Chanel Inc. v. US880

Filing 40

ORDER Re Supplemental Briefing and/or Evidence Re Plaintiff's Motion for Default Judgment. Signed by Magistrate Judge Edward M. Chen on 4/14/2011. (emcsec, COURT STAFF) (Filed on 4/14/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CHANEL, INC.

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Plaintiff,
v.

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For the Northern District of California

United States District Court

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No. C-10-2601 PJH (EMC)

US880, et. al.

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Defendants.
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ORDER RE SUPPLEMENTAL
BRIEFING AND/OR EVIDENCE RE
PLAINTIFF’S MOTION FOR DEFAULT
JUDGMENT
(Docket No. 19)

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Pending before the Court is Plaintiff Chanel, Inc.’s Motion for Default Judgment against

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Defendant US880, an entity of unknown makeup d/b/a/ various internet websites. Having

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considered Plaintiff’s Motion and supporting papers, the Court finds invites supplemental briefing.

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Chanel requests an award of $3,000.00 per registered Chanel Mark (totaling eleven marks)

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per type of goods sold (totaling six – handbags, wallets, watches, sunglasses, scarves, and

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swimwear) for a total award of $198,000 ($3,000 x 66 infringements). Mot. at 13. Plaintiff bases its

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request on the statutory minimum ($1,000.00 per counterfeit mark per type of good sold) trebled to

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reflect Defendant’s willfulness. Plaintiff alleges that Defendants have knowingly sold or offered for

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sale goods bearing marks which are identical to the Chanel Marks with the intent to capitalize on the

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reputation and goodwill of the marks, and Plaintiff has provided evidence of the infringement of its

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marks. See Gaffigan Decl. Ex. 3; Supp. Gaffigan Ex. 3. Chanel’s calculation methodology

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(assessing a statutory penalty for each alleged infringement) appears to be reasonable. See Chanel,

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Inc. v. Xiuyin Lin, No. 09-4996, 2010 U.S. Dist. LEXIS 61205 (N.D. Cal., June 21, 2010) (awarding

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$456,000 in statutory damages for willful infringement of nineteen marks across eight categories of

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products); Chanel, Inc. v. Doan, 2007 U.S. Dist. LEXIS 22691, 2007 WL 781976, *6 (N.D. Cal.

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Mar. 13, 2007) (awarding $127,701 in statutory damages for willful infringement of six federally

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registered trademarks); Adobe Systems Inc. v. Kern, 2009 U.S. Dist. LEXIS 123566, 2009 WL

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5218005, *9 (N.D. Cal. Nov. 24, 2009) (awarding $250,000 in statutory damages for willful

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infringement of five federally registered trademarks); Adobe Systems, Inc. v. Taveira, 2009 U.S.

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Dist. LEXIS 127751, 2009 WL 506861, *6 (N.D. Cal. Feb. 27, 2009) (awarding $250,000 in

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statutory damages for willful infringement of five federally registered trademarks). Moreover,

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Plaintiff’s request is well within the $2 Million “per each counterfeit Chanel mark used and product
sold, as provided by 15 U.S.C. § 1117(c) . . . .” Compl. ¶ 43c. The Court nonetheless finds a

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For the Northern District of California

United States District Court

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shortcoming in Chanel’s request. There are two problems.

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First, as this Court previously noted, the original infringement table attached to the

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Declaration of Gaffigan as Ex. 3, documents 16 examples of infringements. Eight of the eleven

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registered marks are infringed by only one type of good (e.g. handbags); only three marks are

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infringed by more than one type of good. Plaintiff failed to prove each of the eleven marks are

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infringed by each of six types of goods. In Mr. Gaffigan’s supplemental declaration, Ex. 3, the

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infringement table lists three marks but does not specify the type of good allegedly infringing (as he

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did in the first declaration). While Mr. Gaffigan attaches printouts of offending websites, many of

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the printouts are not clear enough to identify the mark. In any event, Plaintiff has still failed to

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prove 66 infringements. See generally Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th

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Cir. 1987) (noting that while factual allegations of the complaint are generally taken as true after

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entry of default, damages must be proven); Board of Trustees of the Boilermaker Vacation Trust v.

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Skelly, Inc., No. 04-02841 CW, 2005 WL 443462 at *2 (N.D. Cal. Feb. 24, 2005) (explaining that, in

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moving for default judgment, “Plaintiff has the burden of proving damages through testimony or

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written affidavit.”).

