LG Electronics Mobile Comm U.S.A., Inc. et al v. Xiaowen et al

Filing 127

AMENDED ORDER Granting 111 Motion for Default Judgment. It is ordered that the Court grants plaintiffs' motion for default judgment and grants plaintiffs' request for permanent injunction. The Court grants plaintiffs' request for statu tory fees in the amount of $168,100,000. The Court grants plaintiffs' request for attorneys' fees and costs. Plaintiffs shall submit evidence of their attorneys' fees and costs on or before 30 days from the date on which this orde r is electronically docketed. The Court directs Whois Privacy Corporation to reveal to LG the owner of the "lgtonewholesale.com" domain name. Said owner and/or the relevant registrar (Internet Domain Service BS Corp.) is directed to transfer the "lgtonewholesale.com" domain name to LG.Signed by Judge Janis L. Sammartino on 2/6/2017.(dxj)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LG CORPORATION, et al., Case No.: 16-CV-1162 JLS (NLS) Plaintiffs, 12 13 v. AMENDED ORDER GRANTING MOTION FOR DEFAULT JUDGMENT 14 HUANG XIAOWEN DBA TOPUUSHOP, et al., (ECF No. 111) 15 Defendants. 16 17 18 Presently before the Court is Plaintiffs LG Corporation, LG Electronics, Inc., and 19 LG Electronics MobileComm U.S.A., Inc.’s (collectively, “Plaintiffs” or “LG”) Motion for 20 Default Judgment (“Mot.,” ECF No. 111), against each of the following Defendants 21 (“Defaulting Defendants”): 22  Huang Xiaowen doing business as top-uushop (“Xiaowen”); 23  Enjoy International Trading (HongKong) Co., Ltd. (“Enjoy”); 24  Guangzhou City Hosphone Electronic Co., Ltd. (“Hosphone Electronic”); 25  Shenzhen Bingos Trading Co. Ltd. (“Shenzhen Bingos”); 26  Guangzhou Winding Electronic Technology Co. Ltd. (“Winding Electronic”); 27  Guangzhou Newkingser Electronic Technology Co. Ltd. (“Newkingser”); 28  Shenzhen Little Link Communication Firm (“Little Link”); 1 16-CV-1162 JLS (NLS) 1  Shenzhen King Flash Electronics Co. Ltd. (“King Flash”); 2  Shenzhen Smart Link Communications Co. Ltd. (“Smart Link”); 3  Ruilin Tech Limited Company (“Ruilin Tech”); 4  Herman Wheeler, Inc. (“Herman Wheeler”); 5  Zexiao Lu doing business as everydaysmile2015 (“Lu”); 6  Yoon Hee Park doing business as Deals-Wow (“Park”); 7  Shenzhen ZL Times Technology Co. (“Shenzhen ZL”); 8  Shenzhen Powerfire Technology Co. Ltd. (“Shenzhen Powerfire”); 9  Shenzhen Newsinte Electronics Co. Ltd. (“Shenzhen Newsinte”); 10  Shenzhen Leisen Technology Co., Ltd. (“Shenzhen Leisen”). 11 12 (Mot. 11–12, ECF No. 111-1.1) 13 Because the Clerk of Court entered default against the Defaulting Defendants on 14 December 2, 2016, (ECF No. 108), and because on balance the Eitel factors guiding the 15 exercise of the Court’s discretion in entering default judgment counsel in favor of the Court 16 granting default judgment, the Court GRANTS Plaintiffs’ Motion for Default Judgment 17 (ECF No. 111). BACKGROUND 18 LG is the owner of various registered Federal Trademarks. (See Compl. ¶ 34, ECF 19 20 No. 1.) The following LG marks are at issue in this case: 21 Mark 22 Relevant Reg. No. Reg. Date Owner 3661175 07/28/2009 LG Corp. Goods/Services 23 Earphone for 24 Mobile Phone 25 26 27 28 1 Pin citations refer to the CM/ECF page numbers electronically stamped at the top of each page. 2 16-CV-1162 JLS (NLS) 1 2 Mark Relevant Reg. No. Reg. Date Owner Goods/Services 3 Headphones; 4 5 HBS LG Wireless 4894207 02/02/2016 Headphones 6 7 Inc. Headphones; 8 Earphones; 9 HBS-730 11 12 LG 4894209 02/02/2016 Wireless Headphones; HBS-740 13 Electronics, Inc. Headphones 10 Electronics, LG Wireless 4894212 02/02/2016 Electronics, Headphones Inc. Headphones; LG 14 15 16 HBS-750 Wireless 4894211 02/02/2016 Electronics, 17 Headphones Inc. 18 Headphones; LG 19 HBS-760 20 Wireless 4894210 02/02/2016 Electronics, Headphones Inc. Headphones; LG 21 22 23 HBS-800 Electronics, HBS-900 Inc. Headphones; 25 27 4894206 02/02/2016 Headphones 24 26 Wireless LG Wireless 4894208 02/02/2016 Headphones Electronics, Inc. 28 3 16-CV-1162 JLS (NLS) 1 2 Mark Relevant Reg. No. Reg. Date Owner Goods/Services 3 4 Earphones; Head 5 Phones LG 4694125 03/03/2015 Electronics, Inc. 6 LG 7 Headphones 8 4925092 03/29/2016 Electronics, Inc. 9 10 11 12 LG Headphones; Earphones 4820986 9/29/2015 Electronics, Inc. 13 14 15 TONE PRO LG Head Sets; 4734180 5/12/2015 Earphones Inc. 16 17 18 Wireless Cellular TONE INFINIM 19 Electronics, Phone Headsets; LG 4780031 7/28/2015 Earphones Electronics, Inc. 20 Headphones; 21 22 23 24 NECKBEHIND LG Earphones; 4630809 11/4/2014 Headsets for Mobile Phones Electronics, Inc. 25 26 27 28 4 16-CV-1162 JLS (NLS) 1 2 Mark Relevant Reg. No. Reg. Date Owner Goods/Services 3 Software For 4 Wireless 5 6 7 8 9 TONE&TALK Communication Between Mobile LG 4900181 2/16/2016 Phone And Electronics, Inc. Earphones 10 11 (Compl. ¶ 34, ECF No. 1 (collectively, the “LG Trademarks”).) 12 Defaulting Defendants are various individuals and companies located in the United 13 States and in China. (Id. ¶¶ 6–30.) Plaintiffs filed suit against Defaulting Defendants, 14 among other defendants, on May 16, 2016. (ECF No. 1.) The Complaint alleges several 15 causes of action, including trademark counterfeiting and infringement, false advertising, 16 and cybersquatting. (See generally id.) On December 2, 2016, the Clerk entered default 17 against the Defaulting Defendants. (ECF No. 108.) Plaintiffs filed the instant motion for 18 default judgment on December 13, 2016. (ECF No. 111.) 19 LEGAL STANDARD 20 Federal Rule of Civil Procedure 55 permits a court to enter default judgment upon 21 party application. “If the party against whom a default judgment is sought has appeared 22 personally or by a representative, that party or its representative must be served with written 23 notice of the application at least 7 days before the hearing.” Fed. R. Civ. P. 55(b)(2). 24 Although default judgments are ordinarily disfavored, a court may grant or deny a motion 25 for default judgment at its discretion. See Alan Neuman Prods., Inc. v. Albright, 862 F.2d 26 1388, 1392 (9th Cir. 1988) (citing Haw. Carpenters’ Tr. Funds v. Stone, 794 F.2d 508, 27 511–12 (9th Cir. 1986); Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986); Aldabe v. 28 Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980)). The Ninth Circuit has set out seven factors, 5 16-CV-1162 JLS (NLS) 1 known as the Eitel factors, a court may consider when exercising its discretion: (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. 2 3 4 5 6 7 Eitel, 782 F.2d at 1471–72. 8 When weighing these factors, the well-pleaded factual allegations of the complaint 9 are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. 