Bose Corporation v. Ejaz

Filing

OPINION issued by Sandra L. Lynch, Chief Appellate Judge; Juan R. Torruella, Appellate Judge and William J. Kayatta , Jr., Appellate Judge. Published. [12-2403]

Case: 12-2403

Document: 00116592266

Page: 1

Date Filed: 10/04/2013

Entry ID: 5769351

United States Court of Appeals
For the First Circuit
No. 12-2403
BOSE CORPORATION,
Plaintiff, Appellee,
v.
SALMAN EJAZ,
Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]

Before
Lynch, Chief Judge,
Torruella and Kayatta, Circuit Judges.

Emily E. Smith-Lee, with whom Sana Abdullah and Smith Lee
Nebenzahl LLP were on brief, for appellant.
Jeffrey S. Patterson, with whom Christopher S. Finnerty,
Morgan T. Nickerson, and Nelson Mullins Riley & Scarborough LLP
were on brief, for appellee.

October 4, 2013

Case: 12-2403

Document: 00116592266

Page: 2

LYNCH, Chief Judge.

Date Filed: 10/04/2013

Entry ID: 5769351

Plaintiff Bose Corporation won

summary judgment on its breach of contract and trademark claims
against defendant Salman Ejaz.

Bose Corp. v. Ejaz, No. 11-10629,

2012 WL 4052861 (D. Mass. Sept. 13, 2012).

Ejaz admitted to

selling home theater systems manufactured by Bose for use in the
United States to customers in other countries, selling them across
international markets to take advantage of higher retail prices
abroad.

Bose asserted that Ejaz sold its American products in

Australia without Bose's consent even though he had signed a
settlement agreement promising not to do so after he had made
similar sales in Europe.

Ejaz appeals, and we affirm.
I.

Because this case comes to us following Bose's motion for
summary judgment, we recite the facts in the light most favorable
to Ejaz.
Ejaz first began selling Bose products online through
eBay as early as 2005.

He was not an authorized reseller or

distributor of Bose products.

Rather, he sought to take advantage

of the fact that the price of electronics can vary significantly
between different countries, and would buy electronics in one
country and resell them in another.

Products sold in this way are

known as "gray market goods" because the goods themselves are
legitimate and unaltered products of the claimed manufacturer, but
they are sold outside of their intended retail markets.

-2-

Case: 12-2403

Document: 00116592266

Throughout

2005

Page: 3

and

Date Filed: 10/04/2013

2006,

Ejaz

sold

Entry ID: 5769351

Bose

products

designed for use in the United States to customers in other
countries, mostly in Europe.

Bose soon became aware of Ejaz's

activities and approached him in late 2006 with threats of legal
action. At that time, Bose indicated that Ejaz could be liable for
roughly

$250,000

for

trademark

unauthorized sales of Bose products.

infringement

based

on

his

Bose then went on to offer a

settlement: in essence, Bose would drop all of its existing legal
claims against Ejaz, including a suit that it had already filed in
the United Kingdom, and in exchange, Ejaz would not sell Bose
products without Bose's permission.
Negotiations over the settlement were tense.

Ejaz chose

to be unrepresented and later stated that he found the tactics
Bose's lawyers used "very pressurizing, very intimidating." He was
recently married, and he and his wife were "anxious to resolve the
dispute."

Ejaz felt as though Bose's lawyers were implicitly

suggesting throughout the negotiations that he would go to jail if
he did not reach an agreement with Bose, although he never claims
such threats of criminal prosecution were actually made.

By

January of 2007, Ejaz agreed to settle the claims.
The agreement was executed through two documents. First,
the parties agreed to the terms of a written Settlement Agreement.
The Settlement Agreement released all of Bose's preexisting claims,
including those not related to the U.K. lawsuit, and prohibited

-3-

Case: 12-2403

Document: 00116592266

Page: 4

Date Filed: 10/04/2013

Entry ID: 5769351

Ejaz from selling Bose products anywhere in the world without
Bose's prior consent. It further provided that Ejaz would owe Bose
$50,000 in liquidated damages for every violation of the Settlement
Agreement.
2007.

Ejaz signed the Settlement Agreement on January 27,

Bose signed it on February 26, 2007, and it took effect on

that date.

Second, the Settlement Agreement included a Consent

Order, to be filed in the British High Court of Justice.

