Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2018 Decided August 10, 2018

No. 17-7075

PALETERIA LA MICHOACANA, INC., A CALIFORNIA

CORPORATION, ET AL.,

APPELLEES

v.

PRODUCTOS LACTEOS TOCUMBO S.A. DE C.V., A MEXICAN

CORPORATION,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:11-cv-01623)

Martin B. Schwimmer argued the cause for appellant.

With him on the briefs were Lauren B. Sabol, Lauren B.

Emerson, Lori L. Cooper, and John L. Welch.

Laura L. Chapman argued the cause for appellees. With

her on the brief were Toni Qiu and Paul Werner.

Before: GRIFFITH and PILLARD, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge PILLARD.

2

PILLARD, Circuit Judge: Paletas are frozen, fruit-based

Mexican-style desserts akin to popsicles. Two vendors of

paletas, one based in Mexico and one in the United States,

assert conflicting trademark and false-advertising claims over

words and images they use in their competing paleta sales in

the United States. Productos Lacteos Tocumbo (Prolacto) is a

Mexican paleta company whose owners claim their ancestor

started the first paleteria in the Mexican state of Michoacán in

the 1940s. Paleteria La Michoacana (PLM) is another paleta

company, started by two Mexican-American brothers with

pushcarts in northern California in the 1990s. Today PLM sells

paletas in the United States through major retail outlets. The

two companies now find themselves toe-to-toe, both selling

their wares in certain U.S. markets using variants of the name

“La Michoacana” (meaning “the Michoacán woman”) and an

image of a girl in traditional dress holding a paleta or ice cream

cone (the “Indian Girl”). Broadly speaking, the parties dispute

whether Prolacto or PLM, if either, owns the contested phrase

and image—and, accordingly, which paleta company, if either,

unfairly competed or otherwise infringed the other’s trademark

rights.

Prolacto and PLM disagree about the key evidence and

events that determine ownership and infringement. As

Prolacto sees it, PLM’s adoption of the “La Michoacana” name

and Indian Girl logo, the latter of which PLM registered as its

own in the United States, is culturally exploitative. Prolacto

insists that it has long sold paletas in Mexico under the name

and image of “La Michoacana.” The founders of competitor

PLM first encountered the mark, says Prolacto, when they

visited Mexico before opening their own paleta business in the

United States. On Prolacto’s account, PLM, acting in bad faith,

appropriated the marks, along with the associated goodwill and

reputation Prolacto had developed over decades, and passed

them off here as PLM’s own.

3

Prolacto unsuccessfully sought to register certain marks

with the United States Patent and Trademark Office, but

Prolacto did manage to persuade the Trademark Trial and

Appeal Board to cancel the registration of one of PLM’s marks,

an updated version of the Indian Girl encircled by the words

“La Indita Michoacana.” PLM, in turn, challenged the Board’s

cancellation order in district court, and added fresh claims that

a Prolacto version of the Indian Girl logo was invalid and

infringed PLM’s Indian Girl marks. Prolacto counterclaimed,

charging that PLM’s uses of related “La Michoacana” and

Indian Girl marks amounted to unfair competition in violation

of the Lanham Act.

After discovery, cross-motions for summary judgment,

and a thirteen-day bench trial, the district court largely held in

PLM’s favor, except that it affirmed the Trademark Board’s

cancellation of PLM’s La Indita Michoacana mark, a decision

not contested here. The court held that Prolacto infringed

PLM’s Indian Girl marks by using similar marks in its own

United States sales. As for Prolacto’s counterclaims, the court

held in PLM’s favor. Relying on the sovereign-specific nature

of trademark law, the court concluded PLM’s use of “La

Michoacana” and the Indian Girl in the United States did not

infringe any Lanham Act rights of Prolacto, which asserted

claims largely based on its prior use of the disputed words and

images in Mexico. For the most part, Prolacto was not the first

to use the marks in the United States. The only exception was

the phrase “La Michoacana,” which Prolacto had used in the

Houston market before PLM adopted it. But the court found

that phrase, rather than being uniquely associated with

Prolacto’s paletas, was a cultural commonplace in Mexican

paleta sales; in Mexico, the phrase is generally associated with

paletas much as, in the United States, a red, white, and blue

striped pole denotes barbershop service rather than any one

brand of barber. As such, Prolacto could claim no exclusive

4

right to the phrase. Because we find neither any error of law,

nor any clear error in the district court’s findings of fact, we

affirm. 1

I. Background

A. Factual Context

By its own account, Prolacto is the modern standard bearer

of a tradition of paleta sales originating at “La Michoacana”

paleteria in Tocumbo, Michoacán in the 1940s. See Paleteria

La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. de

C.V., 188 F. Supp. 3d 22, 64-65 (D.D.C. 2016). 2 But the

Mexican Prolacto corporation was not founded until 1992. Id.

at 65. It began using the “Indian Girl” design, a version of

which is depicted below, “[a]t some point roughly between

1992 and 1995” in some of its paleterias in Mexico and on the

packaging of its products. Id. at 65.

1

Throughout, we refer to the disputed phrase “La Michoacana”

and disputed Indian Girl logos as “marks” for ease of reference rather

than to represent the legal conclusion that either is a protectable

trademark.

