Coach, Inc. et al v. Diana Fashion et al

Filing 24

DEFAULT JUDGMENT in favor of Coach Services, Inc., Coach, Inc. against Diana Fashion, Diane Dao. Signed by Judge Samuel Conti on 12/13/2011. (sclc1, COURT STAFF) (Filed on 12/13/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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COACH, INC.; COACH SERVICES, INC., )
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Plaintiffs,
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v.
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DIANA FASHION, an unknown business )
entity; DIANE DAO, an individual; )
and DOES 1-10, inclusive,
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Defendants.
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Case No. 11-2315 SC
ORDER VACATING PRIOR ORDER
AND GRANTING APPLICATION
FOR DEFAULT JUDGMENT

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I.

INTRODUCTION

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Plaintiffs Coach, Incorporated ("Coach") and Coach Services,

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Incorporated ("Coach Services") (collectively, "Plaintiffs") seek

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entry of Default Judgment against Defendants Diana Fashion and

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Diane Dao (collectively, "Defendants").

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Court previously denied Plaintiffs' application because there were

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defects in Plaintiffs' proof of service.

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2011 Order").

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of service and a declaration from the process server, Robina Alves

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("Alves"), showing that the Complaint and Summons were served on

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the proper defendants in accordance with Federal Rule of Civil

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Procedure 4.

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ECF No. 14 ("Mot.").

The

ECF No. 18 ("Oct. 13,

Plaintiffs subsequently submitted a corrected proof

See ECF Nos. 20 ("Dao POS"), 23 ("Alves Decl.").

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Having considered the papers submitted by Plaintiffs, the Court

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VACATES its October 13, 2011 Order and GRANTS Plaintiffs' motion

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for default judgment.

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II.

BACKGROUND

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Coach Services is a wholly owned subsidiary of Coach, a

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Maryland corporation with its principal place of business in

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Jacksonville, Florida.

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manufactures, markets, and sells fine leather and mixed material

ECF No. 1 ("Compl.") ¶ 5.

Coach

Id. ¶ 10.

United States District Court

For the Northern District of California

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products, including handbags, wallets, and accessories.

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Coach owns the "COACH" trademark and various composite trademarks

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and assorted components (collectively, "Coach Marks").

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Additionally, Coach owns various copyright registrations, including

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the Horse and Carriage Mark and the Op Art Mark.

Id. ¶ 11.

Id. ¶ 13.

Plaintiffs allege that counterfeit Coach branded products were

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sold by and purchased from Defendant Diana Fashion, an unknown

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business entity operating out of San Jose, California.

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18.

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owner of Diana Fashion and "is the active moving, and conscious

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force" behind Diana Fashion's infringing activities.

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Id. ¶¶ 6,

Plaintiffs further allege that Defendant Diane Dao is the

Id. ¶ 21.

Plaintiffs filed this action on May 10, 2011 and personally

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served the Summons and Complaint on Diane Dao June 2, 2011.

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Alves Decl. ¶ 3; Dao POS; ECF No. 7 ("Diana Fashion POS").

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Complaint asserts claims for: (1) trademark counterfeiting; (2)

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federal trademark infringement; (3) false designation of origin and

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false advertising; (4) federal trademark dilution; (5) trademark

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dilution in violation of the California Business and Professions

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See
The

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Code; (6) common law unfair competition; and (7) copyright

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infringement.

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an award of Defendants' profits and all damages sustained by

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Plaintiffs as a result of Defendants' illicit acts, treble damages

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pursuant to 15 U.S.C. 1117(b), and interest, costs, and attorney's

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fees.

Compl. ¶¶ 23-87.

Plaintiffs seek injunctive relief,

Id. at 16-17.

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After Defendants failed to answer or otherwise respond to the

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Complaint, the clerk of the court entered default on July 1, 2011.

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ECF No. 13 ("Entry of Default").

United States District Court

For the Northern District of California

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Plaintiffs now apply for default

judgment.

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III. LEGAL STANDARD
After entry of a default, the Court may enter a default

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judgment.

Fed. R. Civ. P. 55(b)(2).

Its decision whether to do

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so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092

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(9th Cir. 1980), is guided by several factors.

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matter, the Court must "assess the adequacy of the service of

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process on the party against whom default judgment is requested."

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Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. 00-

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0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2,

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2001).

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should consider whether the following factors support the entry of

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default judgment: (1) the possibility of prejudice to the

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plaintiff; (2) the merits of plaintiff's substantive claim; (3) the

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sufficiency of the complaint; (4) the sum of money at stake in the

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action; (5) the possibility of a dispute concerning material facts;

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(6) whether the default was due to excusable neglect; and (7) the

As a preliminary

If the Court determines that service was sufficient, it

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strong policy underlying the Federal Rules of Civil Procedure

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favoring decisions on the merits.