The

Consent Order was filed with that court on February 23, 2007, and
issued

by

that

court

on

March

9,

2007.

The

Consent

Order

terminated the U.K. lawsuit in exchange for Ejaz's promise to stop
selling Bose products in the European Union.
Not long after executing the Settlement Agreement, Ejaz
violated it.

As he wrote in an email, "greed got [the] better of

[him]," and he started selling Bose products in Australia.
response, Bose initiated the present case.

In

Bose sought damages

against Ejaz for breach of the Settlement Agreement on seven
occasions.1

It also added further claims, of which only its claim

for trademark infringement is relevant here.
After discovery, Bose moved for summary judgment.

Ejaz

opposed the motion, claiming that there were a number of disputed
material facts relating to several contract defenses.

1

He further

By his own admission, Ejaz sold at least seven units in
Australia. For purposes of this case, Bose has decided to rely on
that admission and seek recovery for seven violations of the
Settlement Agreement rather than try to prove a potentially much
greater number of sales.
-4-

Case: 12-2403

Document: 00116592266

Page: 5

Date Filed: 10/04/2013

Entry ID: 5769351

maintained that Bose had not carried its burden of proving each
element of its trademark claim.
Ejaz also asked the district court to extend discovery
before ruling on Bose's motion for summary judgment. He complained
that Bose's corporate representative had been unable to answer
questions on many of the topics for which he had been designated to
give deposition testimony on Bose's behalf.

That inability was

particularly

because

problematic,

Ejaz

maintained,

Bose

had

previously opposed a motion to extend discovery by explaining that
Ejaz would be able to obtain all the information he needed by
deposing its corporate representative.

Ejaz argued that Bose had

thus obstructed his discovery attempts, and that he should be
granted more time for discovery as a result.
Without ruling on the motion to extend discovery, the
district court granted summary judgment in favor of Bose on its
breach of contract and trademark infringement claims.
appeals.

Ejaz now

He argues that the Settlement Agreement, or at least its

liquidated

damages

provision,

is

unenforceable,

and

that

the

district court erred in holding him liable under it on summary
judgment.
fact

He further argues that genuine questions of material

remain

such

that

summary

judgment

on

the

trademark

infringement claim is inappropriate. Finally, he contends that the
district

court

abused

its

discretion

-5-

in

declining

to

extend

Case: 12-2403

Document: 00116592266

discovery.

Page: 6

Date Filed: 10/04/2013

Entry ID: 5769351

We reject these claims and affirm the grant of summary

judgment.
II.
We review the district court's grant of summary judgment
de

novo,

drawing

nonmoving party.
2012).

all

reasonable

inferences

in

favor

of

the

Rockwood v. SKF USA Inc., 687 F.3d 1, 9 (1st Cir.

Summary judgment is appropriate "when there is no genuine

issue of material fact and the moving party is entitled to judgment
as a matter of law."

Cortés-Rivera v. Dep't of Corr. & Rehab. of

P.R., 626 F.3d 21, 26 (1st Cir. 2010).
According to Section 8.4 of the Settlement Agreement,
"interpretation and performance of [] [the] Agreement" is governed
by Massachusetts law.2

Under Massachusetts law, a breach of

contract claim requires the plaintiff to show that (1) a valid
contract between the parties existed, (2) the plaintiff was ready,
willing, and able to perform, (3) the defendant was in breach of
the contract, and (4) the plaintiff sustained damages as a result.
See Singarella v. City of Boston, 173 N.E.2d 290, 291 (Mass. 1961).
Ejaz contests only two elements of Bose's case: whether a valid
contract existed and whether the contract's liquidated damages
clause is enforceable.

2

The parties have not raised any choice of law issues and
instead assume that Massachusetts law applies.
We will do the
same.
-6-

Case: 12-2403

A.

Document: 00116592266

Page: 7

Date Filed: 10/04/2013

Entry ID: 5769351

Contract Validity
Ejaz offers four arguments to explain why the Settlement

Agreement is not a valid contract: (1) there was no consideration
supporting the Settlement Agreement, (2) there was no meeting of
the minds when the parties signed the Agreement, (3) the Settlement
Agreement is unconscionable, and (4) he signed the Settlement
Agreement under duress.
1.

Consideration

Ejaz

argues

that

the

Settlement

Agreement

lacked

consideration because, although it purported to release Bose's
legal claims against Ejaz, that release was illusory, as the
earlier Consent Order in the British courts had already released
those same claims.

