Ploom, Inc. v. iPloom, LLC et al

Filing 25

ORDER by Judge Samuel Conti granting 21 Motion for Default Judgment (sclc1, COURT STAFF) (Filed on 5/12/2014)

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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 PLOOM, INC., Plaintiff, 8 v. 10 For the Northern District of California United States District Court 9 IPLOOM, LLC, and ANTHONY MARINO, 11 Defendants. 12 13 14 15 ) Case No. 13-cv-05813 SC ) ) ORDER GRANTING MOTION FOR ) DEFAULT JUDGMENT ) ) ) ) ) ) ) ) ) ) ) ) 16 17 18 I. INTRODUCTION Plaintiff Ploom, Inc. ("Ploom") seeks the entry of a default 19 judgment against Defendants iPloom, LLC ("iPloom") and Anthony 20 Marino ("Defendants"). 21 action on December 16, 2013, asserting federal claims for trademark 22 infringement, 15 U.S.C. § 1114; unfair competition, false 23 representation, and false designation of origin, id. § 1125(a); 24 cybersquatting, id. § 1125(d); and related claims under state law 25 and common law, for Defendants' alleged sale of counterfeit Ploom 26 products. 27 papers submitted by Ploom, the Court concludes that an award of 28 default judgment against Defendants is appropriate, and GRANTS ECF No. 21 ("Mot."). See ECF No. 1 ("Compl.") at 8-22. Ploom filed this Having considered the 1 Ploom's Motion. 2 3 4 II. BACKGROUND Except where otherwise indicated, the following allegations 5 are taken from Ploom's Complaint. 6 vaporizers (devices that heat tobacco for inhalation without 7 smoke), tobacco, and related accessories. 8 unique products include the "Ploom modelTwo" and "PAX" vaporizers, 9 which it markets exclusively on its website and through authorized Compl. ¶ 13. Ploom's United States District Court For the Northern District of California 10 retailers. 11 trademarks, including the name PLOOM, as well as a stylized version 12 of that brand name (the "Ploom Marks"). 13 holds two trademarks for the PAX product name (the "PAX Marks"). 14 Id. ¶¶ 21-23. 15 the "X Design" trade dress it uses to identify its PAX vaporizer. 16 Id. ¶¶ 25, 31. 17 Ploom has invested substantial resources in establishing 18 recognition of its brand. 19 Id. ¶ 14. Ploom designs and sells Ploom owns a number of federally registered Id. ¶¶ 18-20. Ploom also Finally, Ploom has filed for federal registration of The Ploom Marks and Pax Marks are valuable because Id. ¶¶ 26-32. Ploom alleges that Defendants used reproductions of the Ploom 20 Marks, X Design trade dress, and the PAX Marks in creating the 21 "iPloom Pax" and "Pax by Ploom" vaporizers. 22 claims that these vaporizers are counterfeit products that infringe 23 upon Ploom's trademarks. 24 iPloom to use its trademarks or trade dress. 25 sold the iPloom Pax and Pax by Ploom vaporizers on its website, 26 27 website show use of Ploom Marks, Pax Marks, and X Design. 28 33-35 & Ex. G. Id. ¶¶ 55-56. Id. ¶¶ 35-46. Ploom Ploom has never authorized Id. ¶ 49. IPloom Photographs of the products displayed on the 2 Id. ¶¶ 1 In October of 2013, a private investigator retained by Ploom 2 purchased two iPloom Pax units from Defendants' website for a total 3 of $159.90. 4 discovered that the units' packaging included the mark "PAX." 5 ¶¶ 38-40 & Ex. H. 6 dress very similar to the Ploom Pax's. 7 Ploom's investigator contacted iPloom by calling the phone number 8 listed on Defendants' website. 9 Marino, who stated that he was not affiliated with Ploom, but said Upon delivery of the units, the investigator Id. The iPloom Pax also had a size, shape, and trade Id. On October 21, 2013, The investigator spoke with Mr. United States District Court For the Northern District of California 10 "I know all about them." 11 similarities between the Ploom Marks and the marks used on iPloom 12 products, as well as the Defendants' use of the Pax Marks. 13 Marino laughed and said, "All's fair in love and war." 14 Marino also told the investigator that he was expecting a delivery 15 of 10,000 units of the "Pax II" in the next week. 16 Id. ¶ 37. The investigator mentioned the Id. Mr. Mr. Id. On December 9, 2013, another of Ploom's investigators placed 17 an order on iPloom's website for one Pax by Ploom for a total of 18 $199.95. 