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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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 8 10 For the Northern District of California United States District Court 9 11 12 13 14 COACH, INC.; COACH SERVICES, INC., ) ) Plaintiffs, ) ) v. ) ) DIANA FASHION, an unknown business ) entity; DIANE DAO, an individual; ) and DOES 1-10, inclusive, ) ) Defendants. ) ) ) Case No. 11-2315 SC ORDER VACATING PRIOR ORDER AND GRANTING APPLICATION FOR DEFAULT JUDGMENT 15 16 I. INTRODUCTION 17 Plaintiffs Coach, Incorporated ("Coach") and Coach Services, 18 Incorporated ("Coach Services") (collectively, "Plaintiffs") seek 19 entry of Default Judgment against Defendants Diana Fashion and 20 Diane Dao (collectively, "Defendants"). 21 Court previously denied Plaintiffs' application because there were 22 defects in Plaintiffs' proof of service. 23 2011 Order"). 24 of service and a declaration from the process server, Robina Alves 25 ("Alves"), showing that the Complaint and Summons were served on 26 the proper defendants in accordance with Federal Rule of Civil 27 Procedure 4. 28 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."). 1 Having considered the papers submitted by Plaintiffs, the Court 2 VACATES its October 13, 2011 Order and GRANTS Plaintiffs' motion 3 for default judgment. 4 5 II. BACKGROUND 6 Coach Services is a wholly owned subsidiary of Coach, a 7 Maryland corporation with its principal place of business in 8 Jacksonville, Florida. 9 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 10 products, including handbags, wallets, and accessories. 11 Coach owns the "COACH" trademark and various composite trademarks 12 and assorted components (collectively, "Coach Marks"). 13 Additionally, Coach owns various copyright registrations, including 14 the Horse and Carriage Mark and the Op Art Mark. Id. ¶ 11. Id. ¶ 13. Plaintiffs allege that counterfeit Coach branded products were 15 16 sold by and purchased from Defendant Diana Fashion, an unknown 17 business entity operating out of San Jose, California. 18 18. 19 owner of Diana Fashion and "is the active moving, and conscious 20 force" behind Diana Fashion's infringing activities. 21 Id. ¶¶ 6, Plaintiffs further allege that Defendant Diane Dao is the Id. ¶ 21. Plaintiffs filed this action on May 10, 2011 and personally 22 served the Summons and Complaint on Diane Dao June 2, 2011. 23 Alves Decl. ¶ 3; Dao POS; ECF No. 7 ("Diana Fashion POS"). 24 Complaint asserts claims for: (1) trademark counterfeiting; (2) 25 federal trademark infringement; (3) false designation of origin and 26 false advertising; (4) federal trademark dilution; (5) trademark 27 dilution in violation of the California Business and Professions 28 2 See The 1 Code; (6) common law unfair competition; and (7) copyright 2 infringement. 3 an award of Defendants' profits and all damages sustained by 4 Plaintiffs as a result of Defendants' illicit acts, treble damages 5 pursuant to 15 U.S.C. 1117(b), and interest, costs, and attorney's 6 fees. Compl. ¶¶ 23-87. Plaintiffs seek injunctive relief, Id. at 16-17. 7 After Defendants failed to answer or otherwise respond to the 8 Complaint, the clerk of the court entered default on July 1, 2011. 9 ECF No. 13 ("Entry of Default"). United States District Court For the Northern District of California 10 Plaintiffs now apply for default judgment. 11 12 13 III. LEGAL STANDARD After entry of a default, the Court may enter a default 14 judgment. Fed. R. Civ. P. 55(b)(2). Its decision whether to do 15 so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092 16 (9th Cir. 1980), is guided by several factors. 17 matter, the Court must "assess the adequacy of the service of 18 process on the party against whom default judgment is requested." 19 Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. 00- 20 0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 21 2001). 