10 Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987); see also Fed. R. Civ. P. 8(b)(6). To 11 prove damages, a plaintiff may submit declarations or the Court may hold an evidentiary 12 hearing. See Affinity Grp., Inc. v. Balser Wealth Mgmt., LLC, No. 05CV1555 WQH (LSP), 13 2007 WL 1111239, at *1 (S.D. Cal. Apr. 10, 2007); Taylor Made Golf Co. v. Carsten 14 Sports, 175 F.R.D. 658, 661 (S.D. Cal. 1997) (“In assessing damages, the court must review 15 facts of record, requesting more information if necessary, to establish the amount to which 16 plaintiff is lawfully entitled upon judgment by default.”). 17 18 ANALYSIS I. Jurisdiction 19 Before turning to the merits, the Court must assess whether it has jurisdiction to enter 20 default judgment against the Defaulting Defendants. The Court indisputably has subject 21 matter jurisdiction under 28 U.S.C. §§ 1331, 1338, and 1367, since the core of Plaintiffs’ 22 claims arise under federal law. (See Compl. ¶ 31, ECF No. 1 (“This action arises under the 23 federal Trademark Act, 15 U.S.C. §§ 1051, et seq., and under the related laws of 24 California.”).) 25 The Court must also have personal jurisdiction over each of the Defaulting 26 Defendants, or else entry of default judgment is void. See Bittorrent, Inc. v. Bittorrent 27 Mktg. GMBH, No. 12-CV-02525-BLF, 2014 WL 5773197, at *3 (N.D. Cal. Nov. 5, 2014) 28 (citing Veeck v. Commodity Enters., Inc., 487 F.2d 423, 426 (9th Cir. 1973)). Here, the 6 16-CV-1162 JLS (NLS) 1 Court finds that it has personal jurisdiction over each of the Defaulting Defendants. 2 A. Service of Process 3 A court has personal jurisdiction over a defendant who has been served in 4 accordance with Federal Rule of Civil Procedure 4. See Travelers Cas. & Sur. Co. of Am. 5 v. Brenneke, 551 F.3d 1132, 1135 (9th Cir. 2009). “Rule 4 is a flexible rule that should be 6 liberally construed so long as a party receives sufficient notice of the complaint.” United 7 Food & Comm. Workers Union v. Alpha Beta Co., 736 F.2d 1371, 1382 (9th Cir. 1984). 8 Pursuant to the Federal Rules of Civil Procedure, an individual or corporation “may be 9 served at a place not within any judicial district of the United States . . . by other means not 10 prohibited by international agreement, as the court orders.” Fed. R. Civ. P. 4(f)(3), (g). 11 Service under Rule 4(f)(3) must be directed by the court, not prohibited by international 12 agreement, and comport with constitutional notions of due process. Rio Props., Inc. v. Rio 13 Int’l Interlink, 284 F.3d 1007, 1014–16 (9th Cir. 2002). It is within the court’s discretion 14 “to craft alternate means of service.” Id. at 1016. 15 The Court previously granted Plaintiffs’ Ex Parte Application for electronic service, 16 finding that such a method did not run afoul of the Hague Convention. (See ECF No. 6, at 17 4.) Thus, the Court directed Plaintiffs to electronically serve Defaulting Defendants using 18 the email addresses that Plaintiffs’ agents used to communicate with and/or purchase 19 certain counterfeit products or had determined were associated with the unknown and 20 foreign Defaulting Defendants. (Id. at 9.) The email message was to include, among other 21 things, a link to a secure website where each Defaulting Defendant could download PDF 22 copies of the Summons and Complaint. (Id.) Plaintiffs complied with the Court-ordered 23 service procedures. Specifically, throughout May and June 2016, Plaintiffs electronically 24 served several of the Defaulting Defendants, which included substantial efforts to send, re- 25 send, follow-up, and track delivery of their e-mail messages to certain unknown and foreign 26 Defaulting Defendants. (Mot. 21–22, ECF No. 111-1 (collecting citations).) Plaintiffs 27 additionally sent the Complaint and summons via courier to some of the unknown and 28 foreign Defaulting Defendants where Plaintiffs believed it reasonably likely to provide 7 16-CV-1162 JLS (NLS) 1 notice, and delivery was confirmed for each of these Defendants. (Id. at 22.) Furthermore, 2 Plaintiffs served Defendants Herman Wheeler and Park via process server because they 3 were not subject to the Court’s electronic service order. (Id. at 23.) Accordingly, the Court 4 finds that Plaintiffs have fully complied with the Court’s electronic service order and the 5 requirements of Rule 4. 6 B. Due Process 7 Personal jurisdiction must also comport with due process. Bittorrent, Inc., 2014 WL 8 5773197, at *4. Absent an applicable federal statutory basis for jurisdiction, a federal court 9 must apply the personal jurisdiction laws of the state in which it sits. Panavision Int’l, L.P. 10 v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). Because “California’s long-arm 11 jurisdictional statute is coextensive with federal due process requirements,” a court has 12 personal jurisdiction so long as defendants have “sufficient minimum contacts with the 13 forum state such that the exercise of jurisdiction does not offend traditional notions of fair 14 play and substantial justice.” Bittorrent, Inc., 2014 WL 5773197, at *4 (internal quotation 15 marks and citation omitted). 16 17 The Ninth Circuit has established a three-prong test for analyzing a claim of specific personal jurisdiction: 18 19 20 21 22 23 24 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 25 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The plaintiff 26 bears the burden of establishing the first two prongs. See Mavrix Photo, Inc. v. Brand 27 Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 2011). If the plaintiff does so, the burden shifts 28 to the defendant to argue that exercise of jurisdiction would be unreasonable. Id. 8 16-CV-1162 JLS (NLS) 1 1. Purposeful Direction 2 A defendant purposefully directs its activities toward the forum state by “(1) 3 commit[ing] an intentional act; (2) expressly aimed at the forum state; (3) causing harm 4 that the defendant knows is likely to be suffered in the forum state.” Lindora, LLC v. 5 Isagenix Int’l, LLC, No. 15-CV-2754-BAS-RBB, 2016 WL 4077712, at *5 (S.D. Cal. Aug. 6 1, 2016) (quoting CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1077 (9th Cir. 7 2011)). 8 Plaintiffs’ Complaint establishes that each of Defaulting Defendants “targeted and 9 solicited sales from California residents by operating online stores that offer shipping to 10 California,” (Compl. ¶ 32, ECF No. 1), “sold counterfeit LG wireless headsets to residents 11 of California,” (id.), are “infringing one or more of the LG Trademarks in this District,” 12 (id.), and “use[d] slavish copies of the federally registered LG Trademarks,” (id. ¶ 124), to 13 sell counterfeit LG products through online stores on eBay.com, Alibaba.com, wish.com, 14 and self-hosted sites like www.lgtonewholesale.com, (id. ¶¶ 49, 52, 56, 59, 62, 65, 68, 71, 15 77, 80, 83, 86, 94, 97, 103, 106, 112). Furthermore, Plaintiffs allege that these counterfeit 16 sales “are likely to mislead consumers into believing that Defendants’ products are genuine 17 LG products” and “have damaged and irreparably injured . . . the public’s interest in being 18 free from confusion and deception.” (Id. ¶¶ 32, 118, 122.) Additionally, Plaintiff LG 19 Electronics MobileComm U.S.A., Inc. has its principal place of business in San Diego, CA, 20 and “a corporation can suffer economic harm both where the bad acts occurred and where 21 the corporation has its principal place of business.” Mavrix Photo, Inc., 647 F.3d at 1231. 