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1471-72 (9th Cir. 1986).

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default the factual allegations of the complaint, except those

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relating to the amount of damages, will be taken as true."

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v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977).

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Therefore, for the purposes of this Motion, the Court accepts as

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true the well-pleaded facts in the Complaint.

Eitel v. McCool, 782 F.2d 1470,

"The general rule of law is that upon

Geddes

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United States District Court

For the Northern District of California

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IV.

DISCUSSION

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A.

Adequacy of Service

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Federal Rule of Civil Procedure 4(e) provides that an

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individual may be served by "delivering a copy of the summons and

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of the complaint to the individual personally."

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4(e)(2)(A).

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corporation, partnership, or other unincorporated association may

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be served by "delivering a copy of the summons and of the complaint

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to an officer, a managing or general agent, or any other agent

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authorized by appointment or by law to receive service of process."

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Here, the Complaint and Summons for Dao and Diana Fashion were

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personally served on Dao on June 2, 2011 at Diana Fashion, located

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at 2549 South King Road, San Jose.

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Diana Fashion POS.

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herself as the owner of Diana Fashion.

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finds that service of process upon Defendants was adequate and

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complete by June 2, 2011.

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///

Fed. R. Civ. P.

Federal Rule of Civil Procedure 4(h) provides that a

See Alves Decl. ¶ 3; Dao POS;

During the service of process, Dao identified

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Alves Decl. ¶ 3.

The Court

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B.

Default Judgment

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After entry of a default, a court may grant a motion for
See Fed. R. Civ. P.

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default judgment on the merits of the case.

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55.

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infant or incompetent person unless represented in the action by a

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general guardian or other such representative who has appeared.

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See id. Furthermore, a default judgment may not be entered against

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an individual in military service until after the court appoints an

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attorney to represent the defendant.

A default judgment may not be entered, however, against an

See 50 U.S.C. App. § 521.

United States District Court

For the Northern District of California

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Neither Dao nor Diana Fashion are infants, incompetent persons, or

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persons in military service.

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Court may consider whether a default judgment may be entered

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against Defendants.

Accordingly, the

Here, the majority of the Eitel factors favor default

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Chan Decl. ¶ 7.1

judgment.
1.

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Prejudice

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Plaintiffs allege that Defendants' actions have caused them to

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suffer a loss of goodwill since consumers who purchased Defendants'

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counterfeit products believed them to be genuine Coach products and

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were disappointed by their inferior quality, design, and style.

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See Compl. ¶¶ 25, 39.

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financial loss from the lost sales of genuine Coach products.

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id.

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the motion for default judgment were to be denied, then Coach would

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likely be left without a remedy.

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prejudiced absent entry of default judgment.

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Plaintiffs also allege they have suffered
See

As Defendants have thus far ignored Plaintiffs' lawsuit, if

Thus, Plaintiffs would be

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Cindy Chan ("Chan"), attorney for Plaintiffs, filed a declaration
in support of the Motion. ECF No. 14-2 ("Chan Decl.").

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2.

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Merits of Plaintiffs' Substantive Claims and
Sufficiency of the Complaint

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Taken together, the second and third Eitel factors essentially

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require that "a plaintiff state a claim on which [it] may recover."

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Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1175 (C.D.

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Cal. 2002) (internal quotations omitted).

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(1) trademark counterfeiting and infringement, 15 U.S.C. § 1114;

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(2) false designation of origin, id. § 1125(a); (3) trademark

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dilution, id. § 1125(c); and (4) related claims under state law.

Coach asserts claims for

United States District Court

For the Northern District of California

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See Compl.

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actual damages as relief.

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examines the only one of Coach's claims for which statutory damages

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are available -- its claim for federal trademark counterfeiting and

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infringement.

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damages for trademark counterfeiting); see also Chanel, Inc. v.

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Tshimanga, No. C-07-3592, 2008 U.S. Dist. LEXIS 118783, *17 (N.D.

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Cal. July 15, 2008) (adopting same approach).

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Coach seeks to recover statutory damages in lieu of
Mot. at 7.

Accordingly, the Court

See 15 U.S.C. § 1117(c) (providing for statutory

To prevail on its trademark infringement and counterfeiting

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claim, Coach must prove that, without its consent, Defendants used

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in commerce a reproduction or copy of Coach's registered trademark

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in connection with the sale or advertising of any goods or

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services, and that such use is likely to cause confusion, mistake,

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or deceive customers.

