International Oddities Inc v. Scott Record

Filing 81

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: As to Defendant's Motion for Leave to Amend 50 , Defendant seeks to file an amended answer addressing two oversights in his operative answer. First, defendant's proposed amended answer as serts a new affirmative defensethat this Court may not exercise personal jurisdiction over him in California. Relatedly, defendant has filed a memorandum in support of his motion that explains his grounds for moving to dismiss for lack of personal ju risdiction, or in the alternative, to change venue. The Court construes this as a motion to dismiss for lack of subject matter jurisdiction or alternatively, to change venue. The Court concludes that it is not unreasonable to exercise personal jurisd iction over defendant in this case. The Court denies defendant's request to transfer this action to Idaho. The Court will allow the amended answer to be filed. The Court GRANTS plaintiff's motion for summary judgment as to defendant's liability on plaintiff's claims for relief and the Court awards plaintiff $2,000 in statutory damages 48 . See document for details. Court Reporter: Not Present. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

JS-6

Case No.

CV 12-3934-CAS (VBKx)

Title

INTERNATIONAL ODDITIES V. SCOTT RECORD

Present: The Honorable

Date

July 22, 2013

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Not Present
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants

Not Present

Not Present

Proceedings:

(In Chambers:) PLAINTIFF’S MOTION FOR SUMMARY
JUDGMENT (filed May 24, 2013) [48]
DEFENDANT’S MOTION FOR LEAVE TO FILE AN
AMENDED ANSWER (filed May 28, 2013) [50]

I.

INTRODUCTION

On May 4, 2012, plaintiff International Oddities, Inc., filed suit against pro se
defendant Scott Record. Plaintiff is a California corporation that sells herbs for smoking
under the trademarked name “A’Hia.” Defendant allegedly used plaintiff’s “International
Oddities” and “A’Hia” trademarks without its permission, in addition to making various
false claims concerning the herbal smoking products defendant was then-selling.
Plaintiff brings claims for (1) trademark infringement under federal and California law,
15 U.S.C. § 1125(a); (2) cyberpiracy in violation of the Anticybersquatting Consumer
Protection Act, 15 U.S.C. § 1125(d); (3) false advertising under federal and California
law, 15 U.S.C. § 1125(a) and Cal. Bus . & Prof. Code §§ 17200, 17500; and (4) unfair
competition, Cal. Bus. & Prof. Code § 17200 et seq.
On May 24, 2013, plaintiff filed the instant motion for summary judgment. Dkt.
No. 48. Defendant filed various papers and objections in opposition to plaintiff’s motion,
including his June 12 declaration, which sets forth the majority of defendant’s factual
contentions. Plaintiff filed a reply on June 17, 2013.
On May 28, 2013, defendant filed a motion for leave to file an amended answer.
Dkt. No. 50. In particular, defendant seeks to amend his answer to include an affirmative
defense on the basis of a lack of personal jurisdiction. Plaintiff opposed this motion on
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

June 3, 2013. The Court held a hearing on July 1, 2013, and thereafter received further
briefing from the parties on the issue of damages. Dkt. Nos. 79, 80. After considering
the parties’ arguments, the Court finds and concludes as follows.
II.

BACKGROUND

Plaintiff is a retailer of products that are commonly known as “legal buds,” which
are herbs used for smoking sold through various “mainstream” retail channels. Pl.’s
Stmt. of Undisputed Fact (“PSUF”) 8. Plaintiff has used its company name, International
Oddities, as a trade name and trademark for approximately 17 years for its herbal
smoking and dietary products. Plaintiff has obtained an incontestable U.S. Trademark
Registration, U.S. Registration No. 3,001,848, for International Oddities relating to “nontobacco smoking products, namely, herbal tobacco substitute, not for medical use.”
PSUF 10.
Plaintiff is the owner of a trademark registration for “A’Hia,” also relating to
“herbs for smoking.” U.S. Registration No. 4,217,917; PSUF 13. Plaintiff has sold
smoking products under the A’Hia name since at least 2001, and has expended nearly
$2.75 million on advertising across all its brands, with approximately half of these
expenditures in support of the A’Hia-branded products. PSUF 16. As a result of its
extensive sales and advertising, plaintiff contends that its trademarks and names have
acquired secondary meaning in the herbs for smoking marketplace.
Defendant resides in Twin Falls, Idaho, with a business address located at 266
North Blue Lakes Boulevard. In October 2011, defendant purchased some of plaintiff’s
“A’hia Bud” directly from plaintiff. In early 2012, defendant registered the domain name
ahiabuds.com and ahiabud.com and began selling what defendant called “A’hia,” through
an online storefront called “Ahia Factory.” See PSUF 23–24; Pl.’s Ex. 14-70. This
“a’hia” product was advertised therein as “Same plant as International Oddities,” but
cautioned consumers that “our products are not intended for human consumption.” Id.
Ex. 14-70. The website also included a purported disclaimer, indicating that “A’hia is a
trademark of International Oddities.” Id.
In March 2012, plaintiff’s investigator purchased one pound of “Ahia” product
from the ahiabuds.com website. He also called the phone number listed on the website to
confirm that the website was operated by Scott Record. Decl. of Michael Santoni ¶ 3.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

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INTERNATIONAL ODDITIES V. SCOTT RECORD

Later versions of the website at ahiabuds.com changed the description of the
products and name of the storefront to “Waltheria Americana,” but still advertised the
product for sale as “ahia.” Pl.’s Ex. 14-87. Defendant also advertised his “A’Hia” bud in
print, taking out a full-page advertisement for “AhiaBuds.com” with a disclaimer that
“A’Hia is a trademark of International Oddities.” Pl.’s Ex. 5-13. This advertisement
appeared alongside an advertisement for International Oddities in the same publication.
Id.
In addition, plaintiff contends that defendant made false statements in connection
with the sale of his “A’Hia” smoking product. Defendant stated on his website that his
A’hia came from “the SAME botanical plant as International Oddities,” which defendant
claims is the Waltheria americana plant noted above. PSUF 48. In fact, plaintiff’s A’hia
product is sourced from a number of plants, which are blended and processed into
plaintiff’s proprietary blend. It contains no Waltheria americana. PSUF 47; Decl. of
Robert Hillard ¶¶ 18, 28.
III.