22 Accordingly, the Court finds that Defaulting Defendants directly targeted California in 23 conducting their illegal activities. See Deckers Outdoor Corp. v. Ozwear Connection Pty 24 Ltd., No. CV 14-2307 RSWL FFMX, 2014 WL 4679001, at *4 (C.D. Cal. Sept. 18, 2014) 25 (finding personal jurisdiction for default judgment because “Plaintiff has alleged facts, 26 deemed admitted by Defendants’ default . . . that Defendants sell and ship infringing 27 products to California residents through Defendants’ website, ozwearuggs.com.au, and that 28 such infringing products are the subject of Plaintiff’s claims and injuries in this Action”) 9 16-CV-1162 JLS (NLS) 1 (citations omitted). 2 2. Relatedness 3 “The Ninth Circuit adopted the ‘but for’ test to determine the ‘arising out of’ 4 requirement. . . . The Ninth Circuit has recognized that, in trademark or copyright 5 infringement actions, if the defendant’s infringing conduct harms the plaintiff in the forum, 6 this element is satisfied.” Fighter’s Mkt., Inc. v. Champion Courage LLC, No. 3:16-cv- 7 1271-GPC (BGS), 2016 WL 4879437, at *7 (citing Gray & Co. v. Firstenberg Mach. Co., 8 913 F.2d 758, 761 (9th Cir. 1990), and Adobe Sys. Inc. v. Blue Source Grp., Inc., 125 F. 9 Supp. 3d 945, 963 (N.D. Cal. 2015)). 10 Here, Plaintiffs’ claims arise out of Defaulting Defendants’ advertising and sale of 11 counterfeit goods bearing Plaintiffs’ trademarks. Accordingly, the Court finds that 12 Defaulting Defendants’ infringing actions are related to Plaintiffs’ claims. 13 3. Fair Play and Substantial Justice 14 Plaintiffs have met their burden on the first two prongs. Defaulting Defendants have 15 not responded to any of Plaintiffs’ allegations, much less their arguments here. And the 16 Court cannot discern how its exercise of jurisdiction over Defaulting Defendants would be 17 unfair or unjust. 18 Accordingly, the Court finds that it has personal jurisdiction over Defaulting 19 Defendants. 20 II. Entry of Default Judgment 21 Plaintiffs move the Court for entry of default judgment and have adequately noticed 22 the Defaulting Defendants, to the extent possible. (ECF No. 111-15.) Accordingly, Rule 23 55’s requirements have been met and the Court must turn to the Eitel factors to govern its 24 discretion in this matter. 25 A. Factor I—Prejudice to Plaintiff 26 The first factor weighs in favor of entering default judgment. Plaintiffs state several 27 valid causes of action against the Defaulting Defendants, and Defaulting Defendants have 28 failed to appear or otherwise participate in this action. (Mot. 34, ECF No. 111-1.) Thus, 10 16-CV-1162 JLS (NLS) 1 LG has suffered and continues to suffer injury from the Defaulting Defendants’ illicit use 2 of LG’s marks, and LG lacks any other recourse to recover damages in absence of any 3 answer from the Defaulting Defendants. This constitutes prejudice. See PepsiCo, Inc. v. 4 Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002) (“Potential prejudice to 5 Plaintiffs favors granting a default judgment. If Plaintiffs’ motion for default judgment is 6 not granted, Plaintiffs will likely be without other recourse for recovery.”); see also 7 Moroccanoil, Inc. v. Allstate Beauty Prods., Inc., 847 F. Supp. 2d 1197, 1200–01 (C.D. 8 Cal. 2012). 9 B. Factors II and III—Claim Merits and Sufficiency of Complaint 10 To warrant entering a default judgment, the complaint’s allegations must be 11 sufficient to state a claim upon which relief can be granted. Danning v. Lavine, 572 F.2d 12 1386, 1388 (9th Cir. 1978). A complaint satisfies this standard when the claims “cross the 13 line from conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009) (citing 14 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). A default concedes the truth of the 15 allegations in the complaint, except those relating to damages. Televideo Sys., Inc. v. 16 Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (quoting Geddes v. United Fin. Grp., 17 559 F.2d 557, 560 (9th Cir. 1977)); Taylor Made Golf Co. v. Carsten Sports, Ltd., 175 18 F.R.D. 658, 661 (S.D. Cal. 1997) (noting that “[i]n assessing liability, the complaint’s 19 allegations are taken as true” because “a defendant’s default functions as an admission of 20 the plaintiff’s well-pleaded allegations of fact”). 21 At issue in the present case are claims for (1) trademark counterfeiting under 15 22 U.S.C. §§ 114(1)(b), 116(d); (2) trademark infringement under Federal and California law, 23 as well as related California unfair competition law; (3) false advertising under 15 U.S.C. 24 § 1125(a)(1)(B); (4) trademark dilution under 15 U.S.C. § 1125(c) and Cal. Bus. & Prof. 25 Code § 14245 et seq.; and (5) cybersquatting under 15 U.S.C. § 1125(d). 26 1. Trademark Counterfeiting 27 To state a valid cause of action for trademark counterfeiting under the Lanham Act, 28 a plaintiff must show that its mark is valid and has been infringed. 15 U.S.C. § 1114(1). 11 16-CV-1162 JLS (NLS) 1 Registration of a mark on the principal register is “prima facie evidence . . . of the 2 registrant’s ownership of the mark, and of the registrant’s exclusive right to use the 3 registered mark in commerce . . . .” 15 U.S.C. § 1115(a). The Lanham Act prohibits use of 4 “counterfeit” marks in connection with the “sale, offering for sale, or distribution of 5 goods.” 15 U.S.C. § 1116(d)(1)(A). A counterfeit mark is defined as “a spurious mark 6 which is identical with, or substantially indistinguishable from, a registered mark.” 15 7 U.S.C. §§ 1116(d)(1)(B), 1127. 8 As discussed, LG has valid trademark registrations for several marks, including in 9 connection with the sale of earphones, headphones, and headsets. (Compl. ¶ 34, ECF No. 10 1.) Furthermore, each of the Defaulting Defendants have used and continue to use 11 counterfeit/identical versions of LG’s registered trademarks in connection with the sale of 12 their own, non-LG wireless headsets. (Mot. 25, ECF No. 111-1 (providing table 13 summarizing the allegations against each Defaulting Defendant with respect to the 14 counterfeit marks used).) Thus, the Court finds that Plaintiffs have set forth a valid claim 15 for trademark counterfeiting. 