2

For the full findings of fact that pertain to all of the claims the

parties initially levied against each other, see 188 F. Supp. 3d at 38-

86. We recount only those facts pertinent to the issues appealed, and

5

Of the paleterias Prolacto now owns or operates in Mexico,

some, but not all, use “La Michoacana” or variants involving

“Michoacán” in their advertising and branding, advertise with

the “Indian Girl” logo, or both. Id. Many other Paleterias in

Mexico, unrelated to Prolacto, also sell under the Indian Girl

design, the name “La Michoacana,” or both. Id. (Prolacto

contends those other vendors are in violation of its Mexican

trademark rights.)

PLM, the American paleta company founded by Mexican

immigrant brothers Ignacio and Ruben Gutierrez, began selling

its paletas in California in 1991. Id. at 40-41. In preparation

to open PLM, they returned to Mexico in 1990 to learn about

paleta production and purchase manufacturing equipment. Id.

at 39. The brothers saw what Ignacio described as “over a

thousand” paleterias named “La Michoacana,” many “distinct

from each other in terms of appearance.” Id. at 42. In hopes

of evoking traditional Mexican paletas in potential customers’

minds, see id. at 48, the brothers named their company

“Paleteria La Michoacana.” The district court found, based on

Ignacio Gutierrez’s testimony, that “[a]t the time that they

adopted the marks . . . they did not believe that, in Mexico, the

terms ‘La Michoacana’ or ‘Michoacana’ denoted a single

source of product.” Id. at 42. Instead, they understood the

words to refer, not to any specific paleta brand, but to a genre—

Michoacán paletas—much as New York cheesecake or Philly

cheesesteak denote food types rather than specific makers or

sources. Id. at 42, 48; see also id. at 84-85. The brothers also

sold their paletas under an Indian Girl mark. The district court

found that, just as they did not view the words “La

Michoacana” as referencing a particular brand, the Gutierrez

rely on the district court’s findings of fact in doing so unless

otherwise noted.

6

brothers “did not . . . believe that, in Mexico, the [Indian Girl]

mark denoted a single source of product.” Id. at 48.

PLM’s business grew quickly in the United States. PLM

was, by 1999, using “La Michoacana” and its version of the

Indian Girl mark in interstate commerce, id. at 45, and the

company now sells paletas and ice cream in approximately

thirty states, id. at 38. Ignacio bought Reuben’s stake to

become PLM’s sole owner in 1999. Id. at 39, 40. PLM had by

2005 registered both its Indian Girl with paleta and Indian Girl

with ice cream cone marks with the United States Patent &

Trademark Office:

Id. at 48. At around the same time, PLM also began to

advertise its products with the following statement or its

equivalent: “La Michoacana is a family company founded in

Tocumbo, Michoacán in the 1940’s. Since then, we’ve

continued to make premium ice cream, fruit bars and drinks

that give the flavor and tradition of Mexico. Distinguish us by

our logo.” Id. at 61. The district court noted that PLM had

ceased using any such “Tocumbo Statement” by the time this

dispute made its way to district court. Id. at 71 & n.23.

Prolacto, for its part, opened its first U.S. store in 2000

through a licensee in Homestead, Florida. Id. at 69. Prolacto

licensees then opened several additional American outposts, in

Texas, Northern California, and North Carolina. Id. at 64.

7

At the time this dispute arose, Prolacto and PLM both sold

paletas with the mark “La Michoacana” and an Indian Girl logo

in the United States, but those sales overlapped only in two

areas. The first was Northern California, where PLM’s use of

the disputed name and logo predated Prolacto’s by at least a

decade. Id. at 81; id. at 39. The parties’ second overlapping

market was Houston, Texas. Prolacto was the first to enter the

Houston market through a licensee in 2002, and to use the

disputed phrase “La Michoacana” there. Id. at 41-42, 48.

Although PLM did not enter that market until 2005, it used both

the name “La Michoacana” and the Indian Girl mark right from

the start of its Houston paleta sales. See id. at 109. Prolacto

did not begin to use the Indian Girl mark in its Houston-area

paleta sales until some undetermined time after 2005, id. at 75-

76, so PLM’s use of the Indian Girl marks in Houston predated

Prolacto’s there.

B. Procedural Context

Prolacto and PLM’s overlapping marks became a point of

legal contention in 2011, when the Trademark Trial and Appeal

Board granted Prolacto’s petition to cancel PLM’s registration

of an Indian Girl logo (closely resembling Prolacto’s),

encircled by the words “La Indita Michoacana.” After

unsuccessfully petitioning the Board to reverse its decision,

PLM challenged it in federal district court under 15 U.S.C. §

1071(b). See 188 F. Supp. 3d at 29. This appeal arises from

the protracted and acrimonious litigation that grew out of that

one original claim.