19 informing the investigator that the Pax by 20 Ploom products were backordered, but that a new shipment was due on 21 December 16. 22 the second investigator ever received this order. 23 The next day, the investigator received an email from Id. ¶¶ 43-44. The Complaint does not specify whether In January of 2014, Ploom submitted a takedown request to 24 Defendants' web hosting provider. The hosting provider 25 communicated the request to iPloom and shut down the website eleven 26 days later. 27 Defendants then switched hosting providers, registered the domain 28, and continued to sell their products from that ECF No. 16-1 ("Pfefferkorn Decl. II") ¶ 17. 3 1 website. Id. ¶¶ 18-19. Defendants have also registered at least 2 two other domain names to sell their products and have started an 3 email-based advertising campaign. 4 Neither defendant has responded to any of the summonses issued in 5 this action or participated in these proceedings in any way. Id. ¶¶ 20-25 & Exs. A-B. 6 7 8 9 III. LEGAL STANDARD After entry of a default, the Court may enter a default judgment. Fed. R. Civ. P. 55(b)(2). Its decision whether to do United States District Court For the Northern District of California 10 so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092 11 (9th Cir. 1980), is guided by several factors. 12 As a preliminary matter, the Court must "assess the adequacy 13 of the service of process on the party against whom default 14 judgment is requested." 15 Workers v. Peters, No. 00-0395, 2000 U.S. Dist. LEXIS 19065, *2 16 (N.D. Cal. Jan. 2, 2001). 17 sufficient, it may consider the following factors in its decision 18 on the merits of a motion for default judgment: Bd. of Trs. of the N. Cal. Sheet Metal If the Court determines that service was 19 20 21 22 23 24 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 25 26 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 27 general rule of law is that upon default the factual allegations of 28 the complaint, except those relating to the amount of damages, will 4 "The 1 be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 2 (9th Cir. 1977). 3 Court accepts as true the facts as presented in the Complaint. Therefore, for the purposes of this Motion, the 4 5 IV. DISCUSSION 6 A. Adequacy of Service 7 Federal Rule of Civil Procedure 4(h) provides that a 8 corporation, partnership, or other unincorporated association may 9 be served in the manner prescribed by Rule 4(e)(1), which allows United States District Court For the Northern District of California 10 service to be perfected in the manner prescribed by state law. 11 California law provides that a corporation or unincorporated 12 association may be served by delivery of a copy of the summons and 13 complaint: 14 To the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process. 15 16 17 18 19 Cal. Civ. Proc. Code § 416.10. Federal Rule of Civil Procedure 20 4(e)(2)(A) provides that an individual may be served in a judicial 21 district of the United States by "delivering a copy of the summons 22 and of the complaint to the individual personally." Here, service was delivered personally to Anthony Marino, both 23 24 in his capacity as an individual and in his capacity as the 25 authorized agent and principal officer of iPloom, on December 24, 26 2013. 27 ("Pfefferkorn Decl. I") Ex. A; ECF No. 9 ("iPloom Proof of 28 Service"). ECF No. 10 ("Marino Proof of Service"); ECF No. 22 The Court finds that service of process upon defendants 5 1 iPloom and Anthony Marino was adequate and complete by December 24, 2 2013. 3 4 B. Default Judgment 5 After entry of a default, a court may grant a default judgment 6 on the merits of the case. See Fed. R. Civ. P. 55. A default 7 judgment may not be entered, however, against an infant or 8 incompetent person unless represented in the action by a general 9 guardian or other such representative who has appeared. See id. United States District Court For the Northern District of California 10 Furthermore, a default judgment may not be entered against an 11 individual in military service until after the court appoints an 12 attorney to represent the defendant. 