22 should consider whether the following factors support the entry of 23 default judgment: (1) the possibility of prejudice to the 24 plaintiff; (2) the merits of plaintiff's substantive claim; (3) the 25 sufficiency of the complaint; (4) the sum of money at stake in the 26 action; (5) the possibility of a dispute concerning material facts; 27 (6) whether the default was due to excusable neglect; and (7) the As a preliminary If the Court determines that service was sufficient, it 28 3 1 strong policy underlying the Federal Rules of Civil Procedure 2 favoring decisions on the merits. 3 1471-72 (9th Cir. 1986). 4 default the factual allegations of the complaint, except those 5 relating to the amount of damages, will be taken as true." 6 v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). 7 Therefore, for the purposes of this Motion, the Court accepts as 8 true the well-pleaded facts in the Complaint. Eitel v. McCool, 782 F.2d 1470, "The general rule of law is that upon Geddes 9 United States District Court For the Northern District of California 10 IV. DISCUSSION 11 A. Adequacy of Service 12 Federal Rule of Civil Procedure 4(e) provides that an 13 individual may be served by "delivering a copy of the summons and 14 of the complaint to the individual personally." 15 4(e)(2)(A). 16 corporation, partnership, or other unincorporated association may 17 be served by "delivering a copy of the summons and of the complaint 18 to an officer, a managing or general agent, or any other agent 19 authorized by appointment or by law to receive service of process." 20 Here, the Complaint and Summons for Dao and Diana Fashion were 21 personally served on Dao on June 2, 2011 at Diana Fashion, located 22 at 2549 South King Road, San Jose. 23 Diana Fashion POS. 24 herself as the owner of Diana Fashion. 25 finds that service of process upon Defendants was adequate and 26 complete by June 2, 2011. 27 /// 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 28 4 Alves Decl. ¶ 3. The Court 1 B. Default Judgment 2 After entry of a default, a court may grant a motion for See Fed. R. Civ. P. 3 default judgment on the merits of the case. 4 55. 5 infant or incompetent person unless represented in the action by a 6 general guardian or other such representative who has appeared. 7 See id. Furthermore, a default judgment may not be entered against 8 an individual in military service until after the court appoints an 9 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 10 Neither Dao nor Diana Fashion are infants, incompetent persons, or 11 persons in military service. 12 Court may consider whether a default judgment may be entered 13 against Defendants. Accordingly, the Here, the majority of the Eitel factors favor default 14 15 Chan Decl. ¶ 7.1 judgment. 1. 16 Prejudice 17 Plaintiffs allege that Defendants' actions have caused them to 18 suffer a loss of goodwill since consumers who purchased Defendants' 19 counterfeit products believed them to be genuine Coach products and 20 were disappointed by their inferior quality, design, and style. 21 See Compl. ¶¶ 25, 39. 22 financial loss from the lost sales of genuine Coach products. 23 id. 24 the motion for default judgment were to be denied, then Coach would 25 likely be left without a remedy. 26 prejudiced absent entry of default judgment. 27 28 Plaintiffs also allege they have suffered See As Defendants have thus far ignored Plaintiffs' lawsuit, if Thus, Plaintiffs would be 1 Cindy Chan ("Chan"), attorney for Plaintiffs, filed a declaration in support of the Motion. ECF No. 14-2 ("Chan Decl."). 5 2. 1 Merits of Plaintiffs' Substantive Claims and Sufficiency of the Complaint 2 3 Taken together, the second and third Eitel factors essentially 4 require that "a plaintiff state a claim on which [it] may recover." 5 Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1175 (C.D. 6 Cal. 2002) (internal quotations omitted). 7 (1) trademark counterfeiting and infringement, 15 U.S.C. § 1114; 8 (2) false designation of origin, id. § 1125(a); (3) trademark 9 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 10 See Compl. 11 actual damages as relief. 12 examines the only one of Coach's claims for which statutory damages 13 are available -- its claim for federal trademark counterfeiting and 14 infringement. 