This argument is contradicted by the facts of

the case in three respects: the Consent Order was not an "earlier,"
separate agreement, but rather part and parcel of the Settlement
Agreement; the actual issuance of the Consent Order was not
earlier; and the releases were not coextensive.

Ejaz signed the

Settlement Agreement on January 27, 2007 and has not identified any
releases predating that agreement. The Settlement Agreement became
effective upon Bose's signing it on February 26, 2007. The Consent
Order was not issued until March 9, 2007, after both parties had
executed the Settlement Agreement. Additionally, the Consent Order
released only those legal claims at issue in the U.K. litigation,
while

the

Settlement

Agreement

-7-

released

all

legal

claims,

Case: 12-2403

Document: 00116592266

regardless of location.

Page: 8

Date Filed: 10/04/2013

Entry ID: 5769351

Ejaz did receive consideration for his

promises in the Settlement Agreement.
2.

Meeting of the Minds

Ejaz offers two arguments for his claim that there was no
meeting of the minds.

First, he contends that he subjectively

attached a different understanding to the contract than Bose did:
Bose believed, in accordance with the contract's explicit language,
that Ejaz would be barred from selling Bose products anywhere
without permission, while Ejaz believed that he would be barred
from selling Bose products only in the United States and United
Kingdom, leaving him free to sell in Australia.

Second, he argues

on appeal that he never even saw the terms of the Settlement
Agreement before signing it, and that instead he was merely given
a signature page that he thought corresponded to the Consent Order,
which he had previously reviewed.
Ejaz's subjective belief is insufficient to invalidate
the contract.

Absent fraud, an individual "who signs a written

agreement is bound by its terms whether he reads and understands
them or not."

Awuah v. Coverall N. Am., Inc., 703 F.3d 36, 44 (1st

Cir. 2012) (quoting St. Fleur v. WPI Cable Sys./Mutron, 879 N.E.2d
27, 35 (Mass. 2008)) (internal quotation mark omitted). Ejaz falls
directly within the scope of this rule.
Ejaz's second argument attempts to avoid that rule by
asserting that he was defrauded, arguing Massachusetts binds an

-8-

Case: 12-2403

Document: 00116592266

Page: 9

Date Filed: 10/04/2013

Entry ID: 5769351

individual to the terms of the contract he signs only "in the
absence of fraud."

Haufler v. Zotos, 845 N.E.2d 322, 333 (Mass.

2006). But that argument is completely unsupported by the record.
Fraud

is

an

affirmative

defense

that

must

be

pleaded

with

particularity, see Fed. R. Civ. P. 9(b), and Ejaz failed to do so.
Indeed, his answer to the complaint never even makes the contention
that Ejaz presses in his brief, that Bose had Ejaz sign the
Settlement Agreement without his knowledge; much less does it give
specific details about any allegedly fraudulent transaction.
Without those specific details, Ejaz's fraud claim cannot prevail.
See N. Am. Catholic Educ. Programming Found., Inc. v. Cardinale,
567 F.3d 8, 16 (1st Cir. 2009).
Additionally,

regardless

of

the

quality

of

Ejaz's

pleadings, the evidence in the record shows that Ejaz did have the
full Settlement Agreement and knew what he was signing: he stated
in his deposition that he "tried [his] best to read it" and signed
it on the same day he received it; that he had his wife review the
document; and that he "must've read" the whole Settlement Agreement
when he signed it.

As a result, the contract does not fail for a

lack of meeting of the minds.
3.

Unconscionability as Defense to the Contract

Ejaz claims that Bose's lawyers used heavy-handed tactics
to get him, unrepresented by counsel, to sign the Settlement
Agreement.

Unconscionability is an affirmative defense, placing

-9-

Case: 12-2403

Document: 00116592266

the burden of proof on Ejaz.

Page: 10

Date Filed: 10/04/2013

Entry ID: 5769351

See E.H. Ashley & Co., Inc. v. Wells

Fargo Alarm Servs., 907 F.2d 1274, 1278 (1st Cir. 1990).

Under

Massachusetts law, unconscionability requires a "two-part inquiry,"
in

which

the

defendant

must

"substantive" unconscionability.

prove

both

"procedural"

and

Trans-Spec Truck Serv., Inc. v.