13 Mr. Marino is not an infant, incompetent person, or person in 14 military service. 15 Court may consider whether a default judgment may be entered 16 against Defendants. Pfefferkorn Decl. II ¶¶ 14-16. Accordingly, the Here, the majority of the Eitel factors favor default 17 18 See 50 U.S.C. app. § 521. judgment. 1. 19 Prejudice Ploom has tried to work with web hosting providers and 20 21 Defendants' referral service to shut down Defendants' websites that 22 sell counterfeit Ploom products. 23 new websites, with new hosting providers, and continuing to sell 24 their products. 25 denied, then Ploom would likely be left without a remedy, as its 26 efforts to shut down Defendants' operations have been unsuccessful. 27 Thus, Ploom would be prejudiced absent entry of default judgment. 28 // Defendants responded by creating If the motion for default judgment were to be 6 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) unfair competition, false representation, and false designation 9 of origin, id. § 1125(a); (3) cybersquatting, id. § 1125(d); and Ploom asserts claims for United States District Court For the Northern District of California 10 (4) related claims under state and common law. 11 Ploom seeks to recover statutory damages in lieu of actual damages 12 as relief. 13 Accordingly, the Court examines only Ploom's claims for which 14 statutory damages are available -- its claims for trademark 15 counterfeiting and infringement, see 15 U.S.C. § 1117(c) (providing 16 for statutory damages for trademark counterfeiting), and 17 cybersquatting see id. § 1117(d) (providing for statutory damages 18 for cybersquatting). 19 3592, 2008 U.S. Dist. LEXIS 118783, *17 (N.D. Cal. July 15, 2008) 20 (adopting same approach). 21 See Compl. at 8-22. Mot. at 14-15; see 15 U.S.C. §§ 1117(c)-(d). See also Chanel, Inc. v. Tshimanga, No. C-07- To prevail on its trademark infringement claim, Ploom must 22 prove that, without its consent, Defendants used in commerce a 23 reproduction or copy of Ploom's registered trademark in connection 24 with the sale or advertising of any goods or services, and that 25 such use is likely to cause confusion, mistake, or deceive 26 customers. 27 Coast Entm't, 174 F.3d 1036, 1046-47 (9th Cir. 1999). 28 in Part I above, Ploom has properly alleged all of these elements. 15 U.S.C. § 1114(1)(a); Brookfield Commc'n v. West 7 As outlined 1 Taking these allegations to be true, as the Court must, Ploom has 2 adequately stated a claim on which it may recover. 3 To prevail on its cybersquatting claim, Ploom must prove that 4 iPloom (1) registered or used a domain name that was identical or 5 confusingly similar to Ploom's distinctive registered trademark 6 with (2) a bad faith intent to profit from Ploom's mark. 7 alleges that iPloom registered the domain name, which is 8 confusingly similar to the Ploom Marks and Ploom's domain, 9 Ploom The Ninth Circuit has developed the Sleekcraft factors United States District Court For the Northern District of California 10 to determine whether potentially infringing marks are confusingly 11 similar. 12 the relatedness of the two companies' services; (3) the marketing 13 channel used; (4) the strength of [Plaintiff's] mark; (5) [the 14 Defendants'] intent in selecting its mark; (6) evidence of actual 15 confusion; (7) the likelihood of expansion into other markets; and 16 (8) the degree of care likely to be exercised by purchasers." 17, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 18 2000). 19 important Sleekcraft factors are (1) the similarity of the marks, 20 (2) the relatedness of the goods or services, and (3) the 21 simultaneous use of the Web as a marketing channel." 22 quotation marks omitted). 23 Those factors are: "(1) the similarity of the marks; (2) "In the context of the Web in particular, the three most Id. (internal With regard to the similarity factor, there can be no doubt 24 that iPloom and Ploom are very similar. The companies also provide 25 virtually identical services: selling vaporizers and other tobacco 26 products. 27 apparently even advertised as, legitimate Ploom products. 