PLM joined various claims in its suit challenging the

Board’s invalidation of its La Indita Michoacana mark, and

Prolacto responded with a handful of counterclaims. The

district court summarized:

8

PLM’s Second Amended Complaint alleges four

causes of action: Count I seeks reversal of the

[Trademark Board’s] decision to cancel the

registration of PLM’s LA INDITA MICHOACANA

mark and [also seeks] denial of PROLACTO’s

cancellation petition; Count II seeks a declaration that

there is no likelihood of confusion between PLM’s

LA INDITA MICHOACANA mark and various

marks asserted by PROLACTO on the basis of their

common usage of the word “MICHOACANA”;

Count III alleges that PROLACTO’s use of its Indian

Girl mark infringes three of PLM’s registered marks

under 15 U.S.C. § 1114 . . .; and Count IV seeks to

cancel PROLACTO’s registration of certain marks

containing the name LA FLOR DE MICHOACAN if

a likelihood of confusion is found between those

marks and PLM’s marks. . . .

PROLACTO, in turn, filed seven counterclaims:

Counterclaim Count I alleges that PLM infringed its

registered LA FLOR DE MICHOACAN [phrase] and

design mark under 15 U.S.C. § 1114(1); Counterclaim

Count II alleges trademark infringement, unfair

competition, passing off, false advertising, false

association, and false designation in violation of 15

U.S.C. § 1125(a); Counterclaim Count III alleges

trademark infringement of the District of Columbia’s

common law; Counterclaim Count IV alleges

trademark dilution under 15 U.S.C. § 1125(c); and

Counterclaim Counts V, VI, and VII seek cancellation

of two of PLM's registered marks due to fraud and

abandonment.

Id. at 29-30.

9

Over the course of roughly three years, the district court

reviewed all eleven claims and counterclaims, ultimately

holding a bench trial and issuing a comprehensive opinion

based in well grounded credibility determinations and

exhaustive findings of fact. It resolved Count I in Prolacto’s

favor, leaving the Trademark Board’s cancellation of PLM’s

La Indita Michoacana mark in place, id. at 101; it resolved

Counts II and III in PLM’s favor, id. at 103, 107, and dismissed

Count IV as moot, id. at 108. As for Prolacto’s counterclaims,

the court resolved all but Counterclaim II in PLM’s favor at

summary judgment, id. at 31, but ultimately entered judgment

for PLM on that count, too, after trial, id. at 110-11, 115.

Prolacto’s appeal challenges the district court’s adverse

resolution of only three of those claims: first, Prolacto’s false

association claim (Counterclaim II); second, its false

advertising claim (Counterclaim II); and finally, PLM’s

trademark infringement claim (Count III). Those three claims

arise from the Lanham Act, 15 U.S.C. § 1051 et seq., a common

source of federal trademark claims. See Barton Beebe,

TRADEMARK LAW 14-15 (2017). The Lanham Act provides a

right of action for unfair competition in relation to both

registered and unregistered marks. Prolacto, whose marks are

not registered in the United States, brought its claims against

PLM under Section 43(a) of the Lanham Act, 15 U.S.C.

§ 1125(a), charging trademark infringement via PLM’s false

association of its products with Prolacto’s, while PLM seeks to

defend the validity of its registered marks under the Act’s

Section 32(1), 15 U.S.C. § 1114(1), against consumer

confusion from Prolacto’s unauthorized use.

10

II. Prolacto’s Lanham Act Claims Against PLM

Prolacto contends the district court erred in ruling for PLM

after trial on Prolacto’s false association and false advertising

claims. Prolacto’s marks are not registered in the United

States, but because use in commerce, not mere registration, is

the sine qua non of a trademark right under the Lanham Act,

those marks could still be protected against infringement here.

The conditions of that protection are laid out in Section 43(a)

of the Act:

Any person who, on or in connection with any goods

or services, or any container for goods, uses in

commerce any word, term, name, symbol, or device,

or any combination thereof, or any false designation

of origin, false or misleading description of fact, or

false or misleading representation of fact, which—

(A) is likely to cause confusion, or to cause

mistake, or to deceive as to the affiliation,

connection, or association of such person with

another person, or as to the origin, sponsorship, or

approval of his or her goods, services, or

commercial activities by another person, or

(B) in commercial advertising or promotion,

misrepresents the nature, characteristics, qualities,

or geographic origin of his or her or another

person’s goods, services, or commercial activities

shall be liable in a civil action by any person who

believes that he or she is or is likely to be damaged by

such act.

15 U.S.C. § 1125(a)(1). Section 43(a) thereby provides for

“two distinct bases of liability”—first, in subsection (A), false

association, also known as unfair competition or trademark

11

infringement and, second, in subsection (B), false advertising.

See Lexmark Int’l v. Static Control, 134 S. Ct. 1377, 1384

(2014).

Insofar as Prolacto appeals from decisions the district

court made at summary judgment, our review is de novo. See

Estate of Coll-Monge, 524 F.3d 1341, 1346 (D.C. Cir. 2008).

We review the district court’s findings of fact rendered after

the bench trial with deference and disturb them only if we

detect clear error. See Anderson v. City of Bessemer City, N.C.,

470 U.S. 564, 573-74 (1985); ALPO Petfoods, Inc. v. Ralston

Purina Co., 913 F.2d 958, 964-65 (D.C. Cir. 1990); Fed. R.