Caterpillar Inc., 524 F.3d 315, 329 (1st Cir. 2008) (quoting
Zapatha v. Dairy Mart, Inc., 408 N.E.2d 1370, 1377 n.13 (Mass.
1980)) (internal quotation marks omitted).
The evidence does not show substantive unconscionability
as to the making of the contract here.

We discuss later the

discrete issue of the liquidated damages clause.

Contracts are

substantively unconscionable if they show a "gross disparity" in
consideration that makes them facially unfair.

E.g. Waters v. Min

Ltd., 587 N.E.2d 231, 234 (Mass. 1992) (finding "gross disparity"
where annuity with $189,000 immediate cash value was sold for
$50,000, and citing as unconscionable another case in which a trust
interest worth $1,100,000 was sold for $66,000).

The record in

this case shows that, at the time he signed the agreement, Ejaz
understood that he would be relieved of legal liability that could
have reached $250,000 in the U.K. litigation alone.3

3

Because the

The record is unclear as to whether the $250,000 figure
refers specifically to the U.K. litigation, which was addressed in
the Consent Order. But that distinction is immaterial, because the
Settlement Agreement settled all claims, including those covered by
the Consent Order, and incorporated the Consent Order within its
terms.
-10-

Case: 12-2403

Document: 00116592266

Page: 11

Date Filed: 10/04/2013

Entry ID: 5769351

financial benefit for him was at least a quarter of a million
dollars

in

liability

avoided,

no

reasonable

factfinder

could

conclude that Ejaz has met his burden of proof in his attempt to
establish unconscionability.
4.

Duress

Duress is an affirmative defense for which Ejaz must
prove three elements: "(1) he has been the victim of some unlawful
or wrongful act or threat; (2) the act or threat deprived him of
his free or unfettered will; and (3) due to the first two factors,
he was compelled to make a disproportionate exchange of values."
Happ v. Corning, Inc., 466 F.3d 41, 44 (1st Cir. 2006).

Ejaz

contends that Bose acted wrongfully by pressuring and intimidating
him using what he says he perceived as threats of jail time, and
that

Bose's

attorneys

violated

the

Massachusetts

Rules

of

Professional Conduct by advising him, as an unrepresented party, to
sign

the

Settlement

Agreement.

These

actions,

he

claims,

constituted duress.
Ejaz mischaracterizes the facts of this case.

Bose's

lawyers approached him, a savvy internet businessman with total
annual eBay sales near $75,000 and growing quickly,4 to offer a
settlement agreement to avoid a lawsuit.

Those lawyers, according

to Ejaz, told him that there could be "repercussions" to his

4

Ejaz's sales the previous year, 2005, were no higher than
$50,000; by 2010, his financial records showed sales exceeding two
million British pounds annually.
-11-

Case: 12-2403

Document: 00116592266

Page: 12

Date Filed: 10/04/2013

Entry ID: 5769351

actions, which Ejaz took to mean criminal sanctions. However, Ejaz
does not assert that Bose actually made threats, as opposed to
statements that he subjectively interpreted to be threatening.
Indeed, as he described the exchange in his deposition, Bose's
lawyer "might have said [something] along the lines that people do
end up going to jail but I don't remember him exactly saying that,
but behind the words was that implication.
way."

Or at least I felt that

Ejaz later stated in his affidavit: "I do not remember the

precise words that they used about the consequences of not signing
the agreement, but what I understood from those conversations is
that I could face penalties of as much as $250,000 and possible
imprisonment if I did not agree to what they were asking."

None of

these statements show that Ejaz was ever actually threatened or
that Bose's counsel delivered any threats; rather, they show only
that Ejaz believed he could potentially face legal penalties due to
his unlawful sales. This is far from the "unlawful or wrongful act
or threat," Happ, 466 F.3d at 44, required to establish a duress
defense.
More importantly, Ejaz has provided no basis to believe
that the statements by Bose's counsel "deprived him of his free or
unfettered will," id., and forced him to sign the contract.
Instead, the facts show that Ejaz was able to review the proposed
agreement at his own pace, was free to seek advice from others (and
actually did seek advice from his wife), and voluntarily signed and

-12-

Case: 12-2403

Document: 00116592266

returned it.