28 the Internet to sell their products. IPloom's products were made to look like, and some were 8 Both use Ploom has produced evidence 1 of the strength of its mark based on the uniqueness of its product, 2 substantial press coverage, and significant traffic to its website. 3 Compl. ¶¶ 26-30. 4 intent, but much can be inferred by the fact that the iPloom Pax 5 and Pax by Ploom appeared to be its flagship products. 6 G. 7 Given that the first five factors strongly favor a finding of 8 confusing similarity, and the Ninth Circuit's emphasis on three 9 that particularly favor that finding in this context, the Court There is little evidence regarding Defendants' Compl. Ex. No evidence has been presented on the last three factors. United States District Court For the Northern District of California 10 finds that the domain was confusingly similar to Ploom's 11 domain. 12 Ploom must also demonstrate that Defendants registered the 13 domain with bad faith intent to profit from Ploom's 14 marks. 15 registered the domain with the intention of profiting by 16 selling counterfeit Ploom products. 17 the similarity of the products offered for sale by Defendants, and 18 Mr. Marino's statements establishing his knowledge of Ploom's brand 19 are sufficient evidence of the required bad faith intent. 20 has adequately stated a claim on which it may recover. 21 22 The facts Ploom has pled demonstrate that Defendants 3. The similarity of the marks, Ploom Amount of Money at Stake Pursuant to the fourth Eitel factor, "the court must consider 23 the amount of money at stake in relation to the seriousness of 24 Defendant's conduct." 25 iPloom has engaged in the advertising, sale, and distribution of 26 counterfeit goods bearing at least three of Ploom's marks. 27 Defendants' continued sale of counterfeit Ploom merchandise despite 28 this lawsuit and multiple attempts by Ploom to shut down Pepsico, 238 F. Supp. 2d at 1176. 9 Here, 1 Defendants' website augments the seriousness of Defendants' 2 conduct. 3 likelihood that Defendants' conduct may cause confusion or mistake 4 or otherwise deceive customers, and Defendants' failure to comply 5 with the judicial process or to participate in any way in the 6 present litigation, the imposition of a substantial monetary award 7 is justified. 8 proportionate to Defendants' conduct, especially in light of the 9 fact that the size of the award is limited by what the Court United States District Court For the Northern District of California 10 Given Defendants' disregard of these attempts, the The amount of money at stake is therefore considers just. 4. 11 Possibility of Dispute Concerning Material Facts The fifth Eitel factor considers the possibility of dispute as 12 13 to any material facts in the case. 14 pleaded complaint alleging the facts necessary to establish its 15 claims and provided evidence in the form of declarations and 16 attached exhibits. 17 proceedings in this case, and thus no dispute has been raised 18 regarding the material averments of the Complaint. 19 that any genuine dispute may exist is, at best, remote. 20 factor therefore favors the entry of default. 5. 21 Here, Ploom filed a well- Defendants have not responded to any of the The likelihood This Whether Default Was Due to Excusable Neglect Defendants have had nearly five months to respond to the 22 23 Complaint and have not done so. There is no evidence in the record 24 that Defendants' failure to appear and otherwise defend was the 25 result of excusable neglect. 26 being served with the Complaint indicates that their failure to 27 appear was willful. 28 // Defendants' failure to appear after 10 6. 1 2 Strong Policy Favoring Decision on the Merits Finally, the mere existence of Federal Rule of Civil Procedure 3 55(b) indicates that the seventh Eitel factor is not alone 4 dispositive. 5 Defendants' failure to answer Plaintiffs' Complaint makes a 6 decision on the merits impractical, if not impossible. 7 the seventh Eitel factor does not preclude the Court from entering 8 default judgment against Defendants. 