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Second, many of the cited exemplars of particular infringements are websites which have not

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been sufficiently proven to be under the control and ownership of Defendant. Plaintiff provides

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evidence that fourteen internet domains (the twelve “Subject Domain Names” listed in Schedule A

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to the Supp. Gaffigan Decl. plus two of the “Additional Domain Names” listed in Schedule B) are

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registered to Defendant US880. See Supp. Gaffigan Decl. ¶ 10e, Comp. Exs. 2a, 2e. The proof is

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solid. The evidence tying Defendant to the remaining domain names listed in Schedule B, however,

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is more attenuated. Plaintiff argues that Mr. Gaffigan has adequately established that Defendant is

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the owner of each of these sites based on six criteria: “(1) email addresses; (2) tracking codes; (3)

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website redirection; (4) linking between websites; (5) common contact information provided on the

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websites and/or provided as part of the WHOIS domain name registration reports; and (6) self

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identifications.” Supp. Gaffigan Decl. ¶ 9. Only the fourteen sites (12 from Schedule A and 2 from

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Schedule B) satisfy the fifth criterion (actual registration data) – the strongest criteria. Id. at ¶ 10e,
Comp Ex. 2. The Court therefore turns to a discussion of the remaining criteria used by Mr.

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For the Northern District of California

United States District Court

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Gaffigan.

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Plaintiff posits, and the Court agrees, that “[i]dentical email addresses, either provided to the

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domain registrar or provided to customers of an Internet website, are strongly indicative of common

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ownership and control.” Id. ¶ 10a. Mr. Gaffigan’s analysis assumes that online merchants must

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provide accurate email addresses on their websites so their customers may ask questions and place

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orders. Id. Absent any reason to suspect otherwise, the Court finds this to be a reasonable

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assumption, and therefore concludes that sites providing an email address identical to one tied

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directly to US880 are under Defendant’s ownership or control. Mr. Gaffigan explains that the

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contact email address for US880 contained in the WHOIS data registration records is

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[e-mail]. Id. Many of the “Additional Domain Names” are tied to Defendant via,

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inter alia, common email addresses. Nearly all of those list a common email address of

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[e-mail], which is reliably tied to Defendant. See id. Comp. Ex. 2. They also

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appear, based on domain name registrations, to have other contact information in common with

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US880, including their physical address, phone number, and the name US880. Id. at Ex. 2a.

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However, seven are not so reliably tied by email addresses because the listed email address is not

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that of US880, but those indirectly linked through other websites.

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Plaintiff ties many websites to Defendant based on identical tracking codes found in the
websites’ HTML code. Mr. Gaffigan explains that “[a] tracking code is inserted by a domain owner

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into a website’s HTML code in order to allow the site operator to collect statistics about the visitors

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to their website. . . . tracking code providers generate unique codes for each user . . . . [W]hen

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identical codes are used on multiple websites, all the tracking information from each website the

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code appears on goes to a single tracking account, indicating a common owner.” Id. ¶ 10b.

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Tracking codes on sites within domains registered to US880 are also found in the HTML code of

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other sites. See id. (explaining, e.g., that tracking code 51.1a:2988833 is found on multiple domains

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including edhardyshow.com); see, e.g., id. Ex. 2b at 59 (registrant contact information for

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edhardyshow.com). The Court accordingly finds that damages should be awarded with respect to

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domains tied to Defendant via tracking codes.
Plaintiff’s third criteria, “website redirection” is also satisfactory, provided the detour leads

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For the Northern District of California

United States District Court

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to a site reliably associated with Defendant. “A website redirect occurs when a server immediately

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moves and/or directs visitors attempting to visit one website to a different website.” Id. ¶ 10c. Of

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the nine domains associated by redirection, seven of them lead to domains not tied to Defendant by

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virtue of registration data, tracking codes, or contact information (e.g., email addresses). One,

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topairmax.com, is adequately connected to Defendant based on Mr. Gaffigan’s determination that it

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redirects to maxshoesworld.com, which is a domain tied to Defendant via 360gome.com (a domain

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registered to US880 and listed in Schedule A). See Supp. Gaffigan Decl. Ex. 1 (Docket No. 38-5) at

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3 (printout from www.360gome.com dated Sept. 14, 2010 advertising Chanel handbags), 170

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(noting that the www.360gome.com now redirects to maxshoesworld.com), 180 (printout from

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www.maxshoesworld.com dated Dec. 21, 2010 advertising Chanel handbags). Because the

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remaining seven domains are not adequately tied to Defendant by virtue of the website they

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automatically redirect to or any other reliable means, the Court finds that it would be inappropriate

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to consider them in its calculation of damages based on the record evidence.