Page: 13

Date Filed: 10/04/2013

Entry ID: 5769351

As long as the option to reject the contract

remained, Ejaz did not act under duress. Ismert & Assocs., Inc. v.
New Eng. Mut. Life Ins. Co., 801 F.2d 536, 549-50 (1st Cir. 1986)
(noting that the option to refuse to sign a release and to litigate
instead would defeat a claim for duress, and observing that "a
strict interpretation" of the concept of "no real choice" is "what
the Massachusetts courts intend" as a policy matter).
B.

Enforceability of Liquidated Damages Clause
Apart from the validity of the entire contract, Ejaz also

challenges the Settlement Agreement's liquidated damages clause in
particular.
reasonably

He argues that it is unenforceable because it is not
proportional

to

Bose's

anticipated

damages

and

difficulties of proving loss at the time the Settlement Agreement
was executed.5

This is a closer question.

5

Ejaz also makes two other arguments, but both are easily
rejected. First, he claims that there is a dispute over whether
the parties intended the clause to serve as liquidated damages or
as a penalty -- a genuine dispute of material fact that prevents a
grant of summary judgment. That argument is simply wrong. Whether
a clause imposes enforceable liquidated damages or an unenforceable
penalty is a question of law. NPS, LLC v. Minihane, 886 N.E.2d
670, 673 (Mass. 2008). Even if the clause's effect were a question
of fact, Ejaz points to no record evidence indicating that he
believed at the time of contracting that the clause was intended to
be a penalty. Second, Ejaz claims that the clause is unenforceable
because it is disproportionate to the damages Bose actually
suffered. But this argument cannot square with Kelly v. Marx, 705
N.E.2d 1114 (Mass. 1999), which explicitly stated that the damages
actually suffered have no bearing on the enforceability of a
liquidated damages clause. See id. at 1117.
-13-

Case: 12-2403

Document: 00116592266

Page: 14

Date Filed: 10/04/2013

Entry ID: 5769351

Massachusetts law allows enforcement of a liquidated
damages clause "so long as it is not so disproportionate to
anticipated damages as to constitute a penalty." TAL Fin. Corp. v.
CSC Consulting, Inc., 844 N.E.2d 1085, 1093 (Mass. 2006).

The

inquiry depends significantly on the facts of the case, see Honey
Dew Assocs., Inc. v. M&K Food Corp., 241 F.3d 23, 28 (1st Cir.
2001), but in general, a liquidated damages clause "will usually be
enforced, provided two criteria are satisfied": (1) the actual
damages would have been difficult to ascertain at the time of
drafting, and (2) the amount was a "reasonable forecast" of damages
that would actually occur in a breach.

NPS, LLC v. Minihane, 886

N.E.2d 670, 673 (Mass. 2008) (quoting Cummings Props., LLC v. Nat'l
Commc'ns

Corp.,

869

N.E.2d

617,

620

(Mass.

2007))

(internal

quotation mark omitted). Ejaz bears the burden of proving that the
clause is unenforceable, and reasonable doubts are drawn in favor
of Bose, as the provision's proponent.

See id. at 673; Honey Dew,

241 F.3d at 27.
1.

Ascertainability

Ejaz has not produced any evidence, or even argued in his
brief, that Bose's actual damages would be readily ascertainable.
Further, Bose showed that it would be difficult to calculate its
actual damages from a breach: it introduced evidence that Ejaz's
actions threatened Bose's goodwill and brand integrity, which Bose
calls its "most important asset," and showed that damage to

-14-

Case: 12-2403

Document: 00116592266

Page: 15

Date Filed: 10/04/2013

Entry ID: 5769351

goodwill and brand integrity is inherently difficult to quantify.
The law supports Bose.

See Societe Des Produits Nestle, S.A. v.

Casa Helvetia, Inc., 982 F.2d 633, 640 (1st Cir. 1992) ("By its
very nature, trademark infringement results in irreparable harm
because the attendant loss of profits, goodwill, and reputation
cannot be satisfactorily quantified and, thus, the trademark owner
cannot

adequately

be

compensated.").

The

liquidated

damages

provision does not fail on this ground.
2.

Reasonable Forecast

Ejaz has produced no record evidence suggesting that
$50,000 per sale was grossly disproportionate to or an unreasonable
forecast of the actual damages Bose would have expected.

Instead,

he claims that the structure of the clause itself, providing
$50,000 in damages for every breach, without limit, shows that the
forecast

is

unreasonable.

