Exoto Inc. V. Sunrich Company, Llc Et Al

Case Background

Plaintiff EXOTO Inc. filed a trademark infringement lawsuit against Sunrich Company, LLC, Truescale, Truescale Miniatures, Truescale Miniatures Limited, TSM Model Scale Miniatures, Top Speed Model, Glen Chou, and Cindy Chou. The lawsuit was filed in the United States District Court, California Central (Western Division – Los Angeles). The case was assigned to Judge Maame Ewusi-Mensah Frimpong and referred to Magistrate Judge Stephanie S. Christensen. [Case number: 2:21cv3754]

Cause

EXOTO, a company specializing in manufacturing and selling 1:18 scale die-cast racecar models, built a strong reputation for quality and precision. Since its launch, EXOTO’s product designs and branding have gained significant success. The company’s products were manufactured exclusively using specially engineered tooling created by Leasear Ltd., a Hong Kong-based manufacturer. By contract, EXOTO retained all rights to the tooling.

Over time, EXOTO became a target for individuals and entities involved in producing and distributing counterfeit versions of its products. These unauthorized parties engaged in activities such as copying, manufacturing, importing, advertising, and selling fake products that featured EXOTO’s branding. EXOTO discovered that the Defendants had unlawfully obtained its proprietary tooling from Leasear Ltd. and used it to produce counterfeit models, violating EXOTO’s ownership rights.

EXOTO invested substantial time and resources in building consumer recognition and protecting its brand. The company secured federal trademark registrations, including one for “Exoto” (USPTO Reg. No. 2372736, registered August 1, 2000). Despite this, Defendants used EXOTO’s branding and tooling without authorization. EXOTO never permitted them to manufacture, sell, or distribute its products, nor to acquire or use its exclusive tooling.

Defendants operated websites, where they sold counterfeit products featuring EXOTO’s branding. They targeted buyers in California, advertising and distributing fake models through platforms such as eBay, Amazon, Die-cast Legends, and Replicarz. EXOTO purchased some of these counterfeit models and confirmed they were unlawfully manufactured using its stolen tooling.

Defendants knowingly infringed on EXOTO’s trademarks and profited from the company’s reputation. They sought to mislead consumers and capitalize on EXOTO’s goodwill. Their actions, including the unauthorized acquisition and use of EXOTO’s tooling, caused harm to EXOTO’s business and brand integrity.

Damages

EXOTO sought a court order preventing Defendants from manufacturing, selling, or promoting counterfeit products and misleading consumers about an association with EXOTO. It demanded the recall and destruction of infringing goods, a compliance report, and an audit of Defendants’ profits. EXOTO also sought damages, including treble damages for willful infringement, $2.79 million for tooling costs, and $7 million for lost income, along with legal fees and other appropriate relief.

Key Arguments and Proceedings

Legal Representation

  • Plaintiff(s): Exoto Inc. a California Corporation
    • Counsel for Plaintiff(s): Eileen Keusseyan | Natalie Siran Hairabedian | Harout Greg Keosian | Melkon Rafi Melkonian
  • Defendant(s): Sunrich Company, LLC a California Limited Liability Company | Truescale Miniatures Limited | Truescale | Truescale Miniatures | TSM Model Scale Miniatures | Top Speed Model | Glenn Chou | Cindy Chou | Does 1 through 50, inclusive
    • Counsel for Defendant(s): Steven E. Young | Jeffrey Stephen Kravitz

Claims

Plaintiff claimed that Defendants acted willfully and in bad faith, causing irreparable harm to EXOTO. They infringed, tarnished, and diluted EXOTO’s trademark rights while producing counterfeit products. Their actions misled the public into believing an association existed between them and EXOTO. They falsely designated the origin of their goods, engaged in counterfeiting, and unfairly profited from these activities. Their conduct was fraudulent, and malicious, and deliberately disregarded the law. By intentionally harming EXOTO through unfair business practices, they warranted injunctive relief and the forfeiture of their profits. Without intervention, they would have continued causing further harm.

Defense

Defendants Sunrich Company, LLC, Glen Chou, and Cindy Chou denied most of the Plaintiff’s allegations, citing a lack of sufficient information or disputing the claims outright. They admitted ownership and operation of Sunrich but argued that several named entities were merely brand names, not separate legal entities. They acknowledged selling products through Amazon and other platforms but denied wrongdoing.

Defendants asserted that the Plaintiff lacked proper rights to certain trademarks and trade dress, claiming that the designs belonged to automobile manufacturers. They argued that Plaintiff’s models, not theirs, were unauthorized reproductions. They also denied causing any harm to Plaintiff and challenged the legal basis for the claims.

As affirmative defenses, Defendants argued that the lawsuit lacked merit, that their actions were legally protected, and that Plaintiff’s claims were barred by its own misconduct. They alleged that any claimed damages were speculative and that Plaintiff had no valid claims against them. Finally, they contended that the lawsuit was frivolous and sought to recover legal costs.

Verdict

A defense verdict was returned after a trial before District Judge Maame Ewusi-Mensah Frimpong. The Court ordered that Plaintiff EXOTO Inc. recover nothing and dismissed the case on its merits. The judgment on the defense verdict was entered on February 11, 2025.

Court Documents:

Documents are available for purchase upon request at jurimatic@exlitem.com