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v. West Coast Entm't, 174 F.3d 1036, 1046-47 (9th Cir. 1999).

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Here, Plaintiffs have alleged each of these elements in the

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Complaint.

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allegations to be true, as the Court must, Plaintiffs have

15 U.S.C. § 1114(1)(a); Brookfield Commc'n

See Compl. ¶¶ 32-41.

Taking these well-pleaded

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adequately stated a claim on which they may recover.
3.

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Amount of Money at Stake

Pursuant to the fourth Eitel factor, "the court must consider

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the amount of money at stake in relation to the seriousness of

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Defendant's conduct."

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Defendants have engaged in the sale and distribution of counterfeit

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goods bearing at least four of Plaintiffs' trademarks, and

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Defendants continue to sell counterfeit Coach merchandise.

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Mot. at 8-9, Chan Decl. ¶ 3, Ex. 1.

Pepsico, 238 F. Supp. 2d at 1176.

Here,

See

Given the likelihood that

United States District Court

For the Northern District of California

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Defendants' conduct may cause confusion or mistake or otherwise

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deceive customers, and Defendants' failure to comply with the

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judicial process or to participate in any way in the present

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litigation, the imposition of a substantial monetary award is

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justified.

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to Defendants' conduct, especially in light of the fact that the

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size of the award is limited by what the Court considers just.

The amount of money at stake is therefore proportionate

4.

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Possibility of Dispute Concerning Material Facts

The fifth Eitel factor considers the possibility of dispute as

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to any material facts in the case.

Here, Plaintiffs filed a well-

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pleaded complaint alleging the facts necessary to establish their

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claims and provided evidence in the form of Chan's declaration.

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Defendants have not responded to any of the proceedings in this

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case, and thus no dispute has been raised regarding the material

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averments of the Complaint.

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may exist is, at best, remote.

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entry of default judgment.

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///

The likelihood that any genuine issue
This factor therefore favors the

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5.

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Whether Default Was Due to Excusable Neglect

Defendants have had over six months to respond to the

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Complaint and have not done so.

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that Defendants' failure to appear and otherwise defend was the

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result of excusable neglect.

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being personally served with the Complaint indicates that their

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failure to appear was willful.
6.

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There is no evidence in the record

Defendants' failure to appear after

Strong Policy Favoring Decision on the Merits

The final Eitel factor, underscoring the policy favoring

United States District Court

For the Northern District of California

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decisions on the merits, does not save this action from default

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judgment.

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to answer Plaintiffs' Complaint makes a decision on the merits

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impractical, if not impossible."

This policy is not dispositive and "Defendant's failure

Pepsico, 238 F. Supp. 2d at 1177.

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C.

Remedies

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A plaintiff is required to prove all damages sought in the

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complaint.

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917-18 (9th Cir. 1987).

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different in kind from, or exceed in amount, what is demanded in

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the complaint.

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to determine damages are not contained in the complaint, or are

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legally insufficient, they will not be established by default.

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Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir.

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1992).

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See Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915,

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In addition, any relief sought may not be

See Fed. R. Civ. P. 54(c).

If the facts necessary

See

Statutory Damages

First, Plaintiffs seek to recover an award of $50,000 in

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statutory damages under 15 U.S.C. § 1117(c).

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inquiries under Section 1117(c) look to both compensatory and

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Mot. at 6-9.

Damages

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punitive considerations. See Sara Lee Corp. v. Bags of New York,

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Inc., 36 F. Supp. 2d 161, 165 (S.D.N.Y. 1999).

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provides, in relevant part:

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United States District Court

For the Northern District of California

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Section 1117(c)

In a case involving the use of a counterfeit mark . . .
in connection with the sale, offering for sale, or
distribution of goods or services, the plaintiff may
elect . . . to recover, instead of actual damages and
profits . . . , an award of statutory damages for any
such use in connection with the sale, offering for sale,
or distribution of goods or services in the amount of-(1) not less than $ 1,000 or more than $ 200,000 per
counterfeit mark per type of goods or services sold,
offered for sale, or distributed, as the court considers
just; or (2) if the court finds that the use of the
counterfeit mark was willful, not more than $ 2,000,000
per counterfeit mark per type of goods or services sold,
offered for sale, or distributed, as the court considers
just.

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15 U.S.C. § 117(c)(1)-(2).

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infringement are particularly appropriate in default cases such as

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this, where there is a lack of information regarding a defendant's

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sales and profits.

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Statutory damages for trademark

See Sara Lee Corp., 36 F. Supp. 2d at 165.