But

a

hypothetical

larger

range,

separated from the actual facts and the amount sought, does not
make

a

clause

unreasonable.

Rather,

courts

examine

for

reasonableness the amount of liquidated damages actually sought.
See Space Master Int'l, Inc. v. City of Worcester, 940 F.2d 16, 1617,

20

(1st

Cir.

1991)

(denying

summary

judgment

motion

of

defendant seeking to avoid liquidated damages clause even though
clause provided for per-day late fees without limit); Perfect
Solutions, Inc. v. Jereod, Inc., 974 F. Supp. 77, 85 (D. Mass.
1997) (denying summary judgment motion of defendant seeking to

-15-

Case: 12-2403

Document: 00116592266

Page: 16

Date Filed: 10/04/2013

Entry ID: 5769351

avoid liquidated damages clause even though clause provided for
per-violation damages without limit).6
The Restatement also adopts this position, analyzing
liquidated damages as they are actually imposed rather than in
hypotheticals.

See Restatement (2d) of Contracts § 356 cmt. b,

illus. 3 (contemplating valid enforcement of liquidated damages
clause providing for per-day late fees even though fees were
unlimited, where ten days of fees are sought).
Bose articulated a series of harms showing that the
liquidated

damages

clause

is

reasonable

6

in

this

case.

Courts in other jurisdictions have followed the same
approach. See, e.g., ProTherapy Assocs., LLC v. AFS of Bastian,
Inc., 782 F. Supp. 2d 206, 218-19 (W.D. Va. 2011) (allowing
enforcement of liquidated damages provision granting uncapped
damages of $10,000 per breach across fifty-seven breaches); Elexco
Land Servs., Inc. v. Hennig, No. 11-CV-00214, 2011 WL 9368970, at
*6 (W.D.N.Y. Dec. 28, 2011) (reserving decision of whether
liquidated damages clause providing $25,000 per breach is
enforceable until plaintiff actually sought damages under the
clause); Mattingly Bridge Co. v. Holloway & Son Constr. Co., 694
S.W.2d 702, 704 (Ky. 1985) (allowing enforcement of liquidated
damages provision granting $750 damages per day late without limit
but reducing recovery from unreasonable 193-day penalty to
reasonable 32 and 2/3-day damages); Bd. of Cnty. Comm'rs of Adams
Cnty. v. City & Cnty. of Denver, 40 P.3d 25, 32 (Colo. App. 2001)
("If a contract stipulates a single liquidated damage amount for
several possible breaches, the damage provision is invalid as a
penalty if it is unreasonably disproportionate to the expected loss
on the very breach that did occur and was sued upon."); Anonymous
v. Anonymous, 649 N.Y.S.2d 665, 666-67 (N.Y. App. Div. 1996)
(liquidated damages provision allowing $500,000 per breach of
confidentiality agreement not, "in and of itself," unenforceable as
against public policy); cf. Rex Trailer Co. v. United States, 350
U.S. 148, 151-152 (1956) (uncapped statutory penalty of $2000 per
violation enforceable as liquidated damages rather than criminal
sanction for case of five violations).
-16-

Case: 12-2403

Document: 00116592266

Page: 17

Date Filed: 10/04/2013

Entry ID: 5769351

Specifically, Bose identified as its potential harms: loss of
revenue from each sale (Bose's retail price for each unit was
approximately $6500 (Australian)); harm to Bose's brand name;
downstream effects of harm to the brand name, such as interrupting
Bose's distribution chain and discouraging purchases by third
parties; enforcement costs due to the possibility that Ejaz could,
perhaps successfully, evade legal process, thereby increasing
Bose's costs (Ejaz had explicitly told Bose's lawyers that he "will
run away from the country if they come after me for any money");
and the possibility that Bose would not be able to prove all of
Ejaz's sales in court (in this very case, Bose relies on proof of
seven violations but asserts that there may have been many more).
The absence of affirmative proof of unreasonableness is
fatal to Ejaz's argument because he bears the burden of proof. See
NPS, 886 N.E.2d at 673. Since Ejaz has not introduced any evidence
to rebut Bose and show that $50,000 for each of seven violations
was an unreasonable forecast, he remains bound by the liquidated
damages clause.

See Reed v. Zipcar, Inc., No. 12-2048, 2013 WL

3744090, at *3 (1st Cir. July 17, 2013) ("Reed's complaint contains
no allegations as to what a reasonable estimate of damages would
be.

