applied to “restaurant services featuring hand rolls.” This application remains an intent to use application, meaning that the applicant has yet to use the mark in commerce in connection with the applied-for services. However, the application received no rejections from the trademark examining attorney and published for opposition a few months after filing.
Within the United States Patent and Trademark Office, there exist two separate trademark registers, the Principal and the Supplemental. Most commonly, when new trademark applications are approved, they issue to the Principal Register. Under certain circumstances, trademark applications may instead issue to the Supplemental Register. For instance, descriptive marks, that is, marks which merely describe an ingredient, quality, characteristic, function, feature, purpose, or use of a product or service offered under the mark, must go on the Supplemental Register.
The Principal Register provides a presumption of validity of a trademark as well as protection for distinctive marks. Distinctive marks are those which, by their nature, serve a source-identifying function. In this manner, marks on the Principal Register enjoy a presumption of ownership, in addition to constructive notice to junior users. On the other hand, the Supplemental Register provides protection for nondistinctive marks but no presumption of validity. A Supplemental Register trademark owner is therefore required to prove the validity of its mark. Similarly, there is no presumption of ownership nor constructive notice for marks on the Supplemental Register.
Notably, both of Sushi Nozawa’s registrations exist on the Supplemental Register. During prosecution of these trademark applications, the trademark examining attorney refused registration on the Principal Register asserting that the applied-for marks merely describe various characteristics and the nature of the applicant’s services, namely, restaurant services. The examining attorney claimed that “Hand Roll” indicates one of the items featured at the applicant’s restaurant, as demonstrated by a specimen submitted by Sushi Nozawa. In addition, “Bar” is defined as “a small place that serves a particular type of food” and, therefore, indicates the nature of the applicant’s restaurant. Moreover, “original” is merely a laudatory term that, by itself, describes that the goods or services being offered are the first of their kind.
More recently, in November 2019, Sushi Nozawa filed new trademark applications for “The Original Hand Roll Bar” and “The Original Hand Roll Bar Founded 2014 Los Angeles” seeking registration on the Principal Register. In so doing, the restaurant group alleged that both marks had acquired distinctiveness based on its continuous use of the marks for five years. Acquired distinctiveness means that the mark has gained secondary meaning in the minds of consumers in that the mark has come to identify not only the goods or services, but also the source of those goods or services.
In response, the trademark examiner disagreed with the applicant’s assertion of acquired distinctiveness and noted that to support its claim, Sushi Nozawa must submit additional evidence such as advertising expenditures, sales success, length and exclusivity of use, unsolicited media coverage, and consumer studies which link the mark to its source. While Sushi Nozawa responded by submitting more than one hundred pages evidencing its extensive use of the mark, the examining attorney nonetheless maintained its rejection and required the group to disclaim “Hand Roll Bar” asserting that this portion of the mark is unregistrable. As such, Sushi Nozawa agreed to this amendment.
After Sushi Nozawa filed its complaint, HRB moved to dismiss the claims asserting that HRB’s use of any protected marks creates no likelihood of confusion or, alternatively, qualifies as fair use. At the pleading stage of litigation, a plaintiff fails to sufficiently allege likelihood of confusion when the marks are clearly dissimilar or the channels in which the marks are used are completely unrelated. The court noted certain differentiating characteristics between the disputed marks but that both marks prominently use “hand roll bar” in the same channels of trade and geographic location. As a result, the court determined that confusion may exist amongst consumers who enjoy hand roll sushi. Further, the court agreed with Sushi Nozawa that the fair use defense is not available at the pleading stage of litigation.
The co-founder of Sushi Nozawa Group, Jerry Greenberg, publicly stated that it created the concept of a sushi restaurant dedicated to hand rolls in the United States. Greenberg also stated that HRB has copied KazuNori rather than using an original idea. Moreover, Sushi Nozawa Group claims to have reached out to HRB prior to its opening to resolve the issue and the two companies purportedly reached an agreement that would not require litigation. However, according to Greenberg, HRB did not follow through on commitments made.
Also publicly, the HRB team released a statement that the case is “a classic example of a deep pocket business attempting to crush a newcomer in the industry because it is afraid of legitimate competition.” Further, the newcomer officially stated that it has not infringed any of Sushi Nozawa’s trademarks and that it is confident it will prevail on the merits. In this manner, HRB points to the fact that Sushi Nozawa’s registrations are not on the Principal Register and that it was required to disclaim “Hand Roll Bar” in its marks.