2. Trademark Infringement & Unfair Competition2 16 17 To state a valid cause of action for trademark infringement under the Lanham Act, 18 a plaintiff “must prove: (1) that it has a protectable ownership interest in the mark; and (2) 19 that the defendant’s use of the mark is likely to cause consumer confusion.” Rearden LLC 20 v. Rearden Commerce, Inc., 683 F.3d 1190, 1202 (9th Cir. 2012) (quoting Network 21 Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir. 2011)). In 22 the present case, Plaintiffs have shown a protectable interest in the marks at issue, (Compl. 23 ¶ 34, ECF No. 1 (setting forth trademark registration numbers)), and therefore the Court’s 24 inquiry focuses solely on likelihood of confusion. 25 /// 26 27 28 2 Counts 2, 3, 6, and 8: Trademark Infringement, 15 U.S.C. §§ 1114(1)(a), 1125(a)(1)(A); Violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; Common-Law Trademark Infringement and Unfair Competition. 12 16-CV-1162 JLS (NLS) 1 In analyzing whether there is a likelihood of confusion between the two marks at 2 issue courts consider eight factors, known as the Sleekcraft factors.3 Rearden, 683 F.3d at 3 1209. These eight factors are: (1) strength of the mark; (2) proximity of the goods; (3) 4 similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) 5 type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant’s 6 intent in selecting the mark; and (8) likelihood of expansion of the product lines. Id. (citing 7 AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir. 1979), abrogated in part by 8 Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 (9th Cir. 2003)). However, these 9 eight factors are not exhaustive and “other variables besides the enumerated factors should 10 also be taken into account based on the particular circumstances.” Id. Additionally, “[w]hen 11 the goods produced by the alleged infringer compete for sales with those of the trademark 12 owner, infringement usually will be found if the marks are sufficiently similar that 13 confusion can be expected.” See Sleekcraft, 599 F.2d at 348. Furthermore, the 14 counterfeiting of another’s trademark establishes a presumption of a likelihood of 15 confusion. Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1056 (9th 16 Cir. 1999) (“In light of the virtual identity of marks, if they were used with identical 17 products or services likelihood of confusion would follow as a matter of course.”); Louis 18 Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 945 (9th Cir. 2011) (“[T]he 19 presumption [of likelihood of confusion] arises when intent to cause confusion is coupled 20 with the use of a counterfeit mark or a mark virtually identical to a previously registered 21 mark.”). 22 23 24 25 26 27 28 3 The test for infringement and unfair competition under 15 U.S.C. § 43(a) is the same as for trademark infringement under Section 32(a). Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1046 nn.6 & 8 (9th Cir. 1999). Trademark infringement and unfair competition claims under California law are “substantially congruent” with federal trademark infringement and unfair competition claims, and are thus subject to the same analysis. See Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088, 1100 (9th Cir. 2004) (quoting Playboy Enters., Inc. v. Netscape Commc’ns Corp., 354 F.3d 1020, 1024 n.10 (9th Cir. 2004)); Sebastian Int’l, Inc. v. Russolillo, 186 F. Supp. 2d 1055, 1071 (C.D. Cal. 2000) (finding that because the plaintiff adequately plead a claim for trademark infringement, it also adequately plead a claim for unfair competition under Section 17200). 13 16-CV-1162 JLS (NLS) 1 Regarding factor one, Plaintiffs have valid trademark registrations for several marks, 2 including for use in conjunction with earphones, headphones, and headsets. (Compl. ¶ 34, 3 ECF No. 1; Mot. 29, ECF No. 111-1.) Additionally, some of Plaintiffs’ marks (e.g., “LG” 4 and its corresponding logo) appear to have no relation to the products on which they are 5 attached (e.g., wireless headsets) nor any independent meaning. Thus, these marks are 6 probably “fanciful” marks, “which are words or phrases invented solely to function as 7 trademarks, [and thus] receive a high level of trademark protection because they are 8 inherently distinctive.” Hokto Kinoko Co. v. Concord Farms, Inc., 738 F.3d 1085, 1096 9 (9th Cir. 2013). These marks are stronger than other of Plaintiffs’ marks, such as their 10 NECKBEHIND and TONE&TALK marks, which appear to be more descriptive of the 11 products and are weaker marks as a result. See Dreamwerks Prod. Grp., Inc. v. SKG Studio, 12 142 F.3d 1127, 1130–31 (9th Cir. 1998) (discussing the difference in strength between 13 fanciful and descriptive/suggestive marks). Accordingly, some of Plaintiffs’ marks are 14 stronger than others. 15 Regarding factors two and three, Defaulting Defendants use the LG Trademarks in 16 connection with the advertising, offering for sale, and sale of counterfeit LG wireless 17 headset products in the United States and California over the Internet. All of the Defaulting 18 Defendants use the LG Trademarks in their entirety. Additionally, some of the Defaulting 19 Defendants incorporate the LG word mark into the URLs of their sites. (See Compl. ¶¶ 45– 20 47, ECF No. 1.) Because both Plaintiffs and Defaulting Defendants’ goods are similar (e.g., 21 headsets), and because Defaulting Defendants use Plaintiffs’ exact marks on both their 22 infringing products and websites, both of these factors favor likelihood of confusion. 23 Regarding factor four, although Plaintiff has not shown any specific evidence of 24 actual confusion, failing “to prove instances of actual confusion is not dispositive against 25 a trademark plaintiff” because “difficulties in gathering evidence of actual confusion make 26 its absence generally unnoteworthy.” Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 27 1131 (9th Cir. 2014). Nonetheless, in the instant case this factor weighs slightly against 28 Plaintiffs. 14 16-CV-1162 JLS (NLS) 1 The remaining four factors favor Plaintiffs. Both Plaintiffs and Defaulting 2 Defendants market their goods via website, and the type of goods are those that could be 3 purchased and easily confused by a reasonable consumer searching for an LG headset. This 4 is especially true here because all of Defaulting Defendants’ websites are sophisticated in 5 appearance, and some even use the LG marks in the domain name, making it more likely 6 that consumers will be confused into thinking they are actually purchasing from LG. 7 (Compl. ¶¶ 46–47, ECF No. 1.) Additionally, because default was entered against 8 Defaulting Defendants, Plaintiffs’ allegations that Defaulting Defendants were wilful 9 infringers of Plaintiffs’ marks is taken as true. 10 On balance, weighing the Sleekcraft factors strongly favors a finding of likelihood 11 of confusion. Taken in concert with Defaulting Defendants’ continued failure to respond 12 to the claims at issue, the Court finds that Plaintiffs have set forth a valid claim for 13 likelihood of confusion. 