LEGAL STANDARD
A.

Leave to Amend

As a preliminary matter, the Court must decide whether Federal Rule of Civil
Procedure 15(a) or 16(b) applies. Generally, a court grants a motion for leave to amend
pleadings pursuant to the permissive standard of Rule 15(a). Martinez v. Newport Beach
City, 125 F.3d 777, 785 (9th Cir. 1997). However, once the district court enters a
scheduling order establishing a deadline for amending pleadings, Rule 16(b) applies.
Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000). This is because once
the scheduling order is in place, the court must modify the scheduling order to permit an
amendment. W. Schwarzer, A. Tashima & M. Wagstaffe, Federal Civil Procedure Before
Trial (2006) § 8:405.1 (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609
(9th Cir. 1992)).
Here, the Court has already set a deadline of December 7, 2012, for requesting
leave to file amended pleadings or to add parties. Dkt. No. 21. Therefore, defendant
must demonstrate “good cause” for amendment under Rule 16, then if “good cause” is
shown, defendant must demonstrate that amendment is proper under Rule 15(a).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Title

INTERNATIONAL ODDITIES V. SCOTT RECORD
1.

Date

JS-6

July 22, 2013

Federal Rule of Civil Procedure 16

Rule 16(b)(4) provides that a scheduling order shall be modified “only for good
cause.” “Unlike Rule 15(a)’s liberal amendment policy which focuses on the bad faith of
the party seeking to interpose an amendment and the prejudice to the opposing party,
Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking
the amendment.” Johnson, 975 F.2d at 609. Accordingly, while the court may consider
the “existence or degree of prejudice” to the opposing party, the focus of the court’s
inquiry is upon the moving party’s explanation for failure to timely move for leave to
amend. Id. “The pretrial schedule may be modified ‘if it cannot reasonably be met
despite the diligence of the party seeking the extension.’” Zivkovic v. S. Cal. Edison Co.,
302 F.3d 1080, 1087 (9th Cir. 2002) (quoting Johnson, 975 F.2d at 609).
2.

Federal Rule of Civil Procedure 15

Rule 15 provides that after a responsive pleading has been filed, “a party may
amend its pleading only with the opposing party’s written consent or the court’s leave.
The court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a).
Where leave to amend is required, the decision whether to grant leave to amend “is
entrusted to the sound discretion of the trial court.” Jordan v. County of Los Angeles,
669 F.2d 1311, 1324 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810 (1982).
“Five factors are taken into account to assess the propriety of a motion for leave to
amend: bad faith, undue delay, prejudice to the opposing party, futility of amendment,
and whether the plaintiff has previously amended the complaint.” Johnson v. Buckley,
356 F.3d 1067, 1077 (9th Cir. 2004) (citing Nunes v. Ashcroft, 348 F.3d 815, 818 (9th
Cir.2003)). “Some courts have stressed prejudice to the opposing party as the key
factor.” Texaco v. Ponsoldt, 939 F.2d 794, 798 (9th Cir. 1991). However, “[u]ndue
delay is a valid reason for denying leave to amend.” Id. (internal quotation marks and
citation omitted); but see Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999) (“Undue
delay by itself, however, is insufficient to justify denying a motion to amend.”). Further,
“the liberality of Rule 15(a) does not mean that amendment will be allowed regardless of
the diligence of the moving party. Where the party seeking amendment knows or should
know of the facts upon which the proposed amendment is based but fails to include them
in the original complaint, the motion to amend may be denied.” Jordan, 669 F.3d at
1324. “Late amendments to assert new theories are not reviewed favorably when the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
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Date

Title

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INTERNATIONAL ODDITIES V. SCOTT RECORD

facts and the theory have been known to the party seeking amendment since the inception
of the cause of action.” Kaplan, 49 F.3d at 1370 (internal quotation marks and citation
omitted). Delay can contribute to a finding of prejudice, for “expense, delay, and wear
and tear on individuals and companies count toward prejudice.” Id. (internal quotation
marks and citation omitted).
B.

Motion for Summary Judgment

Summary judgment is appropriate where “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The moving party bears the initial burden of identifying relevant portions of the
record that demonstrate the absence of a fact or facts necessary for one or more essential
elements of each claim upon which the moving party seeks judgment. See Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986).
If the moving party meets its initial burden, the opposing party must then set out
specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56(c), (e). The
nonmoving party must not simply rely on the pleadings and must do more than make
“conclusory allegations [in] an affidavit.” Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871,
888 (1990); see also Celotex, 477 U.S. at 324. Summary judgment must be granted for
the moving party if the nonmoving party “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Id. at 322; see also Abromson v. Am. Pac. Corp., 114
F.3d 898, 902 (9th Cir. 1997).
In light of the facts presented by the nonmoving party, along with any undisputed
facts, the Court must decide whether the moving party is entitled to judgment as a matter
of law. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 631 &
n.3 (9th Cir. 1987). When deciding a motion for summary judgment, “the inferences to
be drawn from the underlying facts . . . must be viewed in the light most favorable to the
party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986) (citation omitted); Valley Nat’l Bank of Ariz. v. A.E. Rouse & Co., 121
F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper
when a rational trier of fact would not be able to find for the nonmoving party on the
claims at issue. See Matsushita, 475 U.S. at 587.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Title

INTERNATIONAL ODDITIES V. SCOTT RECORD

III.