9 C. United States District Court For the Northern District of California Moreover, Therefore, Remedies 1. Statutory Damages for Trademark Infringement 10 11 Pepsico, 238 F. Supp. 2d at 1177. The remedies available to a plaintiff who prevails on a claim 12 for trademark infringement and counterfeiting under 15 U.S.C. 13 § 1114 are listed under 15 U.S.C. § 1117(a)-(c). 14 a registered mark holder may recover: (1) defendant's profits, (2) 15 any damages sustained by the plaintiff, and (3) the costs of the 16 action, subject to the principles of equity. 17 requires the court to treble the damages assessed under subsection 18 (a) if the defendant "intentionally us[es] a mark or designation, 19 knowing such mark . . . is a counterfeit mark . . . in connection 20 with the sale, offering for sale, or distribution of goods or 21 services." 22 damages, instead of actual damages and profits, in cases involving 23 the use of a counterfeit mark in connection with the sale of goods. 24 Plaintiffs who elect statutory damages may recover "not less than 25 $1,000 or more than $200,000 per counterfeit mark per type of goods 26 or services sold, offered for sale, or distributed, as the court 27 considers just." 28 where the defendant's conduct is willful, a court may enhance the Under § 1117(a), Section 1117(b) Section 1117(c) permits a plaintiff to elect statutory 15 U.S.C. § 1117(c)(1). 11 Additionally, in cases 1 statutory damages award to an amount "not more than $2,000,000 per 2 counterfeit mark per type of goods or services sold, offered for 3 sale, or distributed, as the court considers just." 4 § 1117(c)(2). 5 the court has wide discretion in determining the amount of 6 statutory damages to be awarded. 7 04996, 2010 U.S. Dist. LEXIS 61295, at *39 (N.D. Cal. May 7, 2010) 8 (citing Columbia Pictures Television, Inc. v. Krypton Broad. of 9 Birmingham, 259 F.3d 1186, 1194 (9th Cir. 2001)). United States District Court For the Northern District of California 10 15 U.S.C. If a plaintiff elects to recover statutory damages, Chanel, Inc. v. Lin, No. C-09- In the instant case, where Ploom has established that 11 Defendants' conduct was willful, Ploom may recover statutory 12 damages pursuant to § 1117(c) in an amount not less than $1,000 and 13 not more than $2,000,000 per counterfeit mark per type of goods 14 sold or offered for sale, as the Court considers just. 15 alleges that Defendants offered for sale two types of goods -- the 16 iPloom Pax (which included counterfeit Ploom and Pax marks) and the 17 Pax by Ploom (which included two distinct counterfeit Ploom Marks 18 and counterfeit Pax marks). 19 that the iPloom Pax and the Pax by Ploom are different types of 20 goods. 21 goods' to be the general product type as opposed to many sub-forms 22 of that product." 23 Food & Beverage Inc., 704 F. Supp. 2d 288, 292 (S.D.N.Y. 2010). 24 Because both the iPloom Pax and the Pax by Ploom were vaporizers 25 that were substantially similar to one another, the Court finds 26 that Defendants used counterfeit marks on only one type of good. 27 Nonetheless, Ploom has properly alleged infringement of three 28 distinct marks used on one type of good: the Ploom trademark, the Ploom However, the Court is not satisfied "Common sense cuts in favor of defining the phrase 'type of Union of Orthodox Jewish Congregations v. Am. 12 1 stylized Ploom trademark, and the Pax Marks. 2 each of the three counterfeit marks. 3 the Court finds that Ploom may recover not less than $3,000 and not 4 more than $6,000,000. 5 Ploom may recover for Under § 1117(c), therefore, Section 1117(c) does not give any specific guidance as to how 6 a court should determine an appropriate statutory damages award. 7 "Although the statutory damages need not reflect the defendants' 8 unlawfully obtained profits, some district courts use § 1117(b) as 9 a guide for setting damages under § 1117(c). In doing so, courts United States District Court For the Northern District of California 10 both counteract the profitability of counterfeiting and execute the 11 punitive purposes of the statute." 12 03464 VRW, 2007 U.S. Dist. LEXIS 22691, *13 (N.D. Cal. Mar. 13, 13 2007) (calculating statutory damages by estimating defendant's 14 profits and trebling for willfulness). 