Civ. P. 52(a). “When findings are based on determinations

regarding the credibility of witnesses, Rule 52(a) demands

even greater deference to the trial court’s findings; for only the

trial judge can be aware of the variations in demeanor and tone

of voice that bear so heavily on the listener’s understanding of

and belief in what is said.” Anderson, 470 U.S. at 575; see

ALPO Petfoods, 913 F.2d at 965. To the extent this appeal calls

for review of the district court’s legal conclusions, our

consideration is de novo. See United States v. Cook, 594 F.3d

883, 886 (D.C. Cir. 2010).

A. False Association Based on PLM’s Use of

“La Michoacana”

Prolacto first contends that the district court erred in failing

to hold PLM liable for false association based on PLM’s use of

the words “La Michoacana” to sell paletas primarily in the

Houston, Texas-area market. To make out a false association

claim, Prolacto must establish a few key elements: (1) PLM

uses the mark in U.S. commerce in connection with the sale of

goods or services; (2) PLM’s use of its mark is likely to cause

consumer confusion; and (3) PLM’s use will likely damage

Prolacto. See 15 U.S.C. § 1125(a)(1)(A); J. McCarthy,

12

MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION § 27:13

(5th ed. 2018) [hereafter McCarthy]. Prolacto can only

establish the third element, damage, upon making a

prerequisite showing that it has a legally cognizable

commercial interest that would be harmed by infringement.

See Lexmark, 134 S. Ct. at 1388-90; McCarthy § 32:12. A

protectable interest only attaches to a term that is sufficiently

distinctive to merit trademark protection, see Blinded Veterans

Ass’n v. Blinded Am. Veterans Found., 872 F.2d 1035, 1039

(D.C. Cir. 1990) (Blinded Veterans), and upon a showing that

the claimant is that term’s first, or “prior,” user, John C. Flood

of Va., Inc. v. John C. Flood, Inc., 642 F.3d 1105, 1109 (D.C.

Cir. 2011).

The parties do not dispute that PLM has used

“Michoacana” in commerce and that consumers may confuse

Prolacto’s and PLM’s uses of the words “La Michoacana.”

Our review focuses, then, on whether “La Michoacana” is a

sufficiently distinctive mark to merit trademark protection, and

whether Prolacto established priority in use of that mark. Only

upon establishing both distinctiveness and priority could

Prolacto make out its false association claim. We affirm the

district court’s posttrial finding that Prolacto has done neither,

and that its false association claim accordingly fails.

First, the district court committed no error in finding that

Prolacto failed to establish that the “La Michoacana” mark is

sufficiently distinctive. 188 F. Supp. 3d at 83-86. Prolacto

primarily contends that PLM would not have adopted “La

Michoacana” but for its value as a marker of Prolacto’s brand.

That argument, however, is belied by established law, logic,

and fact.

The value of “La Michoacana” only stems from Prolacto

if the mark is distinctive to Prolacto as a paleta source.

13

Distinctive marks are those that designate their source, i.e., that

signal that the goods come from “a particular trader,” Matal v.

Tam, 137 S. Ct. 1744, 1751 (2017) (quoting United Drug Co.

v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918)), and only

distinctive marks garner the protection of trademark law, see

Blinded Veterans, 872 F.2d at 1039. In other words, a source’s

trademark protection is only a shield against a putative

infringer’s use of terms or images to the extent that such use

falsely suggests to buyers that they are purchasing the source’s

product. When a mark is not distinctive to a source, it sends no

such signal.

Whether a mark is distinctive—and how distinctive it is—

are questions of fact. See McCarthy §§ 11:3, 15:29. In

measuring distinctiveness, “[c]ourts have identified four

general categories: (1) generic, (2) descriptive, (3) suggestive,

and (4) arbitrary or fanciful,” that map onto a spectrum of

increasing distinctiveness. Blinded Veterans, 872 F.2d at 1039;

see also McCarthy §11:2.

• “Generic” marks, which describe a kind of product,

have no distinctiveness at all, and therefore merit no

trademark protection. See Blinded Veterans, 872 F.2d

at 1039; see also McCarthy § 11:1. For example,

“Frozen Dessert” as a brand name for ice cream or

“Aspirin” for pain medication would be generic marks,

as they simply name the genre of their products. See

Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698

F.2d 786, 790 (5th Cir. 1983).

• “Descriptive” marks are more specific, but not

inherently so. They are distinctive—and thus

protected—“only upon proof of secondary meaning—

i.e., upon proof that the public recognizes only one

source of the product or service.” Blinded Veterans,

872 F.2d at 1039-40; see Two Pesos, Inc. v. Taco

14

Cabana, Inc., 505 U.S. 763, 768-70 (1992); McCarthy

§ 11:16. A descriptive mark—like “Investacorp” to

name a business that provides advice on corporate

investment opportunities, see Investacorp, Inc. v.

Arabian Inv. Banking Corp., 931 F.2d 1519, 1523-24

(11th Cir. 1991)—would acquire secondary meaning

only if consumers observing that mark identified it with

a specific seller. Determining whether a descriptive

mark has secondary meaning, and is thus protected,

depends on a factual inquiry whether consumers in the

relevant purchasing public associate the mark with a

specific producer. Such association presumably could

be shown, for example, in the case of American

Airlines.