Date

JS-6

July 22, 2013

ANALYSIS
A.

Defendant’s “Motion for Leave to Amend”

Defendant seeks to file an amended answer addressing two oversights in his
operative answer. First, defendant’s proposed amended answer asserts a new affirmative
defense—that this Court may not exercise personal jurisdiction over him in California.
Relatedly, defendant has filed a memorandum in support of his motion that explains his
grounds for moving to dismiss for lack of personal jurisdiction, or in the alternative, to
change venue. The Court construes this as a motion to dismiss for lack of subject matter
jurisdiction or alternatively, to change venue, and addresses this motion below.
1.

Motion to Dismiss for Lack of Personal Jurisdiction

Under Federal Rule of Civil Procedure 12(h)(1), a party waives a defense of lack
of personal jurisdiction by “failing to either: (i) make it by motion under [Rule 12]; or (ii)
include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a
matter of course.” See Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986) (holding that a
“general appearance or responsive pleading by a defendant that fails to dispute personal
jurisdiction will waive any defect in service or personal jurisdiction”); Am. Ass’n of
Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1106 (9th Cir. 2000) (“A
fundamental tenet of the Federal Rules of Civil Procedure is that certain defenses under
[Rule 12] must be raised at the first available opportunity or, if they are not, they are
forever waived.”); Wright & Miller, 5C Federal Practice and Procedure § 1391 (3d ed.)
(noting that these defenses are waived if they are “not included in a preliminary motion
under Rule 12 . . . or, if no such motion is made, they are not included in the responsive
pleading or an amendment as of right to that pleading under Rule 15(a)”).
Here, defendant appeared in this action and filed an answer, whereby he “denie[d]
the allegations of subject matter jurisdiction,” but said no more on the subject. Dkt. No.
17. The Court finds this “denial” of plaintiff’s jurisdictional allegation insufficient to
preserve defendant’s right to object to personal jurisdiction at this late stage. Rule 8(b)
requires a defendant to “state in short and plain terms its defenses” and to “affirmatively
state any avoidance or affirmative defense.” Defendant did not do so by denying, without
more, plaintiff’s jurisdictional allegations. Indeed, defendant’s answer contains a section
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

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Title

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INTERNATIONAL ODDITIES V. SCOTT RECORD

entitled “affirmative defenses,” but personal jurisdiction is not included therein. As
defendant did not “raise” this defense, he waived it under Rule 12(h).
Waiver or not, the Court finds that it has specific personal jurisdiction over
defendant. In order for a court to exercise personal jurisdiction over a nonresident
defendant, that defendant must have “minimum contacts” with the forum state so that the
exercise of jurisdiction “does not offend traditional notions of fair play and substantial
justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).1 The Court focuses
here only on specific personal jurisdiction, or jurisdiction that arises out of defendant’s
forum-related activities. See Rano v. Sipa Press, Inc., 987 F.2d 580, 588 (9th Cir.1993).
The test for specific personal jurisdiction has three parts:
(1)

(2)
(3)

The non-resident defendant must purposefully direct his activities or
consummate some transaction with the forum, purposefully availing
himself of the privilege of conducting activities in the forum and
invoking the benefits and protections of its laws;
The claim must arise out of or result from the defendant’s forum-related
activities; and
Exercise of jurisdiction must be reasonable.

Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1228–29 (9th Cir. 2011);
see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76 (1985). The plaintiff
bears the burden of satisfying the first two prongs; if plaintiff does so, the burden shifts to
defendant to present a “compelling case” that exercising jurisdiction would be
unreasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.
2004).

1

California authorizes the exercise of personal jurisdiction over a non-forum
defendant to the full extent permitted under the Due Process Clause of the Fourteen
Amendment to the U.S. Constitution. Cal. Civ. Proc. Code § 410.10. Accordingly,
jurisdictional analysis under state law and federal due process are the same. Roth v.
Garcia Marquez, 942 F.2d 617, 620 (9th Cir. 1991).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

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July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