3. False Advertising4 14 15 The Lanham Act prohibits “[a]ny person . . . in commercial advertising or 16 promotion” from misrepresenting “the nature, characteristics, qualities, or geographic 17 origin of his or her or another person’s goods, services, or commercial activities . . . .” 15 18 U.S.C. § 1125(a)(1)(B). To state a valid cause of action under the Lanham Act for false 19 advertising, a plaintiff must provide “a showing that . . . the defendant made a false 20 statement either about the plaintiff’s or its own product . . . .” PhotoMedex, Inc. v. Irwin, 21 601 F.3d 919, 923 (9th Cir. 2010) (quoting Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 22 1038, 1052 (9th Cir. 2008)). A statement is proven to be false either by showing (1) that 23 the statement is literally false, or (2) that the statement is literally true but likely to mislead 24 or confuse customers. Mutual Pharm. Co. v. Ivax Pharms., Inc., 459 F. Supp. 2d 925, 932 25 (C.D. Cal. 2006) (citing Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139–40 26 (9th Cir. 1997)). A violation may be established without evidence of consumer confusion 27 28 4 Count 4: False Advertising, 15 U.S.C. § 1125(a)(1)(B). 15 16-CV-1162 JLS (NLS) 1 if the statement is literally false. Id. at 933 (citation omitted). 2 The allegations in the Complaint demonstrate that each of Defaulting Defendants 3 used LG’s marks to falsely identify their products as genuine “LG,” “Tone,” and/or “HBS” 4 products. (Mot. 30–32, ECF No. 111-1 (providing table summarizing the allegations 5 against each Defaulting Defendant with respect to the false marks used).) Because the use 6 of LG’s marks in this case is literally false, no evidence of consumer confusion is necessary 7 and default judgment is appropriate. iYogi Holding Pvt. Ltd. v. Secure Remote Support, 8 Inc., No. C-11-0592 CW, 2011 WL 6291793, at *15 (N.D. Cal. Oct. 25, 2011), report and 9 recommendation adopted, 2011 WL 6260364 (N.D. Cal. Dec. 15, 2011) (granting default 10 judgment on Section 43(a)(1)(B) claim because plaintiff alleged defendants made literally 11 false statements in the course of advertising their services). Accordingly, the Court finds 12 that Plaintiffs have stated a valid claim for false advertising. 4. Trademark Dilution5 13 14 In order to state a valid claim for trademark dilution, “a plaintiff must show that (1) 15 the mark is famous; (2) the defendant is making a commercial use of the mark in commerce; 16 (3) the defendant’s use began after the mark became famous; and (4) the defendant’s use 17 of the mark dilutes the quality of the mark by diminishing the capacity of the mark to 18 identify and distinguish goods and services.” Jada Toys, Inc. v. Mattel, Inc., 496 F.3d 974, 19 980–81 (9th Cir. 2007), opinion amended and superseded on other grounds by, 518 F.3d 20 628 (9th Cir. 2008). The analysis for dilution under federal and California state law is the 21 same. Id. 22 Plaintiffs bring a dilution claim only for their LG logo mark (Reg. No. 3661175). 23 (Compl. ¶ 146, ECF No. 1.) The Complaint establishes that (1) LG’s logo is and was 24 famous, through its national registration and extensive nationwide use and recognition, (id. 25 /// 26 27 28 5 Counts 5 and 7: Trademark Dilution, 15 U.S.C. § 1125(c) and Cal. Bus. & Prof. Code § 14245 et seq. 16 16-CV-1162 JLS (NLS) 1 ¶ 146); the relevant Defaulting Defendants (“Diluting Defendants”)6 are using the mark in 2 commerce, (id. ¶ 147); (3) Diluting Defendants’ use of the mark occurred after the mark 3 became famous, (id. ¶ 146); and (4) Diluting Defendants’ use of the mark dilutes the 4 distinctiveness of LG’s mark by diminishing the capacity of consumers to identify genuine 5 LG products, (id. ¶¶ 145–50). Accordingly, the Court finds that Plaintiffs have stated a 6 valid claim for dilution against the Diluting Defendants. 5. Cybersquatting7 7 8 To state a valid cybersquatting claim under the Lanham Act, a Plaintiff must show 9 that “(1) the defendant registered, trafficked in, or used a domain name; (2) the domain 10 name is identical or confusingly similar to a protected mark owned by the plaintiff; and (3) 11 the defendant acted ‘with bad faith intent to profit from that mark.’” Rearden, 683 F.3d at 12 1219 (quoting DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213, 1218–19 (9th Cir. 2010)). 13 Again, taking Plaintiffs’ allegations as true given the entry of default, it is clear that 14 (1) Defendant Shenzhen ZL has a bad-faith intent to profit from its use of two of LG’s 15 marks; (2) Shenzhen ZL registered and/or uses the lgtonewhoesale.com domain name to 16 sell counterfeit mobile headsets; (3) the two LG marks were distinctive at the time the 17 lgtonewholesale.com domain name was registered; and (4) the lgtonewhoesale.com 18 domain name is confusingly similar to LG’s two marks at issue. (Mot. 33, ECF No. 111-1; 19 Compl. ¶¶ 167–75.) Because each element required for a finding of cybersquatting is met, 20 the Court finds that Plaintiffs have set forth a valid claim for cybersquatting against 21 Defendant Shenzhen ZL. Accordingly, because the complaint is legally sufficient and each of Plaintiffs’ 22 23 claims has merit, this factor weighs in favor of entering default judgment. 24 /// 25 26 27 28 6 Mot. 32, ECF No. 111-1 (accusing Xiaowen, Enjoy, Hosphone Electronic, Shenzhen, Bingos, Shenzhen ZL, Winding Electronic, Shenzhen Powerfire, Newkingser, Little Link, Shenzhen Newsinte, Ruilin Tech, Shenzhen Leisen, Herman Wheeler, and Lu of trademark dilution). 7 Count Nine: Cybersquatting, 15 U.S.C. § 1125(d). 17 16-CV-1162 JLS (NLS) 1 C. Factor IV—Sum of Money at Stake 2 This factor turns on whether the damages sought are proportional to the alleged 3 harm. Landstar Ranger, Inc. v. Parth Enter., Inc., 725 F. Supp. 2d 916, 921 (N.D. Cal. 4 2010). Here, Plaintiffs’ damages sought all are within the Lanham Act’s provisions for 5 violations of the magnitude at issue in this case. Specifically, Plaintiffs seek permanent 6 injunctive relief, statutory damages of $2 million per Defaulting Defendant per mark used, 7 $100,000 per domain name, as well as attorneys’ fees and costs. (Mot. 33–34, ECF No. 8 111-1.) While substantial, the amount of money, by itself, is not necessarily unreasonable. 9 See Deckers Outdoor Corp., 2014 WL 4679001, at *10. Rather, the court must balance 10 “the amount of money at stake in relation to the seriousness of the defendant’s conduct.” 11 Vogel v. Rite Aid Corp., 992 F. Supp. 2d 998, 1012 (C.D. Cal. 2014) (internal quotation 12 marks, alterations, and citations omitted). Here, Plaintiffs accuse Defaulting Defendants of 13 using LG’s various marks in hopes of deceiving customers into buying their counterfeit 14 products. Given the gravity of this harm, the need to protect Plaintiffs’ marks, consumers, 15 and deter further counterfeiting, and the fact that Plaintiffs seek statutory (and thus 16 discretionary) damages, see Deckers Outdoor Corp., 2014 WL 4679001, at *10, the Court 17 finds that this factor does not weigh against default judgment. 