15 statutory damages are meant to serve as a substitute for actual 16 damages the Court should discern whether the requested damages 17 "bear some relation to the actual damages suffered." 18 v. Ocean Point Gifts, No. C-09-4215 JBS, 2010 U.S. Dist. LEXIS 19 59003, *15 (D. N.J. June 14, 2010) (internal citations omitted). 20 Chanel, Inc. v. Doan, No. C-05- In other words, because Coach, Inc. When determining the appropriate amount of statutory damages 21 to award under § 1117(c), some courts have considered the following 22 factors that guide the award of statutory damages under an 23 analogous provision of the Copyright Act: (1) the expenses saved 24 and the profits reaped by the defendant; (2) the revenues lost by 25 the plaintiff; (3) the value of the copyright; (4) the deterrent 26 effect on others besides the defendant; (5) whether the defendant's 27 conduct was innocent or willful; (6) whether a defendant has 28 cooperated in providing particular records from which to assess the 13 1 value of the infringing material produced; and (7) the potential 2 for discouraging the defendant. 3 Dist. LEXIS 118783 at *34; Microsoft Corp. v. Nop, 549 F. Supp. 2d 4 1233, 1237-38 (E.D. Cal. 2008). 5 See, e.g., Tshimanga, 2008 U.S. Here, Ploom requests $100,000 in statutory damages per 6 counterfeit mark, for a total of $500,000. 7 Order") at 4. 8 the Court will consider both the willful nature of Defendants' acts 9 and the scale of Defendants' operations. ECF No. 21-1 ("Proposed Ploom provides no basis for this figure. However, See Philip Morris U.S.A., United States District Court For the Northern District of California 10 Inc. v. Castworld Prods., 219 F.R.D. 494, 500-01 (C.D. Cal. 2003) 11 (awarding $2,000,000 in statutory damages against defendant in 12 light of the defendant's "importation of large, commercial 13 quantities" of counterfeit cigarettes "having a street value of 14 millions of dollars"). 15 factors commonly considered in copyright law. 16 17 a. The Court proceeds to consider the seven Expenses Saved and Profits Reaped The lack of discovery in this case leaves no data as to 18 Defendants' expenses saved and profits reaped. 19 investigators purchased products from Ploom at prices of $79.95 20 (the iPloom Pax) and $199.95 (the Pax by Ploom). 21 however, no way for the Court to determine how many infringing 22 items Defendants sold. 23 operation is Mr. Marino's statement to Ploom's investigator that he 24 was expecting an order of 10,000 units of the Pax II. 25 that Defendants did receive such an order and managed to sell all 26 such units at the $199.95 price, Defendants reaped revenues of 27 $1,999,500. 28 deliver the investigator's order of the Pax by Ploom indicates that Ploom's There is, The only evidence of the scale of the Assuming However, the fact that Defendants were unable to 14 1 Defendants did not have such large inventories. 2 evidence on this point, the Court cannot make a determination as to 3 whether the requested damages of $100,000 per infringement are 4 proportionate to Ploom's actual damages. b. 5 Given the lack of Revenues Lost Ploom has provided no evidence of its revenues lost, either as 6 7 a result of Defendants' infringing activities or as a result of 8 counterfeiting in general. 9 unlawfully obtained the benefits of Ploom's brand and reputation Ploom alleges that Defendants have United States District Court For the Northern District of California 10 and caused confusion among potential customers by using Ploom's 11 marks and trade dress. 12 evidentiary showing, the Court cannot reach any conclusion about 13 the magnitude of lost revenues to Ploom. c. 14 Compl. ¶ 52. Nonetheless, absent some Value of the Intellectual Property The Ploom Marks, Pax Marks, and X Design trade dress are 15 16 valuable because they are affiliated with a unique and recognizable 17 brand that has garnered considerable media attention. 18 26-30. d. 19 Compl. ¶¶ Willfulness of Defendants' Conduct Defendants' conduct was undoubtedly willful, as they admitted 20 21 knowledge of Ploom's brand, continued their infringing conduct 22 after the commencement of this lawsuit, and repeatedly evaded 23 Ploom's efforts to shut down their websites. e. 24 Defendants' Lack of Cooperation in Providing Records 25 Defendants have not provided any discovery or participated in 26 27 this litigation in any way. 28 // 15 f. 1 Deterrent Effect on Defendants Defendants have created multiple websites to sell products 2 3 that infringe upon Ploom's trademarks. 