The remaining two categories of marks are inherently

distinctive such that they do not require proof of acquired

distinctiveness to garner trademark protection. Whether a

mark is inherently distinctive depends on the relationship

between that mark and the product it is used to sell:

• “Suggestive” marks “suggest[], rather than describe[],

some particular characteristic of the goods or service to

which [they] appl[y] and require[] the consumer to

exercise the imagination to draw a conclusion as to the

nature of the goods and services.” Zatarains, 698 F.2d

at 791. Suggestive marks, in other words, “indirectly

convey an impression of the products or services,” so

are on their own distinctive enough in how they relate

to the source to obviate the need for the party claiming

the mark to make a showing of secondary meaning.

Blinded Veterans, 872 F.2d at 1040; see McCarthy

§ 11:62. Examples of marks held to be suggestive

include “Chicken of the Sea” canned tuna, see Gen.

Shoe Corp. v. Rosen, 111 F.2d 95, 98 (4th Cir. 1940),

15

and “Penguin” refrigerators, see Union Nat. Bank of

Texas, Laredo, Tex. v. Union Nat. Bank of Texas,

Austin, Tex., 909 F.2d 839, 845 (5th Cir. 1990).

• Similarly, “arbitrary” marks—which have “no intrinsic

connection” to the product they describe, like Apple

computers—and “fanciful” marks—neologisms like

Kodak coined to name a specific product, see

Zatarains, 698 F.2d at 791—are the most distinctive,

and require no proof of secondary meaning. Blinded

Veterans, 872 F.2d at 1040.

The distinctiveness of a mark is typically determined only in

relation to a given product, with the mark’s categorization

dependent on the nature of that relationship. “For example, the

mark BRILLIANT may be ‘descriptive’ on diamonds,

‘suggestive’ on furniture polish, and ‘arbitrary’ on canned

applesauce.” McCarthy § 11:64.

The district court ultimately found that “La Michoacana”

was not a sufficiently distinctive mark to merit trademark

protection. At summary judgment, the court explained it was

“somewhat unclear what category the parties believe the marks

fall into but, given their focus on the secondary meaning

inquiry, it appears that they both agree that the marks are not

inherently distinctive and instead are better defined as

geographically descriptive.” 69 F. Supp. 3d at 210. But the

court declined to grant either party summary judgment on the

issue of secondary meaning, finding that substantial questions

of material fact remained. Id. at 211-12.

Prolacto objected that the court had misconstrued its

argument: It insisted that “La Michoacana” was an arbitrary

rather than a descriptive mark. 188 F. Supp. 3d at 84.

Following trial, the district court addressed the question

whether “La Michoacana” was an inherently distinctive mark,

16

and found Prolacto’s position factually untenable. An arbitrary

mark is one that does not describe the product it sells at all, see

McCarthy § 11:11, but “La Michocana,” used as a name for a

paleta company, captured the association of paletas with the

state of Michaocán. 188 F. Supp. 3d at 83-86, 111. Based on

ample trial evidence, including testimony about the ubiquity of

paleta shops in Mexico referring to their wares with the term

“Michoacana,” the court found that the term evoked a type of

product generally linked to the named locale, much like the

names Philly cheese steak or Chicago-style pizza, so did not

have an arbitrary relationship to paletas. Id. at 42, 85-86.

The district court further held that Prolacto had not offered

proof that “La Michoacana” had acquired secondary meaning,

i.e. that consumers identified “La Michoacana” with Prolacto

itself; consequently, “La Michoacana” could not qualify for

trademark protection as a descriptive mark. The court

explained that, in making its case, Prolacto barely offered any

of the “commonly considered” evidence for secondary

meaning, such as “survey evidence, the length and manner of

use of the name, the nature and extent of advertising and

promotion of the name, the volume of sales, the instances of

actual confusion.” Id. at 85. While Prolacto identified a few

instances of confusion between Prolacto and PLM’s products

in their overlapping markets, Prolacto did not offer any

testimony or other support for the proposition that it was the

words “La Michoacana,” as opposed to imaging on the

packages, for example, that caused the confusion. Id. at 86.

Further, the court found, much of the testimony offered to show

consumer confusion came from “witnesses [who] lacked

credibility due to their close family relationship with

PROLACTO’s lead counsel,” and even those witnesses’

testimony suggested they viewed the name “La Michoacana”

as a referring to a type of product rather than a single brand.

Id. at 86 & n.46. Prolacto thus failed to establish that

17

consumers identified the mark “La Michoacana” as distinctive

to Prolacto. Id. at 86.

Prolacto’s first contention on appeal—that “the error here

is that the term [‘La Michoacana’] was never shown to be

[merely] descriptive,” see Appellant’s Br. at 35 n.16; see also

id. at 34-35, 37—places the burden of proof on the wrong party.

Distinctiveness is an element of Prolacto’s false association

claim. Establishing that its mark is inherently distinctive, not

just descriptive, was therefore Prolacto’s burden to bear. The

district court did not err in requiring Prolacto to make out that

essential element of its own false association claim.

In holding that “La Michoacana” was not a distinctive

mark, the district court noted that “[h]ere, the same evidence

that would be required to establish secondary meaning would

also resolve whether ‘Michoacana’ is arbitrary or descriptive.”