18 D. Factor V—Possibility of Factual Dispute 19 This factor turns on the degree of possibility that a dispute concerning material facts 20 exists or may later arise. Eitel, 782 F.2d at 1471–72. In the present case, Plaintiffs’ 21 allegations must be taken as true due to the default. And Defaulting Defendants have been 22 unresponsive since the start of this case. Accordingly, this factor favors Plaintiffs—any 23 purported factual dispute appears settled and there is no indication Defaulting Defendants 24 will further defend against the action. 25 E. Factor VI—Reason for Default 26 This factor turns on whether a Defaulting Defendant’s default may have been the 27 product of excusable neglect. Eitel, 782 F.2d at 1471–72. There is no evidence of excusable 28 neglect here. Plaintiffs note that at some point their counsel spoke with one of the 18 16-CV-1162 JLS (NLS) 1 Defaulting Defendants (Park) and counsel for another (Xiaowen) about this action. (Mot. 2 34, ECF No. 111-1.) But there has been no further response from either of these defendants 3 or the remainder of Defaulting Defendants. (Id.) Furthermore, this factor favors default 4 judgment where, as here, Defaulting Defendants have been properly served or Plaintiffs 5 have demonstrated that Defaulting Defendants are aware of the lawsuit. Landstar Ranger, 6 725 F. Supp. 2d at 922. As discussed above, Plaintiffs have properly served Defaulting 7 Defendants pursuant to the Court’s electronic service order. Additionally, Plaintiffs note 8 they have confirmation that their service emails were delivered to the Defaulting 9 Defendants’ email addresses and that some of them downloaded the documents served. 10 (Id.) Accordingly, this factor favors granting a default judgment. 11 F. Factor VII—Policy Favoring Merits Decisions 12 Although this factor, by its nature, favors defendants because it encourages merits 13 decisions, “[t]he fact that Rule 55(b) has been enacted . . . indicates that ‘this preference, 14 standing alone, is not dispositive.’” Landstar Ranger, 725 F. Supp. 2d at 922 (citing 15 Pepsico, 238 F. Supp. 2d at 1177 (quoting Kloepping v. Fireman’s Fund, No. 94-2684, 16 1996 WL 75314, at *3 (N.D. Cal. 1996))). Further, in the present case there is no indication 17 that a merits decision is practicable; Defaulting Defendants have yet to answer Plaintiffs’ 18 complaint and thus defend this action. Thus, here the timely administration of justice 19 outweighs the strong policy for merits decisions. 20 On balance, weighing the Eitel factors reveals that a default judgment is appropriate 21 in this case. Accordingly, the Court GRANTS Plaintiffs’ motion for default judgment. 22 III. Assessment of Damages 23 A. Trademark Counterfeiting 24 Given Defaulting Defendants’ failure to participate in the case, Plaintiffs seek 25 statutory damages as their sole monetary remedy for counterfeiting under 15 U.S.C. 26 § 1117(c). Section 1117(c) authorizes statutory damages in the amount of “(1) not less than 27 $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, 28 offered for sale, or distributed, as the court considers just; or (2) if the court finds that the 19 16-CV-1162 JLS (NLS) 1 use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per 2 type of goods or services sold, offered for sale, or distributed, as the court considers just.” 3 15 U.S.C. § 1117(c). In order to invoke the civil monetary remedies under § 1117, a 4 plaintiff “must establish that (1) [the defendant] intentionally used a counterfeit mark in 5 commerce; (2) knowing the mark was counterfeit; (3) in connection with the sale, offering 6 for sale, or distribution of goods; and (4) its use was likely to confuse or deceive.” State of 7 Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708, 721 (9th Cir. 8 2005) (citations omitted). 9 As discussed above, supra Section II.B.2, Defaulting Defendants intentionally used 10 counterfeit marks in commerce in connection with their offering for sale and sales of 11 mobile phone headsets, which was likely to confuse or deceive consumers. (Mot. 36, ECF 12 No. 111-1 (citing Compl. ¶¶ 123–25, 136).) Thus, the Court finds that Plaintiffs are entitled 13 to statutory damages under Section 1117(c), and more specifically to the damages for 14 willful counterfeiting under Section 117(c)(2). Nevertheless, the Court is explicitly granted 15 wide latitude under the Lanham Act to use its discretion in determining a just damages 16 award. And while Plaintiffs seek the $2,000,000 maximum per counterfeit mark per type 17 of good or service offered, totaling $168,000,000 broken down per Defaulting Defendant 18 in their accompanying Proposed Judgment (Mot. 38, ECF No. 111-1), Plaintiffs’ citations 19 to Ninth Circuit authority is a mixed bag of some granting the $2,000,000 maximum 20 amount, and some not. Compare, e.g., Deckers Outdoor Corp., 2014 WL 4679001, at *12 21 (granting default judgment and awarding $2 million in statutory damages for defendants’ 22 counterfeit use of UGG mark), with, e.g., Philip Morris U.S.A. Inc. v. Castworld Prods., 23 219 F.R.D. 494, 500 (C.D. Cal. 2003) (awarding $1 million per counterfeit use of two 24 marks, for a total of $2 million in statutory damages). But given the strength and 25 recognition of the LG brand in electronics, and the wilful actions of the large number of 26 Defaulting Defendants, which demonstrates the serious counterfeiting problem LG faces, 27 the Court finds that granting Plaintiffs’ the statutory maximum is appropriate. Accordingly, 28 the Court GRANTS Plaintiffs’ request of $168,000,000 broken down per Defaulting 20 16-CV-1162 JLS (NLS) 1 Defendant as explained at the conclusion of this Order. 2 B. Cybersquatting Statutory Damages 3 When a violation is found under 15 U.S.C. § 1125(d), “the plaintiff may elect, at any 4 time before final judgment is rendered by the trial court, to recover, instead of actual 5 damages and profits, an award of statutory damages in the amount of not less than $1,000 6 and not more than $100,000 per domain name, as the court considers just.” § 1117(d). To 7 determine a reasonable amount of statutory damages for cybersquatting, “courts generally 8 consider a number of factors . . . , including the egregiousness or willfulness of the 9 defendant’s cybersquatting, the defendant’s use of false contact information to conceal its 10 infringing activities, the defendant’s status as a ‘serial’ cybersquatter . . . and other behavior 11 by the defendant evidencing an attitude of contempt towards the court of the proceedings.” 