4 down those websites have clearly not been an effective deterrent. 5 Defendants' persistence suggests that a modest damages award will 6 not deter them. g. 7 Ploom's efforts to shut Deterrent Effect on Others 8 A significant award against Defendants would clearly have some 9 kind of deterrent effect on other would-be infringers, although the United States District Court For the Northern District of California 10 magnitude of this effect is difficult to determine. Taking into account all of the above, the Court finds the 11 12 requested $100,000 per infringement to be an appropriate award. 13 This amount is well within the guidelines established by Congress, 14 takes into account the willfulness shown by continuing to sell 15 counterfeit merchandise after multiple efforts to shut down its 16 website and the culpability of failing to respond, and is 17 significant enough to serve as compensation to Ploom and a 18 deterrent to both the Defendants and others. 2. Statutory Damages for Cybersquatting 19 A party that prevails on a claim of cybersquatting may elect 20 21 to recover "instead of actual damages and profits, an award of 22 statutory damages in the amount of not less than $1,000 and not 23 more than $100,000 per domain name, as the court considers just." 24 15 U.S.C. § 1117(d). 25 of $100,000. Ploom requests the maximum statutory damages Proposed Order at 4. In determining appropriate statutory damages for 26 27 cybersquatting, 28 // 16 courts generally consider a number of factors . . . including the egregiousness or willfulness of the defendant's cybersquatting, the defendant's use of false contact information to conceal its infringing activities, the defendant's status as a "serial" cybersquatter -- i.e., one who has engaged in a pattern of registering and using a multitude of domain names that infringe the rights of other parties -- and other behavior by the defendant evidencing an attitude of contempt towards the court or the proceedings. 1 2 3 4 5 6 7 8 Verizon Cal. Inc. v. Onlinenic, Inc., C 08-2832 JF (RS), 2009 WL 9 2706393 (N.D. Cal. Aug. 25, 2009). In this case, Defendants' United States District Court For the Northern District of California 10 cybersquatting was both willful and egregious. 11 registered their domains with the intent to sell counterfeit Ploom 12 products and repeatedly registered new domains as Ploom discovered 13 them. 14 proceedings by consistently failing to respond to summons. 15 However, there is no evidence in the record that Defendants ever 16 used false contact information or of serial cybersquatting (which 17 requires evidence of domain names that infringe on the rights of 18 other parties). Defendants Defendants have also shown contempt towards these 19 Courts in similar cases have awarded a range of damages. 1 20 Defendants' conduct in this case was willful and in bad faith, and 21 they have shown contempt for this Court and these proceedings. 22 1 23 24 25 26 27 28 The See, e.g., Partners for Health & Home, L.P. v. Yang, 488 B.R. 109 (C.D. Cal. 2012) (awarding $25,000 for domain through which defendant had sold products willfully infringing on plaintiff's trademarks); Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1085-87 (C.D. Cal. 2012) (awarding $50,000 where defendant had provided false contact information to the domain registrar but no other factors were present); Verizon Cal. Inc. v. Onlinenic, Inc., C 08-2832 JF (RS), 2009 WL 2706393 (N.D. Cal. Aug. 25, 2009) (awarding $50,000 per violation where all four factors were present); Citigroup, Inc. v. Shui, 611 F. Supp. 2d 507, 513 (E.D. Va. 2009) (awarding $100,000 where defendant's use of the domain was "sufficiently willful, deliberate, and performed in bad faith"). 