This is sufficient to defeat [Reed's] claim . . . .").
III.
Ejaz

next

challenges

the

district

court's

grant

of

summary judgment against him on Bose's trademark infringement

-17-

Case: 12-2403

claim.

Document: 00116592266

Page: 18

Date Filed: 10/04/2013

Entry ID: 5769351

A plaintiff alleging trademark infringement must prove two

elements:

(1)

the

trademarks

are

"entitled

to

trademark

protection," and (2) "the allegedly infringing use is likely to
cause consumer confusion."

Bos. Duck Tours, LP v. Super Duck

Tours, LLC, 531 F.3d 1, 12 (1st Cir. 2008).7
There is no dispute over the first element in this case.
Bose's trademarks are registered on the Principal Register of the
United States Patent and Trademark Office.
prima

facie

evidence

that

the

Registration serves as

trademarks

are

entitled

to

protection, see 15 U.S.C. § 1057(b), and Ejaz has not contested
that evidence.
On the consumer confusion element, Ejaz argues that there
was a genuine dispute of material fact over whether his sales of
Bose products were likely to cause consumer confusion for two
reasons: any differences between the products suitable for use in
particular countries were trivial, and his customers on eBay would
have been aware of any differences before making their purchases of
products meant for use in other countries.

7

In a gray market goods

Bose stated claims under both federal statutory law and
state common law but did not identify which state's common law
would govern. Regardless, the analysis here may be collapsed into
the federal claim structure because the common law trademark claims
in both Massachusetts and New Jersey -- Ejaz's home state and the
only other plausible candidate for the choice of law here -- both
require the same elements as the federal claim. See Jenzabar, Inc.
v. Long Bow Grp., Inc., 977 N.E.2d 75, 82 n.11 (Mass. App. Ct.
2012); Barre-Nat'l, Inc. v. Barr Labs., Inc., 773 F. Supp. 735, 746
(D.N.J. 1991).
-18-

Case: 12-2403

Document: 00116592266

Page: 19

Date Filed: 10/04/2013

Entry ID: 5769351

case, "a material difference between goods simultaneously sold in
the same market under the same name creates a presumption of
consumer confusion as a matter of law."
Nestle, S.A., 982 F.2d at 640.

Societe Des Produits

Relying on this presumption, Bose

points to several material differences between its Australian
products and the American products that Ejaz sold in Australia.
Those

differences

include

region

coding,

which

will

keep

an

American DVD player from playing Australian DVDs and vice versa;
electrical power requirements, which prevent American electronics
from functioning on Australian power supplies and vice versa;
capabilities of the remote controls; durations of the products'
warranties; and the design and functionality of the products' radio
tuners.8

Evidence

in

the

record,

8

such

as

Bose's

corporate

Ejaz initially contended that evidence of these differences
was not properly before the district court on summary judgment
because statements from Bose's corporate representative not made
based on personal knowledge would not have been admissible at
trial. See, e.g., Noviello v. City of Boston, 398 F.3d 76, 84 (1st
Cir. 2005); Fed. R. Civ. P. 56(c)(2) ("A party may object that the
material cited to support or dispute a fact cannot be presented in
a form that would be admissible in evidence."). Specifically, Ejaz
argued that Bose's only evidence on this point came from its Fed.
R. Civ. P. 30(b)(6) corporate representative; while an opposing
party may ordinarily offer the corporate representative's testimony
as a statement of a party-opponent, see Fed. R. Evid. 801(d)(2),
Ejaz has argued incorrectly that Bose had presented no basis for
making the testimony of its own representative admissible, because
he was testifying to matters outside his personal knowledge.
However, the evidence shows that Bose's representative testified on
his
personal
knowledge
about
differences
in
technical
specifications and warranties for different products.
Further,
there was other record evidence, such as Ejaz's own admissions,
that at least one of the differences Bose identified -- the voltage
requirements -- was in fact a material difference.
-19-

Case: 12-2403

Document: 00116592266

Page: 20

Date Filed: 10/04/2013

Entry ID: 5769351

representative's testimony based on his personal experience and
Ejaz's testimony in his deposition, as well as Ejaz's later
admissions, supports that there are material differences in the
products.
Ejaz

attempts

to

minimize

the

evidence

of

material

differences by asserting that his actual consumers were not in fact
confused.

But that argument misses the mark.