15 damages for trademark counterfeiting); see also Chanel, Inc. v. 16 Tshimanga, No. C-07-3592, 2008 U.S. Dist. LEXIS 118783, *17 (N.D. 17 Cal. July 15, 2008) (adopting same approach). 18 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 19 claim, Coach must prove that, without its consent, Defendants used 20 in commerce a reproduction or copy of Coach's registered trademark 21 in connection with the sale or advertising of any goods or 22 services, and that such use is likely to cause confusion, mistake, 23 or deceive customers. 24 v. West Coast Entm't, 174 F.3d 1036, 1046-47 (9th Cir. 1999). 25 Here, Plaintiffs have alleged each of these elements in the 26 Complaint. 27 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 28 6 1 adequately stated a claim on which they may recover. 3. 2 Amount of Money at Stake Pursuant to the fourth Eitel factor, "the court must consider 3 4 the amount of money at stake in relation to the seriousness of 5 Defendant's conduct." 6 Defendants have engaged in the sale and distribution of counterfeit 7 goods bearing at least four of Plaintiffs' trademarks, and 8 Defendants continue to sell counterfeit Coach merchandise. 9 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 10 Defendants' conduct may cause confusion or mistake or otherwise 11 deceive customers, and Defendants' failure to comply with the 12 judicial process or to participate in any way in the present 13 litigation, the imposition of a substantial monetary award is 14 justified. 15 to Defendants' conduct, especially in light of the fact that the 16 size of the award is limited by what the Court considers just. The amount of money at stake is therefore proportionate 4. 17 Possibility of Dispute Concerning Material Facts The fifth Eitel factor considers the possibility of dispute as 18 19 to any material facts in the case. Here, Plaintiffs filed a well- 20 pleaded complaint alleging the facts necessary to establish their 21 claims and provided evidence in the form of Chan's declaration. 22 Defendants have not responded to any of the proceedings in this 23 case, and thus no dispute has been raised regarding the material 24 averments of the Complaint. 25 may exist is, at best, remote. 26 entry of default judgment. 27 /// The likelihood that any genuine issue This factor therefore favors the 28 7 5. 1 2 Whether Default Was Due to Excusable Neglect Defendants have had over six months to respond to the 3 Complaint and have not done so. 4 that Defendants' failure to appear and otherwise defend was the 5 result of excusable neglect. 6 being personally served with the Complaint indicates that their 7 failure to appear was willful. 6. 8 9 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 10 decisions on the merits, does not save this action from default 11 judgment. 12 to answer Plaintiffs' Complaint makes a decision on the merits 13 impractical, if not impossible." This policy is not dispositive and "Defendant's failure Pepsico, 238 F. Supp. 2d at 1177. 14 C. Remedies 15 A plaintiff is required to prove all damages sought in the 16 complaint. 17 917-18 (9th Cir. 1987). 18 different in kind from, or exceed in amount, what is demanded in 19 the complaint. 20 to determine damages are not contained in the complaint, or are 21 legally insufficient, they will not be established by default. 22 Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 23 1992). 24 25 See Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 1. 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 26 statutory damages under 15 U.S.C. § 1117(c). 27 inquiries under Section 1117(c) look to both compensatory and 28 8 Mot. at 6-9. Damages 1 punitive considerations. See Sara Lee Corp. v. Bags of New York, 2 Inc., 36 F. Supp. 2d 161, 165 (S.D.N.Y. 1999). 3 provides, in relevant part: 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 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. 13 14 15 U.S.C. § 117(c)(1)-(2). 15 infringement are particularly appropriate in default cases such as 16 this, where there is a lack of information regarding a defendant's 17 sales and profits. 18 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 & 19 in determining an appropriate award. 