17 1 Court finds that $50,000 in statutory damages appropriately 2 reflects the gravity of Defendants' violation of the law. 3. Injunctive Relief 3 4 In addition to damages, Ploom requests a permanent injunction 5 enjoining Defendants from using in commerce: (1) Ploom trademarks 6 and trade dress or similar marks; (2) the iPloom mark; (3) trade 7 dress confusingly similar to Ploom's PAX trade dress; and (4) the 8 domain name. 9 grant injunctions according to the rules of equity and upon such The Lanham Act gives the court "power to United States District Court For the Northern District of California 10 terms as the court may deem reasonable, to prevent the violation" 11 of a trademark holder's rights. 12 injunctions are routinely granted in cases like the instant one 13 where a defendant has not appeared in the action at all. 14 e.g., Philip Morris, 219 F.R.D. at 502; Pepsico, 238 F. Supp. 2d at 15 1178; Coach Servs. v. Cheap Sunglasses, No. 09CV1059 BEN (JMA), 16 2010 U.S. Dist. LEXIS 68200, at *6-*8 (S.D. Cal. July 2, 2010). 17 Accordingly, a permanent injunction shall be entered with the 18 judgment. 19 15 U.S.C. § 1116(a). Permanent See, Ploom also requests the transfer of the domain name 20 to it. 21 forfeiture or cancellation of the domain name or the transfer of 22 the domain name to the owner of the mark." 23 § 1125(d)(1)(C). 24 intentional misuse of the domain at Ploom's expense. 25 The Lanham Act gives the Court the power to "order the 15 U.S.C. The court finds such relief appropriate given the 4. Costs 26 Ploom also requests costs and attorney's fees under 15 U.S.C. 27 § 1117(a), which authorizes recovery of the costs of an action for 28 the violation of any right of the registrant of a trademark. 18 That 1 section also authorizes the court to award attorney's fees to a 2 plaintiff in "exceptional cases." 3 case is exceptional where the district court finds that the 4 defendant acted maliciously, fraudulently, deliberately, or 5 willfully." 6 (9th Cir. 2007) (quoting Watec Co. v. Liu, 403 F.3d 645, 656 (9th 7 Cir. 2005)). 8 in this case, and so this is an exceptional case for the purposes 9 of § 1117(a). United States District Court For the Northern District of California 10 Id. § 1117(a). "A trademark K & N Eng'g, Inc. v. Bulat, 510 F.3d 1079, 1081-82 The Court has found that Defendants acted willfully However, it is still not immediately obvious that Ploom may 11 recover its attorney's fees. 12 statutory damages under § 1117(c) may also recover costs under 13 § 1117(a) is an open question in this Circuit: "we do not reach the 14 issue whether an election to receive statutory damages under 15 § 1117(c) precludes an award of attorney's fees for exceptional 16 cases under the final sentence of § 1117(a)." 17 F.3d at 1082 n.5 (9th Cir. 2007). 18 resolved this issue, holding that "an award of attorney's fees is 19 available under section 1117(a) in 'exceptional' cases even for 20 those plaintiffs who opt to receive statutory damages under section 21 1117(c)." 22 83, 111 (2d Cir. 2012). 23 reasoning persuasive. 24 Whether a plaintiff who elects K & N Eng'g, 510 The Second Circuit, though, has Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d The Court finds the Second Circuit's Ploom is entitled to the costs of this action. See Lindy Pen 25 Co. v. Bic Pen Corp., 982 F.2d 1400, 1405 (9th Cir. 1993). Ploom 26 is also entitled to attorney's fees in addition to its statutory 27 damages. 28 Civil Local Rule 54-1. Ploom may submit its Bill of Costs in accordance with 19 1 2 V. CONCLUSION The Court GRANTS the Motion for Default Judgment filed by 3 Ploom against Defendants iPloom, LLC and Anthony Marino. 4 Defendants are jointly and severally liable for $350,000 to Ploom, 5 plus Ploom's costs. 6 within fourteen (14) days of this Order as provided by Civil Local 7 Rule 54-1. 8 injunction shall issue with the judgment. 9 responsibility to serve the injunction in such a manner to make it United States District Court For the Northern District of California 10 Plaintiffs shall submit their Bill of Costs Failure to do so will result in a waiver of costs. Plaintiffs have the operative in contempt proceedings. 11 12 IT IS SO ORDERED. 13 14 15 Dated: May 12, 2014 UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 20 An

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