In a tort case, courts require a showing that the defendant “purposefully directed”
its actions to the forum state, applying the “effects test” set forth in Calder v. Jones, 465
U.S. 783 (1984). See Mavrix, 647 F.3d at 1228. The effects test requires a plaintiff to
demonstrate that the defendant allegedly (1) committed an intentional act, (2) expressly
aimed at the forum state, (3) “causing harm that the defendant knows is likely to be
suffered in the forum state.” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d
1124, 1128 (9th Cir.2010) (quoting Yahoo! Inc. v. La Lingue Contre Le Racisme, 433
F.3d 1199, 1206 (9th Cir. 2006). Because plaintiff has alleged trademark infringement,
unfair competition, and false advertising, which are “tort-like cause[s] of action,” the
Court applies the purposeful direction framework set forth in Calder. See Mavrix, 647
F.3d at 1228; Washington Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 672 (9th
Cir. 2012).
Here, plaintiff alleges that defendant wilfully infringed upon its protected marks by
selling products under the A’hia name on his website. As to intentionality, plaintiff
offers substantial evidence that defendant knew the marks were protected—by virtue of
defendant’s inclusion of a disclaimer on his website—and that defendant knew where
plaintiff was located, since defendant purchased authentic A’hia product directly from
plaintiff. Thus, defendant’s actions satisfy the first and third prongs of the purposeful
direction test, in that defendant’s allegedly intentional acts caused harm that defendant
knows or should have known was likely to befall plaintiff in the forum state.
Moreover, while “a foreign act with foreseeable effects in the forum state [does
not] always gives rise to specific jurisdiction,” specific jurisdiction will exist where a
defendant “expressly aims” their conduct at the forum state. Bancroft & Masters, Inc. v.
Augusta Nat’l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000). This further requirement is
satisfied “when the defendant is alleged to have engaged in wrongful conduct targeted at
a plaintiff whom the defendant knows to be a resident of the forum state.” Washington
Shoe Co., 704 F.3d at 675; see CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066,
1077 (9th Cir. 2011) (“the ‘expressly aimed’ prong of the purposeful direction test can be
met where a plaintiff alleges that the defendant individually targeted him by misusing his
intellectual property on the defendant’s website for the purpose of competing with the
plaintiff in the forum”) (quotation omitted).
Here, defendant’s “alleged willful infringement of [plaintiff’s trademark], and [his]
knowledge of both the existence of the [trademark] and the forum of the [trademark]
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

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Title

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INTERNATIONAL ODDITIES V. SCOTT RECORD

holder, is sufficient ‘individualized targeting’ to establish the ‘something more’ necessary
to satisfy the express aiming requirement.” Washington Shoe, 704 F.3d at 678–79.
Accordingly, the Court concludes that purposeful direction is established here.
Because there can also be no dispute that plaintiff’s claims arise out of the forumrelated activities described herein, this leaves the question of whether defendant has
presented a “compelling case” that the exercise of personal jurisdiction in this case would
be unreasonable. The Court concludes that it would not be. Seven factors guide the
Court in determining whether an exercise of jurisdiction comports with “fair play and
substantial justice”; namely:
(1) the extent of the defendants’ purposeful injection into the forum state’s
affairs; (2) the burden on the defendant of defending in the forum; (3) the
extent of the conflict with the sovereignty of the defendant’s state; (4) the
forum state’s interest in adjudicating the dispute; (5) the most efficient
judicial resolution of the controversy; (6) the importance of the forum to
the plaintiff’s interest in convenient and effective relief; and (7) the
existence of an alternative forum.
CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1079 (9th Cir. 2011). While
defendant cites the relevant legal test, his only argument with respect to these
considerations is that he is presently insolvent. The Court notes that the burden on
defendant of defending in California is not insubstantial, and that defendant’s “injection”
into California’s affairs is not overwhelming. However, California has a strong interest
in protecting the intellectual property rights of its citizens, and plaintiff has a strong
interest in vindicating these rights in an expeditious fashion. Given defendant’s length
delay in raising this defense, the Court concludes that it is not unreasonable to exercise
personal jurisdiction over defendant in this case, even if he had not waived this defense.
2.

Motion to Transfer Venue

As to plaintiff’s motion to transfer, the Court must deny this untimely request.
Under 28 U.S.C. § 1404(a), the Court must consider the (1) the convenience of the
parties, (2) the convenience of the witnesses, and (3) the interests of justice. See Los
Angeles Memorial Coliseum Comm’m v. NFL, 89 F.R.D. 497, 499 (C.D. Cal. 1981). In
deciding whether the “interests of justice” support a transfer, a Court may consider the
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INTERNATIONAL ODDITIES V. SCOTT RECORD

plaintiff’s choice of forum, the parties’ respective contacts with each forum, the contacts
relating to plaintiff’s claims in the chosen forum, the costs of litigation in each forum,
and the ease of access to sources of proof. See Jones v. GNC Franchising, Inc., 211 F.3d
495, 498–99 (9th Cir. 2000).
While defendant’s request to transfer this action to Idaho may have been more
compelling if made at the outset of the action, at this late stage, plaintiff has not
demonstrated that a transfer is warranted. Plaintiff’s choice of forum is owed great
deference, particularly where defendant requests a transfer late in litigation, after
substantial time and expense have already been incurred in litigating this action here.
Given that the other factors are largely neutral, the Court denies defendant’s request.
3.

Motion for Leave to Amend

In addition to requesting leave to amend to raise an affirmative defense based on a
lack of personal jurisdiction, defendant also seeks leave to amend his answer to assert
denials or admissions to paragraphs 38 through 81 of plaintiff’s complaint, which
defendant neglected to respond to in any form in his original answer. See Dkt. No. 17.
He also seeks to clarify his denials with respect to many other paragraphs of the
complaint, as well as to admit to certain allegations that he previously denied.
Given that plaintiff has now offered evidence in support of its factual contentions
as part of its motion for summary judgment, many of defendant’s denials, at this late
stage, are not prejudicial to plaintiff. Moreover, defendant’s new denials in his proposed
amended answer seek to circumvent his failure to respond to plaintiff’s first two requests
for admissions, as discussed below, which renders many of defendant’s new denials
futile. Allowing defendant to assert denials now would be prejudicial to plaintiff, who
has relied on these admissions in preparing its case and moving for summary judgment.
However, in the interests of adjudicating this case on the merits, the Court will
allow the amended answer to be filed. Of course, defendant’s denials in his answer to the
allegations supporting plaintiff’s claims for relief does not relieve defendant of his burden
to bring forth evidence in support of these denials, where plaintiff offers undisputed
evidence that allows it to prove its claims.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

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Title

INTERNATIONAL ODDITIES V. SCOTT RECORD
B.