Id. at 95. To the extent that the district court intended thereby

to state a general rule of law, it was incorrect. A mark may

well be inherently distinctive even if it lacks secondary

meaning. A factual record, typically including surveys or other

empirical evidence, is necessary to show secondary meaning

(i.e., that consumers identify a mark with a specific producer).

Inherent distinctiveness, however, focuses on the mark’s link

to the product rather than its producer, and may be evident on

consideration of the mark and the product themselves. We

need not inquire whether the district court’s error in eliding the

distinct analytic categories affected the judgment, however,

because any challenge on that ground was forfeited by

Prolacto’s failure to plainly raise the point on appeal. See Hall

v. District of Columbia, 867 F.3d 138, 152 n.1 (D.C. Cir. 2017).

Finally, Prolacto also asserts that PLM’s appropriation of

the words “La Michoacana” is itself evidence that the mark is

distinctive. That argument is logically flawed. It does not

18

follow that mere appropriation of a phrase would itself be

evidence of that phrase’s distinctiveness. A term may usefully

signify a genre without signifying a brand—as in the cases of

New York-style cheesecake or Tex-Mex cuisine. Further,

Prolacto points to no specific evidence of distinctiveness that

the district court overlooked. The evidence the court did

consider amply supported its factual determinations that the

phrase “La Michoacana” was neither inherently distinctive nor

had acquired distinctiveness. See 188 F. Sup. 3d at 85-86. To

the extent that those findings turn at least in part on the district

judge’s credibility determinations, we are especially loath to

invalidate them. See ALPO Petfoods, 913 F.2d at 965.

The district court’s findings that “La Michoacana” lacks

distinctiveness—whether inherent or acquired—are not

erroneous, let alone clearly so. Prolacto accordingly cannot

establish false association with respect to the “La Michoacana”

marks under Section 43(a) of the Lanham Act, and we affirm

the district court’s dismissal of that claim.

Second, even if “La Michoacana” were distinctive and thus

potentially subject to trademark, Prolacto’s challenge would

largely fail because, as the district court found, Prolacto did not

establish its “priority of use” for the “La Michoacana” mark in

most U.S. markets. In the United States, a party acquires

trademark rights by being the first to use the mark in U.S.

commerce. See McCarthy § 16:1; see also Estate of Coll-

Monge, 524 F.3d at 1346-47. The United States subscribes to

the “territoriality doctrine,” under which “a trademark is

recognized as having a separate existence in each sovereign

territory in which it is registered or legally recognized as a

mark.” McCarthy § 29:1; accord ITC Ltd. v. Punchgini, Inc.,

482 F.3d 135, 155 (2d Cir. 2007). Priority of use in the United

States is what triggers protection under U.S. law, and prior use

19

of a mark outside the United States ordinarily does not create a

trademark right here.

Prolacto initially claimed that PLM violated the Lanham

Act’s prohibition on false association by using both the “La

Michoacana” and Indian Girl marks in Houston, Texas,

Florida, and Northern California. At summary judgment,

however, the district court held that the undisputed evidence

showed PLM did not do business in Florida, eliminating the

possibility that Prolacto suffered infringement in that market,

Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo

S.A. de C.V., 69 F. Supp. 3d 175, 207 (D.D.C. 2014); it further

held that PLM’s use of the marks in the Northern California

market—and even its registration of those marks—

undisputedly predated Prolacto’s entry into that market by

several years, defeating Prolacto’s infringement claim in

Northern California, id. at 207-08. Prolacto’s false association

claim was thereby limited to the Houston market. Id. After

trial, the court found that Prolacto could not establish its

priority, even within the Houston market, with respect to the

Indian Girl logo; Prolacto did not use that mark in Houston

until after PLM started doing so in 2005. 188 F. Supp. 3d at

76-77, 109. (As discussed above, Prolacto did establish prior

use of “La Michoacana” in the Houston market, but its priority

gained it no protection because Prolacto failed to show “La

Michoacana” was distinctive, see supra pp. 12-18).

Prolacto concedes that PLM is the prior user of all of the

contested marks in the relevant United States markets, save “La

Michoacana” in the Houston area. Prolacto does not challenge

the district court’s factual determinations regarding PLM’s

priority in the other U.S. markets, whether those

determinations result from the court’s legal holdings as to the

undisputed facts at summary judgment, or from its factual

findings on the full trial record. Instead, Prolacto contends only

20

that it has trademark rights in the United States based on its

own undisputed prior use in Mexico.

Prolacto makes two alternative arguments, each of which

would require us to decide a matter of first impression.

Principally, Prolacto urges us to read Section 43(a)(1)(A)’s

protection against false association not to depend on any proof

of Prolacto’s prior use in the United States, as the Fourth

Circuit recently did in Belmora LLC v. Bayer Consumer Care

AG, 819 F.3d 697, 705-08 (4th Cir. 2016). The Belmora court

reasoned that “the plain language of § 43(a) does not require

that a plaintiff possess or have a trademark in U.S. commerce

as an element of the cause of action,” id. at 706; instead, a

plaintiff that held the same mark in Mexico could simply show

that defendant’s deceptive use of the mark in U.S. commerce

was likely to injure it, at least where the Mexican mark had

given rise to a reputation in the United States. Id. at 706, 708-

09. Prolacto argues, along those lines, that PLM’s use of the

“La Michoacana” mark in U.S. commerce injured Prolacto by

trading on its goodwill, which Prolacto accrued in Mexico

before entering the U.S. market. Prolacto charges that, in doing

so, PLM usurped some of Prolacto’s business by passing off its

wares in the United States as Prolacto’s. See Appellant’s Br.

at 27-28 & n.13.