The Lanham Act does not provide guidelines for courts to use
See Louis Vuiton Malletier &

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in determining an appropriate award.

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Oakley, Inc. v. Veit, 211 F. Supp. 2d 567, 583 (E.D. Pa. 2002).

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Consequently, if a plaintiff elects statutory damages, a court has

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wide discretion in determining the amount of statutory damages to

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award.

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Birmingham, 259 F.3d 1186, 1194 (9th Cir. 2001).

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consider estimates of actual damages in calculating statutory

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damages; however, "there is no necessary mathematical relationship

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between the size of [an award of statutory damages] and the extent

See Columbia Pictures Indus. Inc. v. Krypton Broad. of

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Some courts will

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or profitability of the defendant's wrongful activities."

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Corp., 36 F. Supp. 2d at 165 (internal quotations and citations

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omitted).

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Sara Lee

In the instant action, Plaintiffs request statutory damages of

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$50,000.

Plaintiffs' request is based on their assertion that

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there are at least four trademarks infringed on the handbag

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purchased by Coach's investigator, the investigator's observation

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that there were about 15-20 infringing handbags on sale at

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Defendants' store, the assumption that there were far more

United States District Court

For the Northern District of California

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counterfeit products sold than those that were at the store at the

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time of survey, and the fact that authentic Coach handbags that are

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similar in style to the infringing handbag typically retail for

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approximately $385.

Mot. at 8-9, Chan Decl. ¶ 3, Ex. 1.

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The Court finds that the statutory damages requested by

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Plaintiffs bear a plausible relationship to Defendants' infringing

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activities and the profits Defendants may have realized from those

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activities.

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infringement by Defendants or others.

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award of $50,000 is in line with default judgments granted by other

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district courts in similar circumstances.

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Terre Fashion, Inc., CV 10-2129 PSG (JCx), 2011 U.S. Dist. LEXIS

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126763, at *10-11 (C.D. Cal. Nov. 1, 2011) (granting an award of

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$45,000).

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2.

Such damages will also serve to deter future
Further, a statutory damage

See Coach Servs. v. La

Injunctive Relief

In addition to damages, Coach requests a permanent injunction

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enjoining Defendants from using Coach trademarks in connection with

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the sale and offer for sale of infringing products.

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The Lanham Act

of equity and upon such terms as the court may deem reasonable, to

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prevent the violation" of a trademark holder's rights.

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§ 1116(a).

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like the instant one where a defendant has not appeared in the

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action at all.

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F.R.D. 494, 502 (C.D. Cal. 2003); Pepsico, 238 F. Supp. 2d at 1178;

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Coach Servs., Inc. v. Cheap Sunglasses, No. 09 CV 1059 BEN (JMA),

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2010 U.S. Dist. LEXIS 68200, at *6 (S.D. Cal. July 6, 2010).

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United States District Court

gives the court "power to grant injunctions, according to the rules

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For the Northern District of California

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Accordingly, the Court grants Coach's request for a permanent

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injunction enjoining Defendants from using Coach trademarks in

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connection with the sale and offer for sale of infringing products.

Permanent injunctions are routinely granted in cases

3.

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15 U.S.C.

Philip Morris U.S.A., Inc. v. Castworld Prods., 219

Costs

Coach also requests costs under 15 U.S.C. § 1117(a), which

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authorizes recovery of the costs of an action for the violation of

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any right of the registrant of a trademark.

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the costs of this action.

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F.2d 1400, 1405 (9th Cir. 1993).

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Costs in accordance with Civil Local Rule 54-1.

Coach is entitled to

See Lindy Pen Co. v. Bic Pen Corp., 982
Coach may submit its Bill of

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V.

CONCLUSION
The Court VACATES its October 13, 2011 Order (ECF No. 18) and

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GRANTS the Motion for Default Judgment filed by Plaintiffs Coach,

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Inc. and Coach Services, Inc.

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of Plaintiffs and against Defendants Diana Fashion and Diane Dao in

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the amount of $50,000 plus Plaintiffs' costs.

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PERMANENTLY ENJOINED from infringing any of Plaintiffs' trademarks.

The Court enters JUDGMENT in favor

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Defendants are

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Plaintiffs shall submit their Bill of Costs within fourteen (14)

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days of this Order as provided by Civil Local Rule 54-1.

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to do so will result in a waiver of costs.

Failure

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IT IS SO ORDERED, ADJUDGED, AND DECREED.

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Dated: December 13, 2011
UNITED STATES DISTRICT JUDGE

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United States District Court

For the Northern District of California

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