Date

JS-6

July 22, 2013

Plaintiff’s Request for Admission

In addition, plaintiff contends that defendant has admitted many of the facts
potentially at issue by failing to respond to plaintiff’s requests for admissions. Under
Federal Rule of Civil Procedure 36(a)(3), “[a] matter is admitted unless, within 30 days
after being served, the party to whom the request is directed serves on the requesting
party a written answer or objection addressed to the matter and signed by the party or its
attorney.” Matters that are admitted are deemed “conclusively established” for purposes
of the litigation, unless “the court, on motion, permits the admission to be withdrawn or
amended.” Id. Withdrawal or amendment is permissible where “it would promote the
presentation of the merits of the action and if the court is not persuaded that it would
prejudice the requesting party in maintaining or defending the action on the merits.” Id.
It appears that defendant did respond to plaintiff’s third set of requests for
admissions, which numbered in the hundreds, but that defendant did not respond to either
of the first two sets of requests. Although defendant has not made a motion to set aside
the admissions that have resulted from his lack of responses, defendant has offered
evidence in support of his opposition to plaintiff’s motion, including evidence that
contradicts some of his binding omissions. Again, in the interests of adjudicating this
dispute on the merits, the Court will consider this evidence here.2

2

Defendant’s failure to produce some of this evidence to plaintiff during
discovery, however, raises yet another problem of default. Under Federal Rule of Civil
Procedure 37(c)(1), “a party [who] fails to provide information . . . as required by Rule
26(a) or (e) . . . is not allowed to use that information . . . to supply evidence on a motion,
at a hearing, or at a trial, unless the failure was substantially justified or is harmless.”
The Court may also adopt other sanctions in addition to or in lieu of the foregoing. Id.
To the extent that this evidence is relevant to adjudicating plaintiff’s motion, the Court
will consider it as discussed herein.
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UNITED STATES DISTRICT COURT
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CV 12-3934-CAS (VBKx)

Title

INTERNATIONAL ODDITIES V. SCOTT RECORD
C.

Date

JS-6

July 22, 2013

Plaintiff’s Motion for Summary Judgment.
1.

Trademark Infringement and Unfair Competition

Plaintiff moves for summary judgment on its claims for trademark infringement
and unfair competition under federal and California law.
As to trademark infringement, the Lanham Act prohibits the “use in commerce [of]
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 [when] such use is likely to cause confusion, or to cause mistake. . . .” 15 U.S.C.
§ 1114. Relatedly, 15 U.S.C. § 1125(a) prohibits the use in commerce of “any word,
term, name, symbol, or device,” which “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. . . .” An aggrieved trademark owner may bring
suit to enforce its rights under both of these provisions.
To prevail on its Lanham Act claims, “plaintiff must prove: (1) that it has a
protectible ownership interest in the mark; and (2) that the defendant’s use of the mark is
likely to cause consumer confusion.” Rearden LLC v. Rearden Commerce, Inc., 683
F.3d 1190, 1202 (9th Cir. 2012) (quotations omitted). Because plaintiff’s state law
claims here mirror its federal claims, the analysis is the same for plaintiff’s claims for
under California law. See Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir.
2008).
(a)

Ownership of a Valid Trademark

“The Lanham Act grants trademark protection only to marks that are used to
identify and to distinguish goods or services in commerce—which typically occurs when
a mark is used in conjunction with the actual sale of goods or services.” Brookfield
Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1051 (9th Cir. 1999).
“[O]wnership of a mark and the exclusive right to a mark belongs to the one who first
uses the [m]ark on the goods placed on the market.” Chance v. Pac-Tel Teletrac, Inc.,
242 F.3d 1151, 1158 (9th Cir. 2001).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

In addition, a plaintiff’s registration of the mark entitles it to “a strong presumption
of validity.” KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596,
604 (9th Cir. 2005) (citing 15 U.S.C. § 1115(a)). As for marks that have been
continuously used for five consecutive years after registration, the presumption of
validity is conclusive, subject to limited defenses. See 15 U.S.C. § 1065
(incontestability); id. § 1115(b) (defenses to infringement actions involving incontestable
marks).
Here, plaintiff offers undisputed evidence that its registered “International
Oddities” mark has achieved incontestable status through its use in commerce for greater
than five years. The evidence is also undisputed that plaintiff’s “A’hia” mark is
registered and has been used by plaintiff in connection with the sale of its smoking
products for over ten years. PSUF 16. Defendant also agrees that plaintiff has superior
and prior rights in each of these registered marks, and that defendant’s uses of these
marks was done without plaintiff’s authorization. PSUF 76–78; see also Def.’s Response
to Decl. of Robert Hillard ¶¶ 8–15. Accordingly, because defendant has offered no
evidence to rebut this prima facie showing of validity, the Court concludes that plaintiff
has demonstrated ownership over valid, protectible marks.
(b)