12 Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1086 (C.D. Cal. 2012) (internal 13 quotation marks and citation omitted). As above, Plaintiffs elect for an award of statutory 14 damages for this claim because of Defendant Shenzhen ZL’s lack of participation in this 15 case. (See Mot. 38, ECF No. 111-1; Compl. ¶ G, at 54, ECF No. 1.) Thus, the Court must 16 consider what would constitute a just damage award.8 17 Plaintiffs argue they are entitled to the statutory maximum of $100,000 for 18 Defendant Shenzhen ZL’s infringing domain name “lgtonewholesale.com.” (Mot. 38–39, 19 ECF No. 111-1.) In support of their request, Plaintiffs cite eAdGear, Inc. v. Liu, where the 20 court granted the statutory maximum against a defendant who used the plaintiff’s 21 trademarks in its domain name in order to compete with the plaintiff by confusing its 22 23 24 25 26 27 28 8 Unsurprisingly, courts vary widely in assessing what constitutes a just damage award for cybersquatting. For a sampling, 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 the 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 the 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”). 21 16-CV-1162 JLS (NLS) 1 potential customers. No. CV-11-05398 JCS, 2012 WL 2367805, at *19 (N.D. Cal. June 21, 2 2012), report and recommendation adopted, No. C-11-05398 RMW JCS, 2012 WL 3 4005454 (N.D. Cal. Sept. 11, 2012). Here, there is an even stronger case for imposition of 4 the statutory maximum, since Shenzhen ZL’s domain name not only contains two LG 5 marks, and thus may already confuse consumers, but also contains the term “wholesale,” 6 which may further confuse consumers into thinking that they can purchase LG-authorized 7 products at a lower price, thus seriously harming consumers and Plaintiffs alike. 8 Accordingly, the Court GRANTS Plaintiffs’ request for the statutory maximum and 9 assesses a total of $100,000 against Defendant Shenzhen ZL for violating 15 U.S.C. 10 § 1125(d). 11 C. Permanent Injunction 12 The Lanham Act “vests the district court with the power to grant injunctions 13 according to principles of equity and upon such terms as the court may deem reasonable, 14 to prevent the violation of any right of the trademark owner.” Reno Air Racing Ass’n v. 15 McCord, 452 F.3d 1126, 1137 (9th Cir. 2006) (citing 15 U.S.C. § 1116). A party seeking 16 a permanent injunction must show: “(1) that it has suffered an irreparable injury; (2) that 17 remedies available at law, such as monetary damages, are inadequate to compensate for 18 that injury; (3) that, considering the balance of the hardships between the plaintiff and 19 defendant, a remedy in equity is warranted; and (4) that the public interest would not be 20 disserved by a permanent injunction.” La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V., 21 762 F.3d 867, 879 (9th Cir. 2014) (citations omitted). Although irreparable harm was once 22 presumed in meritorious trademark infringement actions, irreparable harm now “must be 23 demonstrated to obtain a permanent injunction in a trademark infringement action.” Herb 24 Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc., 736 F.3d 1239, 1248–49 (9th Cir. 2013) 25 (emphasis added) (recounting via caselaw prior presumption and subsequent Supreme 26 Court and Ninth Circuit developments). 27 Plaintiffs demonstrate that a permanent injunction is appropriate. As to irreparable 28 injury, Plaintiffs argue that Defaulting Defendants’ continuing sales of counterfeit and 22 16-CV-1162 JLS (NLS) 1 infringing products will cause Plaintiffs lost profits and customers, as well as damage to 2 goodwill and business reputation. (Mot. 40, ECF No. 111-1 (citing Stuhlbarg Int’l Sales 3 Co. v. John D. Brush and Co., 240 F.3d 832, 841 (9th Cir. 2001) (holding that “evidence 4 of threatened loss of prospective customers or goodwill certainly supports a finding of” 5 irreparable harm)).) Here, Plaintiffs provide evidence that LG spends millions of dollars 6 promoting its trademarks, building and maintaining its reputation among customers as a 7 premium consumer electronics brand, and uses distribution agreements to control the sales 8 of its mobile headsets. (Id.) Thus, Defaulting Defendants’ continuing illegal activities 9 undermines LG’s investment in its brands and its customer and distributor relationships, 10 which constitutes irreparable harm. (Id. (collecting cases).) Accordingly, the Court finds 11 that this constitutes irreparable harm and that this factor weighs in favor of issuing a 12 permanent injunction. 13 As to inadequate remedies at law, Plaintiffs argue that Defaulting Defendants’ 14 failure to respond to Plaintiffs’ service attempts or otherwise appear in this action suggests 15 they continue their counterfeiting and infringing activities. (Id. at 41 (citing Herman Miller 16 Inc. v. Alphaville Design Inc., No. C 08-03437 WHA, 2009 WL 3429739, at *8 (N.D. Cal. 17 Oct. 22, 2009) (granting permanent injunction on default because “[defendant]’s refusal to 18 answer or appear in this action makes it difficult for plaintiff to prevent further 19 infringement. An injunction would serve to prevent [defendant] from continuing to infringe 20 plaintiff’s trademarks”)).) Accordingly, the Court finds that Plaintiffs have no adequate 21 remedy at law and that this factor weighs in favor of issuing a permanent injunction. 22 Third, the balance of hardships weighs decisively in Plaintiffs’ favor. As Plaintiffs 23 note, refraining from willful trademark infringement and counterfeiting imposes no 24 hardship on the infringing party. (Mot. 41, ECF No. 111-1 (citing Ozwear Connection Pty 25 Ltd., 2014 WL 4679001, at *13 (“There is no hardship to a defendant when a permanent 26 injunction would merely require the defendant to comply with law.”)).) Defaulting 27 Defendants can simply sell their own products without using LG’s marks. Plaintiffs, on the 28 other hand, will continue to suffer the irreparable harm detailed above. Accordingly, the 23 16-CV-1162 JLS (NLS) 1 Court finds that the balance of hardships tips in Plaintiffs’ favor and that this factor weighs 2 in favor of issuing a permanent injunction. 3 Fourth and finally, issuing a permanent injunction would serve the public interest. 4 As Plaintiffs argue, such an order would prevent consumer confusion and protect their 5 property interests in their various trademarks. (Mot. 42, ECF No. 111-1 (citing Herman 6 Miller Inc., 2009 WL 3429739, at *8 (noting that a permanent injunction against sale of 7 counterfeit goods serves the public interest by “resolv[ing] the on-going public confusion 8 regarding [the counterfeit goods]”)).) And there is no discernable public interest served by 9 allowing Defaulting Defendants to continue their counterfeit and infringing sales. 10 Accordingly, the Court finds that the public interest is served by granting a permanent 11 injunction and that this factor weighs in favor of issuing a permanent injunction. 12 13 All four factors weigh in favor of granting a permanent injunction. Accordingly, the Court GRANTS Plaintiffs’ request for a permanent injunction. 