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Plaintiff’s fourth criterion, links between websites, is more attenuated than automatic

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redirection. According to Mr. Gaffigan “an online merchant will not divert a possible sale to

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another Internet website, unless it is irrelevant on which Internet website the sale is processed, as the

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merchant receives payment from both.” Supp. Gaffigan Decl. ¶ 10d. But there are other reasons a

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merchant might link to another’s website, such as where they receive a commission from a resulting

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sale or click-through as part of a search engine optimization campaign. The fact that these websites

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sell “the same type of products” (not “identical” products), does not sufficiently prove common

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ownership and control based solely on links between websites.

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Plaintiff’s final criterion, while less substantial than some other indicators, is sufficient.

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Plaintiff contends that common “self-identifications,” whether purposeful or unintentional, indicate

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common control between websites. Id. ¶ 10f. Mr. Gaffigan points to an example from

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www.dearsunglass.com, which states: “The products we provide cover various aspects of fashion

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article, so you may choose products according to brand or choose brand according to products you

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like form watchesagent.com which is all-round shopping website.” Ex. 1 to Supp. Gaffigan Decl. at
132 (unedited). According to Plaintiff, this is sufficient to establish that common ownership and

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For the Northern District of California

United States District Court

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control of watchesagent.com and dearsunglass.com. The Court is persuaded that these “self-

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identifications” warrant the inference that Defendant is responsible for the four websites tied to it

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solely by virtue of such text.

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In total, the Court is satisfied that 73 of the 176 domains listed by Plaintiff are under the
Defendant’s ownership or control. The others listed on Schedule B are not.

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Because the asserted domain names are relevant to the relief sought by Plaintiff herein – both

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as exemplars for statutory damages as to particular infringements of certain marks and as to

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equitable relief – Plaintiff must “prove up” the essential elements for relief. Televideo Sys., Inc.,

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supra, 826 F.2d at 917-18. Based on the proof submitted, the Court finds the domains listed in

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Appendix A, infra, adequately tied to Defendant such that they may form a basis for damages and

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equitable relief. The others (not listed) are not.

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However, the Court will permit Plaintiff to file a supplemental filing to enhance this list.

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Plaintiff may also list substitute exemplars of alleged infringements based on those approved

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domains listed in Appendix A in order to prove violations entitling it to statutory damages. It may

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also enhance its table of infringements to assert more than 16 infringements. The supplemental

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filing shall be made by April 27, 2011.

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IT IS SO ORDERED.

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Dated: April 14, 2011
_________________________
EDWARD M. CHEN
United States Magistrate Judge

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For the Northern District of California

United States District Court

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APPENDIX A

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360gome.com

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atthego.com

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bagsagent.com

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belovebags.com

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belovewrist.com

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leaderol.com

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officalugg.com
runtimberland.com

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For the Northern District of California

United States District Court

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shopkiss.com

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timberlander.com

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timberlandsou.com

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watchesagent.com

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bagshow.biz

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sexyhygeia.com

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80trade.com

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abercrombiesales.com

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abercrombiestar.com

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allbestdvd.com

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bagsontheway.com

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bapeshopping.com

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basemall.info

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hotsalex.com

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ilikebuy.com

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ireplicachoice.com

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ispv.net

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kicksbap.com

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kicksboots.com

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mixitems.com

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mysoftware123.com

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onairbuy.com

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order24hours.com

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order2you.com

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youmestore.com

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topairmax.com

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topofbikini.com
thehandbagssale.com

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For the Northern District of California

United States District Court

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software4cpu.com

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shixy.com

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sellelec.com

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selinged.com

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robbtrade.com

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progiftstore.com

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pearltop.com

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gsshring.com

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gototbl.com

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golinksoflondon.com

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fangpinb2b.com

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fangpin.net

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fallowtrade.org

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e-superbuyer.com

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edhardyshow.com

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ed-hardys.com

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ecspeed.com

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ecshopking.com

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ecgoshop.com

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ecgohere.com

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ecbape.com

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easydoing.org

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dvdsword.com

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dearpolo.com

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dearmobiles.com

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dearbridal.com

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clortsblog.org
bikinismark.com

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For the Northern District of California

United States District Court

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bikinionlineshop.com

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webmydvd.com

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victor88.com

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selingbags.com

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dearsunglass.com

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