20 Oakley, Inc. v. Veit, 211 F. Supp. 2d 567, 583 (E.D. Pa. 2002). 21 Consequently, if a plaintiff elects statutory damages, a court has 22 wide discretion in determining the amount of statutory damages to 23 award. 24 Birmingham, 259 F.3d 1186, 1194 (9th Cir. 2001). 25 consider estimates of actual damages in calculating statutory 26 damages; however, "there is no necessary mathematical relationship 27 between the size of [an award of statutory damages] and the extent See Columbia Pictures Indus. Inc. v. Krypton Broad. of 28 9 Some courts will 1 or profitability of the defendant's wrongful activities." 2 Corp., 36 F. Supp. 2d at 165 (internal quotations and citations 3 omitted). 4 Sara Lee In the instant action, Plaintiffs request statutory damages of 5 $50,000. Plaintiffs' request is based on their assertion that 6 there are at least four trademarks infringed on the handbag 7 purchased by Coach's investigator, the investigator's observation 8 that there were about 15-20 infringing handbags on sale at 9 Defendants' store, the assumption that there were far more United States District Court For the Northern District of California 10 counterfeit products sold than those that were at the store at the 11 time of survey, and the fact that authentic Coach handbags that are 12 similar in style to the infringing handbag typically retail for 13 approximately $385. Mot. at 8-9, Chan Decl. ¶ 3, Ex. 1. 14 The Court finds that the statutory damages requested by 15 Plaintiffs bear a plausible relationship to Defendants' infringing 16 activities and the profits Defendants may have realized from those 17 activities. 18 infringement by Defendants or others. 19 award of $50,000 is in line with default judgments granted by other 20 district courts in similar circumstances. 21 Terre Fashion, Inc., CV 10-2129 PSG (JCx), 2011 U.S. Dist. LEXIS 22 126763, at *10-11 (C.D. Cal. Nov. 1, 2011) (granting an award of 23 $45,000). 24 25 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 26 enjoining Defendants from using Coach trademarks in connection with 27 the sale and offer for sale of infringing products. 28 10 The Lanham Act of equity and upon such terms as the court may deem reasonable, to 3 prevent the violation" of a trademark holder's rights. 4 § 1116(a). 5 like the instant one where a defendant has not appeared in the 6 action at all. 7 F.R.D. 494, 502 (C.D. Cal. 2003); Pepsico, 238 F. Supp. 2d at 1178; 8 Coach Servs., Inc. v. Cheap Sunglasses, No. 09 CV 1059 BEN (JMA), 9 2010 U.S. Dist. LEXIS 68200, at *6 (S.D. Cal. July 6, 2010). 10 United States District Court gives the court "power to grant injunctions, according to the rules 2 For the Northern District of California 1 Accordingly, the Court grants Coach's request for a permanent 11 injunction enjoining Defendants from using Coach trademarks in 12 connection with the sale and offer for sale of infringing products. Permanent injunctions are routinely granted in cases 3. 13 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 14 15 authorizes recovery of the costs of an action for the violation of 16 any right of the registrant of a trademark. 17 the costs of this action. 18 F.2d 1400, 1405 (9th Cir. 1993). 19 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 20 21 22 V. CONCLUSION The Court VACATES its October 13, 2011 Order (ECF No. 18) and 23 GRANTS the Motion for Default Judgment filed by Plaintiffs Coach, 24 Inc. and Coach Services, Inc. 25 of Plaintiffs and against Defendants Diana Fashion and Diane Dao in 26 the amount of $50,000 plus Plaintiffs' costs. 27 PERMANENTLY ENJOINED from infringing any of Plaintiffs' trademarks. The Court enters JUDGMENT in favor 28 11 Defendants are 1 Plaintiffs shall submit their Bill of Costs within fourteen (14) 2 days of this Order as provided by Civil Local Rule 54-1. 3 to do so will result in a waiver of costs. Failure 4 5 IT IS SO ORDERED, ADJUDGED, AND DECREED. 6 7 8 Dated: December 13, 2011 UNITED STATES DISTRICT JUDGE 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12

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