14 D. Post-Judgment Interest 15 “Interest shall be allowed on any money judgment in a civil case recovered in a 16 district court.” 28 U.S.C. § 1961(a). Post-judgment interest is calculated pursuant to the 17 statutory rate at the date of entry of the judgment. Id. Plaintiffs simply assert that they are 18 entitled to this interest without argument. (Mot. 42, ECF No. 111-1.) Nevertheless, there 19 appears to be no reason why the Court should not grant this request. Accordingly, the Court 20 GRANTS Plaintiffs post-judgment interest. 21 E. Attorneys’ Fees and Costs 22 Title 15 U.S.C. § 1117(a) provides that a court “in exceptional cases may award 23 reasonable attorney fees to the prevailing party.” For a case to warrant an award of attorney 24 fees under this provision requires a court finding that “the defendant acted maliciously, 25 fraudulently, deliberately, or willfully.” K & N Eng’g, Inc. v. Bulat, 510 F.3d 1079, 1081– 26 82 (9th Cir. 2007) (citing Watec Co. v. Liu, 403 F.3d 645, 656 (9th Cir. 2005)). This 27 determination is a question of law for the court. Watec Co., 403 F.3d at 656. 28 /// 24 16-CV-1162 JLS (NLS) 1 As discussed above, Plaintiffs’ Complaint alleges that Defaulting Defendants 2 willfully infringed LG’s marks. (Mot. 43, ECF No. 111-1.) Because Defaulting Defendants 3 have not responded to Plaintiffs’ allegations, the Court awards Plaintiffs reasonable 4 attorneys’ fees and costs. Herman Miller Inc., 2009 WL 3429739, at *10 (awarding 5 plaintiff attorneys’ fees and costs on default judgment in a trademark counterfeiting and 6 infringement case where defendant willfully infringed). Thus, Plaintiffs SHALL SUBMIT 7 evidence of their attorneys’ fees and costs on or before thirty (30) days from the date on 8 which this Order is electronically docketed. 9 CONCLUSION 10 For the reasons stated above, the Court: 11 (1) GRANTS Plaintiffs’ motion for default judgment. 12 (2) GRANTS Plaintiffs’ request for a permanent injunction. Defaulting Defendants, 13 and each of their respective employees, agents, partners, officers, directors, 14 owners, shareholders, principals, subsidiaries, related companies, affiliates, 15 distributors, dealers, alter-egos, and all persons in active concert or participation 16 with any of them are HEREBY ENJOINED from: 17 a. Using the LG Trademarks or any reproductions, counterfeit copies or 18 colorable imitations thereof in any manner in connection with the 19 distribution, advertising, offering for sale, or sale of any product that is not 20 a genuine LG branded product or not authorized by LG to be sold in 21 connection with the LG Trademarks; 22 b. Passing off, inducing, or enabling others to sell or pass off any product as 23 a genuine LG branded product or any other product produced by LG, that 24 are LG’s or not produced under the authorization, control or supervision 25 of LG and approved by LG for sale under the LG Trademarks; 26 c. Shipping, delivering, holding for sale, transferring or otherwise moving, 27 storing, distributing, returning, or otherwise disposing of, in any manner, 28 products or inventory not manufactured by or for LG, nor authorized by 25 16-CV-1162 JLS (NLS) 1 LG to be sold or offered for sale, and which bear any of the LG Trademarks 2 or any reproductions, counterfeit copies or colorable imitations thereof; 3 and 4 d. Representing by any means whatsoever, directly or indirectly, that any 5 Defendant is an authorized reseller of LG products and/or that any 6 defendant or any of its products or activities are associated or connected in 7 any way with LG or sponsored or otherwise affiliated with LG. 8 (3) GRANTS Plaintiffs’ request for statutory fees in the amount of $168,100,000 9 broken down as follows: 10 11 12 Defendant 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Total Number Total of Number Domain of Marks Names Used Used Statutory Damages HUANG XIAOWEN dba TOPUUSHOP 9 $18,000,000 ENJOY INTERNATIONAL TRADING (HONGKONG) CO., LTD. 6 $12,000,000 GUANGZHOU CITY HOSPHONE ELECTRONIC TECHNOLOGY CO. LTD. 4 $8,000,000 4 $8,000,000 SHENZHEN BINGOS TRADING CO. LTD. SHENZHEN ZL TIMES TECHNOLOGY CO. 7 1 $14,100,000 GUANGZHOU WINDING ELECTRONIC TECHNOLOGY CO. LTD. 7 $14,000,000 SHENZHEN POWERFIRE TECHNOLOGY CO. LTD. 3 $6,000,000 27 28 26 16-CV-1162 JLS (NLS) 1 2 3 Defendant 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total Number Total of Number Domain of Marks Names Used Used GUANGZHOU NEWKINGSER ELECTRONIC TECHNOLOGY CO. LTD. Statutory Damages 5 5 $10,000,000 3 $6,000,000 8 $16,000,000 1 $2,000,000 6 7 $12,000,000 $14,000,000 4 $8,000,000 2 $4,000,000 3 84 SHENZHEN LITTLE LINK COMMUNICATION FIRM SHENZHEN KING FLASH ELECTRONICS CO. LTD. SHENZHEN NEWSINTE ELECTRONICS CO. LTD. SHENZHEN SMART LINK COMMUNICATION CO. LTD. RUILIN TECH LIMITED COMPANY HERMAN WHEELER, INC. ZEXIAO LU DBA EVERYDAYSMILE2015 YOON HEE PARK DBA DEALS-WOW SHENZHEN LEISEN TECHNOLOGY CO Total $10,000,000 $6,000,000 $168,100,000 1 21 22 (4) In view of the above, the Court HEREBY ORDERS that all monies currently 23 retained in the Defaulting Defendants’ financial accounts, including monies held 24 by PayPal, Inc. (“PayPal”), are hereby released to LG as partial payment of the 25 above-identified damages, and PayPal is ordered to release to LG the amounts 26 from the Defaulting Defendants’ PayPal accounts within ten (10) days of receipt 27 of this Order. Until LG has recovered full payment of monies owed to it by any 28 Defaulting Defendant, LG shall have ongoing authority to serve this Order on 27 16-CV-1162 JLS (NLS) 1 any banks, savings and loan associations, or other financial institutions including, 2 without limitation, PayPal (collectively, the “Financial Service Providers”) in the 3 event that any new financial accounts controlled or operated by the Defaulting 4 Defendants or those in privity with them are identified. Upon receipt of this 5 Order, the Financial Service Providers shall immediately locate and restrain any 6 newly discovered accounts connected to the Defaulting Defendants or the 7 Defaulting Defendants’ websites, and any funds in such accounts shall be 8 transferred to LG within ten (10) days of receipt of this Order. 9 (5) GRANTS Plaintiffs’ request for attorneys’ fees and costs. Plaintiffs SHALL 10 SUBMIT evidence of their attorneys’ fees and costs on or before thirty (30) days 11 from the date on which this Order is electronically docketed. 12 (6) DIRECTS Whois Privacy Corporation to reveal to LG the owner of the 13 “lgtonewholesale.com” domain name. Said owner and/or the relevant registrar 14 (Internet 15 “lgtonewholesale.com” domain name to LG. 16 17 Domain Service BS Corp.) is directed to transfer the IT IS SO ORDERED. Dated: February 6, 2017 18 19 20 21 22 23 24 25 26 27 28 28 16-CV-1162 JLS (NLS)

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