We need not pass on Belmora’s reading of Section

43(a)(1)(A), however, because Prolacto has not established an

injury to its commercial sales or prospects—a fact Prolacto

acknowledges. See Oral Arg. Tr. 7:10-8:2. The district court

noted that “PROLACTO offered no evidence, for example,

concerning any loss of sales from customers who bought

PLM’s products in the United States in lieu of PROLACTO’s

products in Mexico. Nor did it offer any evidence of consumer

confusion in Mexico concerning its products, any credible

evidence showing a crossover of the parties’ customers

21

between the United States and Mexico, or any other evidence

suggesting that PROLACTO suffered any injury in the

Mexican market.” 188 F. Supp. 3d at 111 n.66. Because

Prolacto had a full opportunity to develop the factual record,

we decline its request that we either presume the relevant injury

or remand for further factual development in the district court.

As for Prolacto’s second alternative theory of unfair

competition loosely based on the Tea Rose-Rectanus exception

to the prior-use principle, we reject Prolacto’s contention that

the exception is “[c]onceptually similar” to its claim. See

Appellant’s Br. 50. That exception stems from Hanover Star

Milling Co. v. Metcalf, 240 U.S. 403 (1916) (Tea Rose), and

United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918)

(Rectanus). The Supreme Court in the Tea Rose and Rectanus

cases recognized a regional exception to domestic trademark

rights’ national scope: A junior user could have regional rights

over a senior user in the United States where the junior’s use

occurred in areas remote from the senior’s use. Following the

parties’ lead, we assume, without deciding, that despite the

intervening changes in interstate commerce, transportation,

and internet sales, this early twentieth-century exception has

traction in the twenty-first century marketplace. We can so

assume because, by its own terms, the Tea Rose-Rectanus

exception is inapplicable to this case. Prolacto is not the senior

user within the United States. See 188 F. Supp. 3d at 88.

Despite this clear difference, Prolacto views Tea Rose-

Rectanus as helpful because the rights recognized under the

exception implicitly depend on the good faith of the junior’s

use and, Prolacto insists, PLM appropriated the marks in bad

faith. Prolacto thus deploys Tea Rose-Rectanus’s general

concept to cast itself as an internationally senior user and then

to suggest that, under Tea Rose-Rectanus, we should hold any

22

regional right PLM might have to be defeated as derived from

bad faith appropriation. See Appellant’s Br. at 25, 50.

Prolacto’s theory is in tension with the territorial

foundations of trademark law, under which its prior use in

Mexico does not establish priority in United States markets.

Even on its own terms, the theory fails in light of the district

court’s finding that PLM’s adoption of the mark was not in bad

faith. See 188 F. Supp. 3d at 42, 86-92. Rather, the district

court found that when PLM adopted its marks it was unaware

of Prolacto and “did not believe that the term denoted a single

source of product in Mexico.” Id. at 91. 3

In sum, Prolacto’s false-association claim fails because

Prolacto has not established a right to the “La Michoacana”

mark or injury from PLM’s use sufficient to establish false

association in violation of Section 43(a) of the Lanham Act.

We thus affirm the district court’s entry of judgment for PLM

on that claim.

B. Prolacto’s Claim that PLM Engaged in

False Advertising

Prolacto next claims that PLM’s advertisements,

particularly its use of the Tocumbo Statement, violate the false

advertising prohibition of Section 43(a)(1)(B) of the Lanham

Act. To prevail in a false advertising suit under Section 43(a),

“a plaintiff must prove that the defendant’s ads were false or

misleading, actually or likely deceptive, material in their

effects on buying decisions, connected with interstate

3

Prolacto does not on appeal invoke the “well-known marks”

exception to territorial prior use principles. See Appellants’ Br. at

24. Compare Grupo Gigante SA DE CV v. Dallo & Co., 391 F.3d

1088 (9th Cir. 2004), with ITC Ltd. v. Punchgini, Inc., 482 F.3d 135

(2d Cir. 2007).

23

commerce, and actually or likely injurious to the plaintiff.”

ALPO Petfoods, 913 F.2d at 964. The parties do not dispute

that the Tocumbo Statement was, in fact, false or misleading,

actually or likely deceptive, and connected with interstate

commerce. See 69 F. Supp. 3d at 216. Our review is therefore

confined to the elements of materiality and injury. As elements

of its false advertisement claim, injury and materiality are

Prolacto’s to prove. Prolacto has not carried that burden.

The district court did not err in concluding Prolacto failed

to prove a relevant injury. Reviewing all the facts before it, the

district court concluded that “PROLACTO offered little, if any,

evidence that any consumers even saw one of the [allegedly

false advertising] statements, let alone that any consumers

factored the statement into their decision whether to purchase

or not purchase PLM’s products.” 188 F. Supp. 3d at 62-63.