Likelihood of Confusion

“The ‘likelihood of confusion’ inquiry generally considers whether a reasonably
prudent consumer in the marketplace is likely to be confused as to the origin or source of
the goods or services bearing one of the marks or names at issue in the case.” Rearden
LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1209 (9th Cir. 2012). To determine
whether such a likelihood exists, the Ninth Circuit applies the eight-factor Sleekcraft test,
set forth in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir.1979). The
factors are: (1) the strength of the plaintiff’s mark; (2) the relatedness or proximity of the
goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the degree to
which the parties’ marketing channels converge; (6) the type of goods and degree of care
purchasers are likely to exercise in selecting the goods; (7) evidence of the defendant’s
intent; and (8) the likelihood that the parties will expand their product lines. Id.
The factors “should not be rigidly weighed,” Dreamwerks Prod. Grp., Inc. v. SKG
Studio, 142 F.3d 1127, 1129 (9th Cir. 1998), but are instead “intended to guide the court
in assessing the basic question of likelihood of confusion,” E. & J. Gallo Winery v. Gallo
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

Cattle Co., 967 F.2d 1280, 1290 (9th Cir. 1992). “A determination may rest on only
those factors that are most pertinent to the particular case before the court, and other
variables besides the enumerated factors should also be taken into account based on the
particular circumstances.” Readen LLC, 683 F.3d at 1209. In the context of allegedly
similar internet domain names, the most important factors are the similarity of the marks,
proximity of the goods, and the simultaneous use of the Internet for marketing. Id. The
Court addresses the most pertinent factors here.
(i)

Strength of Marks

A mark’s strength is based on its conceptual strength and strength in the
marketplace. See GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir.
2000). At the outset, the Court notes that defendant does not offer any evidence to
counter plaintiff’s showing that its marks are well-established in the marketplace. There
is no genuine material dispute on this issue.
Conceptual strength, in turn, depends on the mark’s characterization: the strongest
marks are “arbitrary” or “suggestive” marks; the weakest are “descriptive” and “generic”
marks. See Sleekcraft, 599 F.2d at 349. Weaker marks are afforded less protection than
strong ones, with generic marks afforded no protection at all. See Matrix Motor Co. v.
Toyota Jidosha, 290 F. Supp. 2d 1083, 1091 (C.D. Cal. 2003). In addition, “in situations
in which the appearance of the conflicting marks and the services provided are almost
identical, the strength of the mark is of diminished importance in the likelihood of
confusion analysis.” GoTo.com, 202 F.3d at 1208.
Plaintiff’s evidence that its International Oddities and A’hia marks are
conceptually strong is also left undisputed by defendant. See Def.’s Response to Hillard
Decl. ¶ 14. Defendant’s objections to plaintiff’s evidence in this regard are unfounded.
The undisputed evidence before the Court is that both of plaintiff’s marks are distinctive
and strong, as they bear no particular relation to the product being sold. These are the
sort of arbitrary marks entitled to the highest level of protection.
(ii)

Similarity of the Marks

To determine the similarity of the marks, the Court must look to “sight, sound, and
meaning,” with the understanding that “any similarities weigh more heavily than
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

differences.” Rearden, 683 F.3d at 1211. “The greater the similarities between the two
marks, the greater the likelihood of confusion.” GoTo.com, Inc. v. Walt Disney Co., 202
F.3d 1199, 1206 (9th Cir. 2000). Here, there is no dispute that defendant registered the
domain name “ahiabuds.com,” and utilized the terms “Ahia bud,” “A’hia,” and
“International Oddities” in connection with the sale of his goods over the internet,
making direct use of plaintiff’s protected marks. The similarity borders on total identity.
The fact that defendant included a purported “disclaimer” that “A’hia is a
trademark of International Oddities” on his website does little to detract from plaintiff’s
showing. The disclaimer cannot distance defendant from the fact that the website itself
incorporated the “A’hia” trademark in its domain name, and that he called the website
“AHIA factory” on the home page. The undisputed evidence of the mark’s similarity
strongly supports a likelihood of confusion.
(iii)

Relatedness of the Parties’ Goods and Marketing
Channels

These factors also strongly support there being a likelihood of confusion.
Defendant freely admits that he “decided to go into direction competition with [plaintiff]”
in the sale of legal smoking products, as the evidence demonstrates. PSUF 28, 34.
Moreover, on his website, defendant admitted that he “went into competition with
[plaintiff]” to offer the “illusive ‘A’hia Bud,” claiming to offer “exactly the same plant.”
PSUF 45. When the website was operative, it is further undisputed that both parties used
the internet to sell their respective products. Other relevant considerations, including the
parties’ “advertising [and] the existence of direct competition,” also strongly support a
likelihood of confusion finding here. Matrix, 290 F. Supp. 2d at 1094.
Defendant attempts to distance himself from these admissions by arguing that his
products were not intended for “consumption,” unlike plaintiff’s, but he fails to raise
genuine factual disputes in this regard. It is undisputed that defendant did not include a
disclaimer with respect to consumption in his print advertisement that appeared directly
adjacent to plaintiff’s, and that he wanted to sell the same plant as International Oddities,
because he “thought this might be a good business.” Decl. of Scott Record at 2. Even
taking this evidence in a light most favorable to defendant, there is no dispute that
defendant intended his goods to be identical to plaintiff’s—he admits that was the point
of his enterprise. This factor supports awarding judgment in plaintiff’s favor on this
claim.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Title

INTERNATIONAL ODDITIES V. SCOTT RECORD
(iv)

