http://www.ocregister.com/ocr/2005/07/1 ... 593267.php

Brand-name 'piracy' disputes cross the border both ways
Many Mexican firms complain their brands are unfairly used in the U.S., though it's not illegal.

By JOEL MILLMAN
The Wall Street Journal

On a hot summer day, families strolling in plazas from Tijuana to Cancun often stop at stalls selling La Michoacana ice cream bars, a brand synonymous with frozen treats in Mexico for decades. These days, identical-looking bars are also sold in the United States.

In both cases, the bars' packaging and design are nearly the same. That's raising a cross-border dispute.

La Michoacana of Mexico, the brand's originators, say it has never sold its product in the United States and has never authorized anyone to use their well-known logo, a girl in a pink dress holding an ice cream cone.

"It's robbery," said Alejandro Andrade, an executive at Industrias Alto SA, of Tocumbo, Michoacan, the firm that markets the La Michoacana brand. Andrade said he has registered the name and logo with Mexico's intellectual property agency, but not with U.S. authorities.

La Michoacana is not alone. With the explosive growth of immigration in the United States, many old-country firms are discovering that their brands are being appropriated here. It may be unethical for a U.S. company to use a brand developed by a foreign firm outside the country, but U.S. law doesn't make it illegal - unless the original brand has registered its trademark here.

"Brands are trademarks, and trademark rights only extend as far as the jurisdiction in which they are obtained," says Beth Goldman, an intellectual-property specialist at the law firm of Heller Ehrman in San Francisco.

For years, complaints of piracy were a one-way street. U.S. and European makers of clothing and computer software pressed trade officials to crack down on companies in developing nations that used their brand names. But now the complaints are going both ways.

John M. Mings, a trademark attorney at Fulbright & Jaworski in Houston, says he represented Costa Rica's biggest dairy, La Cooperativa de Productores de Leche Dos Pinos R.L., in 2001 in a successful effort to stop a New York firm run by entrepreneurs from El Salvador from registering the Dos Pinos name with U.S. trademark authorities for a line of milk products.

In the case of the Mexican ice cream bars, the U.S. treats are produced by a Mexican immigrant, Ignacio Gutierrez, whose company, Paleteria la Michoacana Inc., is located in Ceres. The company disputes the Mexican company's rights to the brand's name and logo in both the United States and Mexico.

Paleteria la Michoacana's Web site does seem to confuse the two companies. Even though the California company was founded in Modesto in 1991, the site says, "La Michoacana is a family company founded in Tocumbo, Michoacan, in the 1940s. Since then, we've continued to make premium ice cream, fruit bars and drinks that give the flavor and tradition of Mexico."

Despite making the Tocumbo connection, the company says it isn't claiming to be part of the original family, only that it produces its ice cream in a typical Mexican style.

"We just chose a name we knew Mexican people would know," said Patricia Gutierrez, who works as a secretary at Paleteria La Michoacana and is married to Gutierrez.

Paleteria La Michoacana ships its version of the ice cream to supermarkets and convenience stores around the United States and also supplies La Michoacana snack carts. Gutierrez applied for a trademark for his product in 2003, which his Mexican rivals didn't contest, according to U.S. federal records. The trademark is scheduled to take effect this year. The U.S. company says it trademarked the name after other companies tried using it, too.

Kevin Seibert, the attorney for the Modesto manufacturer, says his clients' logo has significant differences from the one commonly seen in Mexico. "There is no likelihood of confusion with the Mexican company log," Siebert said.

The Mexican firm fears there is little now it can do legally in the United States, where it never tried to register the La Michoacana name or logo. "We never imagined this could happen to us," said Andrade, who added he would like to set up a licensing deal with Gutierrez. The California company says it is not interested.

Registering a trademark in the United States is relatively easy. Any foreign company, even one that doesn't have a U.S. presence, can hire a lawyer in its home country to file the application and pay the $325 fee to the U.S. Patent and Trademark Office. It can take up to two years to clear and must be renewed between the fifth and sixth years, and then again five years after that. Alternatively, the application can go through the World Intellectual Property Organization, an international advocacy group based in Geneva. Protection outside the United States must be applied for on a country-by-country basis.

Registering a trademark doesn't ensure that interlopers won't try to copy a brand's name or identity. Tres Hermanos, a shoe store owned by Estilos Modernos Del Bajio SA de CV, Mexico's largest footwear chain, has registered its trademark in the U.S. since 1976 - though it doesn't operate here - and says it is still targeted by pirates. It stopped one Orange County company from selling shoes in the U.S. under the Tres Hermanos name in 2002, and vigilantly watches for other infractions.

"It costs us $30,000 or $50,000 to go after someone every time we hear about it, in Mexico," says Benito Munoz, Tres Hermanos' controller, who said he currently has several cases pending in Mexico. "It's twice that in California."

Now, another company, Tres Hermanos Inc., is using the name (tres hermanos means "three brothers" in Spanish), for a chain of 26 stores that sell clothing and Mexican cowboy-style shoes and boots in California, Nevada and Arizona. In this case, the owners are actually three brothers - although they were born in Lebanon. The U.S. chain uses nearly the same logo as the one in Mexico.

On Anaheim's South Euclid Street, in a sprawling immigrant neighborhood, shoppers say they were attracted to the store bearing the same name they knew from home. "I know it from TV (in Mexico)," said house painter Fernando Contreras, who emigrated from the Mexican state of Hidalgo.

"It's piracy. What else can you call it?" said Arnulfo Padilla, who founded the Mexican Tres Hermanos chain in 1955. But the owners of the American Tres Hermanos say they are doing nothing wrong. "They're in Mexico, and we're in the U.S.," says Monir Awada, the youngest of the three brothers. The Mexican firm says it hopes to negotiate a settlement.