The court methodically surveyed all of the evidence Prolacto

offered to establish injury, starting with the Tocumbo

Statement.

First, in its effort to show that consumers were swayed by

the Tocumbo Statement, Prolacto offered testimony of a

paletas expert, Sam Quinones, who had taken several trips to

Mexican paleterias and written articles on the subject. Id. at

62. While Quinones testified that he had read the “small print”

on PLM’s paleta wrappers (which at certain times included the

Tocumbo Statement), he could not recall what it said; “[t]hus,”

the court concluded, “it is not even clear whether [he] read the

Tocumbo Statement, in any of its variations.” Id. The court

further noted that Quinones, who testified to spending fifteen

minutes reading the packaging of paletas, was far more

attentive than the average consumer—a fact that reinforced the

court’s conclusion that the average consumer was unlikely to

have been affected by the Statement. Id.

24

Second, Prolacto introduced testimony of the company’s

counsel’s own family members in an effort to show the

Tocumbo Statement’s effect. Id. We defer to the court’s

credibility determination that their testimony was not reliable.

Third, Prolacto offered a “consumer survey,” the results of

which have little bearing on injury. Id. at 62-63. In that survey,

Prolacto’s expert asked consumers to read and interpret the

Tocumbo Statement. Id. The expert did not, however, “test the

materiality of the statement on consumers’ decision-making

processes” or attempt to replicate the environment of a

marketplace to “determine whether, for example, any

consumers would actually take the time to study PLM’s

product packaging and read about its purported history before

deciding whether to make a purchase.” Id. at 63. The court

reasonably concluded: “Simply put, there was no credible

evidence that the Tocumbo Statement has had, or would have,

any real impact on PROLACTO in any way.” Id.

Beyond the deficient evidence of injury stemming from

the Tocumbo Statement, the court found that PLM’s use of

other images and phrases in its advertising similarly had no

unlawfully injurious effect on Prolacto. Id. at 63-64, 112-15.

The name “La Michoacana,” for example, lacks

distinctiveness, and images of sand beaches are a common

advertising trope. Prolacto points to nothing in the record that

contradicts or even weakens the court’s findings and

conclusions, and we see no source of clear error.

Because the district court did not clearly err in finding a

lack of credible evidence of any injury, and Prolacto’s failure

to establish injury is fatal to its claim, we need not consider

additional arguments regarding materiality. See ALPO

Petfoods, 913 F.2d at 964. On this ground, we affirm the

district court’s conclusion that Prolacto has not established

25

PLM’s use of the Tocumbo Statements and other advertising

materials constituted false advertising in violation of Prolacto’s

rights under Section 43(a)(1)(B) of the Lanham Act.

III. PLM’s Lanham Act Claim Against Prolacto’s

Use of Indian Girl Logos

Finally, Prolacto appeals the district court’s holding that it

infringed PLM’s trademark rights in the Indian Girl marks, in

violation of Section 32 of the Lanham Act. Section 32 protects

registered trademarks from infringing use. It provides:

Any person who shall, without the consent of the

registrant—

(a) use in commerce any reproduction, counterfeit,

copy, or colorable imitation of a registered mark in

connection with the sale, offering for sale,

distribution, or advertising of any goods or services

on or in connection with which such use is likely to

cause confusion, or to cause mistake

shall be liable in a civil action by the registration for

the remedies hereinafter provided.

15 U.S.C. § 1114(1). To establish a violation of Section 32,

the claimant must show (1) that it owned a registered mark (2)

which another person used in commerce, and that (3) such use

likely caused consumer confusion. See id.; see also McCarthy

§ 23:76. The parties do not dispute that PLM has used its marks

in commerce or that PLM’s and Prolacto’s Indian Girl marks

might be confused. See 188 F. Supp. 3d at 107. The issue here

is whether PLM owns the Indian Girl marks that Prolacto used.

PLM’s two Indian Girl marks are registered with the U.S.

Patent & Trademark Office, and have been since 2005. See id.

at 48. The fact of registration, under the Lanham Act, is itself

26

“prima facie evidence of the validity of the registered mark and

. . . of the registrant’s ownership of the mark, and of the

registrant’s exclusive right to use the registered mark in

commerce on or in connection with the goods or services

specified in the registration subject to any conditions or

limitations stated therein.” 15 U.S.C. § 1115(a). PLM

sufficiently established its ownership by offering evidence of

the marks’ registration. And because proof of registration is

prima facie evidence of ownership, we need not consider the

merits of Prolacto’s challenge to the marks’ “incontestability”

under 15 U.S.C. § 1065. Regardless of whether that ownership

is incontestable, the evidence does not rebut the presumption

of PLM’s ownership. Accordingly, we affirm the district

court’s conclusion that Prolacto infringed PLM’s use of its

registered marks.

* * *

We find no merit in Prolacto’s remaining arguments,

including its objections to the district court’s denial of a right

to a jury trial on its equitable claim to an accounting of profits,

and to several evidentiary determinations and other orders

identified in the notice of appeal but not discussed in the

briefing. Accordingly, we affirm the district court’s entry of

judgment for PLM on Prolacto’s false association and false

advertising claims under Section 43(a) and PLM’s

infringement claim under Section 32(1).

So ordered.