The law requires

only that the infringement is likely to cause consumer confusion,
not that it actually does so.

See Societe Des Produits Nestle,

S.A., 982 F.2d at 640 ("[A] plaintiff need only show that a
likelihood of confusion is in prospect; a showing of actual
confusion is not required.

Indeed, federal courts have routinely

granted injunctions in gray goods cases notwithstanding an absence
of evidence of actual consumer confusion." (citations omitted)).
To that end, Ejaz claims that consumers on eBay are less
susceptible to confusion than consumers in traditional stores. His
only evidence in support of this conclusion is his own affidavit,
in which he asserted that based on his experience, eBay customers
are "primarily bargain hunters, and understand that in exchange for
significant price savings they are not purchasing from authorized
re-sellers or distributors."

That statement, however, does not

actually support his position because it explains only that eBay
consumers would not be confused about the identity of the sellers
of the products they bought; it gives no reason to believe that

-20-

Case: 12-2403

they

Document: 00116592266

would

expect

the

Page: 21

products

Date Filed: 10/04/2013

to

function

products sold by authorized distributors.

Entry ID: 5769351

differently

from

Additionally, Ejaz's

generalizations fail to counter the specific proof Bose offered, in
the form of an email thread showing confusion by one of Ejaz's
actual eBay customers.

In light of the presumption of consumer

confusion plus Bose's unrebutted evidence, no reasonable factfinder
could conclude that Ejaz had met his burden of showing that the
sales in question were not likely to cause consumer confusion.
IV.
Ejaz's final argument on appeal is that the district
court erred by declining to extend discovery before granting Bose's
motion for summary judgment.
The procedural history of the discovery in this case is
not complicated.

The district court set an initial discovery

deadline of December 23, 2011, and later extended it to January 30,
2012.

Ejaz served Bose with notice of a deposition of its

corporate representative on August 12, 2011, and actually deposed
the representative on January 27, 2012.

At the deposition, Ejaz's

counsel complained on the record that Bose's Fed. R. Civ. P.
30(b)(6) representative had not sufficiently been able to answer
her questions about several topics on which he had been designated
to speak.

Three weeks later, on February 18, 2012, Ejaz filed a

motion to reopen discovery under Rule 56(d) of the Federal Rules of
Civil Procedure, claiming that Bose had obstructed his efforts to

-21-

Case: 12-2403

Document: 00116592266

Page: 22

Date Filed: 10/04/2013

Entry ID: 5769351

obtain information in the case by providing an insufficiently
prepared representative.

The district court did not address the

motion to reopen discovery and instead ruled on the summary
judgment motion.

Ejaz argues that the court erred in doing so.

We review a district court's refusal to reopen discovery
for abuse of discretion.
(1st Cir. 2008).
decision

to

Vineberg v. Bissonnette, 548 F.3d 50, 55

The same standard of review applies to the

proceed

with

a

summary

judgment

motion

while

a

discovery request remains outstanding. See Nieves-Romero v. United
States, 715 F.3d 375, 380 (1st Cir. 2013).
Here, the district court was well within its discretion
in ruling on the summary judgment motion first.

A Rule 56(d)

motion requires its proponent to show via "an affidavit or other
authoritative document":
(i) good cause for his inability to have
discovered or marshalled the necessary facts
earlier in the proceedings; (ii) a plausible
basis for believing that additional facts
probably exist and can be retrieved within a
reasonable time; and (iii) an explanation of
how those facts, if collected, will suffice to
defeat the pending summary judgment motion.
Rivera-Torres v. Rey-Hernandez, 502 F.3d 7, 10 (1st Cir. 2007). In
this case, Ejaz made no showing in support of the third requirement
for a 56(d) motion -- namely, how any additional facts he collected
would defeat the pending summary judgment motion.

Indeed, Ejaz

even suggested that no additional facts were needed, noting in his
brief opposing the motion for summary judgment that "Defendant
-22-

Case: 12-2403

Document: 00116592266

Page: 23

Date Filed: 10/04/2013

Entry ID: 5769351

contends that the existing record is sufficient to deny Plaintiff's
motion in its entirety."
discretion

in

declining

The district court did not abuse its
to

act

on

the

56(d)

motion

before

considering the summary judgment motion.
V.
For

the

reasons

stated

decision is AFFIRMED.

-23-

above,

the

district

court's