Date

JS-6

July 22, 2013

Alleged Infringer’s Intent

“This factor favors the plaintiff where the alleged infringer adopted his mark with
knowledge, actual or constructive, that it was another’s trademark.” Brookfield
Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1059 (9th Cir. 1999). Here,
defendant has admitted his knowledge of plaintiff’s ownership of the International
Oddities and A’hia marks at the time he adopted these marks for use on his website, and
has admitted his intent to go into “direct competition” with plaintiff by using the “A’hia”
name. Whether or not defendant intended to infringe plaintiff’s marks in the legal sense
is irrelevant, as defendant’s undisputed intent to use plaintiff’s marks is circumstantial
evidence of a likelihood of confusion.
(v)

Conclusion

Based on the foregoing, the Court finds that there remains no genuine issue of
material fact that consumers are likely to be deceived by defendant’s use of the “A’hia”
and “International Oddities” marks. Indeed, the facts are largely undisputed, even
without taking into account defendant’s admissions. At a minimum, defendant’s
adoption of the ahiabuds.com website and use of the A’hia name is highly likely to
confuse consumers, and no reasonable jury could find to the contrary. Judgment for
plaintiff is appropriate as to defendant’s liability on these claims for trademark
infringement and unfair competition.
2.

ACPA Claim

Under the ACPA, a trademark owner may bring suit against a person who (1)
registers or traffics in a domain name that is (2) “identical or confusingly similar” to a
distinctive mark with (3) “a bad faith intent to profit from that mark.” 15 U.S.C.
§ 1125(d)(1)(A); see Rearden, 683 F.3d at 1219.
There is no dispute of material fact as to the first element of plaintiff’s ACPA
claim here—defendant has adopted multiple domain names that are “identical or

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

confusingly similar” to plaintiff’s protected A’hia mark.3 The Court’s discussion with
respect to trademark infringement above applies with equal force here, as these domain
names are clearly highly similar and nearly identical to plaintiff’s mark. No reasonable
jury could find to the contrary.
Bad faith intent is determined with reference to a number of statutorily-defined
factors, including the defendant’s “prior use” of the domain name; “noncommercial”
nature of the website; and “the [defendant’s] intent to divert consumers from the mark
owner’s online location to a site accessible under the domain name that could harm the
goodwill represented by the mark.” Id. § 1125(d)(1)(B). The Court must also consider
“the unique circumstances of each case, which represent the most important grounds for
finding bad faith,” as well as whether a “safe harbor” applies for a defendant who
“believed and had reasonable grounds to believe that the use of the domain name was a
fair use or otherwise lawful.” Rearden, 683 F.3d at 1220 (citing 15 U.S.C. §
1125(d)(1)(B)(ii)) (quotations omitted).
Viewing the evidence in the light most favorable to defendant, defendant’s lack of
good faith is not subject to genuine dispute, even if the Court discounts defendant’s
admissions in discovery. See Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1202 (9th Cir.
2009) (affirming grant of summary judgment on the issue of bad faith). Defendant’s use
of the mark was commercial in character, and he sought to attract consumers to his
website by using plaintiff’s “A’hia” mark in the website’s domain name. His very
purpose, as he admits in his declaration, was to compete with plaintiff. The difficulty is
that defendant did so by co-opting plaintiff’s trademark for use in his new website’s
domain name. Plaintiff has also offered undisputed evidence that the potential diversion
of consumers to defendant’s website would harm its goodwill in the marketplace.
Finally, although defendant does not argue the point, the Court concludes that no
safe harbor could apply here. As in the case here, “a defendant who acts even partially in
bad faith in registering a domain name is not, as a matter of law, entitled to benefit from
the ACPA’s safe harbor provision.” Lahoti, 586 F.3d at 1203 (quotation omitted). The

3

Although defendant now purports to dispute whether he in fact registered the
“ahiabud.com” domain name (as opposed to “ahiabuds.com”), plaintiff offers
uncontroverted documentary evidence that defendant owned this website.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

safe harbor is meant “to protect[] uses such as parody and comment, and use by persons
ignorant of another’s superior right to the mark,” neither of which describes defendant’s
undisputed conduct here. DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213, 1220 (9th Cir.
2010). Accordingly, the Court finds that judgment for plaintiff is appropriate.
3.

False Advertising Claims

The elements of a false advertising claim under the Lanham Act are:
(1) a false statement of fact by the defendant in a commercial
advertisement about its own or another’s product; (2) the statement
actually deceived or has the tendency to deceive a substantial segment of
its audience; (3) the deception is material, in that it is likely to influence
the purchasing decision; (4) the defendant caused its false statement to
enter interstate commerce; and (5) the plaintiff has been or is likely to be
injured as a result of the false statement, either by direct diversion of
sales from itself to defendant or by a lessening of the goodwill associated
with its products.
Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997) (citing 15
U.S.C. § 1125(a)).4 These elements are “substantially congruent” to the elements of a
claim under California law, and therefore these may be considered together.
Taking the evidence in the light most favorable to defendant, the Court finds that
plaintiff is entitled to judgment on this claim. First, the evidence is undisputed that
defendant falsely advertised his product as coming from “exactly the same plant” as
International Oddities’ A’hia product. PSUF 45, 47. Defendant now claims that an
unidentified botanist “identified” the “plant sold by International Oddities” as Waltheria
americana, but this speculative, hearsay evidence is not admissible to counter plaintiff’s
showing. As such, plaintiff’s evidence that their A’hia product contains no Waltheria
americana whatsoever, and is a blend of more than one plant, stands unrebutted.

4

It is undisputed that the advertisements at issue entered interstate commerce.
PSUF 42.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

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July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

Second, the very nature of defendant’s false statement is likely to deceive
reasonable purchasers in the segment audience. Defendant offers nothing to counter
plaintiff’s arguments on this point. Telling consumers that a product is from “exactly the
same plant” when in fact, the product is not, is by definition a statement that has the
tendency to deceive.
Third, defendant does not dispute that he made the false statement in question in
order to influence target consumers into believing that his goods were a viable alternative
to plaintiff’s goods, sold in connection with the same A’hia mark. PSUF 48. This
undisputed fact establishes the materiality of this of this false statement, as this statement,
along with the far lower price point, was the key selling point for defendant’s “A’hia”
merchandise.
Fourth, although plaintiff has not demonstrated it suffered actual damages, “an
inability to show actual damages does not alone preclude a recovery” on a claim for false
advertising. Southland Sod, 108 F.3d at 1146 (quotation omitted). “[T]he preferred
approach allows the district court in its discretion to fashion relief, including monetary
relief, based on the totality of the circumstances.” Id. Along with plaintiff’s other
claims, the Court finds that plaintiff is entitled to “appropriate relief” for its false
advertising claim.
Based on the foregoing, the Court concludes that plaintiff is entitled to judgment as
a matter of law on its claims for false advertising. There is no genuine dispute of material
fact that defendant advertised his goods in a materially deceptive way, by making false
statements with respect to the identity of his and plaintiff’s “A’hia” product.
4.

Remedies

Plaintiff seeks a permanent injunction against defendant, statutory damages under
the ACPA in the amount of $100,000 per domain name, post-judgment discovery to
ascertain its actual damages resulting from defendant’s trademark infringement and
unfair competition, and its attorneys’ fees incurred in prosecuting this action.
First, based on the evidence in the record thus far, the Court is not convinced that
plaintiff is entitled to the substantial statutory damages that it seeks under the ACPA. As
best as can be discerned, defendant’s website was only active for a limited amount of
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

time, and defendant did not achieve even a modicum of commercial success, legitimate or
otherwise. And while defendant has not participated in this action in good faith at all
times, awarding plaintiff the statutory damages that it seeks would amount to a
substantial windfall, based on the evidence before the Court. Accordingly, the Court
finds that the appropriate amount of statutory damages for plaintiff’s ACPA claims is
$1,000 per violation, the statutory minimum. See 15 U.S.C. § 1117(d).
Second, plaintiff initially requested further discovery on the issue of damages. At
the hearing, the thrust of plaintiff’s argument in favor of an award of compensatory
damages concerned the likely cost of advertising needed to correct defendant’s
misstatements. Thereafter, plaintiff submitted further argument and evidence as to its
need for corrective advertising, including the price of advertisements in various trade
publications, and defendant filed a response.
The Court determines, however, that an award of compensatory damages for
corrective advertising costs is not appropriate. Significantly, plaintiff has not adduced
any evidence that it suffered an injury to its brand that would require corrective
advertising. In the Ninth Circuit, “[a]n award of the cost of corrective advertising, like
compensatory damage awards in general, is intended to make the plaintiff whole. It does
so by allowing the plaintiff to recover the cost of advertising undertaken to restore the
value plaintiff's trademark has lost due to defendant’s infringement.” Adray v.
Adry-Mart, Inc., 76 F.3d 984, 988 (9th Cir. 1995). To determine the reasonable cost of
such advertising, courts have looked to the Federal Trade Commission’s benchmark,
which requires businesses that engage in misleading advertising to spend twenty-five
percent of the amount of their advertising budget for corrective advertising. Quia Corp.
v. Mattel, Inc., Case No. CV 10-1902, 2011 WL 2749576, at *5 (N.D. Cal. July 14,
2011). But in all such circumstances, an award of compensatory damages based on
potential “corrective advertising” costs must be tied to “non-speculative evidence” that
the goodwill associated with the plaintiff’s mark has actually been diminished by the
defendant’s conduct. Id. (citing, inter alia, Zazu Designs v. L‘Oreal S.A., 979 F.2d 499,
506 (7th Cir. 1992)); see also Binder v. Disability Grp., Inc., 772 F. Supp. 2d 1172, 1181
(C.D. Cal. 2011) (finding that compensatory damages should not be awarded for
corrective advertising where plaintiff offered no definitive evidence of any diminishment
in the goodwill associated with the defendant’s mark).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-3934-CAS (VBKx)

Date

Title

JS-6

July 22, 2013

INTERNATIONAL ODDITIES V. SCOTT RECORD

Here, plaintiff has offered only speculative evidence as to the potential loss of
goodwill or business reputation that it has suffered, inferring from the nature of its
products, the relevant marketplace, and defendant’s three-month period of advertising
that its brand has suffered significant harm. From this entirely inferential showing,
plaintiff extrapolates that it is “now burdened with the overwhelming task of combating
the extensive damage to [its] good will.” However, plaintiff’s speculation as to the harm
that it has suffered as a result of defendant’s conduct is insufficient to support an award
of compensatory damages for corrective advertising costs. As the record presently
stands, defendant did not obtain even the slightest measure of commercial success, and
plaintiff offers no evidence as to how its brand has been harmed. Accordingly, the Court
denies plaintiff’s request for the costs of corrective advertising.
The Court also concludes that permanent injunctive relief is also appropriate in this
case. A separate order will issue setting forth the terms of such an injunction.
IV.

CONCLUSION

In accordance with the foregoing, the Court GRANTS plaintiff’s motion for
summary judgment as to defendant’s liability on plaintiff’s claims for relief and the Court
awards plaintiff $2,000 in statutory damages.
IT IS SO